Adams v. George, 812 P.2d 280

Adams v. George

812 P.2d 280

Idaho

1991

Check Treatment

*1 ap- application of this of law elusions P.2d 280 rule There is of construction. propriate L. W. ADAMS and Sharon Charles virtually support proposition no wife, and husband in appellate indulge court is free that an Plaintiffs-Respondents, or administrative body adhering prin- is adjudicative other regardless of law its failure ciples woman, GEORGE, single Jane Carol analysis. only acceptable provide Defendant-Appellant. reviewing as a assumption, if we 18298. No. assume, ever when the Com- should the rule of liberal con- mission does recite Idaho, Supreme coverage in of benefits struction favor Falls, October Term. workers, has con- that the Commission May applied case this rule and it to the sidered them. But to assume that the Com- before applied rule

mission considered and which given any not mention makes absolute- course, sense, unless, of

ly no the standard recog- simplistieally applicable,

of review

nized, decision in case is each “[t]he to make.” 119 Idaho Commission 812 P.2d at 279. component

The other of this Court’s review,

“no review” standard of mentioned paragraph dissenting first this just type

opinion, can be another viewed assuming. go- is apparently The Court

ing to henceforth assume that a referee’s

ruling proper in a unreview- case was

able whenever the Commission does ruling.

specifically explicitly reject words, adopts if the other Commission referee, findings and conclusions fails to a contro- referee mention discovery

versy relative to or some other matter,

ancillary in the referee’s decision Period, ancillary end matter final. message. sentence readily apparent,

As is now all too in

referee the first instance and the Com- second, actu-

mission in essence and

ality decide what

may not be reviewed this Court. Court, contesting parties,

involved turn, helpless find and itself themselves

to address issues which referee ad- perceive and/or

Commission failed

dress. *2 given

trust deed had been security. as They sought to recover from amount of the deficiency together with at- torney fees and litigation. costs incurred in Both moved for summary judg- ruling ment. In the district determined that had assumed personal liability for the indebtedness which remained after foreclosure of the trust deed. The court heard evidence on the issue of the deficiency claimed judgment $15,- entered for the Adams for interest, which included attorney fees George’s appeal and costs. assigns error being in so held liable.

In June of purchased 1982 the Andes a residential property from the Needs. At that time property already encum- by bered a granted by deed of trust Marcia (“the Tipton note”). to United First The Andes executed a note to (“the note”), the Needs Andes and contem- poraneously executed a deed of trust favor of the repayment. Needs to secure July assigned of 1982 the Needs Andes note and deed respon- of trust to the dents Adams. It was on the basis of the rights by assignment created Andes note that the subsequently Adams against George. initiated the action In February of 1983 the Andes sold their interest in property to Unruh and Fries- warranty en. A deed was recorded at that by conveyed time which the Andes Hepworth, Nungester Lezamiz, & Twin property to Unruh/Friesen to” the Falls, defendant-appellant. John C. preexisting encumbrances created argued. Hohnhorst Tipton- and Andes deeds of trust. Turner, Falls, Harry plaintiffs- In October of 1983 Unruh/Friesen sold respondents. appellant George. to A war- ranty deed was recorded at that time con- BISTLINE, Justice. veying to her to” the existing Tipton and Andes deeds of trust. complaint alleged The Adams’ that Carol George executed two new “All-Inclusive purchased J. had real (the “AINs”), along Deed of Trust Notes” which was encumbered a deed of trust with an “All-Inclusive Deed Trust and granted by preceding owner. Adams “AIDT”) Assignment (the of Rents” to se- alleged that this trust deed had been as- cure of the two AINs. signed them; they appellant claimed that had assumed the obli- According George, the transaction was gation it They alleged sale, secured. further “wraparound” structured as and to transaction, that the deed of trust had been foreclosed facilitate the the two AINs deficiency respect to, but that a corresponded directly remained with executed underlying obligation “wrapped” existing Tipton for which the and thus genuine single given AIDT We there is and Andes notes. The hold the sum be secure both recited as to issue of material fact whether $41,000, representing the com- created AINs, balance of the and effec- bined note. tively, “wrapped” both *3 AINs a crit Both of the contained Tipton Andes and notes. concerning obligations of provision ical the to the respective regard pay with to the $45,000, of title for the total sum with existing mortgage debts: ment of the conveyed “subject to” the two obli- note, acceptance this By Payee’s of $41,000. gations totalling After deduction that, agrees Payee [Unruh/Friesen] costs, re- Unruh/Friesen’s transactional [George] not in de- provided Maker maining equity necessitated a cash down Note, this under the terms fault of $2,054. George of prin- Payee pay shall all installment of parties initially pay- The established a cipal become and interest which due First re- ment American which escrow Note(s). the under terms Senior of monthly payments quired George to make in In the event Maker shall be default on totalling First $437. on two note, Payee’s obligation to this make in turn instructed dis- American was to payments is deferred until the de- such payments to the Falls burse Bank in Payee fault is cured. Should default Trust, representing the debt service due on any pay- of the as to the installments note, First, repre- Andes and United and Tipton] ment of the Senior [Andes senting payments Tipton due on the Note(s) Deed(s) by the of Senior later, Approximately note. months in four Trust, said pay- Maker make 1984, February the parties of canceled the ments to the holder suck of escrow, was directed to make Note(s) and United Senior [Adams directly to payments the holders of the First]; any all so made payments Tipton and Andes notes. shall be to this note. credited February In of mak- ceased added). (emphasis The R. 108-09 AIDT ing the In payments. June language: similar contained note, as holders of the Andes accept- By Beneficiary’s [Unruh/Friesen] noting that transmitted a Notice of Default Trust, ance of this All-Inclusive Deed in payments advising were arrears that, Beneficiary agrees provided Grant- of their intention to out- accelerate the [George] in or is not default on the Se- standing In balance. October AINs], Beneficiary Note cured [the deed holder note and of trust pay principal all shall installments a likewise issued notice of default. which become due under the interest The under default the Andes note was Note(s). of the terms Senior following cured within time allowed (Section D(l) AIDT). R. 111 Wheth service of the Notice of Default provisions er these establish Adams. In November of 1987 the trustee obligation seemingly in named the Andes of trust deed sold question of is a triable fact. at a trustee’s sale. The exchange sold the Adams in George asserts the transaction $3,500. bid in the credit amount between and Unruh/Friesen was a February of 1988 Adams initiated (WAM) “wraparound mortgage” transac remaining deficiency. action to recover principal defining The characteristic tion. “wrapping” of a WAM the exist finding district erred prior ing debt owed the seller to a seller genuine any as to mate- there was no issue buyer lending The new ob institution. rial fact were entitled and that Adams seller, himself who ligates herself or judgment law. to a as matter of I.R.C.P. obligated 56(c); pay remains exist turn Rawson v. United Steelworkers of America, buyers and sell- ing debt. While P.2d frequently

ers preexisting choose to handle particularly described as A follows: mortgage obligations by requiring that the original note which had an them, assume the use of the $13,318.21 amount of dated June mutually-exclusive WAM is a alternative to 1982 in favor of wherein [the Needs] “straight the more assump- conventional Payor. are] tion.” (All-Inclusive Note, Promissory dated 18, 1983.) October appellate

The Idaho courts have not had Thus, occasion to discuss A appel- WAMs. Texas George assumed the obligation recently late court the wrapa- described and agreed unpaid mortgage: round the Andes’ note. The law does not of require wraparound Adams foreclose relatively *4 new, prereq- all-inclusive trust deed financing as a device which is used in- collecting note, uisite especially stead of on her junior a conventional lien mort- gage. wraparound when her new mortgage all-inclusive trust deed is a subsequent encompassed the mortgage Andes’ trust deed: subordinate by property secured upon real which [George] hereby irrevocably does mortgage there exists a first that is out- GRANT, BARGAIN, SELL AND standing and unsatisfied. The property ... that CONVEY in the money wraparound mortgage differs County of Twin Falls Pur- ... For the from a conventional second pose Securing performance ... wraparound that seller agreement of each [George] incorpo- transaction remains personally liable by rated reference of contained herein under any prior obligation, but (2) ... A Deed of Trust recorded June personally never becomes ob- 30, 1982, as Instrument No. 823829 ... ligated such. A distinctive Needs], in favor of feature such a agreement transaction is the (All-Inclusive of by Deed, Trust dated October wraparound upon seller that 18, 1983.) receipt wrapa- the debt on service added). (emphasis R. 116-17 round a deduction will be The district court’s reliance on this lan- and remitted therefrom guage “George for the conclusion that as- mortgagee to the to credit the re- first obligation pay sumed the quired debt service on the mort- first is, unpaid balance of the Andes’ note” gage. appellant, sequitur. words of the a non Vistas, Greenland Inc. v. Plantation wraparound mortgage always A involves Assoc., Ltd., Place 746 S.W.2d 925 of a promissory execution note which (Tex.1988) (citations omitted) (emphasis “wraps” or “includes” the balance of an added). See also Balboa v. Constr. Co. existing part indebtedness of the debt Golden, 97 N.M. 639 P.2d wraparound buyer. owed This does (1981) (using explain similar not mean that the new has therefore WAMs). personal liability “assumed” for the exist- The district court concluded that ing obligation. proved had assumed note, promissory A like the Andes obligation under the Andes note. The assigned note which was is a upon court reached this conclusion based In promissory contract. the context of a reading part its of an isolated of the AIN: by mortgage, purchaser note secured new, The court concludes that property repayment can become liable for obligated pay all-inclusive note her to given by preceding of a note owner if the unpaid balance of the Andes’ note: purchaser contractually commits herself or principal total amount of this Note obligation. himself to “assume” the unpaid principal also includes the bal-

ance There a critical distinction be note ... se- Deed(s) purchases property and cured Senior of Trust more tween one who appar Although the district court and one existing debt an agrees to assume consideration, the Adams gave it no ently merely purchases who fact suggest also The mere existing encumbrance. to” an directly to the payments made a number property “sub- mortgaged conveyance of an Andes note establishes holder of the granted existing encumbrance an ject to” the debt. George to assume intention not existing mortgage does- an to secure However, purchased if personal liabili- assumption of an constitute encumbrance, mere fact existing an to” distinction is purchaser. This ty by the payments on purchaser makes purchaser is in Idaho. The recognized well mortgage does not establish liable to personally liabili personal purchaser has assumed unless existing encumbrance by an Moler, this ty for the debt. Siekman by clear and con- proved failed to dem the evidence held that Moler, 47 vincing evidence. Siekman had assumed onstrate that 454-55, P. fact that the despite the debt George’s purchase There is evidence payments purchaser had made a number “subject to” the exist- mortgage. holder of the directly to the *5 warranty deed ing The encumbrances. The Court wrote: language. R. 66. “subject to” contains the importance to the special no We attach mortgage obli- that the The AIDT recites purchas- appellant that circumstance [the “subject and subor- gation it creates is becoming due and paid interest later er] Tipton Andes encum- dinate to” the and by mortgagors nothing paid was AIDT). (Section A of the R. 77 brances. land, the title to which The sellers]. closing denote that statements primarily appellant, was passed had “conveyed subject to” the property was of the debt and payment for the liable obligations. R. 71-72. existing two entirely by him of interest was that he ac- position his consistent with have concluded that where Some courts by the mort- cepted the title incumbered buys property “sub- subsequent purchaser personal responsibility. gage without but encumbrances, ject to” 456, Siekman, from the P. at 312- outstanding balance is deducted Idaho at 276 Therefore, infer- fact that price, supports this fact purchase payments directly to the holder impliedly has as- ence that the necessarily establish Moler, Andes note does not sumed the debt. Siekman v. the debt. by George to assume an intention 446, 451-52, 310-11 276 P. Idaho theory (1929). The Adams invoke summary grant of The district court’s lia- to show that their efforts vacated, and the the Adams is judgment to by suggesting under the Andes note ble court for remanded to the district cause is closing statements showed the issue of whether jury trial on existing mortgages were the balance of the obligation created assumed price. against purchase “credited” appeal are awarded note. Costs on receive a George asserts that she did not 40. No pursuant to I.A.R. appellant she purchase price appeal. because attorney reduction fees on assumed, thereby relieved Un- rather, she obligations; ruh/Friesen BAKES, C.J., and JOHNSON purchase against “credit” the total

received JJ., BOYLE, concur. AINs, executed the two price because she Justice, McDEVITT, dissenting: equal these exist- sums promising majority’s hold- assump- agree with the obligations. The inference of I cannot ing the exist- George did not assume simply ing not arise. therefore tion would are three main mortgages. There ing interpretation of the transaction Which conclude that leading me to to be factors question is a of fact the correct one mortgages. underlying jury. determined First, George purchased Fliegel, 92 Idaho 450 P.2d 990 $45,000.00 (1969). believe, existing mortgages I judge, to- as did the trial $41,000.32. testimony deducting taled After showed that assumed the underlying mortgages. purchase price from making and then deductions for transac- I do not believe the of Frauds is Statute costs, George paid tional the sellers applicable in this case. Idaho Code 9- §§ $2,054.30 in cash. The deduction of the 9-505(5) require agreement 503 and that an purchase price balance from the property, for the sale of real or an interest proof in and of itself is therein, in writing signed by must be mortgage. Hinckley assumed the Estate party charged. to be These statutes Gurry, 53 Idaho 26 P.2d 121 Co. prevent enforcement of oral contracts for (1933). Dunn, property. the sale of real Dunn v. (1938). Idaho 83 P.2d 471 Second, of the deed states present dealing case we are not with an to” the Andes contract, oral with a deed. Ex but written notes. The term to” is only trinsic evidence was introduced ambiguous parol appropri evidence is purpose explaining ambiguous instru clarify ambiguity ate to and to deter ment, prove not to an oral contract. parties. mine the intent of the Intern. Industries, 102 Engineering Co. v. Daum part performance The doctrine of would 630 P.2d 155 The law in apply to take the transaction at issue out of Idaho is that an of an applicable. the Statute of Frauds if it was mortgage by need not be parties to an have Where the oral contract incorporated conveyance in the deed of nor steps in significant taken substantial and instrument; need in a be contained written *6 contract, performing an oral the Statute of proof assumption by of an apply does and the courts will Frauds proven parol be on the evi basis agreement. not hesitate to enforce the Moler, dence. 47 Siekman v. Idaho Hill, 93, 212 P.2d 391 v. 70 Idaho Wood (1929). 276 P. 309 While the term (1949); taking Idaho 9-504. The Code § to” is not and therefore does of, to, possession making improvements part not create an on the of the and the of taxes on purchaser, language does not automat part performance to take the sufficient ically assumption demonstrate that an did transaction out of the Statute of Frauds. Carothers, not occur. Klundt v. 96 Idaho 646 P.2d 413 Jolley Clay, v. (1975). 537 P.2d 62 As this has case, (1982). present In the took stated: property, paid possession the sellers exceptions It is with rare held that the payment, monthly pay- a cash down agreement, express or im- oral either property, paid property on the ments plied, pay mortgage is to assume and part performance is sufficient taxes. This convey- not inconsistent with a deed of the contract out of the Statute of to take reciting subject ance it is to the Frauds. grantee fact Third, of an mort- so assumed and the debt gage by the can be inferred may be shown. surrounding all the facts implied from

Siekman, 276 P. at 311. 47 Idaho ambiguous transaction evidenced parties writing and the conduct of the ambiguity Because of the in the term to,” Hinckley v. appropriate that transaction. Estate Co. it was P.2d 121 Gurry, ex- 53 Idaho trial court to allow the introduction of monthly payments on made the clarify ambiguity trinsic evidence to *7 CORPORATION, NATIONAL STEEL Sciences, Inc.,

Earth and Southwire

Company, partners doing un business Alumet, firm name of also

der Counterdefendants-Appellants-Cross Company, Alumet known as

Respond ent s, Archer, D. Archer and Elizabeth

John wife,

husband and Counterdefendants- Respondents.

Appellants-Cross 17212, 17219, and 17655.

Nos. Appeals of Idaho.

Court of

Aug.

Petition for Review Granted 17, 1989.

Nov. notes deed both the Andes the contract. When the of a notes, not to the sellers. the holders ambiguous, is unclear or the intention This a manifestation of ac- from all must be ascertained the mort- knowledgment that she assumed surrounding circumstances. Gardner actions are inconsistent with gages. These that she did not assume the contention mortgages. in con- considering these factors When sur- all of the other factors junction with transaction, I the con- rounding the believe reached is that that should be clusion mortgages. P.2d 286 ALUMET, Compa Alumet also known as ny; Company; National Southwire (now Corporation Inter National Steel Sciences, Inc., Inc.), group, and Earth Alumet, Plaintiffs-Ap partners Respondents, pellants-Cross COMPANY, LAKE BEAR GRAZING Defendant-Respondent-Cross Appellant. COMPANY, LAKE BEAR GRAZING Counterclaimant-Respondent-Cross Appellant,