Clark v. Courtland Lumber Co.
| Decision Date | 25 November 1953 |
| Citation | 199 Or. 647,264 P.2d 439 |
| Parties | . et al. Supreme Court of Oregon |
| Court | Oregon Supreme Court |
Charles R. Cater, La. Grande, argued the cause and filed a brief for appellants.
W. F. Brownton, La. Grande, argued the cause and filed a brief, for respondents.
Before LATOURETTE, C. J., and WARNER, ROSSMAN, LUSK and TOOZE, JJ.
This is a suit in equity in the nature of a creditors' bill, wherein Thomas L. Clark, Carl Scott, John Thomas Scott, John W. Hunter, and Mary Ann Hunter Wooten, a partnership, dba T. L. Clark Lumber Company, are plaintiffs, and Courtland Lumber Company, a corporation, A. Sherwood Nelson, F. E. Calder and Eunice Calder, husband and wife, are defendants, to subject to the payment of a debt alleged as owing to plaintiffs, an alleged equitable interest in personal property of defendant F. E. Calder. The trial court entered a decree in favor of defendants, and plaintiffs appeal.
The personal property involved in this suit consists of a lumber planing machine and attachments which defendant F. E. Calder purchased March 21, 1951, under a conditional sales contract, from Bader & Carroll, of Portland, Oregon.
The property is described as '1--Woods 404-B, 6 X 15-8 K planer and matcher W/T & B profiles--motorized side heads with belts & blower hoods, jointers and countershaft for planer and profiles'. The purchase price was $12,500, upon which the sum of $4,167.02 was paid in cash at the time of purchase. The contract provided that the balance of the purchase price should be paid in 12 equal successive monthly instalments of $736.08 each, the first payment to be made on April 21, 1951. It also was provided that title to said personal property should remain in the seller until full payment of the purchase price. On January 12, 1952, Calder owed a balance of approximately $4,500 on said purchase price and was in default.
Calder operated a lumber planing mill at Elgin, Oregon, under the name of 'Elgin Pine Lumber Sales'. Said mill was located upon real property owned by W. H. Culp and Myrtle Culp. The personal property above described, together with other miscellaneous tools and machinery owned by Calder, were located and used in said planing mill.
In the fall of 1951 and in January, 1952, Calder was experiencing financial difficulties. He was indebted to plaintiffs in a substantial sum of money, the exact amount of which was not known, as well as being heavily indebted to others. He endeavored to sell his planing mill, offering it to plaintiffs and to others. Plaintiffs declined to purchase. Late in 1951, defendant Calder opened negotiations with defendant Courtland Lumber Company, acting by and through its president, A. Sherwood Nelson, for the sale of the mill to that defendant.
In December, 1951, and in connection with its negotiations for the purchase of the planing mill, defendant Courtland Lumber Company made contact with Clyde P. Carroll of the firm of Bader & Carroll, with a view to purchasing the seller's interest in the planer. T. L. Clark, one of the plaintiffs, also attempted to purchase that interest. Early in January, 1952, Bader & Carroll agreed to transfer their interest in the planer to Courtland Lumber Company upon payment of the balance of the purchase price owing on the conditional sales contract, with accrued interest. When assured of being able to acquire the interest of Bader & Carroll in the planer, defendant Courtland Lumber Company agreed to and did, on January 12, 1952, purchase the said planind mill and all the equipment therein contained from the said Calder for the sum of $16,500. Seven thousand eight hundred dollars of this purchase price represented the amount paid on account of Calder's interest in the personal property purchased from Bader & Carroll. At the same time (January 12, 1952) defendant Courtland Lumber Company entered into an agreement in writing with W. H. Culp and Myrtle Culp, his wife, for the purchase of the real property upon which the planing mill was located.
On January 12, 1952, Calder executed and delivered to Courtland Lumber Company a written assignment of all his right, title and interest in and to the conditional sales contract covering the planer purchased from Bader & Carroll. Also, on the same day, he executed and delivered to Courtland Lumber Company an additional written assignment of all his right, title and interest in and to a certain conditional sales contract covering a Hyster lumber carrier purchased from Southeast Equipment Company of Portland.
On or about January 12, 1952, defendant Courtland Lumber Company took possession of said planing mill and all the equipment therein contained and posted notices on said property to that effect. On January 22, 1952, Bader & Carroll by written assignment assigned all its right, title and interest in and to said conditional sales contract covering said planer, to Courtland Lumber Company.
On January 16, 1952, plaintiffs commenced an action at law against Calder for the recovery of money. A writ of attachment was issued, but no attachable property was found. That action was not prosecuted to judgment and was pending at the time of trial of the instant suit.
On January 24, 1952, plaintiffs filed their complaint in this suit. They alleged that the legal title to the said personal property at the time the writ of attachment was issued in the law action against Calder was vested in Bader & Carroll; they further alleged that on a date prior to the commencement of this suit the legal title was assigned and transferred by Bader & Carroll to Courtland Lumber Company. There are no allegations in the complaint relative to the sale and transfer of Calder's equitable interest to the Courtland Lumber Company. Plaintiffs explain their failure to make such allegations on the ground that they did not know of such transfer until the answer of defendants had been filed in this suit. Plaintiffs alleged that the sale from Bader & Carroll of the legal title to Courtland Lumber Company was made at the instance and request of Calder, who, they charge, was indebted to them, the plaintiffs, and that it was made for the secret use and benefit of Calder and for the purpose of evading his debts. They further alleged that Courtland Lumber Company and A. Sherwood Nelson accepted the assignment of the legal title knowing that it was made for the secret benefit of Calder and for the purpose of defrauding his creditors.
Defendants in their answer denied the material allegations of plaintiffs' complaint and affirmatively alleged that at the time of the issuance of the writ of attachment in the law action, they were the owners of the equitable interest of Calder in the planer which they had prior thereto purchased from Calder for the sum of $7,800.
In their reply plaintiffs simply denied that Calder had, prior to January 16, 1952, assigned to Courtland Lumber Company for any consideration his right, title, or interest in said conditional sales contract for the purchase of said planer. It is to be noted that plaintiffs' reply contains no allegation that the purchase by Courtland Lumber Company of the equitable interest of Calder in the contract and planer was fraudulent.
Two issues of fact were presented by the pleadings: first, was the sale by Bader & Carroll to Courtland Lumber Company of the legal title to the planer made for the secret benefit of Calder and in fraud of creditors?; second, did Calder at the time of issuance of the writ of attachment in the law action have an equitable interest in the planer that might be attached in this suit?
At the outset of the trial plaintiffs abandoned their claims upon the first issue and offered no evidence in support thereof. Upon the second issue, the trial court found against plaintiffs.
In deciding the issues, the able trial judge prepared and filed a written opinion in which he carefully and thoroughly discussed, analyzed, and weighed all the evidence in the case. Findings of fact and conclusions of law, in keeping with the written opinion, were entered of record. Upon this appeal, plaintiffs' principal complaint is that the trial court did not correctly evaluate the testimony in the case.
Plaintiffs in their brief state the issue on this appeal as follows:
'The question on this appeal is whether the burden of pleading and proof was upon the defendants and whether they have sustained that burden.'
No contention is made that plaintiffs cannot maintain this suit because they have not reduced their money claim against Calder to judgment, although that contention was made by defendants in the trial court in support of their general demurrer to the complaint. The allegations of the complaint and the proof on trial are sufficient to establish the insolvency of Calder. The law in this state is well set forth...
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