Court Opinion

ID: 9720738
Source: CourtListenerOpinion
Date Created: 2023-08-26 08:40:30.676164+00
Date Added: 2024-06-11T18:24:20.257754
License: Public Domain

PIERCE, P. J.
I dissent. The majority opinion is an open invitation under the situation existing in this case to any defaulting “equitable” owner (herein for convenience described as the “mortgagor”)—and particularly to this one—before moving out to lay waste to the real property which stands as security for the debt. That is not justice; it is not the law; it was not the intent of the Legislature when Code of Civil Procedure sections 580a and 580b were enacted in their present form.
Those sections embrace a complete legislative scheme of foreclosure for defaulted debts. Section 580a covers foreclosure of real property where there is no purchase money mortgage or trust deed and where, therefore, a deficiency judgment can or may be sought. Section 580b covers foreclosure sales where a purchase money deed of trust or mortgage is involved. When a foreclosure sale of the first type is involved, section 580a prevents the “mortgage”-debtor from being gouged by exacting from the beneficiary (cestui que trust) or mortgagee (I will, for convenience, refer to him hereinafter by the latter term) the duty, before any deficiency judgment can be sought, to have the court appoint one of the inheritance tax appraisers to appraise and ascertain the fair market value of the secured real property, and a judgment may not be given for any deficiency exceeding that amount. Section 580b, which applies only to purchase money secured debts, flatly wipes out all deficiency judgments. In the event of the foreclosure of such real property mortgage, the Legislature is not in the least concerned with the amount at which the mortgagee bids in the property at the foreclosure sale except as hereinafter noted in the margin. There is no mention of “fair market value.” Where no real equity exists in the mortgagor it makes not the slightest difference whether the mortgagee buys the property in for a dollar or for the full amount of the then unpaid balance of the mortgage-debt or whether the amount so bid is or is not the equivalent of the fair market value. Under no circumstances can the mortgagee get a deficiency judgment. All he Can do is get back his security by *1002the foreclosure sale.1 That the security instrument provides, and that the law (§ 580b) guarantees.
The majority opinion displays a myopic concern for one party only to the security traiisaction and foreclosure—the mortgagor. It unnecessarily penalizes the mortgagee for having insured that he will get back his security (because of the unexpunged default in payment of the debt) or its equivalent in cash by bidding in the property (or instructing some agent to do it for him) at the full amount of the unpaid debt. That—unless the majority opinion shall become law—is what any wise mortgagee would do lest he lose his security. True, when, as here, waste has been committed, he might consult a clairvoyant trying to ascertain the amount in dollars— not of the damage done by the waste committed by the mortgagor, but of the value of his chose in action against the mortgagee and of the judgment he might obtain against him and deduct that from the amount of his bid. I think he would prefer the bird in the hand to the bird in the bush.
I point out that there is no relationship in this, or any, trust deed or mortgage between the provision against the commission of waste written therein and the obligation of the mortgagor to respond in damage for waste committed on the one hand and the provisions regarding the protection of the mortgagee’s security interest, including the procedural steps to enforce them under the law on the other hand.. The two provisions are entirely separate and distinct.
If a third party had moved onto the property and laid it waste and the mortgagee had acquired both the equitable and legal title (whether by foreclosure or deed from the mortgagor), the manner of his having acquired ownership and the price he paid to get back the property would have no bearing on his choice of action for the tort. It has no greater relevancy to his action ex contractu against the mortgagor who has committed waste. The trial court saw that (see fn. 2 of the majority opinion). The majority opinion, as I see it, fails to see this.
I have no quarrel with the Cases cited in the majority opinion. They simply have no relevance to the problem.
I would affirm the judgment.
A petition for a rehearing was denied August 27, 1971, and respondent’s petition for a hearing by the Supreme Court was denied September 22, 1971.

It is to be noted that we are not concerned in this case with forfeitures. If, for example, but a small amount remains unpaid on the secured debt when the foreclosure sale takes place, and if the mortgagee buys the property in at a- sqm out of proportion to the value of the property, and if the mortgagor is unable to protect his equity, courts of equity afford adequate protection against such practices and will prohibit a forfeiture.