Martinez v. Martinez

678 P.2d 1163 (1984)

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Nature of the Case

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Facts

P sold land, under a real estate contract, to D. D agreed to assume the mortgage on the property, which then amounted to $8,580.34. P, the parents of Carlos (D) handed over to Ds a warranty deed. P orally instructed D to take the deed to the Southwest Savings and Loan Association (Southwest), the mortgagee, to be held in escrow until the mortgage had been paid in full. Instead, D recorded the deed. D made payments of $ 119 per month through November 1980. They encountered marital difficulties. Carlos (D) informed Sennie (D) that he no longer was going to pay any mortgage installments but that she would be solely responsible for them. In December 1980, a representative of the mortgage company informed Sennie (D) of her obligations under the mortgage and told her that, if the mortgage remained in default for ninety days, legal action would be taken to foreclose. D defaulted and P cured the default and asserted that the property was to revert back to them. Carlos (D) reconveyed, but Sennie (D) refused. P sued to recover the property. The trial court ruled for P from extrinsic evidence of the P's intent at the time the warranty deed exchanged hands and found that they intended the deed to be held in escrow until the mortgage had been paid in full.