*1 403 August 14, petition Argued 5, affirmed modified June rehearing September 12, 1951 denied v. and MARSHALL STOTTS JOHNSON
JOS *3 argued Erwin, of for cause Warde H. Portland, appellant. the brief was Lee A. On Ellmaker, Portland. argued Wheeloch, E. the cause Portland,
C. respondent. Hathaway the brief were On Wheeloch & Richardson, ft. all of and Portland. C. Justice,
Before Chief Brand, Hay, Rossman Justices. Latourette, J. ROSSMAN, appeal (erroneously
This is an Arthur Johnston Johnson), *4 in entered the title of this case as Art one from defendants, two a decree of the Circuit suit in Court. The which culminated the decree was by Roy plaintiff-respondent, instituted Stotts, O. obtaining purpose of of a for the the foreclosure bill alleged mortgage. in a chattel That be, truth, sale by L. instrument described tractor owned Earl Mar- one of the trans- shall, two who was the defendants, plaintiff The feror the trans- bill sale. complaint alleged The
feree. the bill of sale was payment plaintiff executed to secure of a debt owing by plaintiff. of $6,000 Marshall to the It also alleged preserve plaintiff, that the in order to in- compelled pay July terest on 23, tractor, 1948, the Federal Collector of Internal Bevenue delinquent owing by amount $1,320.71, the of a tax defendant-appellant, pur- Marshall. The May chased the tractor from Marshall 29, 1946.
After the institution of suit, this virtue of a stipulation signed by parties, Wonderly, one D. T. purchased had
who the tractor from Johnston, de- posited the sum $9,000 with the clerk of the court a substitute for the tractor. The record indicates deposit belongs, in fact, to Johnston. (1) granted judgment decree against Marshall in the amounts of $6,000 and together with interest on each of $1,320.71, those sums, (2) directed the clerk of the court to to Wonderly out of the fund of which had deposited just with the clerk, the amounts mentioned and deliver the remainder to Johnston. January
In of 1946 defendant Marshall, who is appellant, an owned the tractor. The latter was then mortgage encumbered awith chattel held one Otto payment W. promissory Heider secured aof January note which there was due 26, 1946, payment $5,820. When Heider demanded and Marshall plaintiff, was unable to meet the demand, the at the *5 408 $5,820 26, Marshall, January Heider of
request paid note received canceled and mortgage. and the 1946, from received Concurrently plaintiff therewith the the tractor. of sale which described Marshall a hill declare, and the of fact findings complaint The avers, as a chattel the of intended to serve bill sale was the of and the to mortgage plaintiff repayment secure $5,820 of with together payment aforementioned sum the by to him the value of some services rendered to the on plaintiff to Marshall. total due plaintiff fact, as found findings account of those items, $6,000. was sell the 29, 1946,
Prior to offered to May in and so defendant-appellant tractor to its condition made concerning doing representations in tractor was which, succinctly, stated were 29, Johnston May mechanical condition. good 1946, from Marshall a the tractor and received bill purchased in the latter’s warranties, referring sale. One from all encumbrances tractor, said: “Free ’ ’’ ’ ‘‘ The name Stoots. Stoots by Boy note held except name plaintiff’s entered when erroneously was intended. “Stotts” was (1) the trial contended that
During and Marshall was between the plaintiff relationship as claimed that of creditor debtor, Marshall, in that of co-venturers; (2) but plaintiff, tractor, him to order induce (Johnston) purchase him tractor was good falsely represented condition; Marshall’s working representations, (3) and Marshall were false; were since (4) plaintiff plaintiff (according Johnston), co-venturers with false repre- Marshall’s chargeable purportedly indebted to the if Marshall was sentations; (5) any apart in- whatever, amount from the arising payment plaintiff’s debtedness out of the delinquent income amount was not tax, no than $4,000. but more claimed, purchased Before Johnston the tractor delinquent of the fact aware that Marshall was in the payment of Federal income For instance, tax. re- *6 ferring to Marshall, Johnston testified: “He told me money he owed to the Internal Revenue and to the gosh, I State, all.” and, wouldn’t who remember Shortly purchased after Johnston tractor fol- lowing, according to occurred: “The Internal him, placed Revenue some seizure notices this on tractor.” When the Federal Internal Collector of Revenue seized custody the tractor he also took into his some other logging equipment including which Marshall owned, donkey engine. a exactly The not record indicate does delinquent ap- the amount of tax but it proximated $3,500. We notice from Johnston’s testi- mony upon pay that one occasion he offered to $2,200 Collector of the tax if the Collector would re- donkey engine. lease to him the Johnston’s exact words pay plus, were: “I offered to to the Bureau of $2,200, donkey.” Internal Revenue to release the lien on that according The offer was refused to and, following explanation: “They he received the couldn’t accept money, donkey that was seized and it must ’’ be sold at auction.
After Johnston’s conditional offer to $2,200 delinquent rejected, of the tax had been some of Mar- equipment by shall’s which had been seized the Col- lector was sold, but $1,320.71 balance of remained uncollected the tax. In the meantime, the tractor transported by remained under seizure and was preparations were under Portland where Collector to juncture plaintiff paid way to for sale. At that its unpaid tax. balance of the $1,320.71,the the Collector plain- decree awarded the It will recalled be only judgment the amount secured tiff foregoing by also for The $1,320.71. bill of but sale, explanation of the two amounts. ais condensed findings fact entered Circuit Court state: Earl Marshall “The is indebted Defendant together $6,000.00, in the amount of
the Plaintiff with interest 1946, by prevent January 26, from thereon and after paid together further sum of $1,320.71, with the Internal the Collector of Revenue Plaintiff to Caterpillar the sale of certain D-8 Diesel together equipment, on with interest tractor July 23, sum from and after 1948. latter said De- made and executed “The bill of sale conveying Earl Marshall fendant Caterpillar equipment Tractor and Diesel the D-8 January mortgage and is a 26,1946, dated payment given $6,000.00 secure the de- *7 (1) Paragraph above. That said bill in scribed mortgage on a the said tractor chattel of sale was July pay- equipment the date of the 23,1948, on thereagainst lien the Collector the tax ment of Revenue. Internal of Art Johnson was an inno- “The Defendant Caterpillar purchaser Trac- of the D-8 Diesel
cent equipment as to the of the Plaintiff and lien tor and in interest tractor is Defendant’s said right subsequent in time and inferior to Plain- lien.” tiff’s assignment consider first shall now
We follows: error which reads finding payment court erred
“The of Internal $1,320.00 to Collector Revenue
411 by respondent proper payment Stotts a protect Ms lien.” plaintiff paid It will remembered that the be bal- ($1,320.71) ance Federal tax after income delinquent it had become and after the of In- Collector ternal Bevenue had seized the Volume 59, tractor. says: § 325(b), page
C.J.S., at Mortgages, 445, mortgagee paying mortgaged “A taxes on the premises acquires charge a lien is a thereon original mortgage additional to the lien.” support assignment In of his of error, Johnston declares:
“Money properly necessarily paid by a mortgagee protect rights proper chattel is but in this case the U. S. Government did not have proper appellant a or valid lien as far as Johnson payment was concerned and the said was not valid debt.”
He adds: appellant “The lien could be valid if knowledge prior
had actual of the lien to the sale of the tractor to him.”
The basis for the assertions is contention that Government’s notice of lien claim was not filed in the right county. Congress
Act of 4, of March Vol. 1913, 1016 Stat. (26 provides: 3670-3677) §§ Int. U.S.C.A. Bev. Code any person pay any neglects “If liable to tax or
refuses to the same after the amount demand, shall a lien in be favor of the United States from time when assessment list was received except provided, the collector, when otherwise until * * paid, any *. Provided further, whenever by appropriate legislation state authorizes fil- ing registrar notice in the such office or *8 or state, the counties that of deeds of recorder parishes thereof, in the
in the State of Louisiana in state as shall not be valid that then such lien * * * mortgagee, any purchaser, against until regis- in the of the shall be filed office such notice county or counties, recorder of deeds trar or ** * subject property which within lien is situated.” granted by privileges that act, this state
Pursuant Begistration adopted Federal Tax Lien the Uniform chapter page Oregon 73, which 1941, Laws 43, Act, whereby provision Federal tax lien notices makes county may in in the office recorder be filed an office in the have such office counties which county all in other counties. 1 of clerk Section county says must be notice filed in the that the the act subject property to such lien is which “within situated.” that tax contends lien notice was County and that in evidence fails to Lane
filed county in that was the tractor when the show no direct filed. There is evidence was notice any county. tax in filed a lien notice Two Government oblique made witnesses to a references tax lien may refer to a been intended to tax but have notice, “lien notice”, used the term and none said no witness anywhere. filed such a document was However, appeal upon positive predicates since Johnston tax lien that a notice was filed, we shall statement assume convenience that one sake was filed wholly this counties. The one of state’s evidence (1) county indicate lien notice fails (3) (2) it filed; was filed; when where the filing tractor located when occurred.
413 just supply void mentioned Johnston seeks to by judicial to a utterance which will now resort of we take notice. after the Six months Circuit Court entered challenges, the decree Johnston the District which Oregon for Court of United States the District “Opinion” pend- filed a in document entitled an action ing in that v. court entitled Art Johnston United defendant-appel- America. of the States The brief (Johnston) lant in the case at bar states that he was plaintiff the Art Johnston who was the in the in case opinion the Federal court. The that indicates Johnston by brought was a v. United States tort action Johnston damages alleged wrongful to recover an seizure by employees of the “a Government of tractor.” The opinion mentions “Tax Lien No. 12609” and declares employees the Government who seized the .that tractor endeavoring payment were enforce of the tax opinion which the lien notice was based. Since was not written until four months after the notice appeal nothing given, in the instant suit was whatever opinion was or said done about the in trial court accordingly, and, the record does not disclose whether opinion tractor” in “the mentioned is the one sold which Marshall and likewise does whether “Tax Lien No. not show 12609” is the one discharged payment which July opinion says: 23,1948. The on $1,320.71 competent no “There was evidence to the effect County tractor was in Lane at the time the ** '* filed. tax lien was Was the tax lien filed County subsisting Lane a valid and in in lumbia lien Co- County, the tractor where seized on was July 10, The court has decided that 19481 the tax County in at was not record Lane the time lien that physically county.” tractor said showing that the lien notice was
In lieu of evidence accept wrong county, asks us to filed the. just quoted. the statement (Stotts) in the case before us party court which re- the action in the Federal entry opinion upon which Johnston
sulted in the adjudicata plead in this suit. We was not relies. Res concerning in the Federal the case no information have opinion except is afforded terse court which nothing about the know we have mentioned. We do not know whether case, outcome of that *10 eventual judgment in it. has been entered opinion think that it obvious that the We is v. court in Art Johnston United filed in the Federal be evidence in this America can not deemed States of unnecessary and it is numerous, The reasons are case. any think is obvious mention of them. we it Likewise, adjudicata opinion be deemed res of that that any cannot this issue in case. assignment arguing of
In that the error under con- lacks sideration contends merit, validity admitted the of the tax lien answer which July discharged 1948. 23, complaint alleged:
The prior “The tractor above described was possession date hereof taken and reduced to the the ground of Internal Revenue Collector for the reason that the defendant Earl Mar- and L. neglected pay shall had failed certain taxes That the United States Government. said tractor subject to sale and in order to forestall sale of protect plaintiff’s and to said tractor interest day July, did on the 23rd thereon, lien Internal to the Collector Revenue the 1948, for said taxes with $1,320.71 sum of full the in- charges penalty and other thereon.” terest, Paragraph com- Y of the That averment constituted plaint. The answer stated:
“Answering Paragraph complaint, of said de- Y allegations thereof.” fendant admits complaint nor was attacked neither motion de- During murrer. the trial no contention was made any complaint averment was defective. complaint
It will be observed that did not men- say tion a tax lien notice and did not that such a complaint document had been Likewise, filed. did not disclose the exact time when the tractor was seized, advanced but the contention Johnston and now under admits a tax consideration lien notice was filed. says: O.C.L.A.,
Section 1-902, pleading pur- “In the construction of a for the pose determining allegations its its effect, shall liberally with a construed, be view of substantial justice parties.” between the supplanted That of our section laws the rule of strict employed construction at common law: 169 Or. Hanford, 351, 128 P. v. 2d 947. As Griffith just decision employed held rule cited, now opposing is one of “fair notice to the side and to the just court.” similar quoted, Under statutes to the one *11 pleading to construction attributes the all facts which by implied can be fair and reasonable intendment from expressly provided, judi- averred; those of course, places upon any cial never pleading construction contrary meaning express language: to its 71 C.J.S., Pleading, p. § 123. 54, Paragraph complaint,
We believe V of the fairly (1) when avers that construed, before the seizure of the tractor Marshall was indebted to the Gi-overn- delinquent upon (2) tax; ment before the unpaid discharged delin- balance of Marshall’s the quent tractor and had had seized the tax the Collector custody de- on account of Marshall’s taken it into his by subject (3) to sale seized tractor was the fault; protect (4) to his interest in order Collector; the prevent latter’s the to the sale in the tractor and plaintiff paid Marshall’s to the Collector the Collector, delinquent tax. attributes to a have seen that construction
We implied pleading fair and which can be all facts expressly al from the facts intendment reasonable Obviously, leged. could not have seized the Collector lawfully unless tax valid and the tractor the “subject to unless not have been sale” tractor could possessed a valid lien it. The the Government right county filing notice of the tax lien of a validity sought of the lien when it was essential parties. latter to third notice of the We attribute Paragraph complaint fairly V of is that when think that the lien and seizure tax, it means were construed also think that when Johnston admitted the We valid. validity verity Paragraph conceded V he of together validity unpaid with the tax, seizure. lien and the trial taken at the confirms the beliefs course During just expressed. the trial the tax and the lien contrary, To the it was taken for contested. were not granted were valid and tractor was that both reception During subject evidence sale. occasionally made to the tax and the reference was questioning validity purpose not for lien, development as incidental some either, but throughout the trial that insisted other fact. (Johnston) bought him before he Marshall had told
417 plaintiff’s more interest in it was no tractor that the good than and that mechanical the tractor was $4,100 giving In related testimony, condition. his Johnston concerning proposed logging some conversations he had venture near Vernonia which with Marshall purchase. and the before he made his Since planned proposed it use the tractor venture, the tax and the mention lien it received during during Nothing the conversations. said questioned validity those conversations preceding paragraph tax and the A lien. of this opinion quotes by an answer made Johnston which an detailed offer which he made to the Collector to pay delinquent provided $2,200 the tax the Collector would release from the lien which all of encumbered equipment donkey engine which Johnston acquire. by making desired to Of course, the offer, recognized validity of the tax and of the Upon another lien. occasion Johnston and a friend of Wonderly negotiating the name of were with purchase Upon of the tractor. following, occasion the as related
occurred: Wonderly accepted propo “Mr. and I, if we partners, pay sition we some liens that were
against donkey by the Internal Eevenue and owing also the amount that was the Industrial Ac against donkey cident Commission total and price figured we would have been around ten donkey. thousand dollars on the tractor and the We were to these liens, which we checked, approximately. get amount of the liens We didn’t exactly go Eugene, but them we did I believe, originated, where the internal Eevenue lien and * * *.'' plan evidently that was in mind at that time con- *13 templated discharge the of all the tax liens. Thus, acknowledged again, Johnston valid as the tax and its validity recognized by lien. The of the lien was John- way. ston in still another After the Collector of In- posses- ternal Revenue had taken tractor into the preliminary offering sion to sale, it for Johnston de- temporary possession pres- sired to resume of it and ently applied permission to the Collector for to do so. Thereby of deemed as he, course, lawful the Collector’s upon of and of seizure the tractor the lien which it was Johnston’s exact based. words were: you custody Did take the tractor from
“Q. the the of Internal Revenue? Collector “ permission I from A. had the Salem office to tractor.” move that that recalled Johnston
It will be mentioned visit Eugene the made to office of the he Bureau of purpose investigating Revenue for Internal unpaid Upon tax. another occasion he and the Portland office of visited the Bureau purpose. appears It also for the same the two attorneys concerning from advice obtained men validity lien Government’s the tractor. the local to offices Bureau of In- visits Their attorneys advice which the Revenue ternal evidently plain- gave convinced Johnston and them upon the tractor the tax lien was tiff that incontestable. challenged any at rate, it was the trial. At transcript more of evidence contains several references and the seizure of tractor. No tax witness, to the mentioning purpose seizure, did so for the regularity, only questioning but as incidental its a transaction which was then delineation under con- example, under Marshall was For while sideration. follows: he testified
cross-examination, on three to Johnston You had talked Mr. “Q. purchase get trying him to to occasions different this you? tractor, didn’t going pay to was no. he Well, “A. going in and we was off, Revenue this Internal * *
partners, *. but he. respect “Q. I then in to the Johnston see—and get money some out of that that deal, was Mr. Stotts money against pay tractor, his claim on from the deal? come Johnston would just “A. I don’t remember how Well, * * * going now. either found timber, Revenue, the Internal Plywood paid for it for *14 and us, and the Vancouver partner, just guess; I I and wasn’t I to be Roy picture to of wanted fade out the and then when money, why, I his talked to Johnston and wanted and was try get Roy going money, but around with dickering at that time was Johnston the donkey going and Revenue, he was Internal get me out of off, see, and and then hock, ’’ partners. going in were we to the tax and to the seizure of references Other recognized vein. All of them in similar were tractor validity and the tax lien. of the reading transcript of of
A careful evidence the tax and the lien us that were not satisfies contested judge during trial trial. The counsel, without stating, granted expressly plead- took it so concerning validity. ings presented issue their no It apparent that the answer was construed seems as we every- that as an admission it; is, construed that have validity thing essential to the that was the tax lien? including filing right county, prop- its in the had been erly performed. appellate practice,
An axiom of familiar to all, Theory which is called sometimes the Rule of the parties appeal theory the Case, restricts the on employed the facts and the issues in the trial court. prevents appellant respondent The rule and the reaching upon appeal from alike out for views concern ing the facts and the issues which are inconsistent with party or different from those which the took in the recognizes appellate trial rule court. The an that court operation is a court review and thus the of the rule scope restricts the A recent review. statement of accompanied rule, with citations, is Edwards, Guardian, Hoevet, v. 185 Or. 200 P. 284, 2d 955.
Plainly, the contention tax lien is invalid position by appellant with the is inconsistent taken the trial In Johnston in that court court. far asking validity for a from determination of the validity. lien, conceded its The concession was made (1) manner: (2) by in a twofold the answer; pursued during course trial.
For the reasons above stated, we dismiss the first assignment lacking of error as merit. assignment
The second of error reads: finding court erred in (re- “The spondent) and defendant Earl L. Marshall were joint owning in a venture operating *15 D-8 tractor.” relationship plaintiff between the
If the and Marshall joint creditor and not that of but debtor, that of plaintiff venturers, was not entitled ato decree relationship Likewise, if the of foreclosure. between joint may venturers, men it be those two concerning representations the tractor’s con- made him Johnston claims Marshall to dition, chargeable says are false, and which he were plaintiff well as to Marshall. as relationship
Johnston bases his contention that the plaintiff between the and Marshall was that of co- principally upon following: (1) venturers, plaintiff document which Marshall delivered to the paid after had $5,820 the latter Heider inwas, form, mortgage; (2) a bill and not a chattel of sale no or note interest-bearing paper accompanied the of sale; bill (3) plaintiff discharged when debt engage who Marshall, was about in a Heider, clearing land- undertaking expected in which he to use the promised, according plaintiff, tractor, to the “to got expense me half of what he par- above the of that job”; (4) impressed ticular * ** being worthy youngster, “a a hard worker,” plaintiff thought young and the that when a man of helped things that kind is those “oftentimes lead into * * * might a eventually lucrative deal and it grow something”; (5) into Marshall, as witness, expressed split the belief that he was bound “to with you [plaintiff] him a certain amount, know” moneys expected he contemplated to receive from the land-clearing paid plain- contract after had (6) talking tiff $6,000; Marshall, with partner”; often (7) termed “his (Wonderly) [Mar- witness Johnston testified: “He shall] didn’t mention Mr. Stotts’ name, but he said partner that he owed his that he would have cash, to have that in and the liens would have to be paid off in cash.”
422 may be face, its absolute sale,
A bill of mortgage: In v. Motor Barber a chattel to be shown P. 216. 298 Co., 361, 136 Or. vestment engaged, part, voca- plaintiff, in in the iswho The evidently adjusting a man is claims, insurance tion ready for his investments who seeks of substance acquainted Marshall several with became cash. He request, paid, Heider’s at Marshall’s he months before presented meeting Marshall occurred when Their note. damage company for suffered a claim insurance to an by through its inundation flood water the tractor adjust- claim for was referred and the During negotiations which then occurred, ment. impression upon plain- the favorable made Marshall paragraph. preceding Later, a when noted in tiff payment for demand made his Heider newly-won sought friend, out his Marshall note, plain- plaintiff, him for assistance. Since the and asked opinion Marshall and a favorable tiff entertained thought much the tractor was worth more than paid note. Heider’s Marshall both swore when
The paid contemplated Heider’s note it was not former partners become or co-venturers. that the two should plaintiff, under examination while counsel testified as follows: my understanding “A. It I to be that was place in the of Mr. Heider. substituted (C# # [*] you yourself as substituted “Q. And was to be security relationship mortgagee in a sort money you actually put into it? for the
there right. “A. That is
It* # [*] you all “Q. Mr. when advanced Now, Stotts, money, mention of a note, this wasn’t there some you taking a note evidence the amount of you? Mr. owed indebtedness which you beginning I told I told Well,
“A. attorney] Klepper place [an me substitute *17 and what Heider, that’s he came back with. Otto ‘‘ you accepted it more Q. And without ? I mean you get a never did note and didn’t ask for one? No, I tell I truth, “A. didn’t. To the to went immediately and I examined after,
Honolulu this had never after, until several weeks when Mr. pay supposed me the amount he failed to to pay me.
i Í “A. You # # [*] understand that Mr. Klepper and Mar- to and shall went Salem consummated the deal, and nights two or three after it was that that we met in says, Klepper’s your office, and he ‘Here are trac- papers.’ enough I tor And was darned fool to stick ’’ my pocket looking without them at them. doubting no reason for aware of
We are the truthful- any testimony. of that ness of
Although plaintiff amount paid the which the to only agreed Heider was it was $5,820, between the plaintiff payment and Marshall when the was made total should indebtedness be deemed $6,000. represented difference between the two The sums plaintiff’s value of the services to Marshall adjusting difficulties latter’s with Heider. That controversy phase questioned, is not and John- usury present no contention ston makes is in the transaction. possession changed tractor was not when plaintiff plaintiff received the bill of sale, and the possession any its
never had at time.
42-i paid plaintiff ex- Heider
When land-clearing job, shortly upon and pected to enter agreed of the sums de- one-half to operation, the full until the cost from less it, rived paid. in that manner that It was sum of $6,000 expected Mar- parties be retired. that the debt would land-clearing upon the did not enter however, shall, payment undertaking, that source of failed of fruition. plaintiff’s determining ad- or not the
In whether created a creditor- $5,820 vancement to Heider joint relationship think venturers, or one of we debtor ought the fact that take into consideration that we repayment him was well believed much more tractor worth He deemed the secured. anticipated since Marshall had that, than $6,000 pro- apply promised the debt one-half of the land-clearing job, money expenses, of less ceeds, repaid to him. Calculations of that kind would be soon *18 accompany relations, of creditor-debtor the formation negotiation part- generally, alien to the are but, nerships. plaintiff
Although that and we do believe tractor, to be co-owners we desired Marshall an occasion looked forward to when think that both together logging join they a The in venture. could adapted men them of the two to each circumstances money willing plaintiff had which he was The other. appeared promising, enterprise if in an it and he to risk hopeful Marshall would discover one of that was logger by debt-ridden, was Marshall, who kind. equipment for that had suitable business. and vocation donkey engine, had a tractor, to his In addition apparatus. All logging of it trucks and incidental standing in lie was need of financial assist- idle. Since ready money like venturesome friend with ance, plaintiff equipment him could to use his to ad- enable vantage. think that men We when two became complement each the other as a acquainted, viewed himself.
Evidently referring plaintiff, Marshall, occasionally “partner”, used word but there is no plaintiff evidence that the was aware of that The fact. “partner” always legal import,
word is not used in its frequently employed, especially by but is laymen, to together denote association in matters of a nonbusiness acquainted character. Johnston, who was well with prospects prop- Marshall’s financial condition, erty, testify plaintiff did not that he believed that the partners. unlikely and Marshall were It is most he could have misled been when Marshall dubbed the partner. Especially as his is that true when we bear in mind that Wonderly Johnston and his friend testified that Marshall told them that he owed “his partner” plaintiff’s or $4,000 $4,100 on account of the Normally, interest in the tractor. men who are, fact, partners do not become indebted to one another in such a manner.
Shortly thoughts land-clearing after contract were abandoned, and Johnston invited the join logging them in a tract of land near proposal contemplated Vernonia. Their that the three partners plaintiff’s should become and that the func- undertaking, tion should be to finance maintain logs. plaintiff, records sell accompanied engineer, an joined went to the tract where he was *19 plaintiff, Johnston and Marshall. The Johnston and engineer spent day together walking the through the log. proposed plain- it was
timber which Later, officials of a concern to which with tiff conferred proposed logs. Marshall to sell the Still and Johnston presence of Marshall and he in the later, Johnston, they equipment which suit- of the owned, a list made equipment logging, of the and also list which for able necessary purchase if venture was be it would upon that the concluded timber He undertaken. quantity justify in insufficient tract was
Vernonia expenditure he which estimated would equipment. additional for the Be- made have to be proposal to him lieving made Marshall and that the profit, prospects plaintiff no offered Johnston undertaking. Marshall and into the to enter declined undertook the venture but were however, compelled it. After Marshall failed to abandon soon land-clearing contemplated work to enter joined in Johnston the Vernonia it, lieu and, payment plaintiff undertaking, asked for item. $6,000 plaintiff surmised ever
If the incident partners, which we have Marshall were surely him just must have made realize that described any together way. they The not associated were (Johnston) and Marshall made overtures concerning the Vernonia timber ended bring hopes Marshall plaintiff’s would forth join together the two could for their in which a venture profit. mutual analysis, express further we resort to
Without did not be the belief plaintiff paid partners co-venturers when or come a bill Heider and received of sale to debt to believe, we was intended to sale, bill the tractor.
427 mortgage than serve as a chattel and secure do no more plaintiff together payment of with legal plain- rate of interest. areWe satisfied that the payment tiff’s of debt Heider and the ac- ceptance relationship bill of created no sale ex- cept that of secured creditor and debtor. assignment
We dismiss the second of error as with- out merit. assignment
The third of error follows: finding respondent “The court erred chargeable Stotts was with defendant Marshall’s warranty good operat- that the said tractor inwas ing condition.” relationship have
Since we held that the between and Marshall was not that of co-venturers, appellant claims, but that of creditor and chargeable debtor, the was not with Marshall’s representations concerning and warranties the tractor. assignment
This of error is without merit. assignment The fourth of error reads: granted appellant judg- “The court Johnston a against ment defendant Marshall for $5,491.00 in findings its of fact and conclusions of law but erred including recovery in not this in the decree.” appearance defendant, Marshall, made no properly and his default was entered in the record. We assignment sustain error. being assignment
The fifth, the last, of error states: ‘‘ granting The court erred in not an order dis- missal of Stotts’ case after the entire case was sub- mitted.” support assignment appellant,
In of that error, argues: protect
“All that had Stotts to do to himself was * * # record chattel The writer mortgage. realizes that Johnson have legally should perhaps been on notice of the in amount the Stotts put cumbrance or at least Johnson should have inquired about the amount but that is rather a hard rule certain cases.”
It will recalled that the bill of be sale which John- ston received from Marshall said: “Free all from en- cumbrances note held Stoots.” The except Roy ’’ “ ‘‘ ’’ *21 word Stoots was erroneously written when Stotts was intended. concedes freely Johnston that he read that his bill of before he provision accepted sale For latter. he testified: example, I
“A. You did see it? mean, “Q. Yes. ‘And I covenant hereby with the said I of the second that am the lawful owner party part ’ of said note held goods, except by Roy Stotts. ‘‘A. That in there. Marshall had that made in there.
“Q. You understood at that time that there lien or claim on outstanding was some this property Roy Stotts? IYes, “A. understood that even over at Buena Mr. I talked to Marshall Vista when with Mr. and myself there Wonderly together.
“ were well Q. you acquainted So when you took a claim in it ? that there was it did know he owed Mr.
“A. I that Stotts. That told me when he gave is what he me bill of sale he ‘I or so and said will day later, tell Mr. Roy I have made the Stotts that and arrangements, you him can direct.’ just pay
“ Q. Now, words, you other knew he had some it? on claim
“A. Marshall told me from the start about that;-that’s right.” foregoing will be observed from the that
It John- purchased ston the tractor Marshall knew when he that plaintiff. was indebted to the He claims that Marshall represented “you may being the amount as but have to Johnston he himself con- $4,100.” knew, so that title tractor ceded, Marshall’s to the was encum- example, For bered. he testified: I asked Marshall
“So what kind of a deal he again wanted to work out and he told me would he what got figures do, when down to he said, my equity’ I ‘Well, want $2,000 said, and he * * $4,000.’ ‘You I Mr. Stotts know owe “equity”, together The word with the words “lien” frequently during which were used “claim”, purchase negotiations, show Johnston knew that title was encumbered. purchased paid
When tractor he Mar- Johnston promissory gave shall cash and him his note for $750 $1,200. He admitted the cash and the did note represent purchase price full of the tractor. payable plaintiff. The balance was testified:
“Mr. told me he would make those *22 arrangements whereby pay I Mr. Stotts, could pay him in I feel like I wanted to he cash, if didn’t far that Mr. so as to tell me Stotts had even went assured him that
it in a convenient could be handled way for me. you gave Marshall “Q. At the time when Mr. promissory and this check for note $750 you that sale, this bill of knew $1,200, and received something the tractor? had on
Stotts Why, sure.” “A. assignment of er- understand that the do not We upon a contention is based under consideration ror than no for the tractor more need that Johnston repre- but it $1,950, submits since that, (so claims) sented Johnston his indebtedness to the plaintiff being plaintiff’s as no than more upon lien the tractor is limited to that amount. admitted that he the office of the was
plaintiff “two or three times” and him had talked to “considerably phone” bought on the before he In tractor. addition to or Johnston’s “two three” plaintiff’s visits to the office, which were made before bought spent day he the tractor, he an entire with the plaintiff together engineer, when the two an men, with walked over the timbered area near Yernonia which it proposed log. That occurred before the tractor purchased. Johnston claims that he did not in- quire any plaintiff concerning at of those times the amount of Marshall’s interest al- tractor, though prior he concedes that to all of those occasions Marshall told him more than once that the had an or interest investment in the tractor. plaintiff’s testimony uncontradicted shows seeking
when Johnston and Marshall were in his office proposed logging agree- him in to interest Vernonia equipment ment, made a list of the which the two opposite men owned and set each item the investment compiled which each had in it. also He list equipment purchased which would have to be to render project According plaintiff’s feasible. un- testimony taking contradicted of which are we now reposed upon there his desk his bill of notice, sale making and he referred to it tractor, while he was calculations. The swore that at that time, as well occasions, other he told Johnston that the amount of Marshall’s indebtedness to him was $6,000.
431 knew We are well satisfied Johnston long tractor that Marshall before owed purchased and that the bill of sale delivered plaintiff Marshall was intended as plaintiff by chattel to secure mortgage payment debt. as familiar with the debt and the nature of the bill as if had sale the latter been recorded. He was
neither deceived nor misled by anything which the had done of had failed to do. The him honorably. dealt with our
In this error opinion, assignment of possesses merit. no of all foregoing disposes assignments error.
Obedient to our fourth disposition assign- ment of error, the Circuit Court will grant judgment in favor of Johnston against Marshall. Otherwise the attacked decree is affirmed. Rehearing
On Petition eor
Boyd, Ferris Erwin, & Portland, the petition.
Wheelock & Hathaway C. R. all Richardson, of Portland, contra.
Before Brand, Chief and Hay, Rossman Justice, Justices. Latotjrette, Petition denied.
ROSSMAN, J.
The defendant-appellant (Johnston) has filed a for a rehearing which, as stated in a petition brief error aceompanyin gthe petition, “assigns the fail- of this ure court consider and determine follow- issues: ing
“1. That where the chattel consents mortgagee sale of the mortgaged property
mortgagor mortgage that such is invalid as to subsequent purchasers. mortgagee “2. That where the chattel consents mortgaged property by to the sale of the mort- the gagor, thereby mortgage lien of the is waived subsequent purchasers either as with or validity irrespective without notice and of the of mortgage. such mortgagor That “3. where chattel sells the mortgaged property agent mortgagee, as for the mortgagee by representations bound and is mortgagor of the in connection there- warranties with. ’’ subject made the Those contentions were not matter any assignment of error. provides: 68-207, O.C.L.A., Section * * * “Every conveyance mortgage, or instru- writing operate a mortgage ment of intended to * * * property personal made, , hereafter of shall accompanied have not be or shall not been delivery actual immediate and followed with change possession personal of the and continual mortgaged, property or or which shall not be shall provided in recorded or filed as have been not against subsequent void as 68-203, shall be section mortgagees good purchasers faith and for a personal prop- of the same consideration, valuable * * any portion erty thereof; or support petition, after submitted A brief says: referring statute, opinion of court is that Johnston this “Since knowledge and also held (purchaser) actual has had mortgage, in fact a chattel of sale was
that the bill that under our statute assumed then be it must now Johnston exception in the the third within came mortgage valid as to him statute ’’ concerned. notice is actual insofar as the frankness of counsel We deem commendable says: petitioner (Johnston). Going the brief on, a it is ‘void’ “However, our statute sets forth not when mortgage chattel is ‘valid’ but when validity no of the mort- and gage mention of the makes voluntarily mortgagee permits or where mortgaged property. directs sale merely designed statute to substitute “Our ‘recording’ or ‘actual notice’ for the common law requirement terminative of ‘possession’ and hence not de- is where the question validity mortgagee the sale. consents to say mortgage is a chattel “The statute does says purchasers but a chattel notice,
valid as to mortgage purchaser. with such notice had void unless is is *25 voluntary mortgagee render part the “A act on the may consenting the to the sale in therefore mortgage chasers. subsequent pur- or void as to creditors present that the mort- it is conceded case, “In the parties gage to thereto as valid as to the is knowledge con- purchasers until the sale with with ’’ mortgagee. of the sent argue that for that counsel it is seen Thus, personal property, mortgaged made with the a sale of mortgage mortgagee, void. the renders of the consent stating: by They, contention limit that broad however, under con- matter has had this “This court parties and has held the as between sideration parties mortgage as between the valid the money express the to direction was the where contrary no such di- mortgagee, where but given. rection 478; Orton, 7 Ore. vs. “Orton “Jacobs 52; 9 Ore. Erwin, vs. 364; Bowman, 25 Ore. vs.
“Currie “Sabin 450; 31 Ore. Wilkins, vs.
434
“Kenney vs. Hurlburt,
“The court states receiving mortgage giving parties is a validity inception, at its but that test of its subject express modification, either or same is continuing prerequisite implied; is a to its that it dealing validity good fair faith and be main by it; * * *.'' those whose interests affected toward are tained accompanies petition brief which Since possessed by rehearing to the bill sale refers mortgage, so shall As a chattel we. *26 previous opinion, the bill of sale was, in our held mortgage. contemplation, a chattel legal nearly from can ascertain the record, as we As during the trial that chattel claim the did Johnston power possessed a of sale mortgage and that void was mortgaged mortgagee the to sell item chattel original mortgage The brief filed void. the renders After upon appeal kind. made no contentions of that present counsel were filed, the Johnston’s brief was possibly, accounts circumstance, and that retained, above-quoted tardy voicing The the contentions. the general developed appear issues latter to be within likely although pleadings, that it seems did not have them answer draftsman of Johnston’s the answer. in mind when he wrote mortgage delivered to chattel
When the anticipated a sale of nor Marshall neither he thought con- Marshall would the tractor. Both past, the tractor himself. Since as in the to use tinue, tractor, to a sale of of them looked forward neither they, disposition provision for the no course, made It proceeds if a sale should ever occur. of a sale, accepted plaintiff, the chattel he when is clear power upon no to sell mortgage, conferred the tractor. prospects
Notwithstanding the fact that plain- bright loan from the his he obtained looked when shortly turn an unfavorable took fortunes tiff, converting necessity long some faced the before money. equipment logging into of his
Although extensive is not the evidence Mar authorized whether or not indicates became financial difficulties the latter’s after shall, that no belief it warrants tractor, to sell acute, expressly authority given least, none was such —at unsatisfactory evidence condition of the given. possibly is due to phase contentions represented at who counsel fact that mind the contentions not have apparently did
trial rehearing. the defend Since petition for a in the made proof upon the burden has ant-appellant, Johnston, *27 436 invalidity, claim of
Ms the one must suffer lie is who unsatisfactory from the condition of the if that record, plaintiff material. of condition is The aware was plight evidently financial and that he knew property have to turn item would some of into cash, empowered no testified that he but witness Marshall affirmatively appears tractor. It that he to sell the disapproved a sale of the tractor to Johnston when the any subject The record does not mention was broached. buyer clearly prospective for tractor, the and it other finding a conferred does not warrant general power of sale. It is that Marshall true eventually Marshall sold the tractor to Johnston, but when the was absent from sale occurred the negotiations. and aware was We state plaintiff never authorized Marshall to that believe the tractor. sell that the brief be recalled submitted
It will rehearing petition support for a several cites of mortgage held that “the this court which of decisions parties express where the between the valid as money pay mortgagee.” to direction money”, proceeds counsel mean By “the term shall now ascertain whether such a We the sale. of given Marshall sold the tractor when to direction was Johnston. purchased paid tractor, Johnston
When gave promissory him his note cash Marshall $750 agreed directly He $1,200. in the sum notMng total of than the those two more Marshall purchased contends one No amounts. only price price set $1,950. aat tractor upon equipment Administration of Price the Office Marshall swore that he $8,500. about kind was and Johnston agreed upon purchase price $6,000 made as follows: for the up discharge held mortgage plaintiff, $2,000 himself (Marshall). also testified that, order *28 induce to Johnston make the cash of payment $750, he of reduced amount $2,000, which was payable to him, $1,950. In manner to that he obtained at the time the sale cash and Johnston’s $750 note in the denomination $1,200.
Johnston conceded that Marshall reduced the pur- in chase order to induce him price $50 (Johnston) to but swore that pay cash, at price $750 which he the tractor purchased $6,000. to According him, Marshall his represented indebtedness to the plaintiff as and thus the being $4,000, purported $6,000 price up $4,000 made as the debt due the plaintiff and for Marshall. $2,000 We are well as satisfied, in that stated our original to debt opinion, in was, $4,000. truth,
Our evidence analysis convinces us now, as it did when we wrote original our opinion, Johnston Marshall promised he would Mar pay shall’s debt as directly bf part purchase of the tractor. We will now price review some items of evidence which have us brought to that conviction. to
By our reverting- original testimony opinion, be will he given by quoted found stated that before he the tractor purchased Marshall “I will tell Mr. that I him, Boy told Stotts have made him just and can you pay direct.” arrangements, testimony other as copied given by We also follows: he told me would those
“Mr. make I Mr. whereby Stotts, could pay arrangements I cash, if didn’t like I feel wanted to him in he even went so far me that tell Mr. Stotts had assured him that it could he handled a convenient way for me.” He also testified: gave “That is he told what me when he me day ‘I later, said, bill of sale or so and he will Roy arrange- I
tell Mr. Stotts that have made the ” you just pay him direct.’ can ments, description part In another of his the transac- still arrangements with the that he “made tion he swore of Mr. Stotts’ claim as Mr. Marshall bank to take care making arrange- gave it to me” and that after those Stotts’ office to talk ments he “went over Mr. following his is also taken from about it.” The him of the transaction: account told him that “I Mr. office and went to Stotts’ why, away, get money right
if he wanted to could arrange- *29 any go I had time; at to the bank pay it.” made to ments delivered to bill of sale which
The from incumbrances “free all recalled, it bewill said, ‘1 ’’ ’’ by Roy except The Stoots Stoots. name held a note plaintiff, inadvertently the for that of written was purchase months after than two Stotts. Less plaintiff as follows: the to wrote tractor, the Johnston morning early I leaving so this town “I am money you. you phone the If want to want didn’t my phone wife I return, tractor before on the due arrangements Bank have the to make will and she you.” pay clearly in which an instance therefore, is This, subject the out- to purchased tractor plaintiff’s chattel is, to standing “note”, part consideration, of the agreed, a mortgage, and as
439 pay plaintiff to amount of Marshall’s debt him. to agreement parole by grantee pay
A a a to mort gage purchased property which encumbers the is valid equity: City Pugh, enforceable Bank v. Falls Mortgages, § 125 135, 233, Or. 266 P. and C.J.S., 412, page at 589. plaintiff
The evidence indicates that the not was apprised of the transaction between Marshall and days completed. Johnston until some after it had been He then wrote to Johnston: recently you [Marshall] “Earl told me that were
taking Plywood Hovey [the tractor] it over and that Vancouver mortgage, would retire the but Chas. yesterday advised me that was not the case. mortgage
I must insist be at retired once disposing or I must set about of it.” advantage It is manifest unfair that no by plaintiff pur taken of Johnston when the latter partici In chased the tractor. fact, the did pate except disapprove in that transaction to of it when subject. Marshall broached the Johnston knew of the possessed mortgage chattel and, as promised, part seen, we have the consideration pay to that debt. is This, therefore, tractor, paraphrase language, an instance in counsel’s “express given money an direction mortgagee.” We think that cited cases holding plaintiff’s counsel demand chattel mortgage was valid. disposes foregoing first contention sub- *30 rehearing. by petition
mitted for a that the second and third contentions We believe petition rehearing for a are answered submitted preceding portrayal forth of the facts set paragraphs. did not authorize a sale The mortgaged property; not authorize at he did least, made never The a sale to Johnston. agent tractor, for the sale agent. plaintiff’s that Marshall was assumed
never rehearing petition for is denied.