Bouldin v. Turek

607 P.2d 962, 125 Ariz. 85, 1978 Ariz. App. LEXIS 771
CourtCourt of Appeals of Arizona
DecidedAugust 15, 1978
DocketNo. 1 CA-CIV 3790
StatusPublished

This text of 607 P.2d 962 (Bouldin v. Turek) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bouldin v. Turek, 607 P.2d 962, 125 Ariz. 85, 1978 Ariz. App. LEXIS 771 (Ark. Ct. App. 1978).

Opinion

OPINION

HAIRE, Presiding Judge.

The only issue raised in this appeal is whether the sellers’ right to forfeit the buyer’s interest under an agreement for the sale of real property was waived by reason of a mortgagee’s acceptance of mortgage payments.

The buyer (appellant) filed an action to set aside a completed forfeiture of his interest in the subject real property. After discovery, cross motions for summary judgment were filed, and the trial court granted judgment in favor of the sellers, in effect upholding the validity of the forfeiture proceedings. On appeal the buyer, admitting that there is no genuine issue of material fact involved, contends that the trial court erred in applying the law to the admitted facts.

The purchase agreement here involved provided that the purchase price was payable in part by the buyer’s assumption of an existing first mortgage obligation payable in monthly installments directly to the [86]*86mortgagee, Western Savings and Loan Association, with the balance of the purchase price payable to the sellers in monthly installments through the parties’ escrow collection agent. The purchase agreement further provided that if the buyer defaulted in making payments required by the contract, the sellers could enforce a forfeiture of the buyer’s interest by means of a forfeiture notice. At the time of the forfeiture proceedings, the buyer had paid less than 20% of the purchase price, and therefore the applicable forfeiture period was 30 days. See A.R.S. § 33-741.

, Without going into the specific details, suffice it to say that the sellers had been encountering some difficulties in obtaining timely payment by the buyer of both the contract payment and the mortgage payment. On October 28, 1975, the buyer was delinquent on three payments on the mortgage, totalling $1,456.40. In order to protect their interests, the sellers paid this amount to the mortgagee on that date. Under the terms of the purchase agreement, the sellers were entitled to reimbursement from the buyer for any delinquent mortgage payments which the sellers might make. At the time the sellers made the delinquent mortgage payments, the buyer was also in default under the provisions of the contract requiring payments to the sellers through the escrow collection agent for the payment due October 5th. After the buyer also defaulted on the escrow payment which was due on November 5th, the sellers caused a notice and declaration of forfeiture to be mailed by the escrow agent on November 18, 1975. This notice demanded reimbursement to the sellers for the amount of the three mortgage payments previously made by sellers, and that the buyer pay the past-due October 5th and November 5th contract payments. The notice further informed the buyer that unless these sums were paid by November 28, 1975, the sellers would enforce their right to a forfeiture of the buyer’s interest. The buyer did not make these payments as required.

No claim is made on this appeal that these forfeiture proceedings were procedurally defective in any manner, or that from a time standpoint the sellers’ right to enforce a forfeiture had not accrued. Although the buyer does allege that ne did not actually receive the notice of forfeiture, he apparently concedes that the notice was appropriately mailed by the escrow agent and was in all respects sufficient to accomplish a forfeiture, absent the facts hereinafter set forth which the buyer contends constitute a waiver by sellers of their right to accomplish a forfeiture.

The claimed waiver is based upon the mortgagee’s acceptance from the buyer of three mortgage payments. The pertinent facts are as follows. We have previously indicated that on October 28, 1975, the sellers paid three delinquent mortgage payments owed by the buyer. This payment to the mortgagee by the sellers brought the mortgage current through the October installment. On November 4, 1975, the buyer’s mother-in-law paid to the mortgagee the payment which was due on November 5th. Thereafter, on November 15th, she made the December payment on the mortgage. These payments were accepted by the mortgagee. Similarly, a mortgage payment was made and accepted for the payment of the January 1976 mortgage installment. The sellers had no knowledge that these mortgage payments had been made by or on behalf of the buyer and accepted by the mortgagee until several months after the forfeiture had been accomplished, and this litigation initiated.

The buyer now contends that the acceptance by the mortgagee of these mortgage payments during and after the forfeiture period constituted a waiver by the sellers of their right to forfeiture. We disagree, and therefore affirm the trial court’s judgment.

Here, the sellers’ right to forfeiture was based upon defaults by the buyer separate and independent of the buyer’s ongoing obligation under his assumption of the first mortgage. The sellers had no right to instruct or cause the mortgagee, Western Savings and Loan Association, to refuse to [87]*87accept then current payments, and more importantly, the forfeiture was not based upon a default on the obligation owed to Western Savings, but rather, was based upon a default on obligations owed directly to the sellers.

Hale v. Flores, 19 Ariz.App. 236, 506 P.2d 276 (1973) has ruled upon the precise issue presented in this case and is dispositive of this appeal. In Hale, as in this case, the buyer was to assume an existing mortgage and pay the seller an additional monthly sum. There the buyer, again as in this case, continued to make the monthly mortgage payments, but did not make the required payments to the seller. The seller brought proceedings to forfeit the buyer’s interest in the property. The buyer claimed that the seller had waived his right to forfeiture because the mortgagee had accepted the mortgage payments during the forfeiture period. The Court of Appeals upheld the forfeiture, stating:

“This contention is without merit in that plaintiff [seller] had no way of knowing whether the mortgage payments were being made; further, she had no legal duty or right to insist that the mortgage company not accept the payment.”

19 Ariz.App. at 238, 506 P.2d at 278

We find the buyer's attempt to distinguish Hale unpersuasive. Nor can the buyer find any solace in this Court’s opinion in Eyman v. Sowa, 23 Ariz.App. 588, 534 P.2d 1087 (1975). In that case, unlike the fact situation presented here,1 the seller was relying solely on a delinquent mortgage payment as constituting the cause for forfeiture. Under those circumstances we held that the seller was bound by the prior conduct of the mortgagee which constituted a waiver of the time of the essence clause of the contract insofar as concerns the mortgage payments. The holding in Eyman is extremely limited. As we cautioned in that opinion:

“By reaching this conclusion we do not hold that acts by a mortgagee in accepting late payments will in all circumstances constitute a waiver on the sellers’ part.”

23 Ariz.App. at 591, 534 P.2d at 1090

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Related

Browne v. Nowlin
570 P.2d 1246 (Arizona Supreme Court, 1977)
Eyman v. Sowa
534 P.2d 1087 (Court of Appeals of Arizona, 1975)
Hale v. Flores
506 P.2d 276 (Court of Appeals of Arizona, 1973)

Cite This Page — Counsel Stack

Bluebook (online)
607 P.2d 962, 125 Ariz. 85, 1978 Ariz. App. LEXIS 771, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bouldin-v-turek-arizctapp-1978.