First Nat. Bank v. Mapson

• Decision Date: 22 March 1935
• Docket Number: 25420.
• Citation: 42 P.2d 782,181 Wash. 196
• Parties: FIRST NAT. BANK OF SEATTLE v. MAPSON et ux.
• Court: Washington Supreme Court

42 P.2d 782

181 Wash. 196

FIRST NAT. BANK OF SEATTLE v. MAPSON et ux.

No. 25420.

Supreme Court of Washington

March 22, 1935

Department 2.

Appeal from Superior Court, King County; John A. Frater, Judge.

Action by the First National Bank of Seattle, a national banking corporation, as trustee for Winifred T. Watson, against A. T Mapson and wife. From a judgment for plaintiff, defendants appeal.

Affirmed.

Carkeek McDonald & Harris, Dore, Beeler & Haven, and Hayden, Merritt Summers & Bucey, all of Seattle, for appellants.

Douglas D. Mote, of Seattle, for respondent.

STEINERT Justice.

This is an action to recover the unpaid purchase price of a real estate contract and to have the contract foreclosed as a purchase-money mortgage. The court, after trial, made findings of fact and conclusions of law, and thereupon entered judgment and decree awarding to plaintiff recovery against defendants in the amount of the unpaid purchase price, establishing the real estate contract as a purchase-money mortgage, foreclosing the same as such, subject only to the right of redemption by defendants, but without right of possession or homestead to defendants during the period of redemption, and awarding plaintiff judgment for any deficiency remaining after sale of the property. The defendants have appealed.

The statement of facts filed in the record is in abridged form and affords but little light as to the evidence except so much as is documentary. Looking, then, to the findings as made by the court, and to the exhibits, the facts are as follows: On April 1, 1927, Swale-Carpenter Construction Company and the appellants entered into a real estate contract, by the terms of which the former agreed to sell, and the latter agreed to purchase, certain residence property in the city of Seattle for the sum of $4,750. The purchasers made a down payment of $500, assumed and agreed to pay an outstanding mortgage of $2,500, and further agreed to pay the remainder of the purchase price, amounting to $1,750, in monthly installments of $45, inclusive of interest on the mortgage and on the remaining unpaid purchase price, and also all taxes and assessments Before delinquency. The contract provided that time was the essence thereof, and that, upon the failure of the purchasers to make any payment due on the purchase price, the vendors might elect to rescind the contract, terminate the rights of the purchasers thereunder, and retain all sums paid, as liquidated damages. The contract did not, however, contain any acceleration clause. The appellants immediately went into possession of the property.

On the day following the execution of the contract, the vendor, Swale-Carpenter Construction Company, conveyed the property by warranty deed to F. M. Watson, and at the same time assigned to him its interest in the contract.

On September 4, 1929, the mortgage became due, and, in order to pay off and satisfy the mortgage and also to pay certain taxes and assessments, the appellants borrowed of Washington Mutual Savings Bank the sum of $2,750, evidenced by their note, and secured by a mortgage on the property. F. M. Watson and Winifred T. Watson, his wife, joined in the mortgage, but not in the note. The mortgage recited that the Watsons were joining therein solely for the purpose of subjecting their interest in the property to the lien of the new mortgage, but with the express understanding that they were not to be personally liable for the payment of the mortgage debt. During all of this time the appellants continued in possession of the property.

In September, 1931, appellants declared a homestead on the property. At about the same time they had become delinquent on their payments on the mortgage to Washington Mutual Savings Bank. The bank thereupon declared the whole amount due and payable and instituted foreclosure proceedings which went to judgment, by default, on July 6, 1932. The foreclosure action was brought and occasioned, as the court found, solely by reason of appellants' failure to keep the mortgage in good standing. The property was sold at sheriff's sale on September 3, 1932, and bid in by the mortgagee, Washington Mutual Savings Bank, for the amount of its judgment. On September 24, 1933, after the year of redemption had expired, the sheriff executed a deed to the bank. During all of this time appellants continued in possession of the property.

In the meantime, that is, during the year 1931, F. M. Watson deeded all his property to his wife, Winifred T. Watson, who, in the latter part of that year, executed a trust deed of the property here involved to the respondent in this action.

For some months prior to the commencement of the foreclosure action by Washington Mutual Savings Bank, appellants had quit paying on the real estate contract and have paid nothing thereon since, although they have at all times been in possession of the property.

In February, 1934, appellants, being still in possession of the property, arranged to procure a loan from Home Owners Loan Corporation in an amount sufficient to pay off the Washington Mutual Savings Bank which then held a deed to the property. To complete that arrangement, Washington Mutual Savings Bank executed a quitclaim deed to the property to appellants, who, in turn, executed a mortgage to Home Owners' Loan Corporation. As a condition to the loan, however, the loan corporation required the respondent to execute a written stipulation to the effect that its mortgage should be a first lien on the property. This was done, as the court found, because of the unpaid purchase price owing under the real estate contract. The court also found that during all of the times that we have mentioned appellants remained in possession of the property under and by virtue of the contract.

From this statement, the following brief résumé may be made: Appellants purchased the property agreeing to assume and pay the mortgage thereon and all taxes and assessments. Solely by reason of their failure to make the payments, the mortgage was foreclosed and the property sold at sheriff's sale, at which the mortgagee became the purchaser. During all of the time from April 2, 1927, when appellants first went into possession, down to the present, which period includes the time antedating the foreclosure, the year of redemption thereafter, and all times since, the appellants have been, and now are, in possession of the property. After the foreclosure of the mortgage and the sale of the property, the appellants took, and now have, title thereto, but since about April, 1931, have failed and refused to pay anything on the real estate contract.

As has already been stated, the present action was brought by respondent to recover the unpaid amount of the contract and to have the contract foreclosed as a purchase-money mortgage. Appellants' answer to the complaint consisted of admissions and denials, and an affirmative defense asserting that all right, title, and interest of the respondent in the property had been foreclosed in the action brought by Washington Mutual Savings Bank. After judgment had been obtained in the present action, the property was sold and was bid in by respondent for less than its judgment. The sale having been confirmed, without objection, respondent petitioned for a writ of assistance, which was resisted. In the meantime, this appeal was taken and a supersedeas bond posted.

By their assignments of error, appellants present a number of questions for decision. We shall take them up in what we consider is their natural order.

Appellants first contend that the court erred in entering judgment for respondent. This contention is based upon four grounds: (1) That respondent did not allege or prove demand prior to the commencement of its action; (2) that respondent did not allege or prove tender of a deed Before the commencement of its action; (3) that respondent's right, title, and interest in and to the property had been extinguished by the prior mortgage foreclosure; and (4) that respondent, having pursued a remedy which was not available to it, was not entitled to recover.

Upon the first ground of this contention appellants argue that respondent permitted appellants to be in default of their payments for almost three years, and that, therefore, demand was necessary Before commencing action. The facts do not justify this contention. This action is not one to forfeit or rescind the contract, but one to...