Home Owners Loan Corp. v. Reese

• Decision Date: 28 April 1938
• Citation: 196 S.E. 625
• Parties: HOME OWNERS LOAN CORPORATION. v. REESE.
• Court: Virginia Supreme Court

196 S.E. 625

HOME OWNERS LOAN CORPORATION.

v.REESE.

Supreme Court of Appeals of Virginia.

April 28, 1938.

Error to Law and Equity Court of City of Norfolk; Richard McIlwaine, Judge.

Action by notice of motion for judgment by the Home Owners Loan Corporation against Warren R. Reese, to recover balance due on note secured by deed of trust. To review a judgment granting insufficient relief, plaintiff brings error.

Affirmed.

Argued before CAMPBELL, C. J., and HOLT, HUDGINS, GREGORY, EGGLESTON, and SPRATLEY, JJ.

William Wight Venable, of Norfolk, Kenneth C. Patty, of Lynchburg, and Henry J. Lankford, of Norfolk, for plaintiff in error.

SPRATLEY, Justice.

On March 14, 1934, the Home Owners Loan Corporation, hereinafter referred to as the plaintiff, granted a loan of $3,522.-40 to Hazel E. Porter and Ryland M. Porter, her husband. The loan was evidenced by a negotiable, promissory note of even date therewith, made by the borrowers. It was secured by a deed of trust on real property, duly recorded. Both the note and the deed of trust waived the benefit of the homestead exemptions of the makers as to the said indebtedness.

On January 30, 1935, the Porters conveyed the same property by a deed of bargain and sale to the defendant, Warren R. Reese, its terms reciting the assumption of the deed of trust by the grantee, as a part of the consideration. In addition, the deed contained the following clause: "The party of the second part expressly assumes payment of the indebtedness secured by a certain deed of trust from Hazel E. Porter and husband, to Francis B. Watson and Tom E. Gillman, trustees, dated March 14, 1934, securing a loan of $3,522.40 made by the Home Owners Loan Corporation."

The defendant evidenced the assumption by executing and joining in the deed of bargain and sale to him.

Default being made in the payment of the loan, the property was foreclosed on October 1, 1936. The proceeds of the sale were credited to the note, leaving an unpaid balance or deficiency amounting to some $1,500, plus attorney's fees.

An action by notice of motion was brought by the plaintiff against the defendant to recover the balance due, as evidenced by the aforesaid note of the Porters. The defendant admitted assumption of the above indebtedness, and that the said balance was justly due by him, but denied that he waived his homestead exemption as to same.

The trial judge heard the case without a jury, and entered judgment against the defendant for the amount of the indebtedness, but refused to enter the judgment as one against which the homestead could not be claimed.

The sole assignment of error is to the action of the trial court in refusing to hold that the homestead exemption was waived as to the obligation of Reese.

The plaintiff contends that Reese by assuming the indebtedness of the Porters stepped into the shoes of the Porters, and assumed their obligation in every respect. But did Reese, by the language of the writing contained in the deed of bargain and sale to him, waive his homestead exemption?

The answer is contained in Virginia Code 1936, § 6548. This section provides how the waiver may be made, the form and the effect thereof, in the following language:

"If any person shall declare in a bond, bill, note, or other instrument, by which he is or may become liable for the payment of money to another, or by a writing thereon or annexed thereto, that he waives, as to such obligation, the exemption from liability of the property or estate which he may be entitled to claim and hold exempt under the provisions of this chapter, the said property or estate, whether previously set apart or not, shall be liable to be subjected for said obligation. * * * If a debt which is superior to the homestead, or as to which the homestead is waived, be paid off by a surety therein, the principal shall not be allowed to claim the homestead as against such surety."

The waiver must be in writing. It must be expressed in the bond, bill, note, or other instrument for the payment of money to another, or in a writing thereon or annexed thereto. It must be the decla ration of the one sought to be bound that he waives his exemption as to the obligation contained in the writing for the payment of the money. Long v. Pence's...