Court Opinion

ID: 9720459
Source: CourtListenerOpinion
Date Created: 2023-08-26 08:31:24.19195+00
Date Added: 2024-06-11T18:24:18.629891
License: Public Domain

BONNEY, J *
I concur in the judgment and opinion of the court. Our holding today states a clear rule that each coborrower on a debt secured by a mortgage on real property is entitled to the benefit and protection of Code of Civil Procedure section 726 whether or not he or she has an ownership interest in the property securing the debt or has signed the deed of trust.
I respectfully write separately to express my concern regarding the issue of implied consent to the reconveyance raised by the issues and the dissent. In my view, section 726 becomes part of the contract between the lender *147and each coborrower in this situation, and that contract cannot be modified so as to impose terms more onerous than those originally agreed to absent a showing of consent to the reconveyance communicated to the lender by the coborrower whose liability is in issue, on the basis of the kind of evidence ordinarily required in proving a modification of the terms of an existing contract by the mutual consent of the parties.
Consent in this situation cannot be implied simply and without more on the basis of agreements inter sese between coborrowers. Here there was no evidence that O’Brien and Schwenke had any discussion as to whether the property should be reconveyed as a consequence of Schwenke’s agreement to become responsible for the loan as part of their division of partnership assets and liabilities, and for all we know all Schwenke ever agreed to do was assume a secured obligation, status quo. This case does not turn, however, in my opinion, on any factual issue of implied consent. It turns on the fact that the evidence shows that Schwenke did not communicate to the Bank his consent to the reconveyance and knew nothing about the reconveyance until the Bank filed this lawsuit against him.
The record before us discloses beyond any doubt that Pacific Valley Bank acted in utmost good faith and in what it believed was the best interests of all the parties. Unfortunately, not all transactions of this kind which reach the courts involve good faith conduct, and not all lenders are reliable banking institutions. Any rule which permits a lender to reconvey the property at the instance of one coborrower, without the consent of the other coborrower(s), communicated to the lender, and allows the lender to thereafter apply the proceeds to various unrelated transactions before arriving at the balance due from the now allegedly unsecured albeit unconsenting coborrower(s) opens the door to untold mischief.
And, as this case illustrates, it is easy to visualize the hazards and uncertainties that could be visited upon both lender and borrower by a rule which (1) would make effective a consent implied years after the event based on the imperfect recollection of the parties and which (2) would obviate the necessity of showing that the coborrower whose liability is in issue had communicated his consent in a legally effective way to the lender.