Keel v. Levy

• Decision Date: 01 July 1890
• Citation: 24 P. 253,19 Or. 450
• Parties: KEEL v. LEVY.
• Court: Oregon Supreme Court

24 P. 253

19 Or. 450

KEEL v. LEVY.

Supreme Court of Oregon

July 1, 1890

Appeal from circuit court, Marion county; R.P. BOISE, Judge.

This suit is prosecuted by the respondent to secure a partition of certain personal property, consisting mainly of grain grown upon the defendant's farm, and some land leased of other parties. The grain was raised by the plaintiff and one Rickey as partners. During all of the times mentioned in the pleadings, Rickey was indebted to the defendant in a large amount of money. After the grain had been sown, Rickey executed a mortgage to one A. Grant on his interest in the grain, to secure the payment of $700 which he had theretofore borrowed of Grant under a contract that said mortgage should be executed after the grain had been sown. Afterwards, for the sole purpose of additional security for the $700 borrowed of Grant by Rickey, the plaintiff executed a mortgage on his interest, being one equal undivided third of the same crops. Plaintiff's note was for $708.50. Keel's mortgage contains the following recital: "The above note together with the mortgage to secure the same, is given by me to said A. Grant in consideration of $708.50 loaned this day by said A. Grant to James M. Rickey at my special instance and request; and this note and mortgage is given by me to said A. Grant to secure said A. Grant the payment of the note and mortgage given this day by said James M. Rickey for said sum of $708.50, in case said James M. Rickey failed to pay on demand his said note; said note so given being dated April 2d, 1888, due one day after date, principal $708.50, with interest at ten per cent. per annum from date until paid, and for reasonable attorney's fees; and that it is further agreed that, when said Grant's claim is fully satisfied my responsibility is to cease." After the maturity of these notes, and when they were overdue, the plaintiff purchased them, as well as the mortgages, for the consideration of $710. He then caused an action to be commenced in his name against Rickey to recover a large amount which Rickey then owed him, and caused Rickey's interest in said grain to be attached, harvested by the sheriff, and then sold, at which sale the plaintiff became the purchaser. The amount of plaintiff's judgment in said action was $2,928.34 and costs, and the amount of plaintiff's bid for Rickey's interest was $1,115.50. The sheriff, after his levy under the attachment, harvested all of said crops; and his expenses and charges amounted to $1,058.79, which were paid by the defendant Levy.

(Syllabus by the Court.)

Unless fraus or illegality be pleaded and proven by a preponderance of the evidence, the writings executed by the parties must be enforced according to their legal import.

Fraud is a matter of fact, which must be proven. It is never presumed. It may be established by circumstances; but the circumstances relied upon must be of such a satisfactory character as to convince the mind of the trier of the fact that the transaction was a sham, and not what it purports to be.

Whether when the holder of a note secured by a chattel mortgage causes the mortgaged property to be attached on another debt due to him by the mortgagor, and sold, and such mortgagee purchases the same at the sale, and there is nothing to show that he intended to keep the mortgage alive as a lien, the mortgage is merged, quaere.

When the principal and surety each mortgages his own property as security for the debt of the principal, and the surety pays the debt, the principal's mortgage given to secure such debt passes to the surety by operation of law, and he is subrogated to all of the rights of such creditor.

Where the principal and surety have both mortgaged property to secure the debt of the principal, the surety is entitled to have the property of the principal sold first, and applied in satisfaction of the debt.

The lien of a chattel mortgage on a growing crop follows the grain after severance and removal, and the money after sale.

Tilmon Ford, for appellant.

J.J Murphy, for respondent.

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

The fact that Keel executed his note and mortgage on his one-third interest in the crops as surety for the $700 borrowed by Rickey of Grant must be taken as established by a clear preponderance of the evidence. Such is the plain import of the mortgage made by Keel to Grant, and it is not attacked for fraud either by the pleadings or directly by the evidence. Misner v. Knapp, 13 Or. 135, 9 P. 65. It is true the appellant refers to some of Keel's evidence on his cross-examination in relation to borrowing money, from which, it is suggested, an inference of fraud might be drawn but I do not think this is enough. Nor is this evidence alone sufficient upon which to predicate any such conclusion. Fraud is a matter of fact, which must be proven. It is never presumed. It is true that direct evidence on the subject is rarely attainable. It may, therefore, be established by circumstances; but the circumstances relied upon must be of such a satisfactory character as to convince the mind of the trier of the fact that the transaction drawn in question was a sham, and not what it purported to be. The evidence relied upon by the appellant on this point...