Murphy v. Bjelik
| Decision Date | 27 December 1917 |
| Citation | 87 Or. 329,169 P. 520 |
| Parties | MURPHY v. BJELIK ET AL. |
| Court | Oregon Supreme Court |
Department 1.
Appeal from Circuit Court, Multnomah County; J. P. Kavanaugh, Judge.
Suit by Grayson M. P. Murphy against John Bjelik and others. From a decree dismissing the complaint, plaintiff appeals. Affirmed. Rehearing denied 170 P. 723.
Although this proceeding has sometimes been referred to by the litigants as a suit to quiet title, in reality it is more in the nature of a suit to remove cloud from title. The Monarch Lumber Company, an Oregon corporation, owned two tracts of land in Multnomah county, Or., one of which will be referred to as tract A and the other will be designated as tract B. Two sawmills and an electric power plant are located upon tract A, and in 1911 this property was probably worth $500,000. Tract B consists of a block of ground which is used as a retail lumber yard.
The plaintiff, Grayson M. P. Murphy, claims to own both tracts of land, and traces his claim of title to a sheriff's deed executed and delivered to him on the faith of a sale which was made to satisfy an execution issued on a judgment obtained by E. W. Spencer on June 5, 1913. All the answering defendants are judgment creditors of the Monarch Lumber Company of Oregon, and all of their judgments were recovered subsequent to June 5, 1913, the date of the Spencer judgment. The plaintiff is proceeding on the theory that the sheriff's deed extinguished the liens of all judgments subsequent in time to the judgment recovered by Spencer, and that consequently the judgments held by the defendants are clouds upon the title of the plaintiff. The answering defendants now take the position that the sheriff's deed was void.
We can gain a better understanding of the litigation if we first narrate some of the prominent transactions which must be kept in mind and then state the substance of the pleadings filed by the several parties. The Monarch Lumber Company of Oregon under date of September 1, 1911, executed 12 promissory notes for the aggregate sum of $300,000; each note being for $25,000 and payable one year after date to the order of the maker. The Monarch Lumber Company of Oregon secured these notes by conveying tracts A and B by a trust deed to William W. Crawford as trustee. The Assets Realization Company, a corporation organized under the laws of New Jersey, acquired the notes and owned them when Spencer and the defendants recovered their several judgments. On July 30, 1913, the Monarch Lumber Company of Oregon deeded tract A, and on August 4, 1913, it conveyed tract B to a corporation which had been organized under the laws of Maine and was likewise called the Monarch Lumber Company, and hence, on account of the two corporations bearing the same name, one will be referred to as the Monarch Lumber Company of Oregon and the other as the Monarch Lumber Company of Maine. On September 4 1913, the Monarch Lumber Company of Maine deeded both tracts of land to Ira M. Cobe, who at that time was occupying the position of vice president of the Assets Realization Company. Subsequently about October, 1914, Cobe resigned as vice president of the Assets Realization Company, and on January 22, 1915, he deeded tracts A and B to the plaintiff, Grayson M. P. Murphy, who had succeeded Cobe as vice president of the Assets Realization Company.
On March 20, 1913, E. W. Spencer commenced an action in the circuit court for Multnomah county to recover $16,750 interest, and attorney's fees from the Monarch Transportation Company, a corporation, the David Investment Company, a corporation, and Lester W. David on a promissory note signed by them. A writ of attachment was issued to the sheriff, and that officer executed the writ by delivering a copy, together with a notice of garnishment, to the Monarch Lumber Company of Oregon. The lumber company answered the writ and notice by delivering a certificate to the sheriff stating that "there is now due from the Monarch Lumber Company to the Monarch Transportation Company at least $7,250." After a trial Spencer obtained a judgment on June 5, 1913, against the Monarch Transportation Company, the David Investment Company, and Lester W. David for $17,251.50 $750 attorney's fees, and $783.80 costs and disbursements; and, after reciting that certain property owned by the Monarch Transportation Company had been attached and directing that such attached property be sold, the judgment order states that:
In addition to attaching the property owned by the Monarch Transportation Company, the sheriff also "attached the Monarch Lumber Company, a corporation duly organized and existing under the laws of the state of Oregon with its principal office and place of business in the county of Multnomah, state of Oregon, by leaving with the Monarch Lumber Company a certified copy of the writ of attachment and notice specifying the property attached, especially attaching any moneys, debts, or other property in the possession of said Monarch Lumber Company owing to or belonging to said defendants or either of them, and especially a sum of money due from said Monarch Lumber Company to the defendant Monarch Transportation Company, and that subsequently thereto, to wit, May 31, 1913, the said Monarch Lumber Company made a return to the sheriff of Multnomah county, Or., stating that there was due and owing from the said Monarch Lumber Company to the Monarch Transportation Company, defendant, the sum of $7,250.
"It is therefore considered, ordered, and adjudged by the court that the plaintiff herein have and recover against said garnishee, Monarch Lumber Company, a corporation, the sum of $7,250, and that execution issue therefor, that the proceeds of said execution and the proceeds of any execution issued herein be applied first to the payment of the costs disbursements, and attorney's fees herein, subsequently to the payment of the demands of the plaintiff herein, to wit, the sum of $17,251.50 with accruing interest, and, if there be any property or proceeds remaining after satisfying said execution, the sheriff shall upon demand deliver the same to the defendant Monarch Transportation Company."
An execution was issued on the judgment on January 26, 1914, and on that day the sheriff executed the writ by levying on tracts A and B, without first demanding that the Monarch Lumber Company of Oregon pay the amount which, in answer to the notice of garnishment, it had stated was due the Monarch Transportation Company. The execution recites that Spencer obtained a judgment against the defendants in the action and that he "also recovered judgment against the Monarch Lumber Company" for $7,250, and the sheriff is then directed to levy upon and sell property of the defendants in the action, and further that he satisfy the sum of $7,250 out of property owned by the Monarch Lumber Company. Pursuant to notice of sale, the sheriff sold tracts A and B on March 2, 1914, to E. W. Spencer for $7,633.60, and delivered to him a certificate of sale. Subsequently on March 11, 1914, the sale was confirmed.
Under date of January 14, 1915, E. W. Spencer, William W. Crawford as trustee, the Assets Realization Company, Ira M. Cobe, and John Getz, entered into an escrow agreement by the terms of which an assignment of the Crawford trust deed, the notes held by the Assets Realization Company, a deed from Cobe to Spencer, and an assignment to John Getz of the sheriff's certificate of sale held by Spencer, should be placed in escrow in a designated bank, and if Spencer paid $300,000 to the bank on January 29, 1915, the papers held by the bank should be delivered to Spencer, but if he failed to exercise his "option of purchase" then Getz had the option of paying $4,300 to the bank for Spencer as part of the purchase price for the assignment of the certificate of sale and an additional $4,300 on March 12, 1915, as the final payment for the certificate of sale. Spencer did not exercise his option to purchase; but his certificate of sale was acquired by John Getz, who in turn assigned the certificate to the plaintiff. The assignment from Spencer to Getz is dated January 14, 1915, and the assignment transferring the certificate of sale from Getz to Grayson M. P. Murphy bears date January 18, 1915. Spencer was paid the total sum of $8,600 for his certificate of sale. On March 26, 1915, no redemption having been made, the sheriff executed a deed to Grayson M. P. Murphy, who at that time held the certificate of sale which had originally been issued to Spencer.
All of the answering defendants secured and still hold unpaid judgments against the Monarch Lumber Company of Oregon. John Bjelik recovered a judgment on June 30, 1913, for $3,084. Brayton & Lawbaugh, Limited, a corporation, commenced an action to recover money, attached tract A on August 13, 1913, and secured a judgment on December 8, 1913, for approximately $8,000. A judgment for $803.95 was awarded to Patton on September 5, 1913, and A. C. Springer recovered a judgment for $6,000 on June 9, 1914.
The complaint filed by Murphy alleges that he owns and is in possession of tract A; that he owns tract B; and that this tract is not in the possession of any person except the sheriff, who only has such possession as is necessary to sell certain lumber which the officer found on the premises and levied upon under an execution issued on a judgment. After averring that the defendants John Bjelik, Brayton & Lawbaugh Limited, a corporation, and A. C. Springer each claims some interest in tracts A and B, the plaintiff alleges that their claims arise out of the respective judgments which they had against the Monarch Lumber Company of Oregon. The complaint also states that W. T. Patton claims some interest in the real property, and the...
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