State Acting By and Through Oregon State Bd. of Higher Ed. v. Cummings

• Decision Date: 18 May 1955
• Citation: 288 P.2d 1036,205 Or. 500
• Parties: STATE of Oregon, ACTING BY AND THROUGH THE OREGON STATE BOARD OF HIGHER EDUCATION, for and on behalf of the Oregon State Library, substituted for Newton E. Carbaugh, Executor, and Dorothy P. Carbaugh, Executrix of the Estate of Mary Elizabeth Forbes Burrell, deceased, Respondent, v. Charles K. CUMMINGS, Appellant.
• Court: Oregon Supreme Court

Page 1036

288 P.2d 1036

205 Or. 500

STATE of Oregon, ACTING BY AND THROUGH THE OREGON STATE

BOARD OF HIGHER EDUCATION, for and on behalf of the Oregon

State Library, substituted for Newton E. Carbaugh, Executor,

and Dorothy P. Carbaugh, Executrix of the Estate of Mary

Elizabeth Forbes Burrell, deceased, Respondent, v. Charles K. CUMMINGS, Appellant.

Supreme Court of Oregon, En Banc.

May 18, 1955.

Millen F. Kneeland, Maurice C. Corcoran and Gale A. Lockhart, Jr., Portland, for appellant.

Robert Y. Thornton, Atty. Gen. of the State of Oregon, and Lloyd G. Hammel, Asst. Atty. Gen., for respondent.

ROSSMAN, Justice.

This is an appeal by Charles K. Cummings, one of the two defendants, from a judgment which the circuit court rendered against him in the amount of $5,000 after it had entered findings of fact and conclusions of law. The subject matter of the action was an alleged indebtedness of $5,000 which, the complaint avers, was evidenced by a writing, dated October 5, 1951, signed by the defendants and which acknowledged to one Mary F. Burrell an indebtedness of $5,000. The complaint denominates the writing a 'demand promissory note.' The plaintiffs in the action are, respectively, the executor and executrix of the estate of the aforesaid Mrs. Burrell, who died testate November 24, 1951. The defendants in the action are the aforementioned Charles K. Cummings and his wife, Marjorie I. Cummings. The judgment ruled that 'the complaint be dismissed as to the defendant Marjorie I. Cummings.'

Subsequent to the entry of the challenged judgment, the probate court made a distribution of the assets of the decedent's estate in accordance with the decedent's will whereby the State of Oregon, on behalf of one of its agencies, received the residue of the estate. The residue included the aforementioned 'demand promissory note.' At that juncture, the State, upon its motion, was substituted as plaintiff-respondent. Notwithstanding the substitution, we will, for the sake of convenience, refer to the executor and executrix as the plaintiffs.

The following is a reproduction of the above-mentioned writing as it was presented at the trial:

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

The instrument, as quoted in the complaint, omitted the superscription, 'Void in the event of my death--Mary F. Burrell.'

The defendants concede that the defendant-appellant, Charles K. Cummings, hereafter designated simply as Cummings, wrote the part of the instrument which the plaintiffs term a demand promissory note, that is, the part which reads:

'October 5, 1951. For value received I owe Mary F. Burrell the sum of Five Thousand and no/100 Dollars. Together with interest thereon at the rate of six per cent per annum from October 3, 1951 to the date of payment. $5000.00

Chas. K. Cummings

Marjorie I. Cummings.'

They also concede that both of the defendants signed the instrument. The plaintiffs freely admit that the decedent, Mrs. Burrell, wrote across the face of the instrument 'Void in the event of my death--Mary F. Burrell.' For example, their reply says:

'Plaintiffs admit that Mary Elizabeth Forbes Burrell wrote across the face of the note set forth in plaintiffs' complaint the words, 'Void in the event of my death--Mary F. Burrell.''

At the beginning of the trial in the circuit court, the plaintiffs offered to stipulate concerning many of the facts that are involved in the controversy and the defendants acquiesced in their offer. One of the facts which the parties stipulated in that manner was that Mrs. Burrell wrote upon the alleged demand promissory note the words, 'Void in the event of my death' 'simultaneously' with the execution of the instrument. Cummings swore that it was understood before the paper was written that he would write the part which he penned and that Mrs. Burrell would write and sign the part which appears in her handwriting.

By glancing at the paper, it will be seen that it constitutes an acknowledgment by the Cummingses of an indebtedness to Mrs. Burrell in the amount of $5,000 and a release of the debt by Mrs. Burrell conditional upon her death. We do not deem it essential that we should select a name for the paper, but for the sake of convenience we may refer to it as the paper, the agreement, or the acknowledgment of indebtedness.

To facilitate an understanding of the foregoing and of other facts which we will shortly recount, we explain that Mrs. Burrell loaned to Mr. and Mrs. Cummings $5,000 October 5, 1951. The paper above quoted bears date of October 5, 1951, but it was not written, signed and delivered until two days later, that is, on October 7, 1951. Accordingly, it appears that (1) on October 5 Mrs. Burrell loaned the Cummingses $5,000; (2) two days later, that is, October 7, Cummings prepared the part of the paper which the plaintiffs deem a promissory note and on that day the Cummingses signed it; (3) before signing, the paper was handed to Mrs. Burrell who wrote the superscription over the part which Cummings had written; and (4) the writing of the document and the signatures of the parties to it were simultaneous acts.

The Cummingses agree that the paper bound them to repay to Mrs. Burrell, upon her demand, all or any part of the borrowed sum, together with interest thereon at six per cent per annum, but insist that upon her death their liability ended and that they owe nothing to her estate. The plaintiffs acknowledge that Mrs. Burrell did not want the Cummingses to be required to repay any part of the $5,000 which might remain unpaid at the time of her death. For instance, their brief says:

'That deceased desired to forgive the appellant of the loan upon her death has not been questioned.'

The brief explains:

'The record shows that deceased had a great deal of affection for appellant, his wife and family. The deceased was a generous woman who wanted to do something for her 'children' that would enable them to make a mark for themselves and consequently give her some vicarious satisfaction.'

Notwithstanding (1) that Mrs. Burrell herself wrote across the face of the paper, the moment it was handed to her, the superscription which, upon her death, terminated the duty to repay, and (2) that Mrs. Burrell died before this action was filed, the plaintiffs instituted this proceeding to recover judgment for the full sum, $5,000, remaining unpaid upon her death.

They grant that when Mrs. Burrell wrote the superscription she was competent, knew what she was doing, understood the import of her words and intended that the Cummingses should not be required to pay anything upon the obligation after her death.

The answer, after acknowledging that the defendants signed the paper above quoted, alleges that they performed 'all things and conditions required of them to be done and performed by the agreement.' In referring to the paper, it avers:

'The instrument incorporated herein by reference Exhibit 'A', show upon its face that said instrument did not become an asset of the estate of Mary Elizabeth Forbes Burrell, that it was and is an obligation personal to the deceased and defendants are not obligated in any way to pay any sum whatever to the plaintiffs.'

The defendants contend that 'the entire record establishes a bilateral contractual agreement limiting the debt to the lifetime of Mary F. Burrell.'

Upon the other hand, the plaintiffs-respondents say that the words which the defendants wrote and signed contained no provision that 'the same should be cancelled in the event of the death of said Mary F. Burell.' They declare that the superscription which Mrs. Burrell penned was not a part of the agreement which was effected orally October 5, when Mrs. Burrell handed the defendants $5,000. We will later review the evidence and in doing so will take note of what was said on and before October 5. Although the parties stipulated in the circuit court that Mrs. Burrell made the superscription simultaneously with the execution of the agreement, the plaintiffs insist, as we have just seen, the the superscription did not become a part of the agreement. Their brief classifies the part penned by Mrs. Burrell in this manner: 'It was a unilateral decision by the deceased and not a part of any mutual agreement.' Pursuing their contention that the writing which Mrs. Burrell inscribed upon the paper was not 'a part of any mutual agreement', the plaintiffs argue that it lacked consideration. Thus, it is the plaintiffs' position that the little slip of paper described above contains two memorandums in the form of agreements written and executed simultaneously. The one agreement, according to them, bound the defendants to pay, upon demand, $5,000 together with six per cent interest. The plaintiffs treat that agreement as valid, complete and supported by adequate consideration. The part penned by Mrs. Burrell affecting repayment was no part, so the plaintiffs maintain, of the acknowledgment of indebtedness. The plaintiffs' brief, speaking of the principles of law which they believe control the case, says:

'Throughout this proceeding the estate of the deceased has contended that the agreement was ineffective as a gift inter vivos or causa mortis and ineffective as a testamentary disposition. Appellant has accepted this but vacillated between contending that the voiding of the debt was a part and parcel of the entire agreement and contending that it was a separate contemporaneous agreement supported by valid consideration. The trial judge found the facts to be that there was no agreement between the deceased and appellant in this matter, but that it was 'decided' by the deceased alone. This finding is supported by the evidence as previously discussed.'

The defendants, as we pointed out in preceding paragraphs, urge that the memorandum contains, not two, but only one agreement. According to them, the words written by Cummings and those contributed by Mrs. Burrell were component parts of a single...