United States v. Glen O. Allgeyer and Jean M. Allgeyer

Defendants appeal from a summary judgment entered for the United States in its suit to recover the balance allegedly due and owing on a promissory note executed by defendants to the Security First National Bank and duly assigned to the United States on behalf of the Federal Housing Administration. The note was given by appellants to evidence a federally insured home improvement loan made to them pursuant to Title I of the National Housing Act. ( 48 Stat. 1246 , 12 U.S.C. § 1701 et seq.) Payment was initially secured by a second deed of trust on real property situated in Los Angeles, California; but the security was lost when the subject property was sold upon a foreclosure by the holder of the first deed of trust.

Defendants contend that the record discloses the existence of a genuine issue of material fact, hence the entry of summary judgment was error. This issue, they say, is whether or not the second deed of trust was given as security for the payment of part of the purchase price of the subject real property. The issue is material, they argue, because if the loan constituting the debt was for purchase money, then California law, particularly Cal.C.C.P. § 580b, prohibits…