Lucas

Sellers (Jones) sold two parcels of real property in 1973, carrying secondary financing for the buyers. When the buyers transferred the property to subsequent purchasers (Lucas) subject to sellers’ loan in *1010 1979, Jones sought to enforce the due-on-sale clause in the promissory note and the deed of trust securing the property. The second sale occurred after the decision in Wellenkamp v. Bank of America (1978) 21 Cal.3d 943 [ 148 Cal.Rptr. 379 , 582 P.2d 970 ], where the Supreme Court prohibited automatic enforcement of due-on-sale clauses as unreasonable restraints on alienation, except where security is impaired. 1 In Wellenkamp , however, the court declined to express a “. . . present opinion on the question whether a private lender, including the vendor who takes back secondary financing, has interests which might inherently justify automatic enforcement of a due-on clause in his favor upon resale.” (Id., at p. 952, fn. 9.)

Lucas cross-complained for injunctive relief to prevent foreclosure under the due-on-sale clause. On January 19, 1982, the trial court applied the Wellenkamp rationale and enjoined Jones, private lenders who took back secondary financing, from…