Munger v. Boardman
| Decision Date | 27 March 1939 |
| Docket Number | Civil 4041 |
| Citation | 53 Ariz. 271,88 P.2d 536 |
| Parties | EDNA A. MUNGER and CHARLES P. MUNGER, Her Husband, Appellants, v. ELEANOR B. BOARDMAN, a Widow, Appellee |
| Court | Arizona Supreme Court |
APPEAL from a judgment of the Superior Court of the County of Maricopa. E. G. Frazier, Judge. Judgment affirmed.
Mr Stephen B. Rayburn, for Appellants.
Messrs Marks & Marks, for Appellee.
Plaintiff Eleanor B. Boardman, a widow, on February 10, 1938, filed this action against the defendants Edna A. Munger and Charles P. Munger, her husband, to foreclose a realty mortgage. The court granted plaintiff's prayer and entered a decree foreclosing the mortgage. Defendants have appealed.
The facts, as they appear from the pleadings and competent evidence, are as follows: On January 28, 1925, Frank Deiter and Mary Deiter, husband and wife, were the owners of Lot 21 in Wise Addition to Phoenix, Arizona, and on that date they made, executed and delivered a mortgage on said lot to Blanche Burnett to secure their note to her for $1,000, due January 28, 1928, and drawing interest at 8 per cent. payable semi-annually. Thereafter, on the same date, the defendant Edna A. Munger took a deed in her name to said lot subject to the Burnett mortgage, and paid the purchase price with the funds of the community, consisting of herself and her husband Charles P. Munger, also a defendant.
On January 28, 1928, the date the note and mortgage became due Blanche Burnett, the mortgagee, entered into an agreement in writing, duly acknowledged, with Edna A. Munger "to extend the time of the payment thereof up to and until the 28th day of January, 1934," and in such agreement it is recited:
"Now, therefore, in consideration of such extension, the said Edna P. Munger, assignee of said Frank Deiter and Mary Deiter, agrees to pay said promissory note, with the specified rate of interest thereon, upon the said mortgage, on 28th day of January, 1934, and if paid before said date that will pay to said Blanche A. Burnett 30 days advance interest or give 30 days notice."
Defendants' answer admits the execution of this agreement but claims that the extension was to run until the 28th day of January, 1931, and not to 1934. Defendant Edna A. Munger, as alleged in the answer, "in behalf of the community," thereafter paid delinquent taxes on the lot for the years 1933, 1934 and 1935. In 1934, at the request of said Edna, the interest rate was reduced from 8 per cent. to 6 per cent. and she, "in behalf of the community," paid the interest up to July 28, 1934, amounting to $120, and each six months thereafter paid the interest at 6 per cent. to July 28, 1937.
In the mortgage it was provided the mortgagors should keep the building on the said lot insured in favor of the mortgagee in the amount of the mortgage, which was $1,000. On February 1, 1934, Edna A. Munger procured an insurance policy from the Milwaukee Mechanics' Insurance Company, Milwaukee, Wisconsin, for $1,000 in her favor on the mortgaged property, for three years, and caused to be attached thereto as a rider a mortgagee clause to the effect that the loss or damage, if any, should be paid to the "Blanche Burnett Estate... as interest may appear," thus recognizing the lien of the mortgage. There were attached to the policy riders as follows: One dated November 22, 1934, at Phoenix, Arizona, which provided:
Another dated July 30, 1936, at Phoenix, Arizona, which provided:
On February 1, 1937, Edna A. Munger procured from the same insurance company a policy on the same property, running to her. This policy was for three years from its date, or until February 1, 1940, and in the sum of $1,000. To it also was attached a mortgagee clause providing that loss or damage, if any, should be payable to "Eleanor B. Boardman, a widow,... as interest may appear," again recognizing the mortgage lien.
Edna A. Munger during all the time was engaged in the real estate business and was acting as an insurance agent under the trade name of Munger Investment Company, and in her trade name countersigned the said insurance policies and riders.
Under these facts plaintiff, who succeeded to the ownership of the note and mortgage given to Blanche Burnett, claimed at the trial that the mortgaged property was the separate property of defendant Edna A. Munger, and defendants claimed that it was community property. Defendants in that connection interposed the six-year statute of limitations against plaintiff's cause of action. Section 2062, Rev. Code 1928. The Deiters were not made parties.
The court concluded that the property was the separate property of Edna A. Munger and held the mortgage lien was not barred, foreclosed the mortgage and directed that the property be sold to satisfy the debt secured. The court thus adopted plaintiff's theory of the case.
Defendants on this appeal really raise but two questions for the court's consideration. They are whether the mortgaged property belonged to the community or to Edna A. Munger as her separate property, and whether the mortgage lien was barred. It is clear to our minds that the defendants' theory as to the character of the property is correct and that it belongs to the community. Both the defendants testified that it was paid for out of the community assets, and there is no testimony to the contrary. It appears in defendants' answer that Edna A. Munger, in purchasing and otherwise handling and looking after the property, was the agent of the community. We conclude therefore that the trial court was in error in holding the property belonged to Edna A. Munger as her separate property.
Notwithstanding, the judgment for plaintiff was correct, in that it reached the right result.
The defendants, acting by and through their agent, bought the lot subject to the mortgage. They did not, in terms, at the time agree to pay the mortgage, but they knew that unless they paid it the mortgagee, or her assigns, could foreclose and sell the property, and that they would have to redeem or lose the property and whatever they had paid thereon. It is certain that the face of the mortgage was deducted from the purchase price, and that what was paid the Deiters was $1,000 less than the price of the property. In other words, if the property had been clear, the Deiters' price would have been, in addition to what defendants paid, the face of the mortgage. This is recognized by defendants in asking for a reduction of interest from 8 per cent. to 6 per cent., and in paying the interest, and in insuring the mortgage debt against loss by reason of the property's destruction or damage by fire, and finally in asking the owner or owners of the mortgage not to foreclose it when due, and in procuring from such owner or owners an agreement not to sue on the promise of Edna A. Munger to pay the Burnett note and mortgage.
It will not do for defendant Charles P. Munger to say he did not participate in the negotiations concerning the property. His wife was his or the community's agent in buying the property and in every step thereafter, and all her acts and admissions and representations and agreements were the acts, admissions, representations and agreements of the community.
Under the law, neither spouse may encumber, by mortgage or lease or otherwise, or sell or dispose of community realty without the consent of the other. It is necessary that they join in any such transaction affecting realty of the community. Defendant seems to be laboring under the belief that the agent of the community (Edna A. Munger), in seeking and securing from the owners of the mortgage an extension of time for foreclosing it, thereby encumbered the property. This is not so in fact or in law. She gave no mortgage. She placed no encumbrance upon the property. The mortgage was on the property when the community bought it, and all the community did was to ask for time in which to pay the obligation and it was granted to them upon the condition that they assume the payment of the note and mortgage.
If there ever was a plainer case of estoppel, it is difficult to imagine it, and such estoppel appears from the admitted facts pleaded. It might be suggested that plaintiff did not plead estoppel. The fact is that the word "estoppel" does not appear anywhere in the pleadings or the briefs, but it is so obviously in the case that it cannot be ignored. In Insurance Company of North America v. Williams, 42 Ariz. 331, 338, 26 P.2d 117, 120, this court said:
"...
This in a nutshell, is the case we have here. Estoppel was not mentioned or argued by either of the parties in his brief and there is a very good reason for it. If, as plaintiff contended and as the court decided, the property was Edna A. Munger's separate property,...
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