Union Nat. Bank v. Oil

• Decision Date: 30 January 1923
• Docket Number: Case Number: 13094
• Parties: UNION NAT. BANK v. LAVACOTA OIL & GAS CO.
• Court: Oklahoma Supreme Court

1923 OK 64

213 P. 869

89 Okla. 258

UNION NAT. BANK v. LAVACOTA OIL & GAS CO.

Case Number: 13094

Supreme Court of Oklahoma

Decided: January 30, 1923

Syllabus

¶0 Mortgages--Foreclosure--Defenses--Contemporaneous Oral Agreement.

The right of action of a mortgagee to foreclose the mortgage on default in payment of notes for borrowed money, secured thereby, prescribing the manner and method of payment, and the right of the payee in default of payment, and the conditions under which the payee may declare the whole sum due and foreclose his lien, cannot be abated or defeated by a plea and proof of a contemporaneous oral undertaking as to a different manner or method of payment.

Error from District Court, Creek County; Lucien B. Wright, Judge.

Action by the Union National Bank against the Lavacota Oil & Gas Company for mortgage foreclosure. Judgment for defendant, and plaintiff brings error. Reversed.

Stuart, Cruce & Bland, Thompson & Smith, and E. J. Doerner, for plaintiff in error.

J. M. Springer and E. G. Wilson, for defendant in error.

BRANSON, J.

¶1 On the 27th day of January, 1921, the plaintiff, the Union National Bank of Tulsa, Okla., plaintiff in error herein, filed its petition in the district court of Creek county, Okla., against the Lavacota Oil & Gas Company, a corporation, the defendant in error, in which the plaintiff, omitting the allegations, prays judgment as follows:

"Wherefore, the plaintiff prays the court to appoint a receiver for the above described real estate and property, with the power and for the purpose of preserving and operating said property; that plaintiff have Judgment against said defendant for the principal sum of ten thousand six hundred and seven 06-100 ($ 10,607.06) dollars, being the amount due on said notes and mortgage, and interest, and also for the sum of one thousand and sixty and 70-100 ($ 1,060.70) Dollars attorney's fee and for the costs of this action and for further judgment foreclosing the lien of said plaintiff upon the oil and gas lease on said real estate, to wit. * * *"

¶2 In brief, the plaintiff's petition is a suit upon three promissory notes and to foreclose a mortgage lien upon an oil and gas leasehold estate, created by a certain oil and gas mining lease, on land therein described, situated in Creek county, Okla.

¶3 To this petition the defendant filed its answer, and later an amended answer, admitting the execution of the notes and mortgage pleaded by the plaintiff, and among other things alleged that the said notes and mortgage were executed by the president of the defendant corporation without the authority of the said corporation; that plaintiff was endeavoring to foreclose as if it were a chattel mortgage, and further alleging:

"That at same time and place (time and place of executing the notes and mortgage-ours), and as a part and parcel of the same transaction, it was mutually orally agreed between the officers and agents of the plaintiff, and the officers and agents of the defendant, that the defendant would execute to the plaintiff a valid assignment of the oil runs produced and saved from said premises, and that the plaintiff should receive and accept the same until the notes and mortgage given were fully paid, and that said notes and mortgage should be paid and discharged from the oil runs of said property and not otherwise; and, that the said plaintiff should receive said oil runs and indorse the same as a credit upon the notes sued upon herein, and that at the time of the indorsement of each amount received said note should be extended from time to time until said notes were fully paid off and discharged and satisfied from the oil produced and saved from said premises as aforesaid."

¶4 To this last quoted part of the defendant's amended answer, the plaintiff filed a demurrer, which the record fails to disclose was acted upon by the court. At a subsequent date, the plaintiff filed a reply to the amended answer, and on the day of the trial on the merits, the demurrer by consent of the parties was presented to the court, and by the court overruled, to which plaintiff duly excepted.

¶5 The question of the appointment of the receiver is not discussed in the brief filed in this cause, and no consideration of the propriety thereof will be given in this opinion. The question raised by the answer on the part of the defendant, that the president executed the mortgage and note sued on without any authority of the corporation, seems to have been abandoned in the trial, and is not discussed in the brief.

¶6 The only question remaining for decision under the record presented herein is raised by plaintiff in error's assignments Nos. 2 and 6, to wit:

"(2) The court erred in admitting, over the objection of the plaintiff in error, incompetent, irrelevant and immaterial testimony offered by the defendant in error.

"(6) For that the judgment of the court upon the plea in abatement of the defendant in error that this action was prematurely brought by the plaintiff in error, was erroneous, unsupported by the evidence and contrary to law."

¶7 The judgment entered by the trial court, omitting that part which is immaterial to the question, is:

"That the action of the plaintiff, the Union National Bank, was prematurely brought; and the court having heard the evidence and arguments of counsel, finds that the defense of the Lavacota Oil & Gas Company, that the action by the Union National Bank is prematurely brought, should be sustained."

¶8 The question is, "Was there any competent evidence presented to the trial court on which said judgment can be sustained?"

¶9 The notes sued on, ordinary promissory notes, made payable to the plaintiff, the Union National Bank, and the mortgage on the oil and gas leasehold estate, omitting the whereas clauses, reciting the description of the property, and the amount of the notes secured, reads as follows:

"Now, therefore, as security for the payment of the said promissory notes, herein-above described, the party of the first part does by these presents mortgage unto the party of the second part, its successors and assigns, the above described oil and gas mining lease and leasehold estate, and all right, title and interest and estate of said first party in and to all and singular the tenements, hereditaments and appurtenances thereunto belonging, or in any wise appertaining, including all oil stored on said land belonging to first party and all oil and gas wells, oil well supplies and machinery of every kind and character, buildings, derricks, pipe lines, tanks, casings, telephone lines, livestock, vehicles located on, in or under said above described property, and all other property of every kind and description on the said lease, or belonging to said lease wherever located. * * *"

¶10 The mortgage then provides that the property would be held intact, and that in event default was made in payment, mortgagee could foreclose, in...