Chaves County Bldg. & Loan Ass'n v. Hodges Et Ux., No. 4112.

• Docket Nº: No. 4112.
• Citation: 40 N.M. 326, 59 P.2d 671
• Case Date: July 20, 1936
• Court: Supreme Court of New Mexico

40 N.M. 326
59 P.2d 671

CHAVES COUNTY BUILDING & LOAN ASS'N
v.
HODGES et ux.

No. 4112.

Supreme Court of New Mexico.

July 20, 1936.

Appeal from District Court, Chaves County; James B. McGhee, Judge.

Foreclosure suit by the Chaves County Building & Loan Association against Wilburn S. Hodges and wife, in which defendants filed a cross-complaint. From a decree of foreclosure, defendants appeal.

Reversed and remanded, with directions.

Mortgagee's consent to take Home Owners' Loan Corporation bonds constituted a valid agreement to accept bonds of the face value stated in full settlement of its claim against mortgagors. Home Owners' Loan Act 1933, 48 Stat. 128.

[59 P.2d 671] G. L. Reese, Sr., of Roswell, for appellants.

H. C. Buchly, of Roswell, for appellee.

HUDSPETH, Justice.

The opinion filed May 22, 1936, is withdrawn, and the following is substituted therefor:

This is an appeal from a decree of foreclosure of a mortgage lien in the total sum of $3,247.37 on a city lot in Roswell. The mortgage was executed by appellants in favor of appellee in 1932 to secure a note for $9,000, and encumbered the north 45 feet of lot 13 in block 28 of the original townsite located at 311 North Pennsylvania avenue and the lot described in the decree.

On the 1st of October, 1933, appellant, Wilburn S. Hodges, being in arrears in his payments to appellee, made application for a loan to the Home Owners' Loan Corporation, organized under the Home Owners' Loan Act of 1933 (48 Stat. 128 [see 12 U.S.C.A. § 1461 et seq.]), on the property at “311 North Pennsylvania, Roswell,” which in due course was approved and bonds of the Home Owners' Loan Corporation, in the sum of $6,880.19, face value, were delivered to appellee. This sum appellee credited upon appellants' note, released the north 45 feet of lot 13 in block 28 from the mortgage lien, and later brought this suit to foreclose its mortgage lien on the other lot for the balance due on the note. About two months before the loan was approved, appellee executed the mortgagee's consent to take bonds, which reads as follows:

“E. C. Robertson, State Manager

“Mortgagee's Consent to Take Bonds

“To Home Owners' Loan Corporation:

“The undersigned is the holder of a first mortgage or other obligation, which [59 P.2d 672] constitutes a lien or claim on the title to the home property of Wilburn S. and Jewell J. Hodges located at 311 (Number) North Pennsylvania (Street) Roswell (City) New Mexico (State) in the sum of $9680.76.

“Being informed that said owner has made application to Home Owners' Loan Corporation to refund his said indebtedness, the undersigned has considered the method of refunding mortgages provided in Home Owners' Loan Act of 1933, as passed by Congress and approved by the President, and the Undersigned hereby consents, if said refunding can be consummated, to accept in full settlement of the claim of the undersigned the sum of $6880.19, face value, of the bonds of Home Owners' Loan Corporation, to be adjusted with not exceeding $50 cash as provided in said act, and thereupon to release all the claim of the undersigned against said property.

“It is understood that you will incur trouble and expense in connection with your effort to refund the indebtedness of said home owner, and this consent is executed in consideration of the same and shall be binding for a period of sixty days from date.”

This was duly executed by the Chaves County Building & Loan Association on the 14th day of October, 1933, and the court found: “That the plaintiff did not execute said instrument, mortgagee's consent to take bonds, through error, mistake, undue influence, duress or fraud.”

It appears that the property described in the mortgage consisted of two adjoining lots forming an L, and that there was a residence on the lot facing on Pennsylvania avenue and another building...