Peppard
Orange County Teachers Credit Union v. Peppard
Opinion
Opinion
Ault, J.
Sally V. Peppard, the defendant homeowner, appeals from a judgment of the Orange County Superior Court which holds an instrument entitled “Agreement and Assignment of Rents” to be an equitable mortgage, and decrees its foreclosure.
Facts
On June 24, 1963, Benny L. Zane and his wife Wanda applied for a loan from plaintiff Orange County Teachers Credit Union (Credit Union). The credit application listed the following items as collateral, with the loan values the Credit Union assigned to them:
On the same day the Zanes signed an installment promissory note in the amount of $4,250. Part of the money was to be used to pay off previous loans from the Credit Union.
The Credit Union waited for over a month before actually paying the money to the Zanes, to allow “time to check and verify certain things involved in the loan.” During this period, it obtained a “lot book report” on real property owned and occupied by the Zanes. However, the Credit Union did not inspect the property, did not verify the price the Zanes had actually paid for it, and although knowing the property was encumbered, did not check to see if the payments were current or the taxes paid.