Holcomb v. Webley
| Decision Date | 22 April 1946 |
| Docket Number | Record No. 3023. |
| Citation | 185 Va. 150 |
| Court | Virginia Supreme Court |
| Parties | C. E. HOLCOMB v. F. H. WEBLEY AND CELIA WEBLEY. |
1. MORTGAGES AND DEEDS OF TRUST — Sale — Constructive Notice — Case at Bar. — In the instant case, an action on a covenant in a deed of trust to recover the difference between the amount due under notes payable in installments and secured by the deed of trust and the net amount realized from a sale of the property, the trustee advertised and sold the property for cash, contrary to the express terms of the deed of trust, but defendants expressed no objection or opposition to the sale.
Held: That defendants were charged with constructive notice, at least, of the sale and of its terms.
2. MORTGAGES AND DEEDS OF TRUST — Sale — Estoppel of Note Holder and Purchaser to Object to Sale Contrary to Terms of Deed — Case at Bar. — In the instant case, an action on a covenant in a deed of trust to recover the difference between the amount due under notes payable in installments and secured by the deed of trust and the net amount realized from a sale of the property, the trustee advertised and sold the property for cash, contrary to the express terms of the deed of trust, but defendants expressed no objection or opposition to the sale. Plaintiff purchased the property, paying with the purchase money one note which was in default and applied the residue of the purchase price to notes which were not then due.
Held: That plaintiff was in no position to object to the sale having been made in violation of the terms of the deed of trust, since the trustee was his agent as well as the agent of the defendants in executing the sale, and it did not lie in plaintiff's mouth to say that the trustee exceeded his authority because plaintiff himself bought the property at the sale for cash and applied the major portion of the purchase money to notes not then due.
3. BILLS, NOTES AND CHECKS — Acceleration — Limited to Grounds Set Forth in Instrument. — When a debt is payable in installments, in the absence of a provision for the acceleration of the time of payment upon default in the payment of any note at its maturity, the notes are payable as they are written, and the time of payment is not accelerated by the happening of other events not specifically agreed upon. The right to accelerate maturity is limited to the grounds therefor set forth in the instrument.
4. MORTGAGES AND DEEDS OF TRUST — Acceleration of Time of Payment — By Sale and Application of Proceeds to Unmatured Portion of Debt. — In the absence of a provision to that effect in either the notes or in the mortgage or deed of trust, a foreclosure sale precipitated by a default in the payment of a part of the indebtedness, and the application of the proceeds, in part, to the unmatured portion of the debt, do not ipso facto accelerate the time of payment of the balance of the debt.
5. MORTGAGES AND DEEDS OF TRUST — Acceleration of Time of Payment — By Foreclosure. — To say that the foreclosure of a mortgage or deed of trust accelerates the maturity of the debt, in the absence of a provision to that effect, is to write a new contract for the parties.
6. MORTGAGES AND DEEDS OF TRUST — Sale — Sale for Cash Contrary to Terms of Deed — Maturity of Debt Not Affected by Acquiescence of Parties in Sale — Case at Bar. — In the instant case, an action on a covenant in a deed of trust to recover the difference between the amount due under notes payable in installments and secured by the deed of trust and the net amount realized from a sale of the property, the trustee advertised and sold the property for cash, contrary to the express terms of the deed of trust, but defendants expressed no objection or opposition to the sale. Plaintiff purchased the property, paying with the purchase money one note which was in default and applied the residue of the purchase price to notes which were not then due. The trial court held that the foreclosure of the deed of trust and the application of the proceeds to the unmatured notes accelerated the time of payment of all the notes and that plaintiff's right to sue on the sealed covenant in the deed became barred ten years after the date of the foreclosure sale.
Held: That the acquiescence of both the debtor and the creditor in the sale of the property on different terms than those contained in the deed of trust merely validated the sale but did not affect the maturity of the debt, for the reason that the contract between the parties did not so provide.
7. MORTGAGES AND DEEDS OF TRUST — Sale — Sale for Cash Contrary to Terms of Deed — Effect of Acceptance of Proceeds by Creditor — Case at Bar. — In the instant case, an action on a covenant in a deed of trust to recover the difference between the amount due under notes payable in installments and secured by the deed of trust and the net amount realized from a sale of the property, the trustee advertised and sold the property for cash, contrary to the express terms of the deed of trust, but defendants expressed no objection or opposition to the sale. Plaintiff purchased the property, paying with the purchase money one note which was in default and applied the residue of the purchase price to notes which were not then due. The trial court held that the foreclosure of the deed of trust and the application of the proceeds to the unmatured notes accelerated the time of payment of all the notes and that plaintiff's right to sue on the sealed covenant in the deed became barred ten years after the date of the foreclosure sale.
Held: That the acceptance by the creditor of the proceeds of the sale did not affect the maturity of the debt in the absence of a provision in the contract to that effect, but was nothing more than the acceptance by the creditor of the net sum paid to him by the trustee as a credit on the debt.
8. PAYMENT — Effect — Date of Maturity Not Accelerated by Part Payment of Unmatured Debt. — The acceptance of a part payment of a debt not due does not accelerate the date of maturity and require the debtor to pay the balance immediately.
9. MORTGAGES AND DEEDS OF TRUST — Enforcement — Action on Covenant in Deed for Deficiency — Limitation of Actions — Case at Bar. — In the instant case, an action on a covenant in a deed of trust to recover the difference between the amount due under notes payable in installments and secured by the deed of trust and the net amount realized from a sale of the property, the trustee advertised and sold the property for cash, contrary to the express terms of the deed of trust, but defendants expressed no objection or opposition to the sale. Plaintiff purchased the property, paying with the purchase money one note which was in default and applied the residue of the purchase price to notes which were not then due. The trial court held that the foreclosure of the deed of trust and the application of the proceeds to the unmatured notes accelerated the time of payment of all the notes and that plaintiff's right to sue on the sealed covenant in the deed became barred ten years after the date of the foreclosure sale.
Held: That, notwithstanding the foreclosure sale, the notes still matured and fell due according to their terms, and an action on the covenant in the deed of trust, which was under seal, was not barred by the statute of limitations for the reason that the debt had not fully matured ten years before the institution of the suit, since the last five notes matured within that period.
10. MORTGAGES AND DEEDS OF TRUST — Enforcement — Action on Covenant after Statute of Limitations Has Run on Personal Obligation. — Where a mortgage contains a personal covenant for the payment of the debt, and the statute of limitations applicable to instruments under seal (such as a covenant) has not yet run, a deficiency or personal judgment may be recovered against the mortgagor under the covenant in a foreclosure action or in an action directly on the covenant, although the personal obligation secured by the mortgage is barred by the statute of limitation.
11. MORTGAGES AND DEEDS OF TRUST — Enforcement — Action on Covenant in Deed for Deficiency — Right of Holder of Notes to Sue — Case at Bar. — In the instant case, an action on a covenant in a deed of trust to recover the difference between the amount due under notes payable in installments and secured by the deed of trust and the net amount realized from a sale of the property, defendants, grantors in the deed of trust, contended that there was no privity of contract between them and plaintiff, holder, for value, of the notes secured by the deed of trust.
Held: That there was no merit in this contention, since the covenant in the deed of trust to pay the debt was for the benefit of the holder of the notes secured, and the right to sue thereon came squarely within the provisions of section 5143 of the Code of 1942.
Error to a judgment of the Circuit Court of Arlington county. Hon. Walter T. McCarthy, judge presiding.
The opinion states the case.
Thomas J. Surface, George W. Chaney and J. Foster Hagan, for the plaintiff in error.
Robert A. Ryland, for the defendants in error.
C. E. Holcomb brought his action at law by notice of motion for judgment against F. H. Webley and Celia Webley for $7,334.28, with interest and costs. The trial court sustained a plea of the statute of limitation to the action and dismissed it.
The case was heard and decided solely upon the motion for judgment and the plea of the statute of limitation. No evidence was heard touching the various issues raised in the grounds of defense or that might have...
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