Wright v. Wimberly

• Citation: 94 Or. 1,184 P. 740
• Parties: WRIGHT v. WIMBERLY ET AL.
• Decision Date: 21 October 1919
• Court: Oregon Supreme Court

184 P. 740

94 Or. 1

WRIGHT v. WIMBERLY ET AL.

Supreme Court of Oregon

October 21, 1919

In Banc.

Appeal from Circuit Court, Douglas County; J. W. Hamilton, Judge.

Action by A. H. Wright against L. Wimberly and Cora Wimberly. From decree dismissing the action, plaintiff appeals. Affirmed.

This is an action by A. H. Wright against L. Wimberly and Cora, his wife, to recover money. The facts are that on January 27 1910, O. C. Jones and his wife, in consideration of $4,000 executed to L. Wimberly a deed of a tract of land in Douglas county, Or. The purchaser paid $1,000 down, and thereupon he and his wife executed to Jones a promissory note for $3,000 maturing on or before ten years with interest at the rate of 6 per cent. payable annually, but, if default were made as to any such installments, the principal and interest were to become immediately due and collectible at the option of the holder of the note, and in case suit or action were instituted thereon the makers promised to pay such additional sum as the court might adjudge reasonable as attorney's fees. In order to secure the payment of the negotiable instrument, the makers at the time it was given also executed to Jones a mortgage of the real property so purchased. The note was assigned to the plaintiff, who, upon default in the payment of interest, elected to treat the entire debt as due and collectible, and thereupon instituted a suit against the defendants herein and others to forclose the mortgage. Pursuant to the provisions of section 426, L. O. L hereinafter quoted, the lien was foreclosed; but the trial court refused to give a deficiency judgment, whereupon an appeal was taken and such final determination was affirmed. Wright v. Wimberly, 79 Or. 626, 156 P. 257. Obeying the command of the decree, the sheriff of that county on January 28, 1913, regularly sold the real property so mortgaged for $2,250, and after deducting the expenses of such sale, the costs and disbursements of the suit, and the further sum of $300, which was adjudged reasonable as attorney's fees, the remainder of the proceeds, $1,909, was indorsed on the promissory note.

Allowing credit therefor as a voluntary payment, this action was instituted to recover the balance due on the note with interest from January 28, 1913, and the further sum of $150 as additional attorney's fees. The complaint states the facts in substance as hereinbefore detailed and alleges in effect that the plaintiff purchased the note in due course, before maturity for a valuable consideration and without notice or knowledge that the mortgage was executed to secure the payment of the purchase price of the land; that neither the note nor the mortgage indicated that either was given for that purpose; and that it appeared from the deed records of Douglas county, Or., that O. C. Jones conveyed the real property to the defendant L. Wimberly on the day the note and mortgage were executed. The complaint also narrates the suit to foreclose the mortgage, the decree given therein, the sale of the land pursuant thereto, and the credit of the remainder of the proceeds upon the promissory note, and also avers that no other payments than those mentioned had been made.

The allegation in the initiatory pleading, relating to the plaintiff's purchase of the note and mortgage without notice or knowledge that they had been executed to evidence any part of the purchase price of the mortgaged real property, was stricken out upon motion of defendants' counsel. Their demurrer to the remainder of the complaint on the ground that it did not state facts sufficient to constitute a cause of action was sustained, the action was dismissed, and the plaintiff appeals.

O. P. Coshow and B. L. Eddy, both of Roseburg, for appellant.

A. N. Orcutt and Carl Wimberly, both of Roseburg (Rice & Orcutt and Neuner & Wimberly, all of Roseburg, on the briefs), for repondents.

McBRIDE, C.J. (after stating the facts as above).

This cause was argued and submitted April 24, 1918, but, owing to the inability of the justices to agree, was continued for further consideration. The late Justice Moore, before his death, and in fact during his last long illness, prepared an opinion in the case which, in the judgment of the writer, correctly states the law. It is a monument to the faithfulness of the deceased jurist, to the duties of his office, and the last evidence of that industry which only death could abate. The writer adopts Judge Moore's opinion as his own, and it is here given in full:

MOORE J.

Before discussing the questions here involved, it should be said that in Oregon, though the same judge usually presides at the trial of actions at law and of suits in equity, these forums are essentially distinct. The final determination of an action at law by a court in this state is called a "judgment," while that of a suit in equity is denominated a "decree." A party who has an equitable defense in a law action is not remediless, however; for, if a defendant in such action is entitled to relief arising out of facts requiring the interposition of a court of equity and material to his defense, he may, upon filing his answer in the action, also as plaintiff file a complaint in equity in the nature of a cross-bill, the institution of which suit shall stay the proceedings at law, and the case shall thereafter continue as a suit in equity, in which the maintenance of the action at law may be perpetually enjoined by final decree, or allowed to proceed in accordance therewith. L. O. L. § 390.

With these preliminary observations, attention will be called to some provisions of our statutes, relating to the foreclosure of mortgages. The Code adopted October 11, 1862, and which went into effect June 1, 1863 (Deady's Gen. Laws of Oregon 1845--64, p. 139), contained clauses which, having been incorporated in Lord's Oregon Laws, read:

"A lien upon real or personal property, other than that of a judgment or decree, whether created by mortgage or otherwise, shall be foreclosed, and the property adjudged to be sold to satisfy the debt secured thereby by a suit. In such suit, in addition to the decree of foreclosure and sale, if it appear that a promissory note or other personal obligation for the payment of the debt has been given by the mortgagor or other lien debtor, or by any other person as principal or otherwise, the court shall also decree a recovery of the amount of such debt against such person or persons, as the case may be, as in the case of an ordinary decree for the recovery of money." L. O. L. § 422.

"During the pendency of an action at law for the recovery of a debt secured by any lien mentioned in section 422, a suit cannot be maintained for the foreclosure of such lien, nor thereafter, unless judgment be given in such action that the plaintiff recover such debt or some part thereof, and an execution thereon against the property of the defendant in the judgment is returned unsatisfied in whole or in part." Id., § 429.

These and other sections of the Code, relating to the foreclosure of mortgages, which later provisions are not deemed to be involved herein, were in force February 24, 1903 (Laws 1903, p. 252), when there was filed in the office of the Secretary of State a statute, which, omitting the enacting clause, is as follows:

"An act to abolish deficiency judgments upon the foreclosure of mortgages to secure the unpaid balance of purchase price of real property.

"Section 1. When judgment or decree is given for the foreclosure of any mortgage, hereafter executed, to secure payment of the balance of the purchase price of real property, such judgment or decree shall provide for the sale of the real property, covered by such mortgage, for the satisfaction of the judgment or decree given therein, and the mortgagee shall not be entitled to a deficiency judgment on account of such mortgage or note or obligation secured by the same." L. O. L. § 426.

Obeying the restriction contained in the clause last quoted, the trial court, though determining the amount of the debt, evidenced by the promissory note as a charge against the land if it would sell for that much, refused to grant a deficiency judgment in the suit to foreclose the mortgage, if the proceeds of the sale were insufficient for that purpose. Wright v. Wimberly, 79 Or. 626, 156 P. 257. For the same reason, the demurrer to the complaint in this action was sustained. The question to be considered is what effect the enactment of section 426, L. O. L., has upon the prior provisions of the statute hereinbefore set forth.

Mr. Wiltsie, in his work on Mortgage Foreclosure (3d Ed. § 11), says:

"In most states a mortgagee, after default, has three remedies, any one or two or all of which he may pursue concurrently. These remedies are, (1) an action at law to recover the debt, being usually an action on the bond or note, (2) an action in ejectment to obtain possession, and (3) the action of foreclosure; but when he pursues these remedies concurrently, each must be governed by the rules of law applicable to the forum in which it is brought. In some states, however, the action of ejectment can no longer be maintained by the mortgagee for the recovery of the mortgaged premises."

Another author discussing this subject, remarks:

"Furthermore, the mortgagee may, in jurisdictions wherein the rules of the common law prevail, bring an action of ejectment, in addition to his action on the debt secured, or a bill for foreclosure and sale." 19 R. C. L. 512.

To the same effect, see, also, Coote, Mort. 518.

It is probable that section 429, L. O. L., was enacted to prevent the maintenance concurrently of a suit "in rem" to foreclose the mortgage, and of an action "in personam" on the note or other obligation thereby...