National Enterprises, Inc. v. Woods

Opinion

KOLKEY, J.

This appeal raises the issue whether, in a case where senior and junior debts, secured by the same property, were once held by the same creditor, which thereafter sells the loans to two independent parties, California’s one-form-of-action rule under Code of Civil Procedure section 726 prohibits the junior lienholder from bringing a separate action to recover its debt following the senior lienholder’s judicial foreclosure of the property.

In this case, a bank made to a single borrower successive loans secured by successive deeds of trust on the same property. The bank failed;…