Hofheimer v. Booker

Decision Date13 June 1935
Citation164 Va. 358
PartiesHENRY CLAY HOFHEIMER v. LILLIAN B. BOOKER.
CourtVirginia Supreme Court

Present, Campbell, C.J., and Holt, Gregory, Browning and Chinn, JJ.

1. SURETYSHIP — Release of Surety — Extension of Time by Creditor without Surety's Consent. — If a creditor by positive contract with the principal debtor, for a valuable consideration, and without the consent of the surety, extends the time for payment of the debt for a definite period, the surety is thereby discharged.

2. MORTGAGES AND DEEDS OF TRUST — Assumption of Mortgage Debt by Purchaser — Grantee Becomes Principal Debtor and Personally Liable — Grantor Becomes Surety. — A grantee of mortgaged premises, who has purchased subject to a mortgage for which his grantor was primarily liable, and has assumed the payment of the mortgage debt as a part of the consideration, renders himself personally liable for the discharge of the debt, not only to the mortgagor but also directly to the mortgagee, on the ground that, as between the parties to the deed, the grantee thereby becomes the principal debtor for the mortgage debt, and the grantor is thenceforth merely a surety for the debt.

3. MORTGAGES AND DEEDS OF TRUST — Assumption of Mortgage Debt by Purchaser — Effect of Assumption by Successive Grantees. — Where there are successive grantees of mortgaged premises, each assuming payment of the mortgage debt, the mortgagee may hold either or all of the grantees for the debt.

4. MORTGAGES AND DEEDS OF TRUST — Assumption of Mortgage Debt by Purchaser — Grantee Becomes Primarily Liable and Grantor Liable Only as Surety — Case at Bar. — In the instant case defendant executed a deed of trust on certain real estate to secure unpaid purchase money evidenced by three notes. Defendant conveyed the property to a grantee who expressly assumed payment of the notes, and the latter in turn conveyed to a realty company which also expressly assumed payment of the indebtedness. The company paid interest on the notes and after obtaining an extension, paid one of them in full. Plaintiff also granted the company, without defendant's consent, an extension of six months in which to pay the last note, and payment not having been made, brought suit.

Held: That by the assumption by the realty company of the mortgage debt, it became primarily liable for the payment of the debt, and defendant only secondarily liable therefor, as surety.

5. MORTGAGES AND DEEDS OF TRUST — Assumption of Mortgage Debt by Purchaser — Grant of Extension of Time by Creditor without Surety's Consent — Evidence Showing Creditor's Assent to Grantor's Occupying Position of Surety Only — Case at Bar. — In the instant case defendant executed a deed of trust on certain real estate to secure unpaid purchase money evidenced by three notes. She subsequently conveyed the property to a grantee who expressly assumed payment of the notes, and the latter conveyed to a realty company who also expressly assumed payment of the indebtedness. Plaintiff, purchaser of two of the notes, forwarded interest notices before the expiration of each interest period to the realty company and the latter paid the interest. When the first note fell due, the company paid the interest, curtailed the note and asked for an extension of six months in which to pay the balance. The extension was granted and the balance was paid at the end of the period. When the last note became due an extension of six months was requested by the realty company and granted by plaintiff without defendant's consent. The note, not having been paid, suit was instituted. Plaintiff contended that in order for defendant to obtain relief as surety by reason of the extension, it was necessary for her to show that plaintiff knew the realty company assumed the debt and that he accepted it as principal debtor. The jury returned a verdict for defendant.

Held: That considering all the facts and circumstances, the jury was warranted in finding that plaintiff had knowledge that the defendant only occupied the position of surety with reference to the debt, and that he assented to that relation.

6. NOTICE — Proof of Notice. — Notice is a matter of fact, and is to be proved like all other facts, by direct proof of the fact itself, or by proof of circumstances from which the fact may be justly inferred.

7. MORTGAGES AND DEEDS OF TRUST — Assumption of Mortgage Debt by Purchaser — Extension of Time by Creditor as Releasing Grantor — Necessity that Extension Be for Definite Period — Case at Bar. — In the instant case defendant executed a deed of trust on certain real estate to secure unpaid purchase money evidenced by three notes. She subsequently conveyed the property to a grantee who expressly assumed payment of the notes, and the latter conveyed to a realty company which also expressly assumed payment of the indebtedness. Plaintiff, purchaser of two of the notes, forwarded interest notices, before the expiration of the respective interest periods, to the realty company which paid the interest and after being granted an extension, also paid the first of the two notes. When the last note became due the company requested an extension of six months in which to pay it, and plaintiff granted the extension without defendant's consent. The note not having been paid, suit was brought on it. Plaintiff contended that the extension was not binding on him so as to release the defendant, as surety, because without consideration. It was testified that the company agreed to pay interest during the period of the extension. The jury returned a verdict for defendant which the trial court refused to set aside.

Held: No error. If the extension is for a definite period, without the consent of the surety, with the promise to pay the contract rate of interest, such promise constitutes sufficient consideration to support the agreement, and the surety is discharged; the determining factor being that the extension must be for a definite and certain period of time.

8. MORTGAGES AND DEEDS OF TRUST — Assumption of Mortgage Debt by Purchaser — Extension of Time by Creditor without Grantor's Consent — Admissibility of Evidence as to Prior Extension — Case at Bar. — In the instant case defendant executed a deed of trust on certain real estate to secure unpaid purchase money evidenced by three notes. She subsequently conveyed the property to a grantee who expressly assumed payment of the notes, and the latter conveyed to a realty company which also expressly assumed payment of the indebtedness. Plaintiff, purchaser of two of the notes, forwarded interest notices, before the expiration of the respective interest periods, to the realty company which paid the interest, and after being granted an extension, also paid the first of the two notes. When the last note became due the company requested an extension of six months in which to pay it, and plaintiff granted the extension without defendant's consent. The note not having been paid, suit was brought on it and the jury returned a verdict for the defendant. The action of the trial court in permitting the questioning of the plaintiff by defendant's counsel in reference to the extension which was given on the first note, was assigned as error.

Held: That the evidence was properly admitted to show the plaintiff's course of dealing with the realty company in regard to the mortgage debt.

9. MORTGAGES AND DEEDS OF TRUST — Assumption of Mortgage Debt by Purchaser — Extension of Time by Creditor without Grantor's Consent — Harmless Error in Admission of Evidence — Case at Bar. — In the instant case defendant executed a deed of trust on certain real estate to secure unpaid purchase money evidenced by three notes. She subsequently conveyed the property to a grantee who expressly assumed payment of the notes, and the latter conveyed to a realty company which also expressly assumed payment of the indebtedness. Plaintiff, purchaser of two of the notes, forwarded interest notices, before the expiration of the respective interest periods, to the realty company which paid the interest, and after being granted an extension, also paid the first of the two notes. When the last note became due the company requested an extension of six months in which to pay it, and plaintiff granted the extension without defendant's consent. The note, not having been paid, suit was brought on it and the jury returned a verdict for the defendant. It was assigned as error that the trial court overruled plaintiff's objection to a question propounded to the attorney for defendant's immediate grantee to show that he advised her that the statute of limitations would be a defense to her under her contract to assume the mortgage debt, and to a question propounded to defendant by the court as to the financial responsibility of this first grantee.

Held: That while the evidence might be termed irrelevant, if error at all, it was not such prejudicial error as to justify reversal.

Error to a judgment of the Circuit Court of Princess Anne county in a proceeding by motion for a judgment for money. Judgment for defendant. Plaintiff assigns error.

The opinion states the case.

Alan J. Hofheimer and James E. Heath, for the plaintiff in error.

W. R. Ashburn, for the defendant in error.

CHINN, J., delivered the opinion of the court.

On the 30th day of July, 1925, Lillian B. Booker, the defendant below, executed a deed of trust on certain real estate at Virginia Beach, Virginia, to A. J. Clay, trustee, to secure to the Virginia Beach Holding Corporation unpaid purchase money for said property, evidenced by her three negotiable notes of even date for $1,600 each, numbered 1, 2, and 3, and payable July 30, 1926, July 30, 1927, and July 30, 1928, respectively, with interest from date, payable semi-annually.

On September 8, 1925, Lillian B. Booker conveyed said property encumbered with the aforesaid deed of trust to Margaret G. Woods, who, according to the express terms of the...

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12 cases
  • In re Bay Vista of Virginia, Inc., Case No. 07-71213-SCS (Bankr. E.D.Va. 2/2/2009)
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — Eastern District of Virginia
    • February 2, 2009
    ...enriched." Lamont, 2004 WL 836018, at *2. The court concluded the action was not barred, stating: Both parties relied upon Hofheimer v. Booker, 164 Va. 358 (1935), in which the Virginia Supreme Court addressed the relationship between a mortgagee and the purchaser of the mortgaged property,......
  • Fid. & Cas. Co. Of N.Y. v. Lackland
    • United States
    • Virginia Supreme Court
    • April 8, 1940
    ...241; Wells v. Hughes' Ex'r, 89 Va. 543, 549, 550, 16 S.E. 689; Livermon v. Floyd 155 Va. 940, 950, 157 S.E. 146; Hofheimer v. Booker, 164 Va. 358, 367, 180 S.E. 145, 148; Williston on Contracts, Rev.Ed, Vol. IV, § 1222, p. 3513, § 1226, p. 3520. The Surety Company next complains of the acti......
  • Yoder v. Commonwealth
    • United States
    • Virginia Supreme Court
    • December 12, 2019
    ...by direct proof of the fact itself, or by proof of circumstances from which the fact may be justly inferred. Hofheimer v. Booker , 164 Va. 358, 365-66, 180 S.E. 145 (1935) (citation omitted). The Court of Appeals correctly found the evidence sufficient to conclude that Yoder had had actual ......
  • Fidelity & Casualty Co. v. Lackland
    • United States
    • Virginia Supreme Court
    • April 8, 1940
    ...7 S.E. 241; Wells Hughes' Ex'r, 89 Va. 543, 549, 550, 16 S.E. 689; Livermon Floyd, 155 Va. 940, 950, 157 S.E. 146; Hofheimer Booker, 164 Va. 358, 367, 180 S.E. 145, 148; Williston on Contracts, Rev. Ed., Vol. IV, section 1222, p. 3513, section 1226, p. The Surety Company next complains of t......
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