Kemple v. Sec. First Nat'l Bank of L.A.

BROWN (H. C.), J. These are appeals from (1) an order denying a preliminary injunction against respondent, a national banking association, (2) a minute order denying a stay of the order denying a preliminary injunction, and (3) the sustaining of a demurrer without leave to amend to those portions of the amended complaint relating to the claim for a preliminary injunction.

Appellants sold certain real property and reserved a right of re-entry to the property as security for the payment of the balance of the purchase price. Appellants permitted their right of re-entry to be subordinated to a first deed of trust in favor of respondent Security First National Bank (hereinafter called Bank) who granted a loan to the purchasers for the construction of a motel on the property. The purchasers defaulted on the installment payments and Bank filed a notice of intention to sell under its first deed of trust. Appellants filed this action against the purchasers and the Bank claiming, inter alia, that appellants were fraudulently induced to sign the subordination agreement and applied for a preliminary injunction to restrain Bank from selling the property under the terms of Bank's deed of trust.

At the time of filing their verified complaint on July 14, 1965, appellants obtained a temporary restraining order and an order to show cause why a preliminary injunction should not issue. On July 28, 1965, the parties appeared in response to the order to show cause and the application for a preliminary injunction was argued. The matter was submitted but the court set aside its order of submission and the ease was set for further hearing. On October 19, 1965, the superior court made an order denying appellants’ application for the preliminary injunction and dissolving the temporary restraining order. The superior court in a minute order also denied appellants’ application for a temporary restraining order to maintain the status quo pending appeal.

Appellants filed an amended complaint which contained a cause of action asking for a preliminary injunction. A demurrer without leave to amend was sustained to that part of the amended complaint containing allegations for a preliminary injunction.

Appellants' motion for a preliminary injunction was properly denied by the trial court. A federal statute prohibits a preliminary injunction against a national banking associa[721]tion. The statute provides that “no attachment, injunction, or execution, shall be issued against [a national banking association] or its property before final judgment in any . . . action . . . in any State . . . court.” (12 U.S.C.A., § 91.)