Plaintiffs brought these actions, which have been consolidated for the purposes of this appeal, in order to quiet title to certain real and personal property. The actions were begun by Stella Schmidt Hatch, Ruben S. Schmidt and Harriet Schmidt Sparks, the children of Huida Franciska Schmidt who died testate in the city of Los Angeles on December 14,1930. At the time of her death, Huida Franciska Schmidt was indebted to the Security-First National Bank of Los Angeles in the sum of $52,000. This debt was evidenced by her unsecured note and that of her son, Ruben S. Schmidt.
Upon the death of Huida F. Schmidt, each of these children was entitled to an undivided one-fifth of the estate. Ruben S. Schmidt and Harriet Schmidt Sparks became co-executors under the will. Bеtween January 22, 1931 and June 29, 1932, the defendant bank made additional loans to the three children individually, for the purpose of paying off the accumulated debts of the estate. These loans were represented by the individual, unsecured notes of Stella Schmidt Hatch, Ruben S. Schmidt and Harriet Schmidt Sparks, and the unpaid balance thereon amounted to $203,511.15 on June 29, 1932. On that date, pursuant to an order of the probate *256 court, Ruben S. Schmidt and Harriet Schmidt Sparks, in their capacities as executor and executrix of the estate, executed an unsecured note in the sum of $278,000 as evidence of the sums advanced, and at the same time Stella Schmidt Hatch, Ruben S. Schmidt and Harriet Schmidt Sparks, individually, executed gеneral continuing guaranties in the sum of $300,000 as further security for the indebtedness of the estate. As part of the same transaction the individual notes previously executed by the three children were stamped “Renewed” and were returned by the bank to the makers. By June 16, 1933, the loans to the estate had been increased to $342,000 and on that date the executors, as such, signed a note for this amount and gave a deed of trust covering the real property of the estate. On April 15, 1935, the note was renewed in the sum of $380,000, a new deed of trust was entered into by the executors, and the three children individually executed new general continuing guaranties in the sum of $450,000.
On February 11, 1937, the bank gave notice of default on the executors’ note and of an election to sell under the trust deed of April 15, 1935. Thereafter separate suits were commenced against Stella Schmidt Hatch, Ruben S. Schmidt and Harriet Schmidt Sparks on their individual guaranties, and in the course of the actions certain real property belonging to each of them individually was attached. Negotiations were еntered into for the purpose of inducing the bank to refrain from selling the property of the estate to satisfy its debt and, as a result, the agreements which form the basis of the present appeal were entered into on October 9, 1937. A written agreement was entered into with Stella Schmidt Hatch, Ruben S. Schmidt and Harriet Schmidt Sparks individually, by the terms of which the bank rеleased them from further personal liability upon their general guaranties and agreed to dismiss the attachment suits previously instituted. The children, however, agreed to execute a deed of trust covering parcels of real property, owned by them individually, as additional security for the existing indebtedness of the estate and for any further loans. On the same day, Ruben S. Schmidt and Harriet Schmidt Sparks, as executors of the estate of Huida F. Schmidt and) with the authorization of the probate court, entered into a written agreement with the bank by which they pledged certain personal property owned by the estate as additional security. As a result of these contracts, the bank agreed to defer sale proceedings under the executors’ deed of trust until November 15, 1938.
*257 On December 8, 1938, a trustee’s sale was held at which the real property of the estate was sold at public auction for the sum of $385,790. This was applied to the amount then due, $514,004.22, leaving an unpaid balance of $128,214.22. On February 28, 1939, a pledge sale was held at which the personal property of the estate pledged by the executors was sold for $9,000, of which the sum of $7,005.56 was applied to the principal of the debt and the remainder to the interest. On March 28, 1939, a trustee’s sale was held at which the real property covered by the individuals’ deed of trust was sold for the sum of $91,760.81. The proceeds of this sale were used to satisfy the remaining debt, consisting of the principal sum of $121,208.66, plus interest, advances and charges of the trustee, which brought the amount of the debt claimed to $137,730.59. After application of the proceeds of the sale of March 28, 1939, to the debt, the sum of $45,969.78 remained unpaid, for which the bank claimed no further security or right of action.
On March 27, 1939, these quiet title actions were filed by Stella Schmidt Hatch, Ruben S. Schmidt and Harriet Schmidt Sparks against the Security-First National Bank of Los Angeles, the beneficiary under the individuals’ deed of trust, and the Los Angeles Trust & Safe Deposit Company, the trustee. In these actions, filed the day before the trustee’s sale covering the same property, plaintiffs sought to establish their title to the real property previously owned by them as individuals. Harriet Schmidt Sparks died on May 11, 1939, after the institution of the action in L. A. 17,531, and her sister, Stella Schmidt Hatch, has been substituted as her administratrix in that action. On May 23, 1939, Ruben S. Schmidt, as the surviving executor of the estate of Huida F. Schmidt, filed the fourth quiet title action, L. A. 17,532, against the Security-First National Bank of Los Angeles, seeking to establish the interest of the estate in the personal property which had been previously sold at the pledge sale held on February 28, 1939. These four cases were tried together in the court below, and by stipulation there is but a single set of consolidated findings although the court entered separate judgments. In each case judgment was entered for the plaintiff, and the defendant bank appeals from the judgments thus rendered.
The trial court concluded that the pledge sale on February 28, 1939, and the sale under the individuals’ deed of trust, held on March 28, 1939, were invalid. In each case it was determined that title to the property involved remained in the *258 original owner thereof. This holding was based solely upon the finding that, after the trustee’s sale оf the real property belonging to the estate of Huida F. Schmidt under the trust deed of April 15, 1935, neither of the defendants took any steps pursuant to Code of Civil Procedure, sections 580a, 725a' and 726, for the purpose of determining the existence of an actual deficiency. Upon this appeal defendants urge that thefce sections of the Cоde of Civil Procedure have no application to a situation where, as in the present ease, no attempt is made by the creditor to secure a personal judgment against a debtor for a deficiency remaining after sale under a deed of trust. Since there is no other claim of invalidity, it is contended that the sale held in each сase is valid and that the judgments for the plaintiffs should be reversed.
Code of Civil Procedure, sections 725a and 726, provide a specific procedure for the entry of a personal judgment for the deficiency remaining after a creditor has brought an action for judicial foreclosure under a deed of trust or mortgage. Since there was no judicial foreclosure in the present cases, these provisions of the statute have no direct application. . Section 580a of the Code of Civil Procedure, however, provides a similar procedure where a personal judgment is sought after the creditor has exercised the power of sale granted in a deed of trust or mortgage. It reads: “Whenever a money judgment is sought for the balance due upon an obligation for the payment of which a deed of trust or mortgage with power of sale upon real property or any interest therein was given as security, following the exercise of the power of sale in such deed of trust or mortgage, the plaintiff shall set forth in his cоmplaint the entire amount of the indebtedness which was secured by said deed of trust or mortgage at the time of sale, the amount for which such real property or interest therein was sold and the fair market value thereof at the date of sale and the date of such sale. . . . Before rendering any judgment the court shall find the fair market value of the rеal property, or interest therein sold, at the time of sale. The court may render judgment for not more than the amount by which the entire amount of the indebtedness due at the time of sale exceeded the fair market value of the real property or interest therein sold at the time of sale with interest thereon from the date of the sale; provided, however, that in no event shall the amount of said judgment . . . exceed the difference between the amount for which the property was sold and the entire amount of the indebtedness secured by said
*259
deed of trust or mortgage. Any such action must be brought within three months of the time of sale under such deed of trust or mortgage ...” This section also provides fоr the appointment of appraisers by the court for the purpose of determining the fair market value of the real property sold under the deed of trust or mortgage. The purpose underlying this legislation was discussed in
Kirkpatrick
v.
Stelling,
36 Cal. App. (2d) 658 [
Plaintiffs urge that where a creditor holds a mortgage or deed of trust as security for an obligation and resorts to that security either by judicial foreclosure or by power of sale, he may take no further steps tо collect his debt unless he proceeds within three months, under sections 580a, 725a or 726, to establish the existence of an actual deficiency in the amount realized from the original security. Thus, in the present case it is said that the bank, which had resorted to the security furnished by the executors’ deed of trust, should have proceeded under section 580a bеfore attempting to realize upon the additional security held by it under the pledge agreement and the individuals’ deed of trust. Unless the creditor proceeds under section 580a to establish the existence of an *260 unpaid balance after resorting to Ms security, plaintiffs contend that it will be presumed that he has realized enough to satisfy the debt in full. Acting uрon this theory, the trial court concluded that the indebtedness of the estate to the defendant bank was fully paid and discharged, that the sales held subsequently were invalid, and that title to the property involved still remains in the plaintiffs. Defendant concedes that, after resort to the principal security held by it, it would be necessary to bring an action under section 580a within three months in order to obtain a personal deficiency judgment against the debtor for any unpaid balance. But, it is argued, that statute imposes no such requirement where the creditor merely seeks to realize upon additional security held by him and makes no attempt to secure a personal judgment for the unpaid balance.
The interpretation placed upon the statute by the defendant is clearly the correct one. The limited scope of section 580a is indicated by the language of that section. Thus, it provides :
“Whenever a money judgment is sought for the balance due
upon an obligation for the payment of which a deed of trust or mortgage with power of sale upon real property . . . was given as security, fоllowing the exercise of the power of sale . . . the
plaintiff shall set forth in his complaint
. . . [etc.] . . .
Any such action
must be brought within three months ...” (Italics added.) Cases which have discussed this legislation have referred to it solely as a limitation upon the creditor’s right to obtain a personal judgment for a deficiency against his debtor.
(Bank of America
v.
Hunter,
8 Cal. (2d) 592, 598 [
Plaintiffs argue that section 580a should be interpreted so as to rеquire the creditor to obtain a judicial determination of the unpaid balance remaining after sale under a deed of trust or mortgage before resorting to any additional security which he may hold. The language of section 580a does not indicate that the legislature had any intention of thus protecting property which is only secondarily liablе as security for the principal obligation. By its express terms, the statute is concerned only with actions to recover deficiency judgments after the security is exhausted and plaintiffs have cited no convincing authority in support of their position. They rely upon
Estate of Naegely,
31 Cal. App. (2d) 470 [
Under the facts of the present cases, since the defendant has at no time attempted to secure a deficiency judgment against anyone, it is clear that section 580a is not applicable. It imposes no requirement which would invalidate the pledge sale or the sale under the individuals’ deed of trust. It has already been pointed out thаt sections 725a and 726 have no application to the facts of this ease (supra). Since the judgments in these cases are based solely upon the finding that defendant failed to proceed under these sections of the Code of Civil Procedure, it follows that each of the judgments appealed from is erroneous.
The judgments are, and each of them is, hereby reversed.
Respondents’ petition for a rehearing was denied February 11,1942.