181 P. 990 | Or. | 1919
Lead Opinion
We are of the opinion that the motion to dismiss in the Wright case is not well taken. There seems to have been a virtual, if not a formal, consolidation of the cases for trial.
It is urged that the effect of this duplicate appeal would be to save a filing fee in one case or the other. Whether or not this is true, we do not think it would justify us in dismissing an appeal where the notice sufficiently describes each of the decrees, and fully notifies the adverse parties that it is the intention to appeal from each of them.
“Service by mail may be made when the person for whom the service is made, and the person upon whom it is to be made, resides in different places.”
Under these sections the appellant Wright had the option to serve his notice of appeal either upon the party individually, or upon his attorney, at any place in the state; and having selected that option in favor of the attorney, such attorney became the “person” who was being served and he living at a different place, to wit: the town of Baker, the service upon him could be properly made by mail. This seems the natural construction of the language, but besides this, it is the usual and we think the appropriate practice, where there is an attorney of record to serve the notice of appeal upon him, even although such attor
What is said above in regard to the Wright appeal, also disposes of the motion to dismiss the appeal of the intervener, Hall. The double notice of appeal in his case was somewhat more general than in the Wright case, but we think it was sufficient under the holding in Robinson v. Phegley, 93 Or. 299 (177 Pac. 942, 178 Pac. 799, 182 Pac. 373); Fraley v. Hoban, 69 Or. 180.(133 Pac. 1190, 137 Pac. 751), and Tucker v. Nuding, 92 Or. 319 (180 Pac. 903).
The motion to dismiss the appeal in both cases is denied. Denied.
Opinion on the Merits
Modified and affirmed December 16, 1919
On the Merits.
(186 Pac. 41.)
In Banc.
This case came before the court on a motion to dismiss the appeal, which was overruled: 181 Pac. 990.
Modified and Affirmed.
For appellant there was a brief with oral arguments by Mr. R. J. Green and Mr. H. E. Dixon.
For respondent there was a brief over the names of Messrs. Crawford & Eakin and Mr. B. F. Wilson, with an oral argument by Mr. T. H. Crawford.
For intervener, George F. Hall, there was a brief over the names of Mr. John L. Rand and Mr. George H. Nichols, with an oral argument by Mr. John L. Rand.
For defendant, La Grande National Bank, there was a.brief submitted by Messrs. Crawford $ Eakin.
On June 26, 1918, the First National Bank of Union filed its complaint against O. F. "Wegener, L. E.'McCarthy and W. W. Maride, partners under the firm name of Western White Pine Lumber Company; A. M. Stonedahl and M. F. Davis, partners as Stonedahl & Davis; P. C. Wright, and later George F. Hall, trustee, as defendants, in which it is alleged that on December 6, 1917, the plaintiff loaned to the defendant company $1,575, for which the latter then executed its note to the bank, payable six months after date; that on December 7, 1917, the plaintiff loaned to the' defendant company $1,550, taking a note therefor; and that on the latter date the company executed and delivered to the plaintiff a certain bill of sale of 304,500 feet of lumber, of which 31,000 feet was then piled on the yards of the company at what is known as the Plaggerty site in Union County, to secure the payment of these promissory notes, which instrument was duly filed in the office of the county clerk of Union County and entered in Book C, at page 172, Becord of Bills of Sale. It is next alleged that on February 9, 1918-, the plaintiff made a further loan of $1,100 to the defendant company, for which it took the company’s demand note; that on April 8,1918, the defendant company executed to the Union Bank another note for $1,800 payable six months after date, and that on the same date it delivered to the Union Bank its certain bill of sale of 265,000 feet of lumber on the Haggerty site, which was duly filed and recorded as a bill of sale on April 9, 1918, in Book C, page 185, Becord of Bills of Sale, and which was intended to secure the payment of the two promissory notes last above described. It is next alleged that on May 7,1918, as evidence of a loan then
The plaintiff prays fo¡r the usual decree of foreclosure of the bills of sale as chattel mortgages, the sale of the lumber and the application of the proceeds to its claims, and that such claims be declared superior in right and time to all other demands against this defendant.
At the time of the filing of the complaint herein the defendant P. C. Wright had commenced a suit to foreclose his own and some thirty-four assigned liens for labor performed in cutting logs and manufactur
For a separate cause of suit, Wright alleges that between the dates last above mentioned, one Harry Proctor performed work, labor and services upon and assisted in manufacturing said logs and other timber into lumber, for which he filed his lien on June 8,1918, a copy of which is attaehed to the pleading and marked “exhibit 24.” Like allegations are made as to eleven further causes of suit, all of which are assigned to the defendant Wright, who as plaintiff in his suit prayed for a decree for the sale of the logs and lumber, the application of the proceeds thereof on the payment of the labor liens, and that all of such liens be declared prior in time and right to the claims of the plaintiff and to all other demands against the defendant company.
Upon petition of P. C. “Wright and order of the court, La Grande National Bank of La Grande, Oregon, was made a defendant, and filed its answer alleging that on April 9, 1918, it loaned to the defendant company $1,400 and took therefor its note payable in ninety days, and that to secure the payment thereof the defendant company executed to that bank its bill of sale of 200,000 feet of lumber then on its yards at
As a reply, the defendant Wright made a general denial of all of the material allegations of the answer of the La Grande Bank.
On July 8,1918, the defendant company was adjudicated to be bankrupt by the United States District Court for the State of Oregon, George F. Hall was appointed trustee and on petition and order of the court he was made a defendant here. On August 29, 1918, he filed his answer, denying all of the material averments of either of the banks or the lien claimants and alleging affirmatively that he was in possession “of all of the assets and property” of the defendant
Tbe defendants Stonedabl and Davis were attaching creditors whose lien in legal effect was dissolved by, the adjudication of bankruptcy, and for sucb reason made no defense.
For tbe purpose of trial, the cases in which P. C. Wright and tbe Union Bank were plaintiffs were consolidated, and they will be so treated in this opinion.
Tbe trial court made findings of fact and conclusions of law and rendered a decree in favor of tbe Union Bank for tbe full amount of its claim; that its bills of sale were in effect chattel mortgages; directing that tbe 700,000 feet of lumber then on the yards of tbe defendant company at Union be sold and tbe proceeds first applied to tbe payment of its claim; that this was a first and prior lien on tbe lumber; that tbe alleged liens of P. C. Wright and bis assignors for labor were null and void, and that tbe rights of tbe trustee, Hall, to any property of tbe company were subject to tbe lien of tbe Union Bank.
A like decree was entered in favor of tbe La Grande Bank, directing tbe sale of tbe 200,000 feet of lumber on tbe Haggerty site and tbe application of the proceeds to tbe satisfaction of its claim.
An appeal was taken by tbe defendant Wright and the defendant Hall as trustee, both claiming that neither of tbe banks was entitled to any lien, tbe defendant Wright contending that be should have a prior lien for tbe full amount of tbe claims for labor, and tbe trustee insisting that all liens against tbe lum
The first transaction between the Union Bank and the defendant company is evidenced by two promissory notes and a written instrument, in form a bill of sale and in substance a chattel mortgage, which contains the following provisions:
“That if the grántors, their executors, administrators or assigns, shall pay unto the grantee or its assigns, the sum of ($3,125.00) Thirty One Hundred Twenty Five and no/100 Dollars in six months from this date, with interest semi-annually at the rate of 8% per annum, and, until such payment, shall not waste or destroy the lumber above mentioned, nor suffer it, nor any part thereof, to be attached on mesne process (labor liens, etc.,-) and shall not, except with the consent in writing of the grantee or its assigns, attempt to remove the same or sell the same, then this deed as also the note of even date herewith, signed by the- said Western White Pine Lumber Company; whereby the said Western White Pine Lumber Company promises to pay to the grantee, or order, the said sum and interest at the time aforesaid, shall become null and void.
“But upon any default in the performance of the foregoing conditions, the said Western White Pine Lumber Company does hereby grant, bargain, sell and convey unto the said First National Bank of Union, Union, Oregon, the foregoing described chattels.”
This was followed by the remaining notes and written instrument above described, which were never filed, indexed or recorded as chattel mortgages and all of which in legal effect contained the above provisions. From an inspection of the first instrument it is apparent that except as to amount, date and descriptions, the alleged chattel mortgage to the La Grande Bank
By Section 7407, L. O. L., it was enacted:
“Every mortgage, deed of trust, conveyance, or instrument of writing intended to operate as a mortgage of personal property, either alone or with real property, hereafter made, which shall not be accompanied with immediate delivery and followed by the actual and continual change of possession of the personal property mortgages, or which shall not be recorded as provided in Section 7405, shall be void as against subsequent purchasers and mortgagees in good faith and for a valuable consideration of the same personal property, or any portion thereof.”
All of the money evidenced by the notes to the banks was then actually loaned to the defendant company and by it used in the payment of labor, in particular, and current monthly expenses. In fact, the labor account was paid in full from January 1 to May 1, 1918, with the money obtained from the banks. There is no proof or allegation that either of the banks knew at the time the respective loans were made that the defendant company was insolvent or that either of the loans was not bankable, or that there was any fraudulent motive or intent in the failure or neglect to have the instruments filed and indexed as chattel mortgages. Nor is there any evidence that either of the banks was not acting in good faith in all of its transactions with the defendant company. There is no allegation that any creditor of the defendant company was misled or deceived, or was induced to extend credit by reason of the failure to have the “bills of sale” recorded as chattel mortgages.
The petition in bankruptcy was filed by the defendant company and it was adjudged a bankrupt on July 8, 1918. Hence, at the time of the adjudication there was pending in the Circuit Court of Union County the suit of the Union Bank to foreclose its liens as chattel mortgages, and that bank had been
“A bill of sale, executed by the bankrupts in order to avoid the sacrifice likely to result from a sale under execution, which had been advertised and intended as security for the debt due, is a chattel mortgage and void as against the trustee in bankruptcy of the .judgment debtor, unless filed for record or unless possession was taken by the mortgagee prior to the date of the filing of the petition in bankruptcy upon which adjudication was eventually had.
“A trustee in bankruptcy, since the amendment of 1910 to Section 47a (2) of the Bankruptcy Act, now stands in the relation of a creditor having obtained a lien by levy of an attachment or execution as and of the date of filing of the petition in bankruptcy”: Matter of Schilling and Loller, 41 Am. Bankr. Rep. 698.
“"Where conditional contracts were filed for record before the filing of a petition in bankruptcy, the trustee in bankruptcy acquired no rights greater than those which would be acquired by creditors who on the day that the petition in bankruptcy was filed secured a lien by attachment or otherwise.
*335 “The rights of a trustee in bankruptcy vest as of the date of the filing of the petition in bankruptcy.
“A mortgage, executed more than four months before the bankruptcy petition is filed, is valid as against the trustee, even though the same is not recorded until three days previous to the filing of the petition in bankruptcy, where there is no claim of preference”: Emerson-Brantingham Co. v. Lawson, Trustee (D. C.), 38 Am. Bankr. Rep. 344, 237 Fed. 877.
In construing the 1910 amendment of the bankruptcy act, Black on Bankruptcy (1914 ed.), Sections 365 and 366, says:
“The trustee is no longer in the situation of a general creditor, but occupies the more favorable position of a judgment or execution creditor, and can resist the enforcement of any lien which would be invalid as against a creditor of that class.
“As to recording, the rule appears to be well established that a mortgage which was valid when executed and entirely free from fraud is not invalidated in the bankruptcy proceedings simply because it was not placed on the record until after the debtor had become insolvent or until shortly before the filing of the petition in bankruptcy, provided it is not shown that there was any fraudulent purpose in so withholding it from the record, and if the law of the state is such that recording is not necessary to its validity as between the parties.”
In Collier on Bankruptcy (11 ed.), page 729, it is said:
“The class of cases, unprovided for by the original act, and intended to be reached by the amendment, was that in which no creditors had acquired liens by legal or equitable proceedings and to vest in the trustee for the interest of all creditors the potential rights of creditors potential with such liens.”
“This provision of the bankruptcy act puts the trustee, in so far as the assets of the estate are concerned, in the position of a lien creditor.”
—distinguishing the case of York Mfg. Co. v. Cassell, 201 U. S. 344 (50 L. Ed. 782, 26 Sup. Ct. Rep. 481, see, also, Rose’s U. S. Notes), and similar cases.
Jones on Chattel Mortgages (4 ed.), Section 178, says in part:
_ “Delivery of possession under a mortgage, before rights have been acquired by others, will cure any invalidity there may be in the instrument, whether arising from an insufficient description of the property, an insufficient execution of the instrument, the omission to record it, or from its containing a provision which makes it void except as between the parties ; as, for instance, an agreement that the mortgagor may retain possession and sell a stock of goods in the usual course of trade.”
This excerpt is quoted with approval in Kenney v. Hurlburt, 88 Or. 688-700 (172 Pac. 490, 173 Pac. 158, Ann. Cas. 1918E, 737, L. R. A. 1918E, 652).
Loveland on Bankruptcy, volume 1, Section 444, page 922, states that:
“The taking possession by a mortgagee under a chattel mortgage or conditional sale is equivalent to recording. ’ ’
The claim of the La Grande Bank presents a more serious question. Its attorneys state in their briefs and the trial court found that the .bill of sale given it by the defendant company was indexed as a chattel
On June 26, 1918, P. C. Wright, as plaintiff in his suit, filed a motion based upon an affidavit of one of his attorneys for an order of court that the La Grande Bank be made a defendant. The order was made and that bank filed its answer, from which it appears:
“That in order to secure the payment of the said promissory note, principal.and interest, in accordance with the tenor and purport thereof, the said defendant Western White Pine Lumber Company then and there made, executed and delivered, to the said defendant La Grande National Bank, a bill of sale of two hundred thousand (200,000) feet board measure, of pine, fir and tamarack lumber. * #
“That said bill of sale, although absolute upon its face, was intended to be and was in fact a chattel mortgage to secure the payment of said sum of $1,400 evidenced by said promissory note.”
To this pleading P. O. Wright filed his reply on July 5, 1918. Hence at the time of the bankruptcy adjudication, beside the suit of the Union bank there was pending the suit of Wright, in which he claimed liens for a large number of laborers for the cutting of logs and the manufacture of lumber.
In the Wright suit an affidavit was then of record from which it appeared that the La Grande bank “has or claims to have a hen or interest in the property mentioned in the complaint, ’ ’ and that the bank named “has or claims to have some lien by way of mortgage on certain of the property described in the complaint, and is therefore a necessary party defendant in this case. ’ ’ The La Grande bank had then filed its answer, setting forth in full detail all its dealings with the de
From an examination of the record it will be found that the .lab or liens were all duly filed in the office of the county clerk of Union County on or about June 8,1918, and were then a matter of record. In addition to this it appeared from the debtor’s bankrupt petition, attached as an exhibit and made a part thereof under the heading, “Creditors holding securities,” the following* :
“Particulars of securities held, with dates of same, and when they were given, to be stated under the names of the several creditors, and also particulars concerning each debt, as required by acts of Congress relating to bankruptcy, and whether contracted as partners or joint contractor with any other person, and if so with whom.”
Each note of the Union bank is then listed and described, together with that held by the La Grande bank, and the statement shows that each note was “attempted to be secured by a bill of sale which holder is attempting to have declared a chattel mortgage. ’ ’
In Remington on Bankruptcy (2 ed.), Section 1270, with reference to the 1910 amendment of the bankruptcy act, the author lays down the rule that:
“The trustee, as to all property in the custody or coming into the custody of the bankruptcy court, is, in addition to his other rights, to be deemed vested with all the rights, remedies and powers of a creditor holding a lien by legal or equitable proceedings thereon; and also as to all property not in the custody of the bankruptcy court is to be deemed vested with all the rights, remedies and powers of a judgment creditor holding an execution duly returned unsatisfied.”
In the case of Posson v. Guaranty Loan Assn., 44 Or. 106 (74 Pac. 923), this court held:
“It is now settled that the assignment or transfer by a defendant of his interest in the subject matter of the litigation during its pendency does not defeat the suit, but that his purchaser is bound by any judgment or decree that may be rendered therein. * * An assignee who acquires title to the subject matter of the litigation after the filing of the complaint takes pendente lite, and is bound by the proceedings against his assignor.”
As to tljLe labor liens, it appears that the defendant operated its mill and cut all of its lumber at the Haggerty site until about May 1,1918, and that during that month about 450,000 feet of lumber there cut was hauled to the defendant company’s yards at Union. About May 1st the defendant company moved its mill from the Haggerty site to what is known as the Railroad site, and at the time the laborers ’ liens were filed there was about 75,000 feet of lumber in that yard. The Haggerty site is on Catherine Creek, at least twelve miles from the defendant company’s yard at Union, and the Railroad site is about one mile from the Haggerty place. No lumber was ever cut or manufactured in the company’s yards at Union, and any placed there was hauled at least twelve miles from the Haggerty site, at which the sawmill was first located and the logs were manufactured into lumber.
There is no dispute as to the amount of the liens for labor and it appears that the men were paid in full for their work up to May 1, 1918, but that within a short time after the Union bank took possession of the lumber in the Union yards, under its claims, the laborers
Section 7461, L. O. L., is as follows:
.“Every person performing labor upon or who shall assist in obtaining or securing sawlogs, spars, piles, or other timber, has a lien upon the same for the work or labor done upon or in obtaining or securing the same, whether such work or labor was done at the instance of the owner of the same or his agent. The cook in a logging camp, and any and all others who may assist in or about a logging camp, shall be regarded as a person who assists in obtaining or securing the sawlogs, spars, piles, or other timber herein mentioned. ’ ’
And Section 7462, L. O. L., provides:
‘‘Every person performing labor upon, or who shall assist in manufacturing sawlogs or other timber into lumber, has a lien upon such lumber while the same remains at the yard wherein manufactured, whether such work or labor was done at the instance of the owner of such lumber or his agent.”
It is shown that twenty-four of the liens were “filed for labor performed upon and assistance rendered in cutting and manufacturing said logs and lumber.” The remaining liens are for work and labor performed “in manufacturing said lumber now on the mill sites.” It is contended that the lumber liens are void as to the lumber in the Union yards. Section 7462 gives the laborers ‘ ‘ a lien upon such lumber while the same remains at the yard wherein manufactured.” The defendant company never had a sawmill or manufactured any lumber at or in its Union yards, and any lumber lying there Vas hauled a distance of at least twelve miles from the yards where it had been manufactured. The lienholders contend that the lumber was hauled to the Union yards for the purpose of cutting the ends and.
By Section 7464, L. O. L., it was enacted that:
“The liens provided for in this act are preferred-liens, and are prior to any and all other liens, and no sale, transfer, mortgage or assignment of any sawlogs, spars, piles or other timber or manufactured lumber, shall divert the lien thereon as herein provided. * * ”
Section 7465, L. O. L., is as follows:
“The person rendering the service or doing the work or labor named in Sections 7461 and 7462 is only entitled to the liens as provided herein for services, work, or labor, for the period of six months, or any part thereof next preceding the filing of the claims as provided in Section 7467.” ■
Section 7466, L. O. L., provides:
*343 “The person granting the privilege mentioned in Section 7463 is only entitled to the lien as provided therein for sawlogs, spars, piles and other timber cut during the six months next preceding the filing of the claim as provided in Section 7467.”
Section 7467, L. O. L., is in part as follows:
“Every person, within thirty days after the close of the rendition of the services, or after the close of the work or labor mentioned in Sections 7461 and 7462, claiming the benefit hereof, must file for record with the county clerk of the county in which such sawlogs, spars, piles, or other timber was cut, or in which such lumber was manufactured, a claim containing a statement of his demands and the amount thereof, * * and it shall also contain a description of the property to be charged with the lien, sufficient for identification with reasonable certainty.”
There are twenty-four claimants who filed liens “for labor performed upon and assistance rendered in cutting and manufacturing said logs and lumber” and who state in their liens that they “performed such labor upon and assisted in cutting and manufacturing said logs and lumber for the period of-days. ’ ’ There is nothing in the liens or in the proof which tends to show or from which this court can deterniine how many days’ labor was performed by either of them in the cutting of logs or in the manufacture of lumber. Mr. Wright, who was superintendent of the defendant company, testified that no separate account of such labor was kept. He says that the men were transferred from one employment to another and some of them worked different days in cutting the logs and in manufacturing the lumber, and that there was no way by which it could be ascertained how many days any particular employee worked in cutting logs or in manufacturing lumber. For such reason no separate
“The two sections were intended to meet different classes of cases, the one for security to the logger, and the other to the operators in the mill.”
The record shows that the following lien claimants, for their respective amount, filed-liens for labor in the manufacture of lumber only:
J. P. Sayer........................$ 55.02
L. F. Ingram......... 31.23
John Julian....................... 99.50
Albert Stocker..................... 107.54
C. H. Gibson....................... 99.00
W. H. Horn....................... 104.00
E. A. Hardman.................... 107.50
John Brown....................... 35.33
Fred Peterson............-......... 57.25
James Davis ...................... 65.67
Y. C. Addelman.................... 118.50
Harry Proctor .................... 23.00
Henry Cooley..................... 299.25
Clifford Horstman................. 113.75
“The lumber upon which the liens are sought is in fact segregated, and the claims for labor, as allowed by the Circuit Court, each clearly specify the character of the labor and contract price therefor, and come within the provisions of the statute covering the character of labor designated therein. The lienable lumber is at the -mill, and the part not subject to liens is at the railroad track, about one mile distant; and the reference to the latter in the lien notices is mere surplusage, as much so as if it had referred to cattle or horses belonging to the Lee Bros. Co., ranging in the vicinity.”
As to the lumber liens, the decree will be modified, sustaining the respective claims on the 75,000 feet of lumber only, at the Railroad site of the defendant company.
A decree will be entered here affirming the decree of the Circuit Court as to the Union bank and as to the La Grande bank, except the allowance of $150 as attorney’s fee there, which was erroneous, and in favor of P. C. Wright for the fourteen liens for labor on lumber only, on the 75,000 feet of lumber on the Railroad site, together with $250 as attorney’s fees for the foreclosure of the same. In all other respects the decree of the Circuit Court is affirmed, neither party to recover costs in either court. Modified and Affirmed.
Concurrence in Part
Concurring in Part and Dissenting in Part. I concur in the able opinion of Mr. Justice Johns, except as to that part relating to the segregating of the items of labor for which liens are claimed. It is held that it is “the duty of the lien claimant in his statement to specify the amount and value of his labor for cutting logs and the amount and value thereof in manufacturing lumber. ’ ’ The statute creating the lien makes no such requirement. The act of 1891, of which Sections 7461 and 7462, L. O. L., are a part, contemplates that but one notice of lien shall be filed for work performed on logs and for labor done in sawing the same. This is clear from a- careful reading of Section 7467, L. O. L., providing for the notice of lien. When one man or ten men should be engaged for three or four days in securing logs and immediately thereafter
“The actual sawing- of the timber is no more a part of manufacturing the same than the cutting and preparing of such timber for the saw. In one case the manufactured product of the laborer would be the log; in the other, the manufactured product would be the lumber. We therefore hold that in this case the respondent was entitled to his lien on the lumber.”
The Washington statute is, as I understand, practically identical with ours as to the creation of such a lien.
It is well settled in this state that a laborer performing work in assisting in the securing of logs to be manufactured into lumber is entitled to a lien therefor on the lumber after the same is manufactured: Jones on Liens (3 ed.), § 703 et seq.; Fischer v. Cone Lumber Co., 49 Or. 277, 283 (89 Pac. 737). The notice of lien therefor may be filed after the logs are sawed. Lien statutes are remedial and should be so construed and enforced so as to carry ont the intent of lawmakers: Day v. Green, 63 Or. 293 (127 Pac. 772). To require the items of labor on the logs and the work in manufacturing the same into lumber to be segregated would only render it necessary for the court to add the amounts together again and render a decree therefor without protecting or changing the rights of any interested party in the least.
I therefore withhold my assent to that part of the opinion' holding a part of the lien void.
