State ex rel. Nayberger v. McDonald

• Decision Date: 05 March 1929
• Citation: 128 Or. 684,274 P. 1104
• Parties: STATE EX REL. NAYBERGER v. MCDONALD ET AL.
• Court: Oregon Supreme Court

274 P. 1104

128 Or. 684

STATE EX REL. NAYBERGER v. MCDONALD ET AL.

Supreme Court of Oregon

March 5, 1929

Department 1.

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

Proceedings for contempt by the State of Oregon, on the relation of D. M Nayberger, against Mrs. G. N. Nichols, in action brought against John F. McDonald and others. Judgment for plaintiff and defendant Nichols appeals. Reversed, and proceedings dismissed.

Everett I. Adcock, of Portland (Ganoe & Ganoe, of Portland, on the brief), for appellant.

S. J Bischoff, of Portland, for respondent.

McBRIDE J.

This is a proceeding for contempt, which, it is claimed, occurred by disobedience to an order of the court authorizing the receiver to take possession of certain effects of one of the defendants, and arising out of the following circumstances:

It appears from the complaint that the plaintiff is the owner and holder of certain notes executed by the defendants John F. McDonald and Mary B. McDonald to Russell E. Butler, and later assigned to the plaintiff and another, and by certain transfers and assignments finally becoming the property of plaintiff. The plaintiff brought this suit to foreclose the mortgage. The mortgage is in the usual form, and contains the following provisions:

"It is expressly understood and agreed that such premises are and shall be kept until this mortgage is fully paid and satisfied, free from all liens and incumbrances whatsoever that shall or may have precedence of this mortgage; that all buildings and tenements that are now upon or that may hereafter be erected upon said premises shall be kept insured for an amount not less than thirtyseven thousand five hundred and no/100 * * * during all the time that this mortgage shall remain unpaid or unsatisfied, in one or more good and responsible fire insurance companies, against all loss or damage by fire; the loss or damage, if any, to be made payable to the said party of the second part, his executors, administrators and assigns, and in case the said parties of the first part their heirs or assigns, shall fail, neglect or refuse to obtain said insurance, or to pay all taxes, street assessments, mechanics' liens or claims of every name and nature, that are or may become a lien or liens upon said premises, having precedence of the lien of this mortgage before the sums shall become delinquent, then the said party of the second part his executors, administrators and assigns, may at their option obtain said insurance and pay the premiums therefor, and may pay, discharge and satisfy any and all such taxes, street assessments or liens at maturity, and all sums of money thus expended shall at once become due and payable on demand from the said parties of the first part their heirs and assigns, to the said party of the second part his executors, administrators and assigns, and that such payment, as well as the attorney's fees mentioned in said note, be and they are hereby secured by the lien of this mortgage.

"It is also expressly understood that if any sum made payable by the terms of said promissory note, or becoming due hereunder, shall remain unpaid for a period of ten days after the same shall have become due and payable, then the party of the second part, his executors, administrators and assigns may foreclose this mortgage at any time thereafter."

The complaint contains the following allegations:

"That prior to the execution of the aforesaid note and mortgage defendants John F. McDonald and Mary B. McDonald for a valuable consideration made, executed and delivered to The Pacific Savings & Loan Association, a corporation, their promissory note for the sum of $27,500.99, bearing interest at the rate of eight per cent. per annum and payable in monthly installments of $333.57 on the first day of each and every month, and to secure the payment of the said note the said defendant John F. McDonald and Mary B. McDonald, husband and wife, did make, execute and deliver to the said The Pacific Savings & Loan Association, a corporation, a mortgage upon the real property described herein, by the terms of which mortgage it was among other things provided that in case of default in the payment of the said promissory note according to its terms, that all of the principal sum remaining unpaid shall at the election of the holder thereof without notice at once mature and become payable, and the mortgagee may at once foreclose the said mortgage.

"That to further secure the payment of the last mentioned note defendants John F. McDonald and Mary B. McDonald, husband and wife, did, among other things, by the said mortgage provide that:

" 'The rents, issues and profits of the property herein described shall belong to the mortgagors, provided they shall make all payments as they mature, and shall perform the covenants required by them to be performed, but in case of default in any payment, the mortgagees shall have the right, and it is hereby appointed as agent to collect such rents, issues and profits which are hereby assigned and transferred to it, expend any necessary portion thereof for the maintenance and operation of said property, and apply the balance less reasonable costs of collection upon the indebtedness hereby secured, until all delinquent payments have been met, and in case it becomes necessary, it shall have the right to have a receiver appointed to collect and apply such rents.'

"That the said defendants have failed and refused to pay to The Pacific Savings & Loan Association the installments which were due on the said note and mortgage for the months of May, 1927, June, 1927, July, 1927, August, 1927, September, 1927, and October, 1927 and by reason thereof the said The Pacific Savings & Loan Association has threatened to declare the whole of the principal sum of said note and mortgage due and payable and to foreclose the mortgage given to secure the same.

"That in order to avoid the foreclosure of the said mortgage and to protect the mortgage of the plaintiff the plaintiff was compelled to and did pay on the fifth day of October, 1927, to The Pacific Savings & Loan Association the sum of $726.21 on account of the interest due on the said note and mortgage to September 1, 1927, and has agreed to pay the interest on the said mortgage as it shall accrue and by reason thereof plaintiff has become subrogated to the rights and remedies of the said The Pacific Savings & Loan Association by virtue of the note and mortgage held by it.

"That the defendants have failed and refused to pay the taxes for the year 1926 amounting to $59.80, and the said taxes together with the accrued interest and penalty allowed by law are now delinquent."

In addition to the usual prayer for foreclosure, it was asked that a temporary receiver be appointed to collect the rents, issues, and profits from the property and to retain the same subject to the order of the court. It is further prayed that the plaintiff be authorized to collect the rents, issues, and profits from the property during the pendency of the suit, and during the period of redemption, and to apply the same to the cost of maintenance of said property as provided in the mortgage to the Pacific Savings & Loan Association.

On October 14, 1927, the plaintiff moved for the appointment of a receiver as prayed for in the complaint, and filed the following affidavit:

"State of Oregon, County of Multnomah--ss.:

"I S. J. Bischoff, being duly sworn, on oath depose and say that I am attorney for the plaintiff above named and that I am familiar with all facts and circumstances of this case and with all proceedings had and taken herein.

"This suit is brought to foreclose a mortgage upon premises situated at 821 Quimby Street in the city of Portland, County of Multnomah, State of Oregon, which mortgage was given to secure the payment of a note for the sum of $10,000.00; that said note and mortgage are fully and at length set forth in the complaint filed herein, which complaint is referred to and made a part hereof as if herein fully and at length set forth.

"That the aforesaid note was payable in monthly installments of $125.00 each; that the defendants have failed and refused to pay the installments that were due during the months of May, June, July, August, September and October, 1927.

"That the defendants have failed and refused to pay the installments of principal or interest that were due on the first mortgage of $27,500.00 for a period of about eight months,...