Thompson v. Marshall

• Decision Date: 19 October 1891
• Citation: 27 P. 957,21 Or. 171
• Parties: THOMPSON v. MARSHALL.
• Court: Oregon Supreme Court

27 P. 957

21 Or. 171

THOMPSON v. MARSHALL.

Supreme Court of Oregon

October 19, 1891

Appeal from circuit court, Multnomah county; L.B. STEARNS, Judge.

Action by R.H. Thompson against J.P. Marshall. Judgment for plaintiff. Defendant appeals. Affirmed.

STATEMENT BY THE COURT. On the 5th day of April, 1890, the Portland Cable Railway Company executed and delivered to the appellant the following writing: "Know all men by these presents that the Portland Cable Railway Company, (a corporation duly organized and incorporated under the laws of the state of Oregon,) in consideration of twenty thousand dollars ($20,000,) to it paid by J.P. Marshall, trustee, does hereby grant, bargain, sell, and convey to said J.P. Marshall trustee, and his assigns, forever, the following described parcel of real estate situate, lying, and being in the county of Multnomah, state of Oregon, to-wit: Lot numbered two, (2,) in block A; lots numbered one, (1,) three, (3,) five, (5,) and seven, (7,) in block B; lots numbered two, (2,) six, (6,) seven, (7,) and nine, (9,) in block D; lots one, (1,) two (2,) three, (3,) four, (4,) five, (5,) and six, (6,) in block E; and lots three, (3,) eight, (8,) and twelve, (12,) in block F,--all in Smith's addition to the city of Portland, county of Multnomah, and state of Oregon, according to the recorded map and plat of said addition to said city in the county and state aforesaid, and containing twenty-two and forty-two one-hundredths (22 42-100) acres, together with the tenements, hereditaments, and appurtenances thereunto belonging or in any wise appertaining, and also all of its estate, right, title, and interest, at law or equity, therein or thereto. To have and to hold the same to the said J.P. Marshall, trustee, and his assigns, forever. And the Portland Cable Railway Company does covenant with the said J.P. Marshall, trustee, and his legal representatives, forever, that said real estate is free from all incumbrances, and that it will and its successors shall warrant and defend the same to the said J.P. Marshall, trustee, and his assigns, forever, against the lawful claims and demands of all persons whomsoever. In witness whereof the Portland Cable Railway Company has, by resolution of its board of directors, duly and legally adopted, caused these presents to be signed by its president and secretary, and its corporate seal to be affixed, this 5th day of April, 1890. [ Seal.] PORTLAND CABLE RAILWAY COMPANY. By PRESTON C. SMITH, President. PORTLAND CABLE RAILWAY COMPANY. By IRA B. STURGES, Secretary. Signed in presence of A.E. BORTHWICK, L.H. MAXWELL." This deed was duly acknowledged.

The complaint alleges that the object and purpose of the execution and delivery of said deed to Marshall was to secure the payment of an indebtedness of said railway company to the Ainsworth National Bank of Portland, Or., under a secret trust that said Marshall should sell and convey said lands at either public or private sale, and out of the proceeds thereof should pay said bank the amount of said indebtedness, rendering the overplus, if any, to said railway company or its assigns. The complaint further alleges that thereafter, and on the 27th day of January, 1891, said railway company was indebted to divers persons, including the respondent, and in various sums of money. That on said day said railway company executed and delivered to said Marshall another conveyance of said real property described in said conveyance dated April 5, 1890, and also by said deed, dated January 27, 1891, conveyed other real property to said Marshall. The following is a copy of said conveyance, dated January 27, 1891, (omitting the acknowledgment, which is in due form,) to-wit: "Know all men by these presents, that the Portland Cable Railway Company, a corporation duly organized and existing under and by virtue of the laws of the state of Oregon, having its principal office and place of business in the city of Portland, in said state, for and in consideration of the sum of one dollar to it in hand paid by J.P. Marshall, of the city of Portland, state of Oregon, and in consideration of other valuable considerations to it moving, has bargained, granted, and sold, and by these presents does grant, bargain, sell, and convey, unto said J.P. Marshall, as trustee, all the following described real estate, situate in the county of Multnomah and state of Oregon, to-wit: Lot two, (2,) in block A; lots one, (1,) three, (3,) five, (5,) and seven, (7,) in block B; lots two, (2,) six, (6,) seven, (7,) and nine, (9,) in block D; all of block E; and lots three, (3,) eight, (8,) and twelve, (12,) in block F,--all in Smith's addition to the city of Portland, in said county and state, according to the recorded map and plat thereof. [ The other lands conveyed by this deed are not in controversy in this suit, and therefore are omitted from the description.] To have and to hold the same, together with the appurtenances thereunto belonging, or in any wise appertaining, unto the said J.P Marshall and his successors in this trust, in trust, nevertheless, and for the security and benefit of all persons holding or owning claims against the said railway company, or holding or owning mortgages upon any of the property of said company not covered by the trust-deed securing the bonds of the company; and when the said indebtedness shall have been fully discharged, and all said claims against said company except said bonds shall have been fully met and paid, then to reconvey the property herein conveyed to said Portland Cable Railway Company, its successors or assigns. It is further agreed and provided that, for the purpose of raising funds to liquidate and pay off said indebtedness intended to be secured hereby, the said J.P. Marshall, as trustee, or his successors in this trust, shall have power and authority, under and with direction and consent of the board of directors of said Portland Cable Railway Company, to borrow money in the name of said company, and to secure the repayment of the same, with interest, by mortgage upon any or all the property hereby conveyed, or for said purpose, with like direction and assent of said board of directors, to sell said real property, or any part thereof, and to make, execute, and deliver good and sufficient deeds therefor, with or without covenants of warranty and against incumbrances; and the money arising from such loans negotiated, and from such sale or sales of said real estate, shall be by the said J.P. Marshall or his successor in this trust applied to the payment of the indebtedness herein provided for. In witness whereof the said Portland Cable Railway Company has caused these presents to be signed by its president and secretary, and its corporate seal to be hereunto affixed, in pursuance of a resolution of its board of directors duly passed on this 27th day of January, A.D. 1891. [ Seal.] PORTLAND CABLE RAILWAY CO. By C.H. WOODWARD, President. PORTLAND CABLE RAILWAY CO. By IRA B. STURGES, Secretary. In presence of CHARLES R. FAY, B.F. CLAYTON." This deed was also duly acknowledged.

It is alleged in the complaint that on the 18th day of April, 1891 the board of directors of said railway company duly passed a resolution directing and assenting that said Marshall, as trustee, should sell certain specified properties described in each of said deeds, and that said resolution directed and assented that said sale should be made at public auction at a place in the city of Portland to be designated by said trustee, and that certain prescribed notice should be given for a specified time, and the property be sold on terms named in said resolution. The complaint further shows that plaintiff is one of the creditors of said cable railway company whose debt was secured by the deed dated January 27, 1891, and that the defendant was about to sell all of said property under said secret trust relating to said deed of April 5, 1890, at the same time he would sell under the deed of January 27, 1891, under the direction and assent of the board of directors of said cable railway company, and make certain disposition of the proceeds of said sale as directed by the said board of directors, and will not foreclose the same by proper proceedings in court. The defendant demurred to the complaint, which was overruled, and, declining to further plead, a final decree was entered enjoining said sale, from which decree this...