Bank of Fairbanks, a Corporation v. A. L. Kaye, Jean Kaye and Josephine Boussard

The Bank of Fairbanks, hereafter the Bank, appeals from a judgment of the District Court for refusing to foreclose a mortgage of certain lands given by Mr. and Mrs. Kaye to secure promissory notes given by them to the Bank. The District Court held that the Bank had waived its right to declare the notes in default, by a novation agreement whereby the Kayes note indebtedness was transferred to and assumed by one Boussard and that the Bank was estopped from foreclosing the mortgage. The Bank contends the Court erred in finding such waiver and novation or that it was estopped to foreclose the mortgage as against the Kayes.

Mr. and Mrs. Kaye were obligated to the Bank on several overdue notes secured by a mortgage on the real property in question. Through one Dworkin they sought to sell the property to pay the notes. Dworkin negotiated with Bous-sard, a prospective buyer of the property. Dworkin then contacted Bailey, the vice-president of the Bank, and explained the terms of the proposed agreement to him. Bailey said that they would not be acceptable to the Bank. Dworkin called Bailey later, and Dworkin testified that “he told me, well, it looks like these notes have defaulted, I…