Temple v. Corp. of America

MOORE, P. J. Plaintiffs sued for the cancellation of a note in the sum of $1,040, dated October 11,1934, and a trust deed given as security therefor. The bases of the action were: (1) that the instruments were void because at the time of their execution no disclosure of their existence to the Home Owners’ Loan Corporation was made by defendant; (2) that the execution and delivery on October 29, 1934, of a mortgagee’s consent to take the bonds after delivery of the note and trust deed was a complete satisfaction of those instruments. These contentions are reasserted on appeal and in addition thereto appellants insist that the findings are not supported by the evidence.

For some time prior to July 20, 1934, appellants were indebted to the Bank of America in the principal sum of $6,500 evidenced by two promissory notes each of which was secured by a trust deed upon the home of appellants. In addition to that sum appellants owed interest, delinquent taxes and street assessments. In 1933 and 1934 demands for payment upon the debt were vainly made, Dr. Temple having more than once offered to convey the property in return for a release of the debt. Not until June of 1934 did their conversations take oh the semblance of serious negotiations. Then the bank in order to relieve itself of an undesirable loan suggested the possibility of refinancing the loan through the Home Owners’ Loan Corporation, hereinafter designated as the “corporation.” Thereafter in July the bank was advised by the corporation that the latter’s appraisal of the property was $5,200 and that it would deliver its bonds in the proximate amount of $3,600 in payment of the total obligation. In conferring with Dr. Temple upon the offer the bank’s manager informed him of its unwillingness to accept the bonds offered in full satisfaction, and that if the corporation would [601]not increase the amount of its bonds the bank would require a note with a second trust deed as security for the difference between the amount offered and the amount of the appraisal, and an unsecured note of the doctor for the balance of his debt. In such event the entire indebtedness would be still outstanding. Although no agreement was then reached, thereafter the bank endeavored to induce the corporation to increase the amount of its commitment but without avail. On July 20, the bank delivered to the corporation a “Mortgagee’s Consent to Take Bonds” for the debt of appellants signed by the bank. With the “Consent” was a letter of the same date from the bank to the corporation which reads: “The amount that we are to receive as mentioned in our Consent is less than the total amount of indebtedness and the borrower has agreed to make satisfactory adjustment of the deficiency. We are therefore forwarding you this amended consent with the understanding and upon the condition that the borrower will make such adjustment.”