I dissent. I think the testimony and the exihibits show that it was not intended that plaintiff agree to a settlement of hisfull morgage indebtedness against both the home and the other tract by accepting $2,000 in bonds.
In the first place, the testimony of the conversation between Haroldsen and Yeates before any application for a loan was made, as given by Haroldsen, was straightforward. Much of the testimony of Yeates was anything but clear-cut. And the exhibits, if carefully examined, bear out the intent as testified to by the plaintiff.
On October 30, 1933, the defendant filed an application for a $2,000 loan. He described only Tract No. 1 (the home *Page 410 property) as security for the loan and in answer to question 11 asking as to
"the total encumbrances or liens on the property [meaning that described in the application — the home property] are to parties and for the amounts as follows"
he answered,
"First Mortgage to Morgan Haroldsen for $2,000."
He himself allocated only $2,000 of the $3,200 indebtedness to the home property. This application is numbered 535. Haroldsen, on this same 30th of October, signed a paper showing a willingness to accept bonds in the sum of $2,000 and agreed thereupon to "release all the claim of the undersigned againstsaid property." (Italics added.) "Said prop-property" is described as "home property of Leo Yeates located at Nibley, Utah." He did say that the lien or claim on said "home property" was $3,000 which was the truth. But this consent to release all claims against the home property is not the equivalent of a consent to release all claims against the defendant. It consents only to a release of the lien against the property. Since this acceptance paper and the application listing only the home property went in together it is obvious that Haroldsen was agreeing to release his indebtedness, only as against the home property. On February 3, 1934, Haroldsen sent the following letter to the Home Owners Loan Corporation:
"Gentlemen:
"This is to certify that I will accept the sum of $2,000 in bond of the Home Owner's Loan Corporation, after deducting any amounts for payment of taxes and costs of closing loan, on my mortgage indebtedness against Leo Yeates, on application No. 535."
It will be noted that the acceptance again covers "My mortgage indebtedness against Leo Yeates on application No. 535." That was there listed as $2,000. *Page 411
The satisfaction of the mortgage executed by Haroldsen was only that on the home tract. It so specified. The Home Owner's Loan Corporation took this release which released only the home property and was satisfied. There was no side agreement, no deceit and no giving of a second mortgage afterward. There was nothing covert about the conduct of the plaintiff or which smacked of taking advantage of his position as creditor to compel the debtor to give a secret second mortgage on the home or a side note. The mortgage was already on the Tract No. 2 and therefore did not endanger the home.
The parties intended to accomplish in a short fashion that which would have been accomplished had the overall mortgage on the two tracts been cancelled before defendant's application to the Home Owner's Loan Corporation and the debt split and two mortgages given. And the HOLC so took that to be the real situation.
In any event, the plaintiff is entitled to have determined the value of Tract No. 2 which together with the ten notes for $100 each was given as consideration to pay both the $700 note plus interest and the $1,000 of the $3,200 indebtedness which he considered still owing. There was no evidence that Tract No. 2 was worth $700 and the interest. There is some evidence that it was worth only $500. Therefore, in any event, plaintiff is entitled to recover on so many of the ten notes as will pay the difference between the value of Tract No. 2 plus what defendant has paid him on the notes ($100), and the $700 plus interest.
The opinion orders that all the notes be cancelled and that the respondent pay back the $100. This, in any event, is most certainly erroneous.
WADE, J., concurs in the views expressed by WOLFE, C.J., in his dissenting opinion. *Page 412