Owens v. State ex rel. Mothersead

• Decision Date: 13 November 1928
• Docket Number: Case Number: 17269
• Parties: OWENS v. STATE ex rel. MOTHERSEAD, Bank Com'r.
• Court: Oklahoma Supreme Court

1928 OK 652

271 P. 938

133 Okla. 183

OWENS v. STATE ex rel. MOTHERSEAD, Bank Com'r.

Case Number: 17269

Supreme Court of Oklahoma

Decided: November 13, 1928

Syllabus

¶0 1. Action--Set-off and Counterclaim--Cause of Action Both in Contract and in Tort--Right to Waive Tort and Sue on Implied Contract as Set-Off in Action on Contract.

No principle of law is more thoroughly settled than that the same act or transaction, under certain circumstances, will constitute a cause of action both in contract and in tort, and the aggrieved party has an election to pursue either remedy. In that sense he may be said to waive the tort and sue on the implied contract; and in such case he may litigate the action by way of a set-off, when the action of the adverse party is founded on contract.

2. Damages--Wrongful Taking and Retention of Land--Right of Equitable Owner to Waive Other Remedies and Treat Transaction as Sale and Sue for Value of Land as Damages.

Where land is taken and retained by a tort-feasor with the intention of benefiting himself or his estate, either by taking physical possession of the land or by wrongfully acquiring a deed of conveyance thereof from the holder of the legal title, the owner of the equitable title to the estate, in waiving his remedies to recover the specific property, and by waiving the tort, treats the transaction as a sale, and is entitled to recover as damages the actual cash value of the land at the time of the taking, with legal interest thereon to the time of the trial.

3. Mortgages--Deed Intended as Mortgage--Transaction Held not to Constitute Mortgage but General Beneficial Power of Sale.

A deed is a mortgage only when it is a conveyance of an estate subject to a defeasance express or implied. A defeasance under certain circumstances will be implied, and it may exist merely in parol. If it is the express or implied intention of the parties at the time of its execution and delivery that a right to redeem exists for any period of time, and thereby have the property restored to the grantor, the instrument is only a mortgage; otherwise, it is not a mortgage.

A. who borrows property from B. for the purpose of pledging it as collateral security for a loan, and then executes an absolute power of sale of his property to B. authorizing him to immediately commence the sale and absolute disposition of the property embraced in the power of sale, before the maturity of the indebtedness, in order to liquidate the loan held by the pledgee and assure the return of the property pledged, and also its return to B., its owner, such transaction is not a mortgage, but is a general beneficial power of sale.

4. Parties--Action for Wrongful Taking and Retention of Land--Grantors in Deed not Necessary Parties Where Tort Waived and Action Based on Implied Contract.

Where an action or a cross-action is instituted by an aggrieved person against & tort-feasor for wrongfully taking and retaining title to land, where the tort is waived and the action is founded on an implied contract, the grantors in the deed are not necessary parties to the action.

C. M. Oakes, for plaintiff in error.

Pounders & Pounders, for defendant in error.

HALL, C.

¶1 This action was instituted in the district court of Tulsa county in September, 1924, by O. B. Mothersead, Bank Commissioner, as plaintiff, against O. O. Owens, defendant. The parties, usually, will be referred to as they appeared in the trial court.

¶2 The action was for recovery on a certain promissory note which defendant had executed to the First State Bank of Bristow on December 7, 1923, in the sum of $ 7,500. The petition was in regular form, and the defendant seasonably filed his answer and cross-petition to the petition; and thereafter filed his second amended answer, set-off and cross-petition, wherein he admitted the execution of the note, but denied any liability to pay the same, alleging as a reason that he at that time had a valid claim against the First State Bank of Bristow accruing prior to the time when that institution was taken over by the Bank Commissioner, in an amount exceeding the sum due upon the note. The claim pleaded as a set-off by defendant is exceedingly lengthy, and involves a series of complicated transactions. It would be impracticable to state the cross-petition verbatim, and it is difficult to abridge it or set forth any useful abstract of same. However, it may be stated that on or about July 7, 1923, one H. H. Barker, F. N. Jondahl, and Joe K. Barker, H. H. Barker being the president and managing officer of the First State Bank of Bristow, and all being directors and officers of the Bristow National Bank of Bristow, Okla., obtained from defendant the loan of a certain $ 50,000 Liberty Bond, at which time the parties entered into a certain contract in relation to the subject, the contract being mostly written, but partly oral. The written portion of the contract was affixed as an exhibit to the answer and cross-petition, and the oral portions thereof were fully pleaded as will be hereinafter stated. Essential portions of the contract will be set out, but, on account of its length, it will not be fully stated. Briefly, the contract provided that H. H. Barker, at the time of making the contract, desired to procure a loan from Joe K. Barker and F. N. Jondahl in the sum of $ 45,000 and in order to accomplish that purpose had obtained from the defendant the loan of a certain Liberty Bond in the sum of $ 50,000, which bond is described in the contract, and that the bond was to be returned within four months from the date of the contract; that to secure the return of the bond and to indemnify the defendant against any loss on account of failure to return the bond, H. H. Barker was to indorse and deliver to defendant a note signed by Joe K. Barker and wife, and F. N. Jondahl and wife, in the sum of $ 40,000 payable four months after date, with interest from maturity at 10 per cent. The contract further provides "that H. H. Barker has procured or will immediately procure from Joe K. Barker and his wife and from F. N. Jondahl and his wife, or from such interested parties as own the same, conveyance of certain land and interest therein as shown upon the schedule of A, B, and C, provided in the contract."

¶3 Defendant was empowered to commence an immediate sale and disposition of this property. H. H. Barker was authorized, under this contract, "by the parties making such conveyances to proceed to sell any or all of the property so conveyed at such prices as the second party (H. H. Barker) shall deem proper, and the proceeds resulting from such sale shall be applied in liquidating the loan in connection with which the second party (H. H. Barker) will use said Liberty Bond as collateral security. The second party agrees to advise the first party before any sale is made of any such property, and will procure first party's consent to such sale, and advise first party immediately upon the receipt of the proceeds from any such sale and of the dispositions made of the same."

¶4 The contract further provides that these deeds and assignments of oil and gas leases and royalties shall be held by the first party, the defendant, in escrow, and when any of the property is sold, the second party, H. H. Barker, agreed to procure a new deed from the parties making such conveyances; that is, Joe K. Barker and F. N. Jondahl and their wives. The new deed was to be made directly to the purchaser, and on the completion of such purchase and receipt of the purchase price, the deed formerly executed to defendant covering the particular property was to be destroyed.

¶5 The contract further provides that if the loan procured by the second party, that is, if the loan which H. H. Barker obtained by the use of defendant's Liberty Bond as collateral security is not paid when due, and in case the said bond is not returned to the first party, the defendant is authorized to sell, independently of any other person, all this property remaining unsold, within 30 days after maturity of the indebtedness, and apply the proceeds thereof upon the loan; and if the same be not sufficient to pay the balance due on said loan, the second party, the Barkers and Jondahl, agreed to pay a sufficient amount so as to make up the full amount of the loan, and thereby procure the release of the Liberty Bond and return the same to the first party, the defendant.

¶6 The above constitutes the essential part of the written portions of this contract, necessary to determine the questions before us.

¶7 The defendant set forth in his answer and cross-petition that the schedules A and B, referred to in the contract, were never made out and reduced to writing, but that at the time of the execution of the contract, it was agreed and understood by all the parties that, in lieu of making said schedules, said Joe K. Barker and F. N. Jondahl and their wives would transfer to defendant by proper conveyances all their oil and gas mining leases and all oil royalty interests in their land and the real estate which they owned. That thereafter, in the performance of said contract on their part, Joe K. Barker and F. N. Jondahl and their wives did convey to the defendant many pieces and parcels of this property; that at said time defendant believed the said Joe K. Barker and F. N. Jondahl had conveyed to him all their real estate and all their interest in all oil and gas mining leases, and all oil royalties in and to all the property which they at said time owned; and that the said Jondahl and Barker intended to convey at said time all the property of the aforesaid kind and character which they at that time owned; but that among other property at such time owned by Joe K. Barker and F. N. Jondahl was an undivided one-eighth interest each in lots 8 and 9 of section 1, township 14 north, range 6 east, in Creek county, Okla.; and that due to a mutual inadvertence, mistake or oversight of all the parties to the contract, the said Barker...