Court Opinion

ID: 9614157
Source: CourtListenerOpinion
Date Created: 2023-08-22 04:23:00.581709+00
Date Added: 2024-06-11T09:00:45.793947
License: Public Domain

McDEVITT, Justice,
dissenting:
I cannot agree with the majority’s holding that George did not assume the existing mortgages. There are three main factors leading me to conclude that George assumed the underlying mortgages.
*978First, George purchased the property for $45,000.00 The two existing mortgages totaled $41,000.32. After deducting the mortgage balance from the purchase price and then making deductions for transactional costs, George paid the sellers $2,054.30 in cash. The deduction of the mortgage balance from the purchase price in and of itself is proof that the buyer assumed the mortgage. Hinckley Estate Co. v. Gurry, 53 Idaho 551, 26 P.2d 121 (1933).
Second, the language of the deed states that the purchase is “subject to” the Andes and Tipton notes. The term “subject to” is ambiguous and parol evidence is appropriate to clarify the ambiguity and to determine the intent of the parties. Intern. Engineering Co. v. Daum Industries, 102 Idaho 363, 630 P.2d 155 (1981). The law in Idaho is that an assumption of an existing mortgage by the purchaser need not be incorporated in the deed of conveyance nor need be contained in a written instrument; proof of an assumption by the purchaser may be proven on the basis of parol evidence. Siekman v. Moler, 47 Idaho 446, 276 P. 309 (1929). While the term “subject to” is not promissory and therefore does not create an obligation on the part of the purchaser, this language does not automatically demonstrate that an assumption did not occur. Klundt v. Carothers, 96 Idaho 782, 537 P.2d 62 (1975). As this Court has stated:
It is with rare exceptions held that the oral agreement, either express or implied, to assume and pay the mortgage is not inconsistent with a deed of conveyance reciting that it is subject to the mortgage and the fact that the grantee so assumed and agreed to pay the debt may be shown.
Siekman, 47 Idaho at 452, 276 P. at 311.
Because of the ambiguity in the term “subject to,” it was appropriate for the trial court to allow the introduction of extrinsic evidence to clarify the ambiguity in the contract. When the language of a deed is unclear or ambiguous, the intention of the parties must be ascertained from all the surrounding circumstances. Gardner v. Fliegel, 92 Idaho 767, 450 P.2d 990 (1969). I believe, as did the trial judge, the testimony showed that George assumed the underlying mortgages.
I do not believe the Statute of Frauds is applicable in this case. Idaho Code §§ 9-503 and 9-505(5) require that an agreement for the sale of real property, or an interest therein, must be in writing and signed by the party to be charged. These statutes prevent enforcement of oral contracts for the sale of real property. Dunn v. Dunn, 59 Idaho 473, 83 P.2d 471 (1938). In the present case we are not dealing with an oral contract, but with a written deed. Extrinsic evidence was introduced only for the purpose of explaining an ambiguous instrument, not to prove an oral contract.
The doctrine of part performance would apply to take the transaction at issue out of the Statute of Frauds if it was applicable. Where the parties to an oral contract have taken substantial and significant steps in performing an oral contract, the Statute of Frauds does not apply and the courts will not hesitate to enforce the agreement. Wood v. Hill, 70 Idaho 93, 212 P.2d 391 (1949); Idaho Code § 9-504. The taking possession of, making improvements to, and the payment of taxes on property is sufficient part performance to take the transaction out of the Statute of Frauds. Jolley v. Clay, 103 Idaho 171, 646 P.2d 413 (1982). In the present case, George took possession of the property, paid the sellers a cash down payment, made monthly payments on the property, and paid property taxes. This is sufficient part performance to take the contract out of the Statute of Frauds.
Third, an assumption of an existing mortgage by the purchaser can be inferred or implied from all the facts surrounding a transaction evidenced by an ambiguous writing and the conduct of the parties to that transaction. Hinckley Estate Co. v. Gurry, 53 Idaho 551, 26 P.2d 121 (1933). George made the monthly payments on both the Andes and Tipton notes directly to the holders of the notes, not to the sellers. This is a manifestation of George’s acknowledgment that she assumed the mort*979gages. These actions are inconsistent with the contention that she did not assume the mortgages.
When considering these factors in conjunction with all of the other factors surrounding the transaction, I believe the conclusion that should be reached is that George assumed the mortgages.