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Sale Void if Petition Filed Before Trustee's Deed Executed - In re
Is anybody out there following the Raul Gonzalez Case? In that case, Judge
Wallace denied relief from stay-unlawful detainer on the basis that a sale
had not been completed pre-petition because the Trustee's Deed Upon Sale
was not executed until after the debtor filed his bankruptcy petition.
Judge Wallace thoroughly analyzes counterarguments I thought about when
reading it.
As duplicitously as some banks have been behaving lately, I have one or two
cases in which this is an issue because the debtor thought the property
wouldn't be sold because the bank was negotiating a loan modification, but
the bank went ahead and sold the property, anyway, and the petition was not
filed until after the trustee's sale. The Gonzalez case is in Riverside
District Court - 6:11-bk-15665. I wonder if anybody is volunteering to
help Mr. Gonzalez, who is in pro per and I don't think the district court
will do the work for him, like Judge Wallace did. I'm all the way in L.A.
and quite swamped right now or I would help myself. I attach the case
hereto. Here is a brief excerpt:
*DISCUSSION*
Although there is a significant dispute between the
parties as to the precise time of the trustee's acceptance of
the final bid (and perhaps the only bid) at the nonjudicial
foreclosure sale, it is not necessary to defer a ruling on
Rancho Horizon's motion. As discussed below, Rancho
Horizon is not entitled to relief from the automatic stay
on the basis of unlawful detainer even if the acceptance
of the final bid by Quality Loan Service occurred prior to
1:46 p.m. on February 22, 2011. Rancho Horizon fails to
meet its burden of establishing a *prima facie *case because
it has failed to demonstrate facts that would support relief
from the stay under *11 U.S.C. 362(d)(1) *or *(d)(4)*.
*A. Postpetition Execution of the Deed*
At common law in earlier ages, the ownership of real
property was transferred by "livery of seisin", a ceremony
in which the grantor (then called the "feoffor") traveled to
the property to be conveyed and, in the presence of
witnesses, declared the contents of the grant and
delivered to the grantee a clod of earth or twig or bough.
2 William Blackstone, Commentaries *315. Modern law,
[*6] however, prescribes the use of written deeds to
convey real property. *Section 1091 of the California Civil*
*Code *provides that an estate in real property (other than
an estate at will or for a term not exceeding one year) can
be transferred only by deed or by operation of law.
The execution, delivery and acceptance of a
properly-drawn deed to real property are no mere
formalities or ministerial acts.5 Rather, they are the
essential acts by which ownership of, and title to, real
property are transferred from one person to another. A
deed is not merely evidence of a grant but is the grant
itself and operates to transfer title to the grantee. *See Cal.*
*Civ. Code 1091*; *Hamilton v. Hubbard, 134 Cal. 603,*
*605 (1901)*; Drake *v. Martin, 30 Cal. App. 4th 984, 994*
*(Ct. App. 1994). Of critical importance here is that there*
can be *no* transfer of title to, or ownership of, real
property (including, of course, the Property) unless and
until a deed is executed in favor a grantee and such deed
is delivered to, and accepted by, such grantee, unless
through a transfer by operation of law.
5 One California case has suggested that the
execution of a deed is only a ministerial act.
*Ballengee v. Sadlier, 179 Cal. App. 3d 1, 4-5 (Ct.*
*App. 1986)*. [*7] However, this case has been
limited to its special facts and, in any event, is of
questionable validity in view of its failure to
discuss or even cite *section 1091 of the California*
*Civil Code*. *See Little v. CFS Serv. Corp., 188*
*Cal. App. 3d 1354, 1362 (Ct. App. 1987) *("We
believe that *Ballengee *should be limited to its
facts: an unsuccessful attempt by a junior lienor to
circumvent an antideficiency statute by arranging
for his trustee to withhold execution and delivery
of the deed to him after he had purchased at his
own sale.").
Giovanni Orantes, Esq.
Orantes Law Firm, P.C.
3435 Wilshire Blvd. Suite 1980
Los Angeles, CA 90010
Tel: (213) 389-4362
Fax: (877) 789-5776
e-mail: go@gobklaw.com
website: www.gobklaw.com
Is anybody out there following the Raul Gonzalez Case? In that case, Judge Wallace denied relief from stay-unlawful detaineron the basis that a sale had not been completed pre-petition because the Trustee's Deed Upon Sale was not executed until after the debtor filed his bankruptcy petition. Judge Wallace thoroughly analyzes counterarguments I thought about when reading it.
As duplicitously as some banks have been behaving lately, I have one or two cases in which this is an issue because the debtor thought the property wouldn't be sold because the bank was negotiating a loan modification, but the bank went ahead and sold the property, anyway, and the petition was not filed until after the trustee's sale. The Gonzalezcase is in Riverside District Court- 6:11-bk-15665. I wonder if anybody is volunteering to help Mr. Gonzalez, who is in pro per and I don't think the district court will do the work for him, like Judge Wallace did. I'm all the way in L.A. and quite swamped right now or I would help myself. I attach the case hereto. Here is a brief excerpt:
DISCUSSION
Although there is a significant
dispute between the
parties as to the precise time of
the trustee's acceptance of
the final bid (and perhaps the
only bid) at the nonjudicial
foreclosure sale, it is not
necessary to defer a ruling on
Rancho Horizon's motion. As
discussed below, Rancho
Horizon is not entitled to relief
from the automatic stay
on the basis of unlawful detainer
even if the acceptance
of the final bid by Quality Loan
Service occurred prior to
1:46 p.m. on February 22, 2011.
Rancho Horizon fails to
meet its burden of establishing a
prima facie case because
it has failed to demonstrate
facts that would support relief
from the stay under 11 U.S.C.
imes New Roman">
A. Postpetition
Execution of the Deed
At common law in earlier ages,
the ownership of real
property was transferred by
"livery of seisin", a ceremony
in which the grantor (then called
the "feoffor") traveled to
the property to be conveyed and,
in the presence of
witnesses, declared the contents
of the grant and
delivered to the grantee a clod
of earth or twig or bough.
2 William Blackstone,
Commentaries *315. Modern law,
[*6] however, prescribes the use
of written deeds to
convey real property. Section
1091 of the California Civil
Code provides that an
estate in real property (other than
an estate at will or for a term
not exceeding one year) can
be transferred only by deed or by
operation of law.
The execution, delivery and
acceptance of a
properly-drawn deed to real
property are no mere
formalities or ministerial acts.5 Rather, they are
the
essential acts by which ownership
of, and title to, real
property are transferred from one
person to another. A
deed is not merely evidence of a
grant but is the grant
itself and operates to transfer
title to the grantee. See Cal.
Civ. Code 1091; Hamilton v.
Hubbard, 134 Cal. 603,
605 (1901); Drake v.
Martin, 30 Cal. App. 4th 984, 994
(Ct. App. 1994).
Of critical importance here is that there
can be no transfer of
title to, or ownership of, real
property (including, of course,
the Property) unless and
until a deed is executed in favor
a grantee and such deed
is delivered to, and accepted by,
such grantee, unless
through a transfer by operation
of law.
5 One California case has
suggested that the
execution of a deed is only a
ministerial act.
Ballengee v.
Sadlier, 179 Cal. App. 3d 1, 4-5 (Ct.
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