Armsey

Here we are asked to decide the proper method of determining indebtedness remaining after foreclosure sale of an all-inclusive deed of trust where the foreclosing beneficiary remains liable on the underlying liens. Channel Associates, Inc., appellant herein and trustor under an all-inclusive deed of trust on property sold by respondent, Armsey, contends that a beneficiary of an all-inclusive deed of trust has no amount owing him where the difference between the total indebtedness at time of foreclosure and the beneficiary’s successful bid at foreclosure sale equals prior senior liens on the property. Armsey counters that the trial court correctly determined that the indebtedness remaining after the foreclosure sale is the difference between the total amount owed pursuant to the terms of the all-inclusive foreclosed deed of trust and the amount of the successful bid. We affirm the judgment.

Facts

November 12,1981, Armsey sold a commercial office building to Channel for $700,000; $100,000 down payment and a promissory note for $600,000 secured by an all-inclusive trust deed (AITD). In March 1982, the property was destroyed by fire and in October 1983, Channel defaulted on…