Ziegler

William Barnes appeals a judgment allowing Leland Ziegler to collect on a promissory note secured by a second trust deed which became valueless upon foreclosure by the construction money lender. Barnes contends the note was a purchase money obligation for which a deficiency judgment is proscribed under Code of Civil Procedure section 580b and which fails to meet the requirements, pursuant to which section 580b would not apply, outlined in Spangler v. Memel (1972) 7 Cal.3d 603 [ 102 Cal.Rptr. 807 , 498 P.2d 1055 ].

I

In 1978, Leland Ziegler and his wife created a family trust, transferring to it real property owned by them. Included in the trust was an undeveloped residential view lot in the Three Arch Bay community in Laguna Beach. In December, Ziegler signed an agreement to purchase a condominium in Hawaii. The agreement, specifically subject to formulation of an Internal Revenue Code section 1031 ( 26 U.S.C. § 1031 ) exchange with the Laguna property, provided for a down payment of $57,000 and assumption of an existing note and trust deed in the amount of $115,000.

In January 1979, Ziegler assigned his rights under the purchase agreement to David Jensen. The owner of…