Bank of America National Trust & Savings Ass'n v. Gianella

CONREY, J. Appeal by defendants from judgment for plaintiff in action in ejectment and to quiet title to some 513 acres of ranch property in Butte County. The words “plaintiff” and “bank” are used to refer to both plaintiff bank and its predecessors. When we refer to defendant Gianella, we shall intend defendant Henry Gianella.

Plaintiff’s title was acquired through a sale made under a trust deed given by defendants to secure two overdue notes of defendant Henry Gianella to the plaintiff. No claim is made that the sale and the proceedings leading to the sale, considered by themselves alone, were not in due form sufficient to pass the title, unless the right of the trustee to malee the sale was defective by reason of the facts to which reference will be made.

Appellants in their statement of questions involved in this-appeal state two questions which in effect present two propositions upon which appellants rely. These propositions are, first, that where a bank under a collateral security agreement held certain negotiable instruments as security for two notes, and later demanded and received a deed of trust as additional security for the same notes, the bank was not justified in foreclosing the deed of trust, the notice of breach having been recorded three months before any collateral was sold under the collateral agreement; second, that where a plaintiff bank sued the defendants in ejectment the trial court did not have the right to make findings of fact on issues not within the pleadings and having no relation to the judgment.

Disposing first of the second proposition, it is sufficient to say that there were no such findings of fact which if erroneously made furnish any good reason for reversal of the judgment; also, that appellants in their brief have not pointed out any discrepancy between pleadings and findings, and have made no argument in support of their contention.

In 1931 defendant Gianella was indebted to the bank in a principal sum of $22,750, represented by two demand [213]notes of $18,000 and $4,750, respectively; and in addition he had with one Jones become jointly obligated to the bank on notes amounting in the aggregate to $11,500. He had deposited with the bank as security for these notes bonds of the aggregate face value of $8,000, and 549 shares of capital stock of Transameriea Corporation. Default having occurred on the $18,000 note, the defendants on October 26, 1931, at the request of the bank, executed for its benefit a deed of trust on their ranch property, subject to a prior deed of trust in favor of other parties. In September, 1932, all of the notes were due both as to principal and as to interest. On September 3d the bank set in motion proceedings to foreclose the deed of trust. Notice of breach and election to sell thereunder was recorded September 5, 1932; and notice of sale was posted December 7, 1932, fixing January 6, 1933, as the date of sale. Prior to the day of sale, but subsequent to the posting of notice thereof, the bank sold all of the stocks and bonds, with one exception, and received therefor total net proceeds of $5,217.79. Part of this was applied to satisfy the Gianella and Jones notes, and the balance was applied on the Gianella notes. The one item not sold consisted of four Caribean Sugar Co. bonds of $1,000 each par value. It appears that these were omitted from the sale because they were in default and had been deposited by the bank with a bondholders’ committee.