Knighton v. Chamberlin

• Decision Date: 01 May 1917
• Citation: 164 P. 703,84 Or. 153
• Parties: KNIGHTON v. CHAMBERLIN ET AL.
• Court: Oregon Supreme Court

164 P. 703

84 Or. 153

KNIGHTON v. CHAMBERLIN ET AL.

Supreme Court of Oregon

May 1, 1917

Department 2.

Appeal from Circuit Court, Marion County; William Galloway, Judge.

Suit by Lella Knighton against Joseph Weller Chamberlin and others in which defendants Chamberlin filed a cross-complaint against defendants Herrold. From a decree as prayed for on the cross-complaint, defendant L. O. Herrold appeals. Affirmed.

This is a suit by Lella Knighton against Joseph W. Chamberlin and Rose W. Chamberlin, his mother, L. O. Herrold, and Epsie E Herrold, his wife, to foreclose a mortgage on lots 11 and 12 in block 74, in North Salem addition to Salem, Or., executed by Mr. Chamberlin to secure a promissory note which he and his mother gave June 21, 1913, to the plaintiff for $500 maturing in two years, with 8 per cent. interest, payable semiannually, and providing for the payment of a reasonable sum in addition as attorney's fees if a suit was instituted to collect any part of the note. The complaint is in the usual form, alleges the payment of only three installments of $20 each as interest, and that $75 is a reasonable sum as attorney's fees.

The separate answer of Mr. Chamberlin and his mother admits most of the averments of the complaint, and by way of cross-complaint for affirmative relief alleges in substance that about November 26, 1913, he entered into a contract with the defendant Mr. Herrold, pursuant to which he conveyed the real property hereinbefore described to the latter, who agreed to assume and pay the mortgage on such premises, and Mr. Chamberlin also deeded a house and lot on Twentieth street, Salem, Or., to the defendant Mrs. Herrold, then Miss Smith, who assumed and agreed to pay a mortgage thereon of $500, and in consideration thereof Mr. Herrold caused to be transferred the tools, machinery, etc., and his interest in a building used for housing motor vehicles and known as the "Salem Auto Garage," then subject to a mortgage of $500, the payment of which Mr. Chamberlin assumed and subsequently discharged, and that Mr. Herrold has failed to keep or perform his part of the agreement, except to pay the installments of interest. The prayer of the answer is that Mr. Herrold be decreed to have assumed and agreed to pay the plaintiff's mortgage; that he thereby became personally liable therefor, while Mr. Chamberlin and his mother are his sureties only; that in case of a deficiency upon a sale of the premises under a decree of foreclosure the plaintiff herein be required first to enforce her demand for such insufficiency against the property of Mr. Herrold before Mr Chamberlin or his mother be required to pay any part of the same; that the latter have a decree against Mr. Herrold for the recovery of any sums, including costs, etc., that they may be obliged to pay the plaintiff, and for such other and further relief as to the court may seem just and equitable in the premises.

The answer of Mr. and Mrs. Herrold denies the material averments of the cross-complaint and for a defense thereto alleges that in November, 1913, the Salem Auto Garage was a corporation, and that the capital stock therein was then owned by Mr. Herrold, Miss Smith, and Jack Melsom; that Mr. Herrold and Mr. Chamberlin entered into an oral agreement whereby such capital stock was transferred to the latter, who as part consideration therefor conveyed his equity only in and to the real property described in the plaintiff's mortgage to Mr. Herrold, and Mr. Chamberlin also conveyed to Miss Smith, now Mrs. Herrold, a like interest in and to the house and lot on Twentieth street, Salem, Or.; that at the time such transfers were made Mr. Chamberlin paid to Mr. Herrold the remainder of the consideration for such exchange of equities; and that the contract here set out is the only agreement ever entered into and the one mentioned in the cross-complaint.

These allegations of new matter were controverted by the reply of Mr. Chamberlin and his mother, and the cause, being then at issue, was tried, resulting in a decree as prayed for in the cross-complaint, except that only $50 was allowed as attorney's fees; and Mr. Herrold appeals.

Jas. G. Heltzel, of Salem (Ernest Blue and Donald W. Miles, both of Salem, on the brief), for appellant. Pogue & Page, of Salem, on the brief, for respondent Knighton. Roy Shields, of Salem (Smith & Shields, of Salem, on the brief), for other respondents.

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

The only question involved...