Page v. Hinchee

• Decision Date: 12 November 1935
• Docket Number: 26265.
• Citation: 51 P.2d 487,174 Okla. 537,1935 OK 1113
• Parties: PAGE v. HINCHEE.
• Court: Oklahoma Supreme Court

51 P.2d 487

174 Okla. 537, 1935 OK 1113

PAGE v. HINCHEE.

No. 26265.

Supreme Court of Oklahoma

November 12, 1935

Syllabus by the Court.

1. Where a grantor conveys real property upon which there is an existing mortgage debt for which the grantor is personally liable and the grantee agrees to assume and pay the mortgage the mortgagee may, by proper action, enforce the assumption agreement against the grantee.

2. The right of a mortgagee in such case is an equitable right to reach and subject to the payment of the mortgage the additional or collateral security taken by the grantor from the grantee for the grantor's own protection, and must be asserted by an equitable action.

3. Where, however, the grantor is not personally liable for the mortgage debt, the mortgagee cannot enforce such agreement against the grantee unless it affirmatively appears from the evidence that the assumption clause was inserted expressly for the benefit of the mortgagee, within the meaning of section 9409, O. S. 1931.

4. In a suit by a mortgagee to enforce against a grantee an assumption clause appearing in the grantee's deed, it is always competent for the grantee to deny the validity of the assumption clause and to prove by parol evidence the actual contract between himself and his grantor, unless estopped to do so by his own conduct.

5. Under the facts disclosed by the record, the plaintiff in error is not estopped to deny the validity of the assumption clause contained in the deed to her, or to prove the actual contract between herself and her grantor, and that the assumption clause was inserted in the deed by mistake, the essential elements of estoppel being absent.

6. The assumption clause having been inserted in the deed to the plaintiff in error by mistake and contrary to the intention of the parties thereto, it was competent for the plaintiff in error and her grantors, by subsequent deed, to correct the mistake and nullify the assumption clause at any time before the trial.

7. The judgment of the trial court is against the clear weight of the evidence and contrary to law.

Appeal from District Court, Oklahoma County; Sam Hooker, Judge.

Action by G. W. Hinchee against Minnie Page and others, wherein Hattie E. Hinchee was substituted as plaintiff. From a judgment for plaintiff, named defendant appeals.

Reversed and remanded, with directions.

William J. Crowe and Twyford & Smith, all of Oklahoma City, for plaintiff in error.

C. J Brown and Leo G. Mann, both of Oklahoma City, for defendant in error.

PER CURIAM.

This action was instituted by G. W. Hinchee in the district court of Oklahoma county on July 7, 1932, against K. B. Clarendon Alice Clarendon, Minnie Page, and Connelly Bros., Inc. seeking a personal judgment against the Clarendons on two notes aggregating $3,750, made by the Clarendons to Hinchee on June 2, 1930, and foreclosure of a mortgage on certain real property in Oklahoma City, given to secure the payment of said notes, and also a personal judgment against Minnie Page for the amount of said notes on a mortgage assumption clause contained in a general warranty deed from the Clarendons to her, recorded October 2, 1930, and a personal judgment against Connelly Bros., Inc., for the amount of said notes on a mortgage assumption clause contained in a general warranty deed made by Minnie Page to it December 19, 1930. Service of summons was had on Connelly Bros. July 10, 1932, and on Minnie Page September 16, 1932. The Clarendons were never personally served, but service on them was had by publication. Connelly Bros. Inc., answered by general denial and Minnie Page filed a verified answer, subsequently amended, whereby she denied generally the allegations of the petition, and specifically the execution of the notes and mortgage sued on, and affirmatively pleaded that the assumption clause in the Clarendon deed to her was inserted by error, mistake, and inadvertence, and was without consideration and never accepted by her; that she did not assume or agree to pay the mortgage; and that after the discovery of the existence of said clause so inadvertently placed in said deed, the Clarendons made her a second general warranty deed on December 30, 1933, correcting said mistake and error, and nullifying said assumption clause. The plaintiff filed a reply denying the new matter in the answer of Minnie Page as amended, asserting in substance that the correction deed was not a deed for the reason that it shows on its face that the grantors therein had no title to convey and the said instrument was merely a self-serving, ex parte document secured without notice to the plaintiff, for the purpose of presenting evidence without taking deposition and without giving plaintiff a chance to cross-examine witnesses, and also that Minnie Page was estopped from denying the validity of the assumption clause contained in the original deed to her, for the reason that the deed had been of record for more than three years, and that she had accepted the benefits thereof and transferred the title obtained thereunder, and because the plaintiff had accepted and acted upon said assumption clause, and had been put to the expense and trouble of making Page a party to the suit, and in obtaining service upon her, and asserting that the defendant Page had ratified the assumption clause by paying interest upon said mortgage indebtedness, which had been accepted by the plaintiff, and further asserting that the correction deed was champertous, being made during the pendency of the suit and at a time when the grantors had been out of possession for more than a year without collecting rent therefrom.

Plaintiff having died March 11, 1933, the cause was revived in the name of Hattie E. Hinchee as his personal representative on October 2, 1933. The administration case having been closed and Hattie E. Hinchee being plaintiff's sole heir, she was thereafter substituted as party plaintiff.

For convenience, the parties will be referred to as they appeared in the trial court, the plaintiff in error as defendant, and the defendant in error as plaintiff.

On the trial, the plaintiff introduced in evidence the notes and mortgage sued on, the defendant objecting as to the notes on the ground that their execution had not been proven. The plaintiff also introduced in evidence the recorded deed from the Clarendons to the defendant and the recorded deed from the defendant to Connelly Bros., Inc., both of which deeds contained the following assumption clause: "Subject to a mortgage in the sum of Forty Five Hundred ($4,500.00) Dollars, which the grantee herein assumes and agrees to pay."

On this evidence the plaintiff rested the case and the defendant demurred to the evidence. The demurrer was overruled. The defendant Minnie Page testified in her own behalf. Her testimony is uncontradicted and undisputed. She said that she did not assume or agree to pay the Hinchee mortgage or any part thereof; that the assumption clause in the original Clarendon deed to her was inserted through inadvertence and mistake and was not discovered by, or known to, her, until after she was served with summons; that she never read the deed until then; and that after the discovery of the mistake, she procured from the Clarendons a correction deed, which was put in evidence over the objection of the plaintiff, containing the following provision:

"The grantee herein does not assume, nor agree to pay, any encumbrance that may exist upon said property. This deed is a correction deed given to correct an erroneous and inadvertent statement occurring in a deed dated ------ day of October, 1930, and acknowledged the same day, between the same grantor and the same grantee, which deed was filed for record October 2, 1930, and recorded in book 406, page 144, in which deed it was incorrectly and inadvertently recited that the grantee assumed and agreed to pay a certain mortgage therein described and such was not the agreement nor contract between the grantor therein and the grantee therein, and the grantors hereby certify that said former deed of October, 1930, was executed, acknowledged and recorded by them without the consent or knowledge of the grantee. It is the purpose of this deed to retract and nullify said assumption clause appearing in said former deed on account of error and mistake, and for the further reason that there is no consideration for same."

She said that prior to October, 1930, Clarendon had borrowed money from her from time to time to meet his pay roll until he owed her about $4,000; that she tried unsuccessfully from time to time to collect from him until finally two or three weeks before October, 1930, he told her he was unable to get the money but would sell her his equity in the property mortgaged to Hinchee, and it was agreed that she would buy his equity and allow him a credit on his indebtedness of $2000; that about two weeks thereafter she met Clarendon and was informed by him that he had deeded her the property; that he had the deed at his home and would either bring it or send it to her, but did neither; that shortly thereafter he informed her that he had mislaid the deed and could not find it; that shortly thereafter Clarendon moved to New York without paying her or delivering the deed; that she wrote him in New York, but did not hear from him for a long time, but about April 1, 1931, she received a letter from him saying that he had found the deed among his old papers and would send it to her, which he did; that when she received the deed from Clarendon she had already, on December 19, 1930, sold and conveyed the property to Connelly Bros., Inc., and did not pay any attention to the deed, but, without reading it stuck it down in her desk where it stayed until she...