McClatchey v. Rudd

FINLEY, J. pro tem.

*

Appellant is the administrator of the estate of Paul W. McClatchey, deceased. Pursuant to the filing of demurrers to his original and first amended complaints, appellant amended. Upon the sustaining of a general demurrer to his second amended complaint on the ground that it failed to state a cause of action, appellant failed or refused to amend and a judgment of dismissal was entered.

The second amended complaint is in three counts. Each is founded upon an allegedly unlawful sale under a deed of trust of certain real property belonging to the deceased.

The first count charges that the sale was unfairly and fraudulently conducted because the beneficiary and the trustee knew that appellant, as the trustor’s successor, had not received mailed notice of the sale proceeding; that the price bid by the purchaser was disproportionate to the true value of the property and the actions of the beneficiary and trustee constituted a forfeiture which should be set aside.

The second count charges a breach of trust by the trustee based upon the trustee’s alleged actual knowledge that the notices mailed to the deceased were returned marked “Deceased,” and that the trustee knew that appellant, as administrator, did not receive the notices but nevertheless failed to inform appellant of the impending sale.

The third count charges that appellant was deprived of his constitutional rights by reason of the fact that the statute permitting a sale under such circumstances is unconstitutional as to him and persons similarly situated. His argument is that where the trustee knew in conducting the sale that the mailed notices were not reaching the administrator, but knew where such notices could have reached him, that the posting of such notice is not adequate since it is not the form of notice most likely to fulfill the purpose of the law.

[607]

The facts appear to be that Paul W. McClatchey, deceased, owned some 26 acres of land in San Diego County worth about $8,000. He borrowed $2,000 from respondent Rudd and, as security, executed a note secured by a deed of trust on the property with the customary power of sale provisions. Union Title Insurance Company was named as trustee. Title Insurance and Trust Company became the successor in interest to Union. Paul McClatchey died in October of 1961. Appellant was appointed administrator of his estate and published notice to creditors. He alleges in his second amended complaint that both the beneficiary and the trustee under the deed of trust had actual knowledge of the death of Paul McClatchey and of the appointment of appellant as administrator.