Wendland

Defendant appeals from a judgment in favor of plaintiff (hereinafter “Union Bank”) in an action upon a promissory note. The issues presented are whether the trial court erred in finding that said promissory note was not intended by the parties to be secured by a first deed of trust executed by defendant; whether the cause of action to recover upon said note was barred by the antideficiency provisions of section 580d; 1 whether the trial court erred in denying defendant’s motion for leave to amend his answer to conform to proof; and whether plaintiff’s interest under a second deed of trust executed by him as security for said note was discharged by merger and a judgment upon said note was therefore prohibited by section 580d.

In 1966 defendant purchased a parcel of real property improved with a residence (“the residence”) for the sum of $26,500. On September 1, 1967, defendant and his wife borrowed $28*000 from The Stanford Bank. As evidence of this indebtedness they executed a promissory note (“the first note”) and as a security for its payment they executed a deed of trust (“the first deed of trust”) which granted the residence to a trustee with power of sale.…

I concur in the opinion of, and the result reached by, Presiding Justice Molinari.

Addressing myself to the dissent of Justice Sims, I am in agreement that, as found by the trial court, “The March 13, 1969, note [described as “the third note” in the principal opinion] was not intended by the parties to be secured by the First Deed of Trust.” But I reject the conclusion that this finding mandated the judgment entered by the superior court.

We are, as pointed out in the principal opinion, concerned with the effect of Code of Civil Procedure section 580d. This statute, and its sister sections 580a, 580b and 580c, are an expression of California’s “strong” public policy that lenders shall be strictly limited in their right to deficiency judgments after foreclosure of real property security given for their loans.

The genesis of the policy was pointed out by Hatch v. Security-First Nat. Bank, 19 Cal.2d 254, 259 [ 120 P.2d 869 ], as follows: “The evil which led to the enactment of this legislation became pronounced during the recent period of economic depression when creditors were frequently able to bid in the debtor’s real property at a nominal figure and also to hold the debtor…

I respectfully dissent.

I agree with the conclusion that the record supports the trial court’s finding that the first deed of trust, which was given to secure a loan of $28,000 effected September I, 1967, was not a deed of trust given to a lender to secure repayment of a loan which was in fact used to pay all or part of the purchase price of the property. The property had been acquired October 21, 1965, partially with a loan from First Savings and *411 Loan Association. Although the balance of that loan was paid off with a portion of the 1967 loan, part of the proceeds were used for other purposes. In any event the advance by plaintiff’s predecessor in 1967 could in no way contribute to an inflationary purchase in 1965. Section 580b of the Code of Civil Procedure is not applicable to either the obligation secured by the first deed of trust or to the additional $10,973.40 secured by the second deed of trust executed March 13, 1969.

The resolution of this controversy must depend on the propriety of the following finding of the trial court: “7. The March 13, 1969, note was not intended by the parties to be secured by the First Deed of Trust.” Defendant’s motion to amend his answer…

Defendant appeals from a judgment in favor of plaintiff (hereinafter "Union Bank") in an action upon a promissory note. The issues presented are whether the trial court erred in finding that said promissory note was not intended by the parties to be secured by a first deed of trust executed by defendant; whether the cause of action to recover upon said note was barred by the antideficiency provisions of section 580d; [1] whether the trial court erred in denying defendant's motion for leave to amend his answer to conform to proof; and whether plaintiff's interest under a second deed of trust executed by him as security for said note was discharged by merger and a judgment upon said note was therefore prohibited by section 580d.

In 1966 defendant purchased a parcel of real property improved with a residence ("the residence") for the sum of $26,500. On September 1, 1967, defendant and his wife borrowed $28,000 from The Stanford Bank. As evidence of this indebtedness they executed a promissory note ("the first note") and as a security for its payment they executed a deed of trust ("the first deed of trust") which granted the residence to a trustee with power…