Shedoudy

Marshalling is an equitable doctrine developed historically and traditionally used to prevent a junior lienholder with a security interest in a single property from being squeezed out by a senior lienholder with a security interest not only in that property, but in one or more additional properties. (See generally Victor Gruen Associates, Inc. v. Glass (9th Cir. 1964) 338 F.2d 826, 829-830 ; Civ. Code, §§ 2899, 3433; 7 Witkin, Summary of Cal. Law (8th ed. 1974) Equity, § 130, p. 5350.) The doctrine requires the senior lienholder to first resort to assets free of the junior lien to avoid the inequity which would otherwise result from the unnecessary elimination of the junior lien-holder’s security with the increased likelihood the junior creditor will be unable to satisfy its claim. We decide the equitable powers of the court are properly used to remove the security interest of a senior lienholder even in the absence of a pending foreclosure by that creditor where necessary to permit a judgment creditor as junior claimant to satisfy its judgment when in doing so, no risk of loss is imposed on the senior creditor.

Factual and Procedural Background.

On May 11, 1977,…