Whitney v. Day

• Decision Date: 06 November 1917
• Citation: 86 Or. 268,168 P. 295
• Parties: WHITNEY ET AL. v. DAY ET AL.
• Court: Oregon Supreme Court

168 P. 295

86 Or. 268

WHITNEY ET AL. v. DAY ET AL.

Supreme Court of Oregon

November 6, 1917

Department 1.

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

Suit by Sarah M. Whitney and another against R. D. Day and others. From the decree entered, defendant Louise Heidecker appeals. Reversed and rendered.

In this suit the gist of the complaint is that on January 6, 1915 the plaintiffs executed and delivered to Victoria E. Newberry their note for $750, securing the same by a real estate mortgage; that afterward Phillips, and later Day, each commenced an action against Mrs. Newberry, who in the meantime had married a man named Young. In respect to both of these cases, without stating the nature of them, it is said in the complaint that as to the Phillips action on June 23 1915, and as to that of Day on July 22, 1915, the plaintiffs herein were duly served with a copy of the writ of attachment, together with notice to them as garnishees, and "that plaintiffs made their return upon said notice to garnishee to the sheriff serving the same that they were indebted to the said Victoria E. Young in the said sum of $750, as evidenced by said promissory note and mortgage above referred to." It is further averred that on October 8 1915, Day took judgment against Young, "and thereafter on October 16, 1916, duly issued execution, and on November 2, 1915, duly sold all the right, title, and interest of the said Victoria E. Young in and to said note and mortgage, made by these plaintiffs to said Victoria E. Young, subject to the interests of defendant M. F. Phillips by virtue of said garnishment proceedings of said M. F. Phillips above referred to." The complaint goes on to state, in substance, that defendant Louise Heidecker afterward demanded from plaintiffs the payment of the interest due on the obligation, claiming to hold the same as the assignee of Young; that the note and mortgage have not been assigned to Heidecker on the mortgage records for Marion county, and plaintiffs have no knowledge whether or not they are held by Heidecker; that a controversy has arisen between defendants, each demanding payment of the interest from plaintiffs, who are ignorant of the rights of the claimants. The essence of the prayer is that the defendants be enjoined from commencing any action or suit against the plaintiff, that they be required to establish their claim to the money, and that plaintiffs be permitted to pay the same into court. The entire complaint is admitted by the defendants Day and Phillips in their answer. They further allege the making and delivery of the note, the commencement of the actions of Phillips and Day, and the service of the writ of attachment and the execution, all practically in the verbiage used in the complaint. They say that the levies of both of the defendants under the attachments were made prior to the time Heidecker had the assignment of the mortgage recorded in Marion county and prior to the maturity of the note, and go on to state that "said defendants by levies became the innocent purchasers of all funds in the hands of plaintiffs herein for the satisfaction of their said claims against the said Victoria E. Newberry, and that said levies against said funds in the hands of plaintiffs by defendants Day and Phillips were made prior to any assignment of the note and mortgage to defendant Heidecker, and that said assignment is without consideration, and made for the purpose of hindering, delaying, and defrauding said defendants in the collection of their claims"; that upon the execution sale in the case of Day against Victoria E. Young the former became the purchaser of said note and mortgage, subject to the interest of defendant Phillips; and that as such purchaser Day is now the owner and entitled to the possession of said note and mortgage.

Louise Heidecker, answering, admits the execution of the mortgage challenges the remainder of the complaint in important particulars, and alleges, in substance, that on April 1, 1915, Victoria E. Newberry sold to her, for the sum of $765, the note described in the complaint, the same being due on or before January 1, 1918, payable to the order of Victoria E. Newberry, and secured by mortgage as stated in the complaint, and ever since April 1, 1915, the defendant Heidecker has been and now is the legal owner and holder of said note and mortgage for value and in due course; that whatever claim, if any, the defendants Day and Phillips have upon the note by virtue of the legal proceedings mentioned in their answer accrued after the defendant Heidecker had bought, paid for, and took possession of the note; and, finally, that the plaintiffs had notice of the ownership of the note by Heidecker before the beginning of the present suit.

Issues were joined on the pleadings, and after a hearing before the circuit court it entered a decree in substance adjudging that Day is the owner of the note and mortgage in question, subject to the interest of Phillips under the attachment mentioned; that the assignment from Victoria E. Young, formerly Victoria E. Newberry, to Heidecker, is void as to Day and Phillips; that Heidecker be restrained from transferring the obligations, or otherwise disposing of the same, or instituting any action thereon, so as to prejudice the rights of defendants Day and Phillips; that the money deposited in court by the plaintiffs be adjudged to be the property of Day and Phillips; and that the latter recover costs and disbursements from Heidecker. Hence this appeal by the latter.

Frank A. Turner and Rex A. Turner, both of Salem, for appellant. W. C. Winslow, Robin D. Day, and Roy F. Shields, all of Salem (Smith & Shields, of Salem, on the brief), for respondents.

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

It is conceded and amply proved that plaintiffs, on January 6, 1915, borrowed from Mrs. Newberry $750, for which they made, executed, and delivered to her their promissory note of that date, payable January 1, 1918, to her order, with interest after date at the rate of 8 per cent. per annum, which note they secured by their mortgage of that date upon real property in Marion county, recorded therein January 7, 1915. It is abundantly established that on April 1, 1915, the defendant Heidecker paid Mrs. Newberry $765 for the note in question, and that the latter then and there indorsed the same to the former, who ever since then has had the same in her possession as the holder thereof. The pleadings show that there is no pretense of any claim against the note or mortgage on the part of either Phillips or Day until June 23, 1915, on the part of Phillips, and July 22, 1915, on the part of Day.

Under these circumstances it may well be doubted whether a bill of interpleader will lie on behalf of the makers of the note as against Miss Heidecker. It is of the essence of interpleader that the plaintiff must be indifferent as between those claiming from him. He must not have incurred any...