Thompson v. Holladay

• Citation: 14 P. 725,15 Or. 34
• Parties: THOMPSON v. HOLLADAY and another.
• Decision Date: 11 April 1887
• Court: Oregon Supreme Court

14 P. 725

15 Or. 34

THOMPSON v. HOLLADAY and another.

Supreme Court of Oregon

April 11, 1887

Appeal from circuit court, Multnomah county.

C.B Bellinger and H.Y. Thompson, for appellants.

James K. Kelly and C.E.S. Wood, for respondent.

THAYER, J.

The respondent commenced a suit in said circuit court against a number of defendants, including the appellants herein, to recover a decree against the defendant, Ben. Holladay, on account of moneys advanced by the former to the latter, and interest on the same at the rate of 10 per cent. per annum from the time the advances were made, and to foreclose a chattel mortgage upon 1194 shares of stock of the Portland Street Railway Company, given by the said Ben. Holladay to the respondent, to secure the said advances; said stock then being held and in the possession of the respondent as receiver in the suit of Ben Holladay v. Joseph Holladay; also to restrain the appellant Joseph Holladay from selling said shares of stock, under a decree of this court directing the sale of certain property including said shares of stock, until he should have first sold all the other property referred to in the said decree, or a sufficient portion thereof to satisfy the sum of $315,492.46 decreed to be due from said Ben. Holladay to said Joseph Holladay.

Answers to the complaint in the suit were filed by the appellants and a reply to the new matter therein contained was filed by the respondent. Subsequently thereto the respondent filed a supplemental complaint. The alleged mortgage bears date November 11, 1884. It recites the execution by the said Ben Holladay of a promissory note for the sum of $4,500, bearing even date with the mortgage, payable to the order of the respondent on or before the first day of January, 1886, with interest thereon at the rate of 10 per cent. per annum until paid, containing an agreement to repay all further advances that may be made by the respondent to said Holladay, but which were not to exceed $500 per month from and after the first day of January, 1885, to be repaid at the time the principal sum became due, with a like rate of interest, and containing also a provision that the same should become due and payable upon the decision being made of the said suit of Ben. Holladay v. Joseph Holladay--the suit in which the decree was given--if said decision should be rendered before January, 1886. Said mortgage contained a granting clause, granting the said property for the purpose of securing the payment of the said note and advances that might be further made by the respondent, with the interest accruing thereon. The note referred to in the mortgage is also set out in the complaint; and it is further alleged in the complaint that, in pursuance of its terms, the said respondent, after the execution thereof, loaned and advanced to the said Ben. Holladay each month, inclusive from December, 1884, to October, 1885, excepting September, the sum of $500, and $1,000 in the month of November of the latter year, making $6,000; and that the amount thereof, with the principal sum mentioned in said note, aggregating $10,500, with accrued interest, was due, and no part had been paid. It is also alleged in the complaint that the said decree of this court in the case of Ben. Holladay v. Joe Holladay was given on appeal from a decree of said circuit court; that it was entered on the twenty-ninth day of June, 1886, and adjudged and decreed that the said Ben. Holladay was indebted to the said Joseph Holladay in the sum of $315,492.46, and that certain conveyances, assignments, and transfers of real and personal property, made by and under the direction of said Ben. Holladay to the said Joseph Holladay, were decreed to be mortgages upon said property to secure the payment of said indebtedness; that the said Ben. Holladay had an equity of redemption in all of said property, and that if he failed to pay the said sum of $315,492.46, together with interest, costs, and disbursements, then and in that case, the receivers appointed in said suit should, as directed by the attorneys of said Joseph Holladay, sell the same to satisfy the said debt, and the balance, if any, pay over to the said Ben. Holladay; that the mortgage property referred to in said decree was more than necessary to pay the indebtedness, and that the lien thereof was prior to the respondent's mortgage; that the respondent had no other lien or security for the payment of said $10,500; and upon which facts the relief, that the said Joseph Holladay first exhaust the other property to obtain satisfaction of his indebtedness before selling said shares of stock, is claimed.

It is also alleged in the complaint that since said decree was rendered by this court, in the suit of Ben. Holladay v. Joseph Holladay, George W. Weidler and said Joseph Holladay were appointed receivers therein, and have the possession and control of the said mortgaged property, and were by order of the judge of said circuit court directed to be made parties to this suit. There were two several answers to the original complaint filed by the appellants; one on behalf of Joseph Holladay and George W. Weidler in their character as receivers; and the other on behalf of Dolph, Bellinger, Mallory, and Simon; and Williams, Durham, and Thompson, who obtained leave of the court to intervene in the suit. The answer of Holladay and Weidler shows that on the twenty-seventh day of September, 1886, said circuit court made and entered an order wherein certain property, described in the decree in said suit of Ben. Holladay v. Joseph Holladay and others, was released and discharged from the lien of said decree, and was ordered to be transferred by them to George W. Weidler as trustee, as provided in the stipulation in the case theretofore filed; that on the said twenty-seventh day of September, 1886, it was so transferred and said receivers had no custody or control of it as such receivers. The property so released is the stock in the Oregon Real-Estate Company, the stock in the Willamette Real-Estate Company, divers tracts of land, town property, and a balance due from Halsey, on stock in the Willamette Real-Estate Company, of $1,328. Said answer contains an averment that the amount then due Joseph Holladay, and secured by the lien of said decree upon the property therein described, excepting that which had been so released, was $346,686.46, with interest thereon from the tenth day of July, 1886; and that, in case it should become necessary to sell said property to satisfy said decree, the stock in the Oregon Real-Estate Company and in the Willamette Real-Estate Company could not be sold by the receivers and the court, and that it is neither practicable nor just to order the sale of said 1,194 shares of the stock of the Portland Street Railway Company to be made after the sale of the other stock mentioned. As a further defense to the suit herein, said Holladay and Weidler alleged, as new matter, that on the eleventh day of November, 1884, at the time of the alleged execution of the note and mortgage referred to in the complaint, the respondent was the duly appointed, qualified, and acting receiver of the said circuit court in said suit of Ben. Holladay v. Joseph Holladay et al., then regularly pending in said court, and as such receiver then had the custody, control, and possession of said 1,194 shares of the capital stock of the Portland Street Railway Company, which had been assigned to him, and were held in his name as such receiver, and not otherwise; and they averred that he could not, in law or equity, acquire the interest in said stock claimed in said complaint.

The answer of the other appellants, Bellinger, Dolph, and others shows that they are and were attorneys at law; were employed as such by the said Ben. Holladay to attend to his law -business long prior to the date of said note and mortgage. That they consisted of two separate firms, said Dolph, Bellinger, Mallory, and Simon composing one; and, at the time of the employment and transaction of the business as such attorneys, the said Williams, Durham, and Thompson composing the other; that the said Ben. Holladay, on the fifteenth day of October, 1883, engaged said firms, and that on the thirteenth day of January, 1885, he agreed with them that, to secure their compensation for said services under said contract of employment, he, said Holladay, would from time to time, as said services should be performed, transfer, convey, and assign to the said law firms, or to some member thereof for the benefit of all, such property, real and personal, as might be agreed upon, which said property, when so conveyed, should be held as security for the compensation for such services and advances by said firms to said Holladay; that in pursuance of said understanding and agreement, said Ben. Holladay did, on the eighteenth day of April, 1885, assign and transfer to said George H. Williams, George H. Durham, and H.Y. Thompson, 550 shares of the capital stock of the Oregon Transfer Company, and 1,200 shares of the capital stock of the Portland Street Railway Company; that in pursuance of said understanding and agreement, said Ben. Holladay did on the twenty-ninth day of August, 1885, assign and transfer to the appellant C.B. Bellinger 5,331 shares of the capital stock of the Willamette Real-Estate Company, 10,000 shares of the capital stock of the Oregon Real-Estate Company, 675 shares of the capital stock of the Willamette Steam-Mills Lumbering & Manufacturing Company, and 550 shares of the stock of the Oregon Transfer Company; that, in pursuance of the said understanding and agreement, said Ben. Holladay did during the month of October, 1885, and prior to the commencement of any of the actions in this state, mentioned in the...