867 F.2d 556 (9th Cir. 1989), 85-2353, In re Globe Inv. and Loan Co.
|Citation:||867 F.2d 556|
|Party Name:||In re GLOBE INVESTMENT AND LOAN COMPANY, INC., Debtor. Giovanni B. MAGNONI, et al., Plaintiffs-Appellants, v. GLOBE INVESTMENT AND LOAN COMPANY, INC., et al., Defendants-Appellees.|
|Case Date:||February 08, 1989|
|Court:||United States Courts of Appeals, Court of Appeals for the Ninth Circuit|
Argued and Submitted Oct. 5, 1988.
Robert T. Mees, Mees & Lester, Sacramento, Cal., for the plaintiffs-appellants.
Reidun Stromsheim, Stokes, Welch & Stromsheim, San Francisco, Cal., James L. Stoelker, William Priest, Jr., Jeffrey Wong, The Priest Law Offices, San Jose, Cal., for the defendants-appellees.
Appeal from the United States District Court for the Northern District of California.
Before FARRIS, POOLE and FERGUSON, Circuit Judges.
POOLE, Circuit Judge:
Giovanni Magnoni and fourteen other appellants brought an action to set aside a trustee's sale of a bankrupt's real estate. The appellants claimed that the sale violated the automatic stay provision of 11 U.S.C. Sec. 362. They also alleged that the trustee in bankruptcy violated 11 U.S.C. Sec. 363(b) by failing to notify them of the pending sale of the debtor's interest in the real estate. The bankruptcy court entered judgment for the appellees, 1 and the appellants appealed unsuccessfully to the district court. They now appeal the district court's order affirming the bankruptcy court.
FACTS AND PROCEEDINGS BELOW
The facts in this case are basically not in dispute. Appellee Globe Investment and Loan Company (Globe) was engaged in business as a loan broker. In November 1980, Globe negotiated a loan between the owner of a parcel of real estate in Saratoga, California and seventeen investors, fifteen of whom are appellants in the present action. The investors made a loan to the property owner in exchange for promissory notes which were secured by a third deed of trust on the Saratoga property. The investors each received an interest in the third deed of trust in an amount proportionate to their respective investments. The second deed of trust was held by John Sanchez who is also an appellee in this action.
In 1981, the owner of the Saratoga property defaulted under both the second and third deeds of trust. The seventeen holders of the third deed of trust foreclosed on the Saratoga property and conducted a trustee sale on August 5, 1981. The sale conveyed the Saratoga property, subject, of course, to the priority of the senior lienholders, to the seventeen deedholders in the same proportion as their interests in the third deed of trust. The foreclosure extinguished the third deed of trust in its entirety.
On November 25, 1981, two of the seventeen original deedholders, Jeffrey and Linda Hancock, recorded an assignment of their six percent interest in the third deed
of trust to Globe. 2 As the third deed of trust had been extinguished by the August 5 foreclosure sale, it is not clear whether Globe acquired any type of recognizable interest in the Saratoga property. We need not resolve this ambiguity however, because the nature of Globe's ownership of the Saratoga property does not affect the outcome of this case.
On July 23, 1982, Globe filed a Chapter 7 petition for bankruptcy. Globe listed among its assets a six percent interest in the Saratoga property. John Billmeyer, an appellee in this action, was appointed trustee of Globe's estate. Following the filing of Globe's petition for bankruptcy, Sanchez (the holder of the second deed of trust) filed for non-judicial foreclosure of the Saratoga property. On September 2, 1982, a trustee's sale was conducted and Sanchez acquired title to the property. 3 This acquisition eliminated the interests of the appellants who had previously foreclosed on the third deed of trust.
After acquiring title to the Saratoga property, Sanchez entered into an agreement with Globe's trustee (Billmeyer), whereby Globe would execute a quit claim deed of any interest it might have in the Saratoga property in exchange for $5,400. The sum...
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