Brandt v. Bonin
| Decision Date | 30 December 1941 |
| Docket Number | 6917 |
| Citation | 120 P.2d 1009,63 Idaho 382 |
| Parties | CARL E. BRANDT, Appellant, v. PETER BONIN, JOHN BONIN, DOMINIC BONIN, and AETNA INSURANCE COMPANY, a corporation, Respondents |
| Court | Idaho Supreme Court |
Rehearing denied January 31, 1942
MORTGAGES-EQUITABLE ASSUMPTION-PAYMENT OF DEBT-CONSENT-INSURANCE-RIGHTS TO PROCEEDS.
1. An agreement between vendor and purchaser to deduct amount of vendor's note, secured by mortgage on realty sold, from total purchase price on purchaser's payment of such amount to payee of such note, amounted to "equitable assumption" of note by purchaser.
2. The term "consent," in provisions of note and mortgage for purchase price of realty that vendors "consent" that all payments due under note be paid by maker directly to prior mortgagee until prior mortgage is released and satisfied of record, amounted to authorization and direction by vendors that purchaser pay so much of his debt in that way, and purchaser's signature of note and mortgage containing such stipulation amounted to acceptance of terms of such consent and agreement to make such payment in that way.
3. Where vendor and purchaser acted in good faith in all transactions between them, vendor thought he was to have benefit of two-thirds of $20,000 fire insurance required by purchase-money mortgage to be procured by purchaser purchaser thought his procurement of $15,000 insurance in favor of bank holding vendor's prior mortgage constituted compliance with insurance clause purchaser paid bank amount of its mortgage note as agreed and deed of mortgaged realty and personalty salvaged after destruction of building on such realty by fire were turned over to vendor, two-thirds of proceeds of additional $7,500 insurance policy procured by purchaser in his own favor should be paid to vendor and one-third to purchaser.
Rehearing denied January 31, 1942.
APPEAL from the District Court of the Fourth Judicial District, for Blaine County. Hon. Isaac McDougall, Presiding Judge.
Action to declare equitable lien on proceeds from insurance policy and for priority of plaintiff's lien. Judgment for defendants. Plaintiff appeals. Reversed and cause remanded.
Reversed and remanded with direction. Costs awarded appellant against the Bonins.
Bissell & Bird, for Appellant.
Where the terms of a real estate mortgage require the mortgagor to carry insurance upon a building situate on the mortgaged premises in the name of and for the benefit and better protection of the mortgagee, and the mortgagor takes out insurance in his own name and does not assign the policy to the mortgagee, and the mortgaged and insured building is burned, such agreement to insure creates an equitable lien in favor of the mortgagee to the extent of his mortgage indebtedness upon the proceeds of such insurance policy: (First Nat. Bank v. Commercial Union A. Co., 40 Idaho 236, 232 P. 899; Cook v. Commellini, 82 P.2d 143; Wheeler v. Factors' & Traders' Ins. Co., 101 U.S. 439, 25 L.Ed. 1055.)
Payments made by Bonin upon the second or $ 40,000.00 mortgage were to be simultaneously credited upon the first or $ 15,000.00 bank mortgage until the latter was paid, so that Brandt was to actually receive and retain in cash upon said $ 40,000.00 mortgage the sum of $ 25,000.00 only. Under such an arrangement the amount of the existing first mortgage was credited upon or deducted from the second mortgage, and there was thereby created an implied agreement or equitable assumption rendering Bonin responsible for the performance of the first or existing mortgage: (Warner v. Bockstahler, 48 Idaho 419, 282 P. 862; Meyers v. Siracusa, 4 A.2d 519; Heid v. Vreeland, 30 N.J. Eq. 591; 41 C. J. 730.)
In law "consent" means a voluntary agreement by a person in the possession and exercise of sufficient mentality to make an intelligent choice to do something proposed by another. Therefore, "consent" as found in the note and mortgage given by Bonin to Brandt (Exs. A & B) is synonymous with "agreement," and said note and mortgage must be interpreted as containing an agreement between Brandt and Bonin for the handling of the payments, and with the resulting responsibility upon Bonin, as outlined in the preceding paragraph: (People v. Conklin, 10 P.2d 98, 101; Standard Dictionary--"consent"; City and County of San Francisco v. Superior Court, 271 P. 121; Plummer v. Commonwealth, 64 Ky. (1 Bush) 76, 78; Geddes v. Brown, 19 S.C. 1; Clark v. North, 111 N.W. 681, 11 LRANS 764, 770.)
Chapman & Chapman and James T. Murphy, for Respondents.
Bonin had an insurable interest in the property. The relation of mortgagor and mortgagee between him and Brandt did not of itself give to Brandt a right to the proceeds of insurance payable to Bonin. (26 C. J. 438; 14 R. C. L. p. 1367; Wheeler v. Factors, Etc. Ins. Co. 101 U.S. 439, 25 L.Ed. 1055; Farmers Loan & Trust Co. v. Penn Plate Glass Co., 186 U.S. 434, 22 S.Ct. 842, 46 L.Ed. 1234.)
To establish that a purchaser assumed and agreed to pay an outstanding mortgage debt to which he was not a party, it must be shown that there was a meeting of the minds as between vendor and vendee on the subject or proof of facts sufficient to estop the vendee from denying the existence of such an agreement. (Empire Trust Co. v. Hitchcock (Mo.) 123 S.W.2d 565; McFarland v. Melson (Mo.) 20 S.W.2d 63; Ayers v. Randall, (Ind.) 9 N.E. 464.)
April 1, 1937, Carl Brandt and wife entered into an agreement with Pete Bonin, for the construction and lease of a hotel in Ketchum, Idaho. By the terms of the contract, the Brandts agreed to furnish all of the lumber and materials then in the old Guyer Hotel on Warm Springs Creek in Blaine county, of a total value of $ 5,000; Bonin to furnish $ 5,000 in labor and materials in constructing a new hotel building. After the sum of $ 5,000 was exhausted, as above set out, each of the parties was to pay one-half of the cost of labor and materials necessary to complete and equip the building; the lessee (Bonin) to pay all taxes levied, and to keep the building and furnishings insured in an amount agreeable to the lessors (Brandts); the lease was to continue for a period of five years, with the privilege of renewal for a like period. In the event the lessors decided to sell the lot and water right, together with their interest in the building and equipment, at any time after two years from the date of the agreement, the lessee was to have first option to buy. In the event lessee desired to quit and abandon the property or the lease, the lessors were to have the prior right of buying all of lessee's interest in the property. Appellant Brandt was the owner of the lots and also the owner of the Bald Mountain Resort in Ketchum, the Guyer Hot Springs and Guyer Hot Springs Hotel located some distance from Ketchum.
To secure additional money for completion of the enterprise, on April 28, 1937, a chattel mortgage for $ 15,000 was executed by the Brandts to the First Security Bank of Idaho, covering furniture and equipment located "at the Bald Mountain Hot Springs cabins and pool and office and confectionery," and also "all other furniture and equipment to be installed in what is to be known as Hotel St. Georg now under construction." To further secure payment of the loan, the Brandts also executed their real estate mortgage in favor of the bank, covering the Guyer Hot Sulphur Springs property, eight lots in Ketchum, together with all water rights, permits and rights of way to property described in the mortgage. June 30, 1937, Bonin signed a waiver and agreement to relinquish to the First Security Bank "any and all right, title, interest, lien or claim" in the hotel building then being constructed, "to the extent of any and all claims which said First Security Bank of Idaho" had or might acquire under their real estate mortgage.
May 1, 1938, in order to purchase Brandt's interest in the hotel property, Bonin executed his promissory note, in favor of the Brandts, for $ 40,000, at 4 1/2% interest, payable in semi-annual installments. To secure payment of the same, a mortgage was executed by Bonin and delivered to appellant, covering the hotel and equipment. Under date of May 1, 1938, and contemporaneous with execution and delivery of the mortgage, the Brandts executed and delivered to Bonin a deed to these premises, reciting a cash consideration of $ 40,000, as having been received for the property. The deed makes no mention of any mortgage or encumbrance but contains covenant of full warranty of title. Bill of sale for all the furnishings and equipment was also given by Brandt to Bonin.
In the body of the mortgage was contained the following provision with reference to carrying of insurance to secure the mortgage:
"Mortgagor further agrees to keep all buildings now or hereafter located on the said premises and all equipment attached or appurtenant thereto insured against loss or damage by fire in an amount not less than $ 20,000.00, and that two-thirds (2/3) of the total insurance carried by mortgagor shall be under a satisfactory mortgage clause assigned and delivered to the said mortgagee as further security to said mortgage debt, save and except in the event the remaining balance due on account of said indebtedness secured hereby is $ 7,500.00 or less, and then in that event said mortgage-- shall have no right or interest in and to said fire insurance."
In addition to the foregoing, the mortgage set out a copy of the note to Brandt, which also contained the following provision with reference to mortgage debt owing by Brandt to the First Security Corporation of Idaho, herein referred to as the "bank." [1] In accordance with provision contained in the mortgage, two...
To continue reading
Request your trial
-
Lundy v. Hazen
...is defined to be the 'voluntary allowance or acceptance of what is done or proposed to be done by another.'' Brandt v. Bonin, 63 Idaho 382, 392; 120 P.2d 1009, 1013 (1941). 'Implied Consent. That which is manifested by signs, actions, or facts, or by inaction or silence, from which arises a......