Egan v. North American Savings, Loan & Building Co.

• Decision Date: 16 May 1904
• Citation: 76 P. 774,45 Or. 131
• Parties: EGAN v. NORTH AMERICAN SAVINGS, LOAN & BUILDING CO. et al.
• Court: Oregon Supreme Court

76 P. 774

45 Or. 131

EGAN v. NORTH AMERICAN SAVINGS, LOAN & BUILDING CO. et al.

Supreme Court of Oregon

May 16, 1904

Appeal from Circuit Court, Multnomah County; Alfred F. Sears, Jr. Judge.

Action by Mary Egan against the North American Savings, Loan &amp Building Company and another. From an order denying defendants' motion to set aside a decree for plaintiff defendants appeal. Affirmed.

This is a motion to set aside a decree. The facts are that on August 24, 1891, B.F. Egan, plaintiff's husband, being the owner of lots 6 and 7 in block 24 in North Portland, formerly Albina, secured from the defendant the North American Savings, Loan & Building Company, a corporation existing under the laws of Minnesota, a loan of $1,200, and gave to it his promissory note as evidence thereof, with monthly interest at the rate of 6 per cent. per annum, payable after three and before nine years, upon the maturity of 36 shares of its capital stock, for which he subscribed. The note was secured by a mortgage on these lots, executed by Egan and his wife, and by an assignment of 24 shares of such stock, the remaining shares having been transferred to the corporation as a bonus to secure the loan. Egan made 51 monthly payments of $27.60 each, being 60 cents per share on the stock for which he subscribed, and $6 on account of the interest on the loan; and on November 1, 1895, he executed a deed of the mortgaged premises to the plaintiff as a gift, and to avoid the expense of administration in anticipation of his death which occurred about January, 1896. The plaintiff, after securing the title to the lots, also paid 19 like monthly installments, and thereafter, insisting that the debt was discharged, instituted a suit in the circuit court for Multnomah county to cancel the mortgage, joining Edward B. Graves as a defendant, alleging that on account of the insolvency of the corporation he had been appointed its receiver by the district court of the Second Judicial District for Ramsey county, Minn., and that the mortgage had been assigned to him. The defendants not being residents of, nor found within, this state, the summons was, by order of the court, served by publication, and, due proof thereof having been made, a decree was entered April 21, 1902, canceling the mortgage. Before the expiration of a year from the rendition of the decree, Graves moved the court to set aside the default, and to permit an answer to be filed, supporting his motion by affidavits tending to show that he had no knowledge that the suit was pending until after the decree was rendered, and that by mistake and excusable neglect the defendants had been deprived of their day in court. He also tendered an answer which denied some of the averments of the complaint, admitted the payments claimed to have been made by plaintiff and her husband on account of the loan, but alleged that, according to the method adopted by the corporation of applying the money so received, the debt had been reduced only to the extent of $122.40, leaving due thereon $1,097.60, and prayed that the mortgage might be foreclosed, and the lots sold to satisfy such liability. The motion was denied, and the defendants appeal.

H.G. Platt, for appellants.

M.G. Munly, for respondent.

MOORE C.J. (after stating the facts).

It is contended by defendants' counsel that plaintiff, having alleged that Graves was appointed receiver of the defendant corporation, neglected to aver that she had secured leave of court to institute proceedings against him, and, this being so, the complaint failed to state facts sufficient to constitute a cause of suit, and an error was committed in overruling the motion. Our statute, in defining the office of a receiver and prescribing the duties devolving upon him, is as follows: "A receiver is a person appointed by a court or judicial officer to take charge of property during the pendency of a civil action, suit, or proceeding, or upon a judgment, decree, or order therein, and to manage and dispose of it as the court or officer may direct." B. & C Comp.§ 1080. It is the court, by its agent, the receiver, that takes possession of the property in controversy pendente lite, or after judgment or decree, for the benefit of the persons entitled thereto, when it does not deem it proper that either party should have control thereof. Beach on Receivers (Alderson's Ed.) § 2. "The possession of the receiver," says Mr. Justice Baldwin, in Beverley v. Brooke, 4 Grat. 187, "is that of the court, and any attempt to disturb it without leave first specially granted will be a contempt, and may be punished as such." Mr. Justice Thayer, in Thompson v. Holladay, 15 Or. 34, 14 P. 725, in speaking of the right of creditors to institute actions against a receiver, says: "They may bring and maintain suits against the receiver in his official capacity, almost as a matter of course, and obtain judgments against him binding the estate, subject to the equities of other parties interested in it. They are compelled, it is true, to obtain leave of the court having custody of the property to bring their suits against the receiver, but that requirement is imposed to prevent vexation and confusion; and they may maintain suits against the debtor in any forum as a matter of right, but the judgment recovered in such case will not bind the receiver, or compel him to do anything in aid of its enforcement." Further in the opinion it is observed: "There is no principle better established than that, where property in litigation is taken into the custody of the court, through the intervention of a receiver, a party interested cannot go into another forum and establish any claim to it. The court which first takes cognizance of the controversy is entitled to retain jurisdiction to the end of the litigation, and, incidentally, to take possession and control of the subject-matter of the suit, to the exclusion of all interference from other courts of concurrent jurisdiction. The principle grows out of a spirit of comity, which has the highest aim for the public good, and without the observance of which conflicts of a serious nature would be likely to arise." The several...