Gould v. Gould

• Decision Date: 14 December 1917
• Docket Number: 14085.
• Citation: 99 Wash. 204,169 P. 324
• Parties: GOULD v. GOULD et al.
• Court: Washington Supreme Court

169 P. 324

99 Wash. 204

GOULD v. GOULD et al.

No. 14085.

Supreme Court of Washington

December 14, 1917

Department 2. Appeal from Superior Court, King County; A. W. Frater Judge.

Action by Kate Gould against Olga H. Gould and others. Judgment for plaintiff, and Olga H. Gould appeals. Affirmed.

Shorett McLaren & Shorett, of Seattle, for appellant.

Kerr &amp McCord and J. P. Wall, all of Seattle, for respondent.

MOUNT J.

This action was brought to foreclose a mortgage for $900, purporting to be executed by the appellant and her husband, H. M. Gould, in June, 1912. The complaint is the usual form in such cases. The defendant H. M. Gould and his wife, the appellant, answered the complaint, denying that they had executed the note and mortgage sued upon, and, as an affirmative defense, alleged that the note had been raised from $750 to $900 after the execution thereof, and prayed that the mortgage be canceled as constituting a cloud upon their title to the lot covered by the mortgage. At the trial of the case the defendants were permitted to amend their answer, alleging a further alteration in the note without their consent, wherein it was changed so as to read 'interest from date,' instead of 'interest from maturity.' Plaintiff, for reply, denied all the allegations of the affirmative defense. Upon the trial the court found, among other things, that the note and mortgage had been altered from $750 to $900 by strangers to the instruments without the consent of the parties thereto, and that the word 'maturity' in the note was changed to 'date' by direction of the defendant H. M. Gould. The court also found that payments amounting to $185 were payments of interest, and were made by the defendant H. M. Gould, and that the mortgaged property was since November 22, 1911, the separate property of Mrs. Olga H. Gould, the wife of H. M. Gould, and entered judgment against the appellant and her husband, H. M. Gould, for $750, with interest from June 4, 1915, which was the date of maturity of the note, with an additional judgment against the defendant H. M. Gould for three years' interest, amounting to $180. The effect of the judgment was that the interest was absorbed by the excess judgment against the husband, except $5, which was credited to the principal.

The facts, as disclosed by the record, are, in substance, as follows: The respondent, Kate Gould, and W. H. Gould, are husband and wife. Olga H. Gould and H. M. Gould are also husband and wife, and H. M. Gould is the son of W. H. Gould. In 1910 W. H. Gould sold to his son, H. M. Gould, the lot in question for a consideration of $900, and took a note and mortgage from the son and his wife, Olga, for that sum. This note and mortgage were dated April 27, 1910, and by its terms the note drew interest at the rate of 8 per cent. per annum. It was payable to W. H. Gould. This note and mortgage represented the full purchase price of the lot. The mortgage was made a second mortgage upon the lot so as to permit the son to put a first mortgage upon the property in order to build a dwelling house thereon. The note and the mortgage were assigned by W. H. Gould to his wife, Kate Gould. The first mortgage, which was placed upon the lot to build the dwelling house, became due about April 27, 1912, and H. M. Gould requested his father to take a new second mortgage so as to prevent foreclosure of the first mortgage. The respondent, Kate Gould, who was then the holder of the note and mortgage, consented to this arrangement. H. M. Gould thereupon had his attorney prepare a new note and mortgage, which were evidently prepared in the sum of $750, with interest after maturity. The respondent, Kate Gould, executed this new note and mortgage before her husband, and was not present when her husband signed the instruments. About the time of the execution of this note and mortgage H. M. Gould stated to his father that the instruments were for $750, because he had paid $150 thereon. It was claimed by H. M. Gould that his father had promised that he would not exact interest upon the original note, and he for that reason had the new note and mortgage drawn for $750, with interest from maturity. His father testified that, when told of that fact, he objected, and told his son that the new note must be for $900, with interest from date. After this time the note and mortgage were changed by some one from $750 to $900, with interest from date. They were given to the First Mortgage & Savings Bank of Seattle, the holder of the prior lien upon the property, were recorded by that bank, and returned through the mails to the respondent, Kate Gould. She did not know of the change in the amount, or of the change in the time from which the interest began to run, until the trial of the case. She supposed that the new note and mortgage were to take the place of the old ones for the same amount and at the same rate of interest. She contended at the trial that the payments made upon the original note were interest payments, and did not apply to the principal.

Three contentions are made by the appellant, as follows: First, that the alteration of the instruments precludes any recovery upon the note and mortgage; second, that there is a fatal variance between the respondent's pleadings and the findings of the court; third, that if any recovery can be had, the appellant is entitled to a credit of $185 on the principal.

The appellant, for her first contention, relies upon the principle that, where a negotiable instrument is materially altered without the assent of all the parties, it is avoided. This is no doubt the general rule, but the court, in this case, while it found that there had been an alteration of the note and mortgage sued upon, found also that the alteration was made by a stranger to the instruments; that the respondent, Kate Gould, who is the owner and holder of the note...