Browne v. San Luis Obispo National Bank

CHOY, Circuit Judge:

In this California bankruptcy case, the parties both appeal a district court order affirming the referee’s denial of Mrs. Ernette Mae Browne’s petition for an injunction halting a sheriff’s sale of her homestead property. We reverse and remand.

I

On May 6, 1965, Mrs. Browne obtained an unsecured loan of $3,675 from the San Luis Obispo National Bank (Bank). She signed a promissory note and a document titled “Assignment of Rents and Agreement Not To Sell or Encumber Real Property” covering a lot in San Luis Obispo which she owned. The Bank promptly recorded the document, which…