Vanasse v. Cavey, 23241.

• Decision Date: 16 March 1932
• Docket Number: 23241.
• Citation: 9 P.2d 60,167 Wash. 238
• Parties: VANASSE et ux. v. CAVEY et ux.
• Court: Washington Supreme Court

9 P.2d 60

167 Wash. 238

VANASSE et ux. v. CAVEY et ux.

No. 23241.

Supreme Court of Washington, En Banc.

March 16, 1932

Appeal from Superior Court, King County; Otis W. Brenker, Judge.

Suit by T. H. Vanasse and wife against Charles Cavey and wife. Decree for plaintiffs, and defendants appeal.

Reversed with instructions.

W. D Lambuth and Roberts, Skeel & Holman, all of Seattle, for appellants.

Guie &amp Guie, of Seattle, for respondents.

BEALS J.

This is an equitable action instituted for the purpose of obtaining a decree reforming a note for $5,500, executed by plaintiffs in favor of defendant Charles Cavey; plaintiffs also asking for reformation of a real estate mortgage executed by them in Mr. Cavey's favor, securing payment of the note above referred to. In their complaint, plaintiffs alleged that the note and mortgage were executed by them as part of the purchase price of real estate purchased from defendants; the mortgage being junior to a mortgage in the sum of $35,000, payable to Puget Sound Savings & Loan Association. Plaintiffs further alleged that, at the time of the execution of the $5,500 note and mortgage, it was the intention of the parties that defendants, in enforcing payment of the note and in foreclosing the mortgage, should be limited to the real property covered by the latter, that defendants should have no right to any deficiency judgment against plaintiffs, and that appropriate language carrying this agreement into effect should have been included both in the note and in the mortgage. Plaintiffs also alleged that in the printed forms which were used in preparing the note and mortgage were contained clauses whereby the persons executing the same expressly consented to the entry of a deficiency judgment in case of any suit on the note and foreclosure of the mortgage, and that, upon plaintiffs' objection to these clauses, the same, prior to the execution of the note and mortgage were stricken from the printed forms, and that plaintiffs were then advised that the striking of these words was sufficient in law to relieve plaintiffs from liability to any deficiency judgment, and that, believing these representations to be true and relying thereon, plaintiffs, through mistake, executed the note and mortgage without requiring the writing therein of clauses relieving plaintiffs from any obligation by way of a possible deficiency judgment in case of suit. Plaintiffs, after alleging that defendants were threatening to institute suit against them on the note and collect the proceeds thereof from property belonging to plaintiffs other than that covered by the mortgage, prayed that the note and mortgage be reformed by adding thereto appropriate language limiting plaintiffs' liability thereon to the property covered by the mortgage. Defendants filed their answer, denying the material allegations of plaintiffs' complaint. Upon the trial, the court ruled in plaintiffs' favor, entering appropriate findings of fact and conclusions of law, followed by a decree reforming the note and mortgage, from which decree defendants appeal.

Section 1119, Rem. Comp. Stat., reads as follows: 'When there is an express agreement for the payment of the sum of mony secured contained in the mortgage or any separate instrument, the court shall direct in the decree of foreclosure (or order of sale) that the balance due on the mortgage, and costs, which remain unsatisfied after the sale of the mortgaged premises, shall be satisfied from any property of the mortgage debtor.'

Under the foregoing section of the statute and under general laws applicable to the situation here presented, the maker of a promissory note, in the situation of plaintiffs in this action, is liable upon the note, irrespective of the mortgaged property and for any deficiency remaining unpaid after the application to the judgment of the proceeds of the sale thereof. The mere striking from the printed forms used in preparing the note and mortgage of the clauses affirmatively providing for a deficiency judgment is of itself insufficient to entitle respondents to a decree, such as they ask here, reforming the note and mortgage and is therefore of itself alone ineffective to relieve respondents from the obligation imposed upon them by law.

While in proper cases and upon evidence which meets the requirements laid down by the authorities the court will reform written instruments so as to make them correspond with the actual intent and agreement of the parties, it has been repeatedly held by this court that there rests upon a party seeking reformation of a written instrument the burden of establishing, by the clear preponderance of the evidence, the truth of his contention. Heffron v. Fogel, 40 Wash. 698, 82 P. 1003; Clutter v. Strange, 41 Wash. 86, 82 P. 1028; Erickson v. Poole, 126 Wash. 130, 217 P. 715; Puget Sound Bridge & Dredging Co. v. Jahn, 148 Wash. 37, 268 P. 169; Fernandez v. Agor, 162 Wash. 475, 298 P. 417; Robinson Lettuce Farms v. Symons, 163 Wash. 351, 1 P.2d 300.

The note and mortgage sought to be reformed are Before us, and consist of printed forms prepared for the savings and loan association above mentioned, filled in on a typewriter. In each form the name of the association as payee and mortgagee respectively, is x'd out, and the name of appellant Charles Cavey inserted. In each of the printed forms the clause providing for a deficiency judgment is also X'd out. The mortgage for $35,000 was executed by plaintiffs two days prior to the execution of the note and mortgage which are the subject-matter of this litigation, in favor of the savings and loan association, for which corporation the forms used in preparing the note and mortgage now Before us were...