Duarte v. Lake Gregory Land and Water Co. (1974) 39 Cal.App.3d 101 was an action for declaratory relief between the present and past owners of a motel, each claiming the exclusive ownership of insurance proceeds. In 1969, the motel was damaged by a mudslide resulting from the negligence of Lake Gregory Land and Water Co., which paid to the joint account of plaintiff and defendant the sum of $ 45,000. At the time of the mudslide, plaintiff owned the motel and defendant held a promissory note secured by a deed of trust on the motel. Subsequent to the damage, the plaintiff defaulted and the defendant initiated foreclosure proceedings, ultimately purchasing the motel for the unpaid balance of the note plus interest and the costs of the sale. The appellate court held that the plaintiff, past owner, was entitled to the entire fund of $ 45,000. The court reasoned that the defendant had no security interest to be impaired, having extinguished the debt and the lien by his full credit bid. (Pp. 105-106.)