Swank v. Elwert

• Decision Date: 04 January 1910
• Citation: 55 Or. 487,105 P. 901
• Parties: SWANK v. ELWERT et al.
• Court: Oregon Supreme Court

105 P. 901

55 Or. 487

SWANK v. ELWERT et al.

Supreme Court of Oregon

January 4, 1910

Appeal from Circuit Court, Multnomah County; Thomas O'Day Judge.

Action by Sarah Swank against C.P. Elwert and others. Judgment for plaintiff, and defendants appeal. Reversed and remanded.

King J., dissenting in part.

The defendant C.P. Elwert, on November 16, 1905, leased his building in Portland to one Hutchinson, for the term of one year, for rooming house purposes, at a stipulated rental payable monthly in advance, on the 16th of each month. The lease contained a clause to the effect that the lessor should "hold the furniture as a lien for the rent," which was not to be removed from the building during the term of the lease until all rents were paid; that the furniture should not be sold without the consent in writing of the lessor, and that upon the lessee's failure to observe or perform any of the covenants thereof, the lessor might re-enter at any time during default, and repossess the premises, forcibly if necessary, without being taken or deemed guilty of trespass, and without prejudice to any remedies which might otherwise be used for collection of arrears of rent. The lease was recorded in the miscellaneous records of the county, and, with the consent of the lessors was afterwards successively assigned and transferred a number of times, together with the title to the furniture placed therein, finally becoming the property of the plaintiff, Mrs Sarah Swank, subject, however, to two chattel mortgages placed on the furniture by her predecessors in interest. The execution and recording of each of these mortgages antedates the making of the lease. The prior mortgage was to secure a promissory note of the then owner of the goods, made in favor of George McGowan, for the sum of $250, and the junior mortgage was to secure a similar note in favor of Mrs. M.C. Blurock, for the sum of $500. Immediately prior to September 16, 1906, which fell upon Sunday, plaintiff was in arrears on her rent to the amount of $30, and on the following day an additional $100 became due, which plaintiff failed to pay. On September 18th C.M. Elwert, acting for C.P. Elwert, re-entered, dispossessed plaintiff, and immediately sold and delivered to defendant A. Schuback, a dealer in secondhand goods, all of the furniture remaining in the building, for the sum of $360. On July 17, 1907, plaintiff brought this action against the defendants to recover damages for the conversion of the furniture, alleging, in substance, that on the 18th of September, 1906, she was the owner and entitled to the immediate possession of the goods, particularly describing them; that on that day the defendants wrongfully, unlawfully, and forcibly obtained possession of the goods, and converted the same to their own use, to her damage in the sum of $1,500. The answer denies the averments of the complaint, but admits that defendants, at the time stated, took possession of certain personal property, a schedule of which is attached to the answer as an exhibit, the value of which, it is alleged, was no greater than $360. As an affirmative defense there is averred the making and recording of the lease and the particular provisions thereof above stated, a default in the payment of the rent, to the amount of $130, on September 18th, and that on that date plaintiff quit and abandoned the premises, and surrendered to defendant C.P. Elwert the property in controversy. As a part of the same defense, there is averred the making, recording, and the terms and amounts of the two chattel mortgages, coupled with the allegation that at the time possession was taken by defendants, the debts secured thereby were past due, and default had been made in the payment thereof, which default had continued until the commencement of this action; that the amounts due for rent and on the debts secured by the mortgages greatly exceeded the value of the property, and that, by reason thereof, plaintiff had no property or equity therein; that on or about September 18, 1906, by reason of the default in the payment of the notes and mortgages, Blurock and McGowan, the mortgagees, claimed to be the owners of the property, and right to its possession, and duly demanded of the defendants possession thereof, with the knowledge and consent of the plaintiff, who refused to pay the amount due on the mortgages, and that by reason thereof Blurock and McGowan became the owners and entitled to the possession of the property, as against the plaintiff, who ceased to be the owner and entitled to possession; that about September 21, 1906, the Ames Mercantile Agency, a corporation, claiming to be the assignee and owner of the notes and mortgages, brought an action against defendants to recover possession of the furniture, which resulted in a judgment of dismissal of the action; and that this action is prosecuted by plaintiff at the request and instigation, and for the sole and exclusive benefit, of said corporation. All of that part of the answer, referring to the two chattel mortgages, the default in the payment thereof, the demand by the mortgagees on the defendants for possession, and the judgment in the replevin action were, on plaintiff's motion, stricken out by the court as irrelevant. The reply put at issue the remainder of the answer and the cause was tried before a jury. Exceptions were taken by the defendants to the admission of plaintiff's testimony on proof of value and damages, and to the instructions of the court, which will be noticed in the opinion. The verdict was in plaintiff's favor in the sum of $720. From the judgment entered thereon defendants have appealed.

A.E. Clark, for appellants.

George Washington Caldwell and W.S. Hufford, for respondent.

SLATER, J. (after stating the facts as above).

The motion to strike out was upon the grounds that the parts of the answer to which it was directed were sham, frivolous, and irrelevant. It is claimed by defendants' counsel that this motion is not available to plaintiff, because it did not assail the entire answer, but only specified portions thereof, and in support of his contention he cites section 76, B. & C. Comp., providing that: "Sham, frivolous, and irrelevant answers and defenses may be stricken out on motion, and upon such terms as the court may in its discretion impose." He also relies upon the case of Brown v. Baker, 39 Or. 66, 71, 65 P. 799, 66 P. 193, interpreting a similar statute, applicable to the reply. There the motion was directed to the new matter of the reply, which presented an apparent departure from the averments of the complaint, and was based on section 79, Hill's Ann.Laws 1892, which is now section 80, B. & C. Comp. It was held that the section of the statute cited contemplates an attack upon the entire reply for the reasons assigned; hence the motion as made was not proper remedy. But here the motion is directed to specified portions of an answer, provided for by section 86, B. & C. Comp., which permits irrelevant or redundant matter inserted in a pleading to be stricken out on motion of the adverse party. As the motion under consideration includes the averment of irrelevancy, and is directed to a part only of the answer, the question is properly raised.

On the merits of this motion it is necessary to consider the relationship of the parties. The plaintiff was the owner of the property, which was subject to two mortgages, placed thereon by her predecessors in interest. It is not specifically alleged in the answer that she had personally obligated herself to pay these mortgages, but it is alleged that they were due, and that default had been made by the plaintiff in the payment thereof, and that the conditions of the mortgages had been broken. It will therefore be assumed that this averment amounts to a charge that she was personally bound to pay the debts thereby secured, and she therefore, stood in the position of a mortgagor in default. The defendant, C.P. Elwert, by the terms of the lease, had a lien on the goods for arrears of rent, subsequent, however, to the lien of the mortgages, which lien was in the nature of a chattel mortgage, and by its terms Elwert was entitled to possession upon default in payment of rent. The lease contains no agreement of the parties as to the manner of its foreclosure. They were bound, therefore, to proceed by suit, according to section 423, B. & C. Comp. Not having done so, but having sold the property at private sale to Schuback, one of the defendants, such sale amounted to a conversion of the property, for which defendants are liable in damages to the owners. By the motion to strike from the answer the averments of these mortgage liens and the breach of the terms thereof at the time of the alleged conversion a question is raised as to who has the right of action to recover the legal damages--whether the plaintiff has that right alone, or the mortgagees, or both, and what the measure of damages is. It is the contention of the defendants that possession, or the right of possession, in the plaintiff at the time of the conversion is essential to the maintenance of the action, and that, as the plaintiff was in default in payment of the mortgages at and prior to the time of the conversion, the right of possession by section 5636, B. & C. Comp., was cast upon the mortgagees; that they thereupon became the owner of said property, and could maintain an action to recover the possession thereof, or an action in the nature of trover to recover the value. That they can maintain such an action has been held in Reinstein v. Roberts, 34 Or. 87, 55 P. 90, 75 Am.St.Rep. 564, and Backhaus v. Buells, 43 Or. 558, 72 P. 976, 73 P. 342. But it is contended that plaintiffs, being out of possession and not entitled to possession, have...