Betz v. Tower Savings Bank

55 P.2d 338, 185 Wash. 314, 1936 Wash. LEXIS 440
CourtWashington Supreme Court
DecidedFebruary 24, 1936
DocketNo. 25954. Department Two.
StatusPublished
Cited by14 cases

This text of 55 P.2d 338 (Betz v. Tower Savings Bank) is published on Counsel Stack Legal Research, covering Washington Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Betz v. Tower Savings Bank, 55 P.2d 338, 185 Wash. 314, 1936 Wash. LEXIS 440 (Wash. 1936).

Opinion

Beals, J.

In their amended complaint in this action, plaintiffs alleged the corporate existence of the two defendants first named in the caption of the action, and that the third defendant, John Bjorklund, was the regularly elected sheriff of Pierce county. Plaintiffs then alleged that, during the month of May, 1930, they were the owners of a tract of land in Tacoma, upon a portion of which stood the “Betz Building;” that the land was reasonably worth $125,000, and that defendant Tower Savings Bank (hereinafter referred to as the bank) loaned plaintiffs $42,000, accepting as security therefor a mortgage upon the land upon which the building stood; that thereafter plaintiffs by payments reduced the amount of the mortgage by some $2,000, but later failed to pay some installments of principal which fell due and some interest, whereupon the hank brought suit against plaintiffs seeking judgment upon plaintiffs ’ note, secured by the mortgage, together with foreclosure of the latter instrument ; that during the month of March, 1934, judgment was rendered against plaintiffs and in favor of the bank for over $50,000, and the property was ordered sold in satisfaction of the judgment; that the then sheriff of Pierce county sold the property to the hank for $43,000, leaving a deficiency judgment against *316 plaintiffs in the sum "of $7,500. In this connection, plaintiffs alleged:

“IV. . . . That at the time of the sale, to-wit, April 21, 1934, there were no bidders or purchasers present to bid for the property; that in violation of Section 585, Remington’s Revised Statutes of the State of Washington, Sheriff Campbell in collusion with the defendant bank, made a farcical sale of the property to the bank, -which was worth at least $100,000, for $43,000, leaving a deficiency judgment against the plaintiffs in favor of the bank for the sum of $7500.00; that said statute provides that in the event that at the time of a sale there are no purchasers, or other sufficient cause, or where it should not be to the advantage of all concerned (and which reasons were known to both the bank and the then sheriff, to be more fully stated in the next paragraph) the sheriff shall postpone said sale. The sheriff, however, did not postpone said sale; on the contrary, he made the alleged sale and in his return to the court, he fraudulently stated that the bank was the highest and best bidder of all the bidders, when he knew that there were no bidders. Moreover, both he and the defendant bank knew that the sale was not for the advantage of all concerned as required by the statute, but only for the advantage of the defendant bank, which obtained the property worth $100,000 for $43,000, and a deficiency judgment for $7500.00, which later was used to appropriate other property of the plaintiffs in the sum of $150,000, and there is still a deficiency of $750.00, all of which facts will be more fully set forth in the second cause of action.
“V. That in addition to the reasons furnished by the statute, namely, Section 585, the sale should have been postponed for equitable reasons as well as on the ground of public policy. At the time of the sale, the property was intact and had depreciated very little since 1930, and although market conditions were bad, a matter of common knowledge to everyone, the Betz Building and land had a reproduction value of at least $100,000; that the defendant bank and the then sheriff had common knowledge of the facts; that *317 money was scarce, and that unless the Federal government loaned money to the banks and other owners of property, such as homes and farms, and both Federal and state governments restricted depositors of hanks from withdrawing their deposits, the people would lose their all; that the defendant hank was one of those assisted by the government; that the Federal government, although it assisted many, did not, until recently, offer to assist these plaintiffs, and now that it has, the assistance will be futile by reason of the fact that the time for redemption will shortly expire, unless the order of sale and/or the return are held void by the court on equitable grounds, and allows these plaintiffs to borrow money from the government to redeem their property; that the new public policy as expressed by the federal government, namely, loaning money to property owners to avoid confiscation of property by private parties, and as expressed by the legislature of the state of Washington, which at its last session passed a law requiring the court to establish a minimum or upset price in foreclosure proceedings so as to give equitable compensation to the mortgagors, should urge this court to apply equitable principles. Equity sprang up out of the harsh application of the common law, and the statutory law when it deprived people of their property. The plaintiffs respectfully state that the economic conditions of which the court must take judicial notice, cry for equity against the taking of property without adequate compensation.
“VI. The sale was void because made in violation of Section 585; because of the false return made by the sheriff which was a fraud perpetrated on the court; because sold when there were no bidders; because of the gross inadequacy of price. The time for redemption expires shortly. The present sheriff, John ■Bjorklund, should he restrained from issuing a deed to the property to the hank or to any person or persons the bank may have assigned the judgment or its interest.
“VII. As an additional reason for equity to interfere on the side of these plaintiffs, the plaintiffs believe and state it as a fact that shortly after the *318 farcical sale was made to the bank, the bank entered into an agreement with the Tacoma Drag Company and third parties, whose names these plaintiffs do not know, to sell the said property for about $80,000, the exact amount the plaintiffs do not know; that these third parties may claim some interest in the said property, but which interests are inferior to that of the plaintiffs, and are based upon the invalid sale.”

For a second cause of action, plaintiffs re-alleged the paragraphs of their first cause of action, and in addition pleaded:

“II. That the Betz Building, even if the sale was valid, was worth more than the judgment, and the defendant bank was not entitled to a deficiency judgment in any sum. In equity and good conscience the deficiency judgment should be set aside.
“III. The defendant bank, having obtained fraudulently and illegally, a deficiency judgment in the sum of $7500.00, as aforesaid on November 10, 1934, proceeded in the same cause, namely 72430, to sell other property of the plaintiffs, to satisfy the iniquitous judgment. The property levied upon is adjacent to the Betz Building in the same section of Tacoma, with the same business advantages; in fact it consists of the balance of the block, and is reasonably worth $150,000, exclusive of legitimate incumbrances. The property is legally described as:
“ ‘All of Blocks 1502 and 1503, map of New Tacoma, Washington Territory, with the vacated portion of Jefferson Street, in the City of Tacoma.’
On said November 10, 1934, the then Sheriff Campbell, Jr., proceeded to hold a mock public auction at which so-called auction there were no bidders or purchasers.

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Cite This Page — Counsel Stack

Bluebook (online)
55 P.2d 338, 185 Wash. 314, 1936 Wash. LEXIS 440, Counsel Stack Legal Research, https://law.counselstack.com/opinion/betz-v-tower-savings-bank-wash-1936.