Waymire v. Shipley

• Decision Date: 27 October 1908
• Citation: Waymire v. Shipley, 52 Or. 464, 97 P. 807 (Or. 1908)
• Parties: WAYMIRE v. SHIPLEY et ux.
• Court: Oregon Supreme Court

97 P. 807

52 Or. 464

WAYMIRE v. SHIPLEY et ux.

Supreme Court of Oregon

October 27, 1908

Appeal from Circuit Court, Marion County; Wm. Galloway, Judge.

Suit by Jennie Waymire against P.A. Shipley and wife to foreclose a mortgage. From an order opening a default and setting aside a decree of foreclosure, plaintiff appeals, and from a subsequent decree of foreclosure, and an order confirming the sale thereunder, defendants appeal. Decree modified, and judgment rendered.

This is a suit to foreclose a mortgage executed by defendants P.A Shipley and Elizabeth Shipley, his wife, to plaintiff, on lots 1, 2, 7, and 8, in block 35, and lots 1 and 2, in block 38, in University addition to Salem, Or. Service on the defendants was had by publication of summons, the order for which was made on March 6, 1906, the complaint being filed 25 days later, while a default for failure of defendants to appear was taken against them on April 2d following, and thereafter, on May 28th, a decree was entered in plaintiff's favor for $2,145, with costs and attorney fees, directing a sale of the lots in satisfaction of the mortgage thereon. On July 31st, following the entry of the decree, defendants moved that the default be opened, and that they be permitted to answer and defend, basing the motion therefor upon P.A. Shipley's affidavit, which purported to state facts showing "mistake, inadvertence, and excusable neglect," which motion was allowed. Defendants thereafter answered, admitting the execution of the notes and mortgage set out in the complaint, but denied the other averments, and as an affirmative defense, charge want of consideration by reason of alleged fraud in the making of a certain sale to defendant P.A. Shipley of a patent right said to be worthless, concluding with a prayer to the effect that the instruments involved be declared null and void, and the suit be dismissed. The reply denies the affirmative averments, except the execution of the written instruments set out therein, and, as separate and affirmative matter endeavors to plead that plaintiff is an innocent purchaser and holder of the notes and mortgage involved. The cause was tried before the court, and upon testimony offered, findings of fact and conclusions of law were entered in favor of plaintiff, and a decree entered thereon reciting that the mortgage was foreclosed by an order of the court on May 28 1906, under which the realty described was, on the 14th of July following, sold at sheriff's sale; that the execution being duly returned satisfied, and no objections thereto having been filed, except those stated in the amended answer, plaintiff was entitled to have the sale confirmed, and it was so ordered. From this order defendants appeal, and from the order opening the default and setting aside the first decree of May 28, 1906, and permitting defendants to answer, plaintiff appeals.

E.D. Horgan, for appellants.

James McCain and W.T. Vinton, for respondent.

KING C. (after stating the facts as above).

The first point demanding attention is the error assigned by plaintiff in respect to the order of the court in opening the default and permitting defendants to answer, which, if tenable, disposes of the controversy. B. & C. Comp. § 59, among other things, provides that "the defendant against whom publication is ordered, or his representatives, *** may, *** upon good cause shown and upon such terms as may be proper, be allowed to defend after judgment, and within one year after the entry of such judgment on such terms as may be just. ***" And the term "judgment," as there used, includes decrees. Words & Phrases, p. 3835. See, also, B. & C. Comp. § 396. It is thus apparent that, if sufficient showing was made by defendants, the order setting aside and vacating the decree and permitting them to answer and defend was proper; and when once properly set aside, whether upon the showing made, or for other sufficient reasons disclosed by the record, the court was without power thereafter to enter a decree confirming any sale made under the vacated decree, and only by entry of another decree upon the facts thereafter found could any rights in the property be acquired by the purchaser under the foreclosure sale. It is disclosed by the record that the complaint was not filed until March 31, 1906, long after procurement of the order for publication of summons, but the default for failure to appear or to plead was taken but two days later. It is obvious, therefore, that since no complaint was filed at the time the order for publication of summons was procured, and the default was based on a failure to answer within the time thus demanded, the default was erroneously, as well as prematurely, entered, and the decree thereon accordingly void. Defendants were therefore entitled to have the same set aside, and, having tendered the answer upon which the cause was tried, before default was legally entered, were entitled to defend. It follows that the order vacating the decree, although entered on other and insufficient reasons, was proper, and no error can be predicated thereon. Defendants, however, by their voluntary appearance, submitted to the jurisdiction of the court ( Mayer v. Mayer, 27 Or. 133, 39 P. 1002), leaving for determination the points urged by defendants on the merits.

Defendants assert that the consideration for the notes and mortgage consists of the sale of a right to sell a patent right, with the privilege of selling the tool patented in the state of California. The instrument alluded to is termed a "mitre square" or "caliper rule," the patent to which was obtained by plaintiff's husband, Albert A. Waymire, who sold it to P.A. Shipley for $2,000. Defendants admit the execution of the notes and mortgage, and, as an affirmative defense, charge fraud in the sale thereof, a summary of which charges are: That at and before the sale and execution of the notes and mortgage Albert Waymire, the owner of the patent, falsely, fraudulently, deceitfully, and with intent to deceive defendants, represented that the patent was a mitre square or caliper rule, of great commercial value, intended for the use of all mechanics, and that it was a useful instrument and invention, for which there would be a great demand, and one which every mechanic and architect in California would need; that the instrument would do the work and take the place of 10 other instruments then in use, insuring rapid building; that the purchaser could take the patent to California, sell it for $3,000, and easily make $2,000 from the profits arising from its sale; and that the instruments patented were being manufactured by the Streator Metal Stamping Company in Illinois, from which he could purchase them at the same rates, figures, and prices as the inventor could, at the same time executing to him (Shipley) written authority to make such purchase, and presenting him with 200 tools made under the patent then in Waymire's possession.

The execution of the notes and mortgage being admitted, the burden of proving the fraud in their execution was upon the defendants, and it devolved upon them to establish every necessary element thereof by clear and explicit evidence. 6 Ency.Ev. 8; Keel v. Levy, 19 Or. 450, 24 P. 253. Defendants have not brought themselves within any exception to this rule. The written assignment of the patent and contract set out in the answer and admitted by the plaintiff taken together, clearly and specifically convey to Shipley the letters patent to the device to and in the state of California, subject only to certain restrictions as to the price for which the articles might be sold, in the event Shipley desired to sell them at retail, with a further grant of a right and privilege to purchase and receive the instruments from the Streator Metal Stamping Company, when manufactured, at the same rate and prices paid for the goods and articles by Waymire. ...