United Security Bank & Trust Co. v. Haden

CRAIG, J.

The defendant Peters-Rhoades Company, a corporation, appeals from a judgment in favor of the plaintiff for a balance alleged to have been due upon a promissory note secured by deed of trust, after foreclosure and sale of the real property, and application of the proceeds toward payment of the indebtedness.

It appears from the complaint that the defendants Haden were in 1919 the owners of certain realty which they deeded in trust to two named trustees as security for the payment of their promissory note to the bank in' the sum of $64,000. Said note was dated September 16, 1919, was payable on November 1, 1924, and recited, in part: “ . . . and in default of the payment of the interest aforesaid, or any instalment thereof, then the whole note may at the option of the holder, and without notice to the makers, become due and payable, and may be treated as collectible. ... If this note is not paid at maturity, it is hereby renewed from year to year, at the option of the holder, until paid, and during such year the makers shall not have the right to pay the same unless by consent of holder.”

The plaintiff alleged that thereafter the debtors conveyed all of their right, title and interest in said property to their children, in trust nevertheless, and retaining full dominion and control thereof; that subsequently thereto, and at the special instance and request of the owners and for their benefit, said children deeded the same to the appellant; that in these latter deeds “it was provided that the said grantee . . . should and would assume a personal liability to pay the indebtedness against the property as evidenced by the . . . note . . . and the said grantee Peters-Rhoades Company did accept said instrument of conveyance subject to said obligation, and did thereupon and thereby assume and agree to personally pay the full amount of said indebtedness, both principal and interest”. Further allegations, briefly stated, aver that the Hadens failed and neglected to pay the interest due on November 1, 1924, and the principal due on said date, because of which the plaintiff, owner of the note, made due application to the

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surviving trustee for a sale of the premises, and caused notices of default to be recorded, all in accordance with the terms of the deed of trust; that thereafter said trustee published in a newspaper of general circulation in the proper town and county, and posted in three public places and on the property, notices of the time and place of sale; that at such time and place the property was offered at public auction to the highest bidder, and was sold to the plaintiff for the sum of $40,000; that after payment of certain costs and expenses which are specifically enumerated, there remained a balance of $24,040, which was delivered to the payee of the note on account, leaving a balance of $39,060 due and unpaid.