Van Vleck Realty v. Gaunt

DRAPER, P. J.

The question on this appeal is whether an anti-deficiency statute (Code Civ. Proe., § 580b) bars recovery on an unsecured note given as part of the purchase price of land. This section proscribes deficiency judgment after sale of land under a deed of trust given to the vendor to secure payment of the balance of its purchase price.

In 1962, defendants agreed to purchase some 140 acres from plaintiffs Givenco. Purchase price was $185,000, $50,000 to be proceeds of loan from Pioneer Savings and Loan Association, secured by first deed of trust; $116,350 by note to Givencos secured by second deed of trust on the property; and $18,650 in cash. Only $3,650 in cash was paid by buyers, and $15,000 of the down payment was made by an unsecured note payable to plaintiff Van Vleck Realty, a corporation, and to plaintiffs Givenco. Of this, $11,100 was apportioned to Van Vleck in

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payment of its commission as real estate broker, and $3,900 to plaintiffs Givenco. Defendants failed to pay the unsecured note, and this action upon it was filed in March 1963. In June 1963, defendants were in default on the note secured by the second deed of trust. In place of exercising their power of sale, Giveneos accepted deed from defendants and returned the second deed of trust and the $116,350 note to them. The $15,000 note was not included as a part of that settlement, and this action was tried.

The trial court found as a fact that the $15,000 note was unsecured. This finding is strongly supported by the evidence. Nonetheless, the court concluded that as a matter of law the note was “a part of the obligation secured” by the second deed of trust, and that recovery upon it was barred by section 580b. Judgment was for defendants, and plaintiffs appeal.

The trial court considered this result dictated by a 1963 decision

(Bargioni

v.

Hill,

59 Cal.2d 121 [28 Cal.Rptr. 321, 378 P.2d 593]). But the resemblance of the facts of that case to those here is but superficial. In

Bargioni,