FOR THE NORTHERN DISTRICT OF CALIFORNIA
FOOTHILL OAKS, INC., No. 1-88-01336
RAYMOND A. CAREY, Trustee,
v. A.P. No. 91-1213
CARMEL FINANCIAL GROUP XXII,
Memorandum of Decision
The only issue in this adversary proceeding is whether a creditor secured by a deed of trust
waives its security by obtaining a judgment against a guarantor of the note secured by the deed
of trust. The law on this issue is very simply stated in Bernhardt, California Mortgage and
Deed of Trust Practice
(CEB 1990), at pages 406-07:
The one-action rule is said to be for the benefit
only of the principal debtor and therefore not applic-
able to parties who are secondarily liable, such as
guarantors or sureties. Murphy v Hellman Commercial
Trust & Sav. Bank
(1919) 43 CA 579, 185 P 485.
Two cases cited by plaintiff, In re Madigan
, 122 B.R. 103 (9th Cir.1991, and In re Tidrick
105 B.R. 584 (Bankr.C.D.Cal.1989), are not applicable to these facts because both cases
involved real property security owned by the guarantor. This case involves real property
security owned by the debtor, not the guarantor. The other case relied upon by plaintiff, In re
Pajaro Dunes Rental Agency, Inc.
, 142 B.R. 383 (Bankr.N.D.Cal.1992), is not applicable
because in that case the note holder obtained a judgment against the maker of the note.
This memorandum constitutes the court's findings and conclusions pursuant to FRCP 52(a)
and FRBP 7052.
Dated: December 7, 1992 _______________________