26 Wash. 505 | Wash. | 1901
The opinion of the court was delivered by
On October 9, 1891, the Commercial Investment Company of Tacoma executed its note, to the Mason Mortgage loan Company for $2,000, payable five years after date, and its mortgage to secure said note on
Passing without deciding many of the errors alleged by the appellants, viz., that the decision by Judge Williamson alone was insufficient, the case having been partially tried by Judge Williamson and Judge Carroll in banc; the fact that the offer to rescind comprehended only a portion of the contract; that the findings tended to support a different case from that made by the pleadings; that the decree was inequitable, from the fact that Deming had allowed Wheeler to go to the expense and trouble of a lawsuit against the National Bank of Commerce to establish the responsibility of that hank for the payment of the mortgage, without any attempt' on the part of Deming to intervene, and without any offer to reimburse Wheeler for expenses incurred; and that there was no proof of the value of the property at the time of the sale, — we do not think the judgment can be justified upon the merits of the case. The record does not establish the fact that the Pacific Investment Company was the agent of Deming, through Easterday,. in the sale of this mortgage. It is true that the Pacific Investment Company sent one of its circular letters to Deming, calling attention to the fact
“West Brattleboro, Vt., April 5th, 1899. President of Rational Bank of Commerce, Tacoma, Wash. — Dear Sir: I inclose with this a note of $2,000, secured by first mortgage on Excelsior Park tract, number nineteen, of five acres, more or less, situated near the car shops of the Rorth. Pacific Railroad, with the coupons due Oct. 19th,*510 1895, April 19th, 1896, and Oct. 19th, 1896, of $90 each, and also the first mortgage, its assignment to me, and the certificate of title furnished hy the Mason Mortgage Loan Co. I also enclose a certificate of title furnished by the same company to N. E.|- of S. E. ¿ of Sec. 7, township No. 20 north, range 5 east of Willamette meridian, — 40 acres, more or less. This has been foreclosed, but the sheriff’s certificate of sale cannot be found; and an affidavit will have to be signed by me to show this, before duplicate or sheriff’s deed can be obtained. The Pacific Investment Go., of the Bernice Building, Tacoma, S. G. Crandall, manager, have written to me for prices of my different pieces of property there, and I gather from their letter that they would be likely to take the mortgage at two hundred dolls., and the Aitkin 40-acre lot at seventy-five dollars, making together $275. I know nothing about them, and would like to have you show them these papers; and if they want to buy at the above prices, and pay all costs of perfecting title and the accrued taxes, please have them pay the money into your bank, and the transfer may be made through your bank. I think the price low, but it must be taken subject to costs and taxes. I would like you to see the business properly done. Respectfully, T. B. Deming.”
Unquestionably, Deming made the National Bank of Commerce his agent, instead of the Pacific Investment Company, or Easterday, through whom it carried on its correspondence. The letter expressly shows that Deming was not placing confidence in Easterday, but that he treated him as a purchaser whose interests were opposed to his, and that the confidential relations were between him and the bank, to whom he sent the papers, with direction to complete the sale. This is the only testimony there is as to the agency of Easterday, and, outside of the testimony of Easterday, which, so far as we can judge, is straightforward and entitled to credit, the showing made by Deming would not be sufficient to establish
“The contract of suretyship, in the relations between the surety and the other parties, and especially the creditor, is also fiduciary, although not in the same degree as that of insurance. It demands good faith towards the surety, and while the creditor is not absolutely bound voluntarily" to disclose every fact which might affect the contract, very slight incidents and collateral circumstances will render his concealment of material facts fraudulent.”
This doctrine is for the protection, not of the creditor, but of the surety, and is founded in manifest justice; and the cases cited are those where the surety was pleading want of good faith on the part of the creditor. Respondent cites Solicitors Loan & Trust Co. v. Robins, 14 Wash. 501 (45 Pac. 39), in support of his contention. In that case it was decided by a bare majority of this court that on foreclosure of a mortgage upon land which had been subsequently conveyed by the mortgagor to another, who assumed payment of the mortgage, the grantee and his wife, when such land was their community property, were subject to a deficiency judgment, which could be enforced against their community property and the separate property of the husband; and although the court cited Keller v. Ashford, 133 U. S. 610 (10 Sup. Ct. 494), it stated specifically that all that was necessary to decide in that case was that the plaintiff was entitled to a deficiency" judgment against the respondents, Robins and wife, and that was all that plaintiffs sought. But Keller v. Ashford, supra,, decides nothing more than was decided by this court in the case in which it was cited, viz., that an agreement in a deed of real estate by which the grantee assumes the payment of a mortgage made by the grantor is a contract between the grantee and the mortgagor only; and does not, unless assented to by the mortgagee, create
“The right of a mortgagee to enforce payment of the mortgage debt, either in whole or in part, against the grantee of the mortgagor, does not rest upon any contract of the grantee with him, or with the mortgagor for his benefit. . . . The purchaser of lands subject to mortgage, who assumes and agrees to pay the mortgage debt, becomes, as between himself and his vendor, the principal debtor, and the liability of the vendor, as between the parties, is that of surety. If the vendor pays the mortgage debt, he may sue the vendee at law for the money so paid.”
It is expressly stated that the right of the mortgagee to this remedy does not result from any fixed or vested right
The only thing left in this case is whether fraud can be concluded from the inadequacy of the price. Section 926, 2 Pomeroy, Equity Jurisprudence, says:
“The rule is well settled that where the parties are both in a situation to form an independent judgment concern*517 ing the transaction, and acted knowingly and intentionally, mere inadequacy in the price or in the subject-matter, unaccompanied by other inequitable incidents, is never of itself a. sufficient ground for canceling an executed or executory contract. ... In some of the earlier decisions, mere inadequacy, either in the price or in the value of the subject-matter, was held to he a sufficient hardship which might defeat the specific performance of an executory contract when set up as a defense. The doctrine, however, is now settled, that mere inadequacy — that is, inequality in value between the subject-matter and the price — is not a ground for refusing the remedy of specific performance; in order to he a defense, the inadequacy must either he accompanied by other inequitable incidents, or must he so gross as to show fraud. In short, inadequacy as a negative defense, and as an affirmative ground for a cancellation, is governed by one and the same rule.”
“If the parties to a contract have dealt at arms’ length, and the contract entered into is the result of a mutual agreement based upon the independent judgment of each, any valuable consideration — no matter how inadequate or disproportionate to the benefit obtained it may he — is sufficient, in the absence of fraud, to sustain the contract.” 10 Am. & Eng. Enc. Law, 326.
There are no circumstances coupled with this case to take it out of the general rule. There is no fiduciary relation existing. There was no weakness of mind on the part of the creditor. All the avenues of information were open to the seller that were open to the purchaser. It is true that he did not live in Tacoma, hut he was doing business there, and had an opportunity to inquire concerning the value of his property of the hank which he made his agent for its sale, knowing that this hank had some business relations with this property, for he stated in his letter that he had understood that it held a second mortgage on the property. He
The judgment will be reversed, the application for rescission denied, and the cause dismissed at the expense of the plaintiff.
Beavis, C. J., and Fullerton, Hadley, Mount, Anders, and White, JJ., concur.