United States v. Howard Gish and Jacquelyn Gish, His Wife

The government appeals from the dismissal of its action for a deficiency judgment which the district court held barred by an Alaska statute prohibiting recovery of such judgments following a nonjudicial foreclosure.

The Small Business Administration (SBA) made a $147,000 disaster relief loan to Howard and Jacquelyn Gish in 1967 as a result of flood damage to their rental properties. The loan was secured by deeds of trust on three parcels of property and the terms of the deeds were incorporated in the note by reference. In 1969 the amount of the loan was increased to $160,000.

The deeds of trust contain two critical typewritten provisions. First, paragraph 6 provides that “[tjrustor shall be liable for and agrees to pay any deficiency.”

Second, paragraph 12 explicitly states:

In February 1970, after the SBA had deferred appellees’ loan payments several times, it accelerated the note and demanded payment. Appellees had then paid $3,811.15 on the loan. They requested a six month extension to enable them to make satisfactory financial arrangements. SBA agreed. When no further correspondence or payment was received the SBA exercised its statutory power of sale under the deeds of…