United States v. William Lee Stewart and Shirley Stewart, His Wife, and the Marital Community Composed Thereof

The appellee, United States of America, brought this action against appellants, William Lee and Shirley Stewart, husband and wife, for a claimed deficiency on a direct loan made by the Veterans Administration (VA) to the Stew-arts in the State of California. The money received from the loan, in the amount of $17,500.00, was used by the Stewarts to purchase a home in California, which loan was evidenced by a Trust Deed Note which was secured by a Deed of Trust.

The Stewarts defaulted on the payment of the loan and the VA elected to sell the home at a non-judicial sale on September 27, 1967, under and pursuant to the Deed of Trust. After the sale there remained a deficiency on the loan of $1,041.26. This action was commenced on January 10, 1973 for the deficiency, together with interest, in the State of Washington where the Stewarts were then residing.

The issue in regard to the liability of the Stewarts for the claimed deficiency was submitted to the trial court on motions for summary judgment filed by the parties, which motions were based on a stipulation of pertinent facts. The district court, relying on the decision of this court in Branden v. Driver, 441 F.2d 1171…