Long v. Smith Hotel Co.

• Decision Date: 14 July 1925
• Citation: 115 Or. 306,237 P. 671
• Parties: LONG v. SMITH HOTEL CO. ET AL.
• Court: Oregon Supreme Court

237 P. 671

115 Or. 306

LONG v. SMITH HOTEL CO. ET AL.

Supreme Court of Oregon

July 14, 1925

Department 2.

Appeal from Circuit Court, Multnomah County; George Tazwell, Judge.

Action by Lena Long against the Smith Hotel Company and others. From the judgment, plaintiff appeals. Affirmed.

This suit was instituted by the plaintiff for the purpose of determining the title to certain furniture and furnishings in the Congress Hotel, Portland, Or. Both the plaintiff and the defendants claim title to the property, which had been subject to a lien by chattel mortgage, from which the plaintiff sought to redeem it. She claimed that the defendants were mortgagees in possession, while the defendants asserted that, for a valuable consideration, the plaintiff had conveyed the title to the property to defendant A. F. Smith, who held it in trust for his mother, Hedwig Smith, one of defendants, and that the plaintiff was indebted to defendant Hedwig Smith for rents collected from guests and for furniture, in the sum of $4,389.50. The court decreed that the plaintiff was not entitled to redeem the property and that the defendants were not entitled to recover judgment for $4,389.50, or any portion thereof, that A. F. Smith took the title to the property for value, in trust for Hedwig Smith, one of his codefendants, and that she is the sole and exclusive owner of that property. The court further decreed that the two chattel mortgages on the property had been satisfied by merger. The plaintiff appeals.

F. K Masters and H. F. McInturff, both of Portland, for appellant.

W. P LaRoche and J. B. Ofner, both of Portland, for respondents.

BROWN J. (after stating the facts as above).

The Congress Hotel was owned by the Smith Hotel Company, and, in 1912, was leased by plaintiff, Lena Long, for three years, Henry Jennings guaranteeing the payment of the rent. On October 20, 1915, plaintiff's rent being in arrears in the amount of $6,000, for payment thereof she executed to the defendant Smith Hotel Company a promissory note, secured by a chattel mortgage upon the furniture and furnishings of the hotel, in the amount of $6,000, bearing interest at 6 per cent. per annum, due October 20, 1917. This mortgage was acknowledged and recorded, and by mutual consent the time of payment was subsequently extended until October 20, 1918. On October 22, 1915, she likewise executed to Henry Jennings & Sons, from whom she had purchased the furniture and furnishings, a second mortgage for $5,000 upon the same personal property. On October 20, 1915, the date of the execution of the $6,000 mortgage by plaintiff to secure the back rental, the Smith Hotel Company again leased the building to plaintiff for a period of two years from date; but subsequently the period was extended until November 1, 1918. On October 25, 1918, the lease was canceled and terminated by mutual consent of the parties, the defendant Hedwig Smith, assignee of the $6,000 mortgage, taking possession of the property.

The complaint avers that defendant Hedwig Smith took possession of the property covered by the chattel mortgage as mortgagee in possession, and that at that time the sum of $600 had been paid upon the principal sum of $6,000; that the value of the use of the mortgaged property was $600 per month, and that the plaintiff was entitled to redeem that property, but that the defendants denied her such right.

The defendants allege that on March 1, 1917, the Smith Hotel Company, for value, transferred to Hedwig Smith the note for $6,000 and the mortgage securing the same, and on June 29, 1917, conveyed the Congress Hotel to Hedwig Smith; that on October 13, 1917, Hedwig Smith, assignee, extended the lease to November 1, 1918. They aver:

"That during October, 1918, the plaintiff was unable to continue as lessee of the Congress Hotel, * * * and was unable to pay any rent, and was unable to continue the management thereof, and was unable to pay the said $6,000 note and mortgage, or any portion thereof, in accordance with its terms or otherwise, either with respect to principal or interest, and was unable to pay the said note for $5,000, or any portion thereof, or in any manner comply with the terms or conditions of the said note and mortgage for $5,000, or any portion thereof."

The defendants assert that on October 25, 1918, there was a complete settlement between the plaintiff and defendant Hedwig Smith with respect to all their business relations arising under the lease of the Congress Hotel; and they aver, among other things:

"For good and valuable considerations then passing and flowing between the parties, the lease to said Congress Hotel was canceled and terminated by mutual consent of both parties, and the possession of the said hotel building and the furnishings and furniture then in said building was delivered by the plaintiff to the said Hedwig Smith; and it was agreed that the plaintiff waived all claims of every kind against the said Hedwig Smith for advance rentals under the lease; and it was further agreed for good and valuable considerations that the said Lena Long was to have no further interest in said premises or in said lease or in said property covered by said chattel mortgage; and the said plaintiff then and there, for good and valuable considerations, did surrender possession of all the furniture and furnishings then in said hotel to the defendant Hedwig Smith, and did further part with all of her right, title and interest in and to said furniture and furnishings, and every portion thereof, including all of her right of redemption, and all of her equity of redemption, and the plaintiff did then and there, in consideration of her being relieved of all further liability under said lease, and in consideration of her being relieved from any personal liability upon the first note and mortgage for $6,000, * * * bargain, sell, and transfer to the said defendant A. F. Smith all of her interest in and to all of said personal property, and by an instrument in writing properly signed and executed according to law, transferred said property to said A. F. Smith."

They aver the recordation of the bill of sale in Book 41, page 57, Miscellaneous Records of Multnomah County, Or. They further aver that on August 12, 1919, Henry Jennings & Sons, for a valuable consideration, transferred to Hedwig Smith the note secured by the second mortgage upon the furniture and furnishings of the hotel.

The plaintiff denies that she made, executed, or delivered to the defendant A. F. Smith, or to any other person, a bill of sale or conveyance of the furniture and furnishings of the Congress Hotel, or of her right of redemption of any of the personal property described in the mortgages. She alleges:

"If any instrument purporting to be any such conveyance was in fact executed by plaintiff, the same was executed by her without any knowledge on her part or notice to her of its contents, and was executed wholly without her knowledge or intention upon her part to execute or deliver any such instrument."

She further alleges lack of consideration for the "alleged and pretended bill of sale or conveyance."

The record in this case discloses that the plaintiff, Mrs. Lena Long, is an intelligent business woman, and that she has been engaged in the hotel business since 1900; that in 1911 she commenced negotiations for a lease of the Congress Hotel, which was then in the course of construction; that her first lease became effective in 1912, and expired in 1915; that during this period of time she paid a rental of $1,325 per month, and that by the later lease the rental was reduced to $750 per month; that the furniture and furnishings of the hotel were purchased by Mrs. Long and placed in the hotel at the commencement of her lease, and at the time of the trial had been used therein for about six years, but that there had been some replacements of the original personal property. As to the condition and value of this furniture at the time of the alleged transfer to A. F. Smith, there is a sharp conflict in the evidence. According to the testimony of some of the witnesses, the plaintiff has received full consideration for the furniture and furnishings of the hotel. On the other hand, there is testimony tending to show that the property was worth several thousand dollars more than the amount of her obligations.

Answering plaintiff...