Dutton v. Locke-Paddon

[694]

KERRIGAN, J.

This is an appeal from the judgment in an action brought to recover the amount of a deficiency arising under a sale of real property by virtue of a deed of trust given to secure the payment of a certain promissory note.

Very briefly, the essential facts of the case are these: In the month of April, 1915, A. W. Morey owned a certain piece of real property which stood in the name of M. McDonough. At that time Morey was or became indebted to the plaintiff D. C. Dutton in the sum of $1,250, whereupon, at the instance of Morey, McDonough gave to plaintiff his promissory note in that amount secured by a deed of trust to said property. Thereafter, at the request of Morey, McDonough signed and acknowledged a deed conveying said property to Ella B. Morey, the wife of A. W. Morey, and wherein there was a covenant to the effect that the grantee assumed payment of said note. Ella B. Morey was not informed of the execution or existence of this deed and it was never delivered to her. Shortly after it was made Morey agreed to a trade of the land with William Locke-Paddon, the appellant herein, but instead of causing a new deed of the land to be made, he, with the consent of McDonough, altered this deed made to his wife by inserting in place of her name the name of appellant, and as so altered he delivered the deed to the appellant. The note secured by the deed of trust not being paid when due, the trustee sold the land under the terms of the trust, and after payment of the expenses of the trust the balance received from the sale was credited by plaintiff upon his note, leaving a deficiency, to recover which this action was brought.

The evidence abundantly supports the finding of the court that the appellant agreed to assume payment of the obligation secured by the deed of trust. Prom the circumstance that a covenant to that effect appears in his deed he is presumed to have had knowledge of its existence from the time he accepted that instrument. It was also shown that he had actual knowledge that such covenant was contained in his deed, and that the holder of the obligation intended to look to him for its payment. He not only accepted the deed burdened with this covenant, but on several occasions treated with the plaintiff concerning phases of the transaction on the basis that this covenant was contained in the deed. In a word,.and as before stated, the evidence shows clearly by the