Taylor

This is an appeal from a judgment awarding respondent Kaiser Industries $69,514.68 and attorney’s fees in the sum of $2,500 in an action on a promissory note.

The principal question is whether the note was secured by an equitable mortgage and, if so, whether, under Code of Civil Procedure section 726, respondent was required to foreclose on that mortgage.

The evidence disclosed that appellant Taylor and West Bay Building Co. were indebted to Sondgroth Brothers for approximately $54,000 for paving and grading. Respondent Kaiser Industries bought the assets of Sondgroth Brothers, including as part of those assets the indebtedness of Taylor and West Bay Building Co. At the time of sale the indebtedness was an open book account with a continuing guaranty signed by appellant Taylor. The account being delinquent, respondent requested appellant to execute a note to be secured by a deed of trust on real property. Efforts were made to obtain a deed of trust on apartments in Sunnyvale owned by Taylor as security for the note, but when this effort failed, an arrangement was offered by appellant which involved other real property in Santa Cruz in which he had an interest. Title to…