Churchill v. Meade

• Decision Date: 24 June 1919
• Parties: CHURCHILL ET AL. v. MEADE ET AL.
• Court: Oregon Supreme Court

182 P. 368

92 Or. 626

CHURCHILL ET AL. v. MEADE ET AL.

Supreme Court of Oregon

June 24, 1919

Department 1.

Appeal from Circuit Court, Tillamook County; George R. Bagley Judge.

Suit by Arthur M. Churchill and another against Minnie A. Meade and another. Decree for plaintiffs, and defendants appeal. Reversed and remanded.

See also, 88 Or. 120, 171 P. 565.

By suit in the circuit court of Tillamook county the plaintiff Churchill, as the assignee of his coplaintiff, foreclosed a mortgage against the defendants herein upon real property and chattels in that county and upon realty in Multnomah county. Execution was issued on the decree, and the Tillamook land was sold, as the complaint here alleges, for $15,000, its full value. The chattel property also was sold, and its proceeds were applied to the partial satisfaction of the decree. Another execution was issued to the sheriff of Multnomah county for the satisfaction of the unpaid balance and on October 16, 1916, at an adjourned sale for want of bidders at the advertised date, the property was struck off to the plaintiff Churchill for $3,110. No bids were received at the sheriff's sale except that of Churchill.

It is stated in the complaint, in substance, that the intention of Churchill for himself and his coplaintiff was that the amount to be bid for the Portland property was the balance remaining unpaid on the decree, and that the intention was that the amounts bid should be paid only by having the same applied on the judgment. It is averred that the Portland realty was worth not more than $1,550, and neither of the plaintiffs would have been willing to take either of the tracts in Portland for that amount, but bid more than the property was worth, so that, if redemption were made, the plaintiffs would have the benefit thereof, to the end that the decree should be entirely satisfied. They say that:

"In fixing the amounts to be bid for said property plaintiffs had a calculation made of the balance still unpaid on said judgment, and, according to the said calculation, there remained at the time of sale of the Portland property a balance unpaid upon said judgment of $3,588.25."

They aver that they relied upon the calculation, believing it to be correct, and acting thereon, and not otherwise, made the bid as stated, intending that the amount thereof should be paid only by giving credit therefor on the balance of the judgment. They say that they would not have made the bid if it had required the payment of any money. They further allege:

"That in the calculation aforesaid a mistake occurred, in that by oversight and inadvertence interest for one year upon the principal amount named in the judgment was added, and in consequence thereof the total amount calculated as accrued upon said judgment was $1,012.50 greater than the true amount accrued; that plaintiffs had no knowledge or information that said mistake had been made, and did not discover said error until on or about July 10, 1918."

The sales were confirmed by the Tillamook court about November 20, 1916, without detection of the mistake then or by any one until about July 10, 1918, when one of the attorneys for the defendants for the first time discovered that a correct calculation of the amount accrued upon the judgment showed that it had been overpaid by the bid, and that upon the face of the record the plaintiffs had received from the sheriff upwards of $700 more than the amount of the judgment when the amount due was computed correctly. The plaintiffs plead several offers to the defendants to adjust the matter by giving them credit on the judgment for the amount of the excess and otherwise, and declare that no income has been received by the plaintiffs for the Portland property, that no sheriff's deed has been issued, and that the sheriff's certificate has been assigned to the plaintiff Beals.

The complaint alleges that the defendants are demanding payment from the plaintiffs of the amount overpaid, and that the defendant Minnie Meade has brought an action against Churchill in the circuit court of Multnomah county to recover the surplus, claimed by her to be $774.95, well knowing that the apparent balance is the result of the mistake already mentioned. This pleading further avers:

"That the aforesaid mistake was not caused by the gross negligence on the part of the plaintiffs, in that said calculation was made at a time when the sheriff's returns of sales on chattel mortgages had not been filed and the exact amount to be credited on said judgment on account thereof had not been determined, and by reason of the fact that said sales were made at different times and required several calculations as to amount of interest accrued to the dates when the credits were to be given, and by reason of said complications confusion crept into the calculations being made, and by the aforesaid inadvertence mistake, and oversight interest for one year and a portion of another year was included, when only interest for a portion of the year should have been included."

The plaintiffs express a willingness that the sale and confirmation be set aside, the proceedings connected therewith canceled, and a resale of the property made, or to set aside the judgment allowing the sale to stand and to transfer the property to the defendants on the terms offered to them, or to have such other disposition made of the transaction as the court may deem equitable. Claiming to have no plain, speedy, or adequate remedy at law, they pray that the confirmation be set aside, and that the defendants be enjoined from prosecuting any action against the plaintiffs for the apparent excess of the bid over the amount of the judgment.

The defendants interposed a demurrer to the complaint on the following grounds:

"First. The complaint shows that the court has no jurisdiction of the persons of the defendants, or of the subject-matter.

"Second. The complaint shows that there is another action at law pending in Multnomah county, Or., between the real parties at interest herein, for the same cause, arising out of the same state of facts, wherein the relief sought herein, if just, could be obtained by a cross-bill in equity, in the manner provided by the Code, and that said action was pending at the time the complaint herein was filed.

"Third. There is a defect of parties plaintiff, in that plaintiff F. R. Beals is a stranger in this action, as shown by the allegations of the complaint; plaintiff Churchill being alone the party at interest under the pleadings.

"Fourth. That several causes of suit have been improperly united, to wit, a suit to vacate a final judgment of this court, and a suit asking equitable relief against a law action pending between the parties in Multnomah county, Or.

"Fifth. Because the complaint does not state facts sufficient to constitute a cause of suit against the defendants, or either of them."

The circuit court overruled the demurrer, and, the defendants having declined to plead further, a decree was rendered setting aside the sale and confirmation and enjoining the prosecution of the action at law. The defendants appealed.

Tom B Handley, of Tillamook (Johnson & Handley, of Tillamook, on the brief), for appellants.

H. T. Botts, of Tillamook, for respondents.

BURNETT, J. (after stating the facts as above).

The defendants contend that the plaintiffs have a full and adequate remedy for the matters alleged in their complaint in the action at law pending in Multnomah county. They rely upon section 390, L. O. L., as amended by the act of February 13, 1917 (Laws 1917, p. 126), reading as follows:

"Bills of revivor and bills of review, of whatever nature, exceptions for insufficiency, impertinence, or irrelevancy, and cross bills are abolished; but a decree in equity may be impeached and set aside, suspended, avoided, or carried into execution by an original suit; and in an action at law where the defendant is entitled to relief, arising out of facts requiring the interposition of a court of equity and material to his defense, he may set such matter up by answer, without the necessity of filing a complaint on the equity side of the court; and the plaintiff may, by reply, set up equitable matter, not inconsistent with the complaint and constituting a defense to new matter in the answer. Said reply may be filed to an answer containing either legal or equitable defenses. The parties shall have the same rights in such case as if an original bill embodying the defense or seeking the relief prayed for in such answer or reply had been filed. Equitable relief respecting the subject matter of the suit may thus be obtained by answer, and equitable defenses to new matter contained in the answer may thus be asserted by reply. When such an equitable matter is interposed, the proceedings at law shall be stayed and the case shall thereafter proceed until the determination of the issues thus raised as a suit in equity by which

the proceedings at law may be perpetually enjoined or allowed to proceed in accordance with the final decree; or such equitable relief as is proper may be given to either party. If, after determining the equities, as interposed by answer or reply, the case is allowed to proceed at law, the pleadings containing the equitable matter shall be considered withdrawn from the case, and the court shall allow such pleadings in the law action as are now provided for in actions of law. No cause shall be dismissed for having been brought on the wrong side of the court. The plaintiff shall have a right to amend his pleadings to obviate any objection on that account. Testimony taken before the amendment and relevant to the issue in the law actions shall stand with like effect as if the pleadings had been originally in the

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