United States v. Rossi, 19173.
| Decision Date | 10 February 1965 |
| Docket Number | No. 19173.,19173. |
| Citation | 342 F.2d 505 |
| Parties | UNITED STATES of America, Appellant, v. Alfred Peter ROSSI, Appellee. |
| Court | U.S. Court of Appeals — Ninth Circuit |
John W. Douglas, Asst. Atty. Gen., Sherman L. Cohn, Frederick B. Abramson, Dept. of Justice, Washington, D. C., Francis C. Whelan, U. S. Atty., Los Angeles, Cal., for appellant.
Henry F. Rager, Rager & Olio, Fontana, Cal., for appellee.
Before BARNES, JERTBERG and DUNIWAY, Circuit Judges.
The United States appeals from an adverse judgment in an action to recover $1039.48 from defendant Rossi. This was the net amount paid by the government to Home Savings and Loan Association of Los Angeles following default on a loan guaranteed by the Administrator of Veterans Affairs under 38 U.S.C. § 1803(c) (1). We reverse.
About October 20, 1953 Rossi received a $8,789 loan from Home Savings for the purchase of a new home from a Mr. Fisher. The loan was evidenced by a note to Home Savings and secured by a deed of trust on the property. After approval of the loan by Home Savings, the Veterans Administrator accepted an application for guaranty of $5,273.40 of the loan. The escrow was then closed and title conveyed to Rossi, but he did not learn of this until he was several months in arrears in payments due under the note. Rossi was unable to make the payments. Fisher advised him to see the Veterans Administration, indicating that if its approval could be secured, he would be willing to take the property off Rossi's hands. The Rossis then went to the Los Angeles Veterans Administration office, where they "were met by a fellow at a desk," whose name they did not know, who told them in regard to the property: "If wou can get somebody to take it off your hands, go ahead and do it." Rossi testified that no representations were made concerning further liability on his loan, but Mrs. Rossi testified that the man behind the desk told them that they "would not be liable for the loan."
Acting upon this advice, the Rossis then saw Fisher, who "assumed to take the house off their * * * hands," through a new escrow arrangement by which Rossi conveyed the property to Fisher in return for Rossi's down payment. Fisher, however, was not substituted for Rossi in the escrow arrangement with Home Savings, and the record does not show that he either assumed the obligation under Rossi's note and deed of trust or became the substitute beneficiary of the Administrator's guaranty of the loan made under the note. Fisher then resold the property, there was eventually a default, the Home Savings deed of trust was foreclosed, and the property was sold. The Administrator was required to pay the net sum of $1,039.48 under his guaranty. Following demand upon Rossi for this sum, which was refused, this suit was commenced.
The district court concluded that the action was for a deficiency on the secured loan, that the United States was estopped because of the oral release of Rossi from liability by the "fellow at the desk," and that, because of the failure of the United States to give notice of the foreclosure proceedings and the possibility of a...
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