Eastland Sav. & Loan Ass'n v. Thornhill & Bruce, Inc.

—Defendant Bruce leased a tract of 12 parcels of unimproved property in the City of Orange. He obtained a construction loan from plaintiff in the amount of approximately $405,000 ($33,800 per parcel) for the purpose of constructing apartment buildings on the leased property. Bruce executed trust deeds in favor of plaintiff as beneficiary, securing a promissory note on each parcel. The trust deeds contained provisions giving plaintiff, as additional security, the right to collect rents and also conferring upon plaintiff a power of sale.

Defendant Bruce assigned the leasehold to Thelma P. Mathewson, subject to plaintiff’s encumbrance. Thelma P. Mathewson assigned the leasehold to Del Mar Mortgage, subject to plaintiff’s encumbrance. The present dispute concerns plaintiff and Del Mar Mortgage, joined as a defendant in the action against defendant Bruce.

On August 15, 1965, Del Mar defaulted in monthly payments due on the promissory notes. In order to preserve its interest in the property, plaintiff advanced Del Mar approximately $24,000 ($2,000 per parcel) to pay rent, taxes and insurance. Del Mar executed additional promissory notes covering plaintiff’s advances, which notes were…