The sole issue presented by this appeal is whether the proceeds of a fire insurance policy are payable to appellant, who was the owner of a note secured by deed of trust on real property improved by a three-story frame building at the time that fire destroyed the building, or to the appellee, who was the owner of said property subject to the deed of trust at said time.

Jurisdiction of the District Court was based upon diversity of citizenship existing between the appellee, a citizen of the State of California, and the defendant Insurance Company, a citizen of the State of New York, the matter in controversy being in excess of the sum or value of $10,000.00. (Title 28 U.S.C. § 1832 )

The jurisdiction of this Court is predicated upon Title 28 U.S.C. § 1291 .

The facts are not in dispute and may be summarized as follows:

On December 23, 1958, appellant, the then owner of certain real property in the City and County of San Francisco, which was improved by a three-story frame building, conveyed said property to one Fulvio and received a promissory note in the amount of $25,000.00 and a deed of trust on said property securing payment of the note. Thereafter, on February 3, 1959, Fulvio conveyed said property, subject to the deed of trust securing said note, to one Martha A. Call, who was the owner of said property subject to the deed of trust at the time that the frame building was destroyed by fire.

Under the terms of the deed of trust, Martha A. Call was required to procure a policy of fire insurance indemnifying the appellant against loss by fire caused to the frame building.

On March 4, 1959, in consideration of premium paid by Martha A. Call, the defendant Insurance Company insured the premises in the principal sum of $25,-000.00 under a California standard form fire insurance policy, naming Martha A. Call as insured and naming appellant as mortgagee under its standard mortgage clause. As a result of two fires which occurred in August of 1959, the frame building was destroyed, at which time the said policy of fire insurance was in full force and effect.

On September 30, 1959, Martha A. Call instituted suit in the District Court against the Insurance Company seeking judgment against the Insurance Company for the principal sum of $25,000.00. In the complaint it was alleged that on September 28, 1959, the promissory note secured by deed of trust held by appellant was fully paid and discharged by the execution of the power of sale under the deed of trust whereby the trustee thereunder sold the property for the entire obligation due appellant under said deed of trust.

By order of the District Court, appellant was granted leave to file a complaint in intervention. In such complaint, appellant alleged that her interest as mortgagee in and to said premises when the same were destroyed by fire was the sum of $24,898.00, and sought judgment against the Insurance Company in said amount plus interest and costs.

As a result of stipulations made by the parties and approved by the District Court, the Insurance Company deposited in Court the sum of $22,500.00 and was fully released and discharged from any claims or liability to any of the parties to the action under said policy.

At the sale under the power granted in the deed of trust, appellant purchased the property for $24,898.00 which amount was equal to the total sum of principal and interest on the secured promissory note.

Prior to May of 1959, Martha A. Call failed to pay the installments of principal and interest due on the promissory note secured by said deed of trust, in violation of the provisions of the promissory note and the deed of trust. On May 28, 1959, appellant caused a notice of default under the deed of trust to be recorded. On September 28, 1959, the trustee under the deed of trust sold the property covered thereby to appellant for $24,898.00, which amount was equal to the total sum of principal and interest then due on the note secured by said deed of trust, and title to the property was conveyed to appellant by the deed of the trustee.

The law of the State of California, with exceptions not here pertinent, forbids the rendition of a judgment for any deficiency upon a note secured by a deed of trust or mortgage in any case in which the real property has been sold by the mortgagee or trustee under power of sale contained in a mortgage or deed of trust. CAL.CODE CIY.PROC. § 580d.

During the pendency of the action in the District Court, Martha A. Call died and the administrator of her estate was substituted as plaintiff in said action.

The District Court held that appellee was entitled to payment of the fund deposited in Court by the Insurance Company, and judgment was entered accordingly. It was the view of the District Court that upon purchase of the property at the trustee’s sale by appellant, the debt to her was extinguished.

The policy in question provides, in the definition of the insured on the cover page of the policy, as follows:

Form 78 NS attached, provides, in pertinent part:

The reverse side of page one of the policy, in pertinent part, provides:

It is appellant’s main contention on this appeal that under the quoted provisions of the insurance policy, the rights of appellant to the proceeds of the insurance policy became vested at the time the fire loss occurred and that the District Court erred in basing its judgment, in favor of appellee, upon events occurring after the vesting of such rights.

From our study of the record on appeal, we have reached the conclusion that the case before us cannot be reviewed as one between appellant and the Insurance Company, which is the posture of the case on this appeal as presented by appellant. In our view, the case must be reviewed in the light of the posture of the case at the time the matter was submitted to the District Court for decision. Prior to the decision of the District Court, a compromise settlement was entered into by appellant and appellee on the one hand and the Insurance Company on the other, as a result of which the Insurance Company paid into the registry of the Court the sum of $22,500.00. Thereupon, the cause of action against the Insurance Company was settled and the Insurance Company was released and discharged of and from any liability to appellant or appellee and was dismissed with prejudice as a party to the action. As a part of the compromise settlement, it was stipulated that the District Court would, upon payment of said $22,500.00 into the registry of the Court, determine the rights of appellant and appellee in and .to said fund as the proceeds of the policy issued to appellee as named assured and to appellant as lender loss-payable payee named in the policy. In view of such circumstances, we need only determine from the facts before the District Court which party is entitled to the fund on deposit with the Court.

Admittedly the jurisdiction of the District Court was properly invoked under Title 28 U.S.C. § 1332 . The Court’s jurisdiction was not ousted by the dismissal of the Insurance Company as a party to the action. The District Court retained jurisdiction to completely dispose of the issue which remained undecided following the dismissal of the Insurance Company as a party to the action. We believe that such issue was properly decided by the District Court and we adopt the following from the memorandum opinion of the District Court:

We have considered all of the points urged on this appeal by appellant but find none of them persuasive.

The judgment of the District Court is affirmed.