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About Daily capital journal. (Salem, Or.) 1903-1919 | View Entire Issue (July 10, 1911)
DAILT CAPITA1 JOURNAL SALEM. ORJCOOM. MOXDAV, JULY 10, 1811. rxB runt JUSTICE BURNETT SEES IT Ifl A DIFFERENT LIGHT And Expresses His Views in an Able Dissenting Opinion Wades Through Wills, Sheriffs' Sales, Deeds, Mortgages and a Mass of Other Things Bewildering to a Layman, and Makes His Own Conclusions. OREGON SUPREME COURT DECISIONS Foil Text Published bj Courtesy of F. A. Turner, Reporter oi the Supreme Court President and Trustees of Tunlutin Academy iind Pacific University T. Keene, et al, Linn County. The president and trustees of Tua latin Academy and Pacific Univer sity, respondent, v. Emma A. Keene, R. G. Keene, her husband, Charta O. Zimmerman, and Florence S. Zim merman, his wife, Ida B. Wlckham, Lafayette Townsend, Samuel M. Gar land as administrator of the estate of M. h. Zigler, deceased, F. P. Bodwell and Ora M. Bodwell, his wife, Mamie L. Burkhart, guardian Alma L. jl len, and E. E. Ferguson, Belle C. Ferguson and J. A. Ruyter, partners doing business as Ferguson & Ruy ter, appellants. Appeal from the cir cuit court for Linn county. Hon. 'William Galloway, judge. Argued and submitted June 8, 1911. Milton V. Smith for respondent. H. H. Hewitt for appellants. Burnett, J Dissenting. On November 7, 1887, Robert Mc Cullough and Carrie A Talbott were the owners of certain lands in Linn county, and at tbat time mortgaged the same to Jacob Kees to secure the payment of $900. On August 25, 1891 they gave Kees a further mortgage on the same premises for $700. In July, 1892, they sold about 20 acres of the land to Mary Cady. Subsequent to the mortgages, McCullough and Talbott made a contract -with M. L. Zigler for the sale to Zigler of still another tract of said land. McCul lough, on the 8th of December, 1892. executed a will in which he provided for the payment of his debts and funeral expenses and the erection, of a monument over his grave, and then gave, devised, and bequeathed the use of all the residue of his property, both real and personal, to his wife, Lavina H. McCullough, during her natural lifetime and directed that at the death of his wife, all that re mained of his property should go to The Congregational Seminary, at Forest Grove in Washington county, state of Oregon." McCullough died December 13, 1892, seized of an un divided half of the lands mentioned, except what had been sold, as stat ed, and subject to the mortgages giv en to Kees. The will was admitted to probate and recorded in Linn coun ty, Oregon, December 17, 1892. Kees afterwards began suit in the clhcult court of Linn county to foreclose the two mortgages, making parties de fendant of all persons having an in terest In the land, Including Zigler and excepting the plaintiff herein, either in its name as the President and Trustees of Tualatin Academy and Pacific University, or as desig nated in the will, "Congregational Seminary at Forest Grove." That suit went to decree of forecloseure, Zigler withdrawing his answer be fore decree. At the sale of the prem ises, the mortgagee, Jacob Kees, bought the property and afterwards received a sheriff's deed which, in pursuance of the decree and sale, purported to convey to him the en tire fee simple estate In the whole tract. He subsequently sold to var ious persons, in separate parcels, all the land in question, having entered into possession of the whole under the sheriff's deed. Among others he quit claimed to Mary Zigler and El len Zigler for $350 the tract bar gained by McCullough and Talbott to M. L. igler and another parcel for $100. 1 On the 9th of March, 1907, the I plaintiff commenced this suit, alleg ing in Its complaint, in detail, all the transactions above alluded to, except that It states that it is advised and believes, and therefore, alleges the fact to be that Robert McCullough never made nor executed the second mortgage mentioned above. How ' ever, the plaintiff offered no testl ' mony In support of this attack upon that mortgage. It made defendants of all the parties claiming interest in the land subsequent to and as gran ' tees of Kees whether by deed, mort- ttnea nr Inriemnnt'.. Tt. sates further '"that each and all of the defendants herein claim that said foreclosure proceedings hereinbefore referred to, and the sheriff's deed made thereon to said Jacob Kees, in effect, con veyed the entire title in the said premises to the said Jacob Kees, and that the subsequent deeds and mortgages hereinbefore referred to, have the effect of transferring the en tire title to the premises herein de scribed, whereas In truth and in fact said foreclosure proceedings and said sheriff's deed conveyed unto said Ja cob Kees only the undivided half in terest in said premises formerly owned by Carrie A. Talbot and the life estate of the said Lavina H. Mc Cullough." The plaintiff also avers "that it is ready, willing, and able to pay such sum, if any, as may be equitably due and chargeable against the undivided half Interest of said premises described In this complaint, owned by the plaintiff, but plaintiff has beep unable to learn or ascec tain what amount, if any. Is charge able against plaintiff's said Interest in said premises, or to which of the de fendants such payment should be made; tbat a discovery and account ing Is necessary in order to deter mine what amount, if any, is charge able against plaintiff's said Interest In said premises on account of any taxes paid thereon by said defen dants, or either of them, since the death of the said Lavina H. McCul lough and to determine what portion of said premises defendants, or any thereof, have been in possession of. and what they have received from the rents, issues, use, occupation, or pro fits of such portions subsequent to the death of the said Lavina H. Mc Cullough," and prays that its title to the undivided half interest, formerly owned by the said Robert McCul lough be declared established; that an accounting may be bad between the plaintiffs and the defendants herein to determine what amount, if any, plaintiff should pay to defen dants, and to which of the defendants such amount, or any portion there of. Is payable; that upon payment of such amount, if any be found due to the defendants, each and all defen dants may be adjudged to have no right, title, interest, lien, or claim, or estate whatsoever against plaintiff's undivided one-half interest in said premises; that they be enjoined and restrained from claiming, or attempt ing to claim, any estate, right, title, lien, or interest in the premises; that the mortgage first above referred to be cancelled, and that the defendants who failed to appear shall be ad Judged lands." Tho plaintiff claims that It is the residuary devisee under the will of McCullough, and that he in tended the designation of "Congrega tional Seminary of Forest Grove" to apply to the plaintiff herein. The widow of the testator had that any of the defendants ever re- which the owner of an integral part ceivea any ot me aeDts or profits, or or me lana included in the mortease were even in possession of the lands was not made a party to the fore- tn aispuate. so far as that is con- closure, was given the option ot cerned, it is, from the complaint, lust compelling the owner of the parcel to as apparent that the plaintiff should redeem by paying the full debt or make such an accounting as that the ' conveying to the subsequent owner defendant should. The bill is man!-! the parcel in question. festly, in substance, one exhibited for the purpose of redeeming the land from the effect of the foreclosure sale in question. If it were not so, why should it go to such extreme particularity in relating the history of the title and setting out the claims of the defendants, and then In Sellwood v. Gray, supra. Judge Lord says, referring to the mortga gor: "His equity of redemption is the right to redeem from the mort gage to pay off the mortgage debt until this right is barred by decree of foreclosure; but until this right is barred, his estate, in law or equity, pray for a decree enjoining the de- la just the same after, aa it was be- fendanu from claiming any right or 'ere default, it is a right, though, of title in the premises? which the law takes no cognizance, For the purposes ot this opinion, it and Is enforceable only in equity. is not necessary to determine wheth- and has nothing to do without stat er the "Congregation Seminary at ute of redemptions. This is a valua- Forest Grove" is a sufficient designs- ble right, and exists not only in the tion ot the plaintiff. The first ques- mortgagor himself, but in every oth- tion which presents Itself is, what - er person who has an .Interest in, or was the effect of "the foreclosure of legal or equitable Hen . upon, the Keene's mortgage without making mortgaged premises, and Includes the plaintiff there a party to that judgment creditors, all of whom may suit? ' . insist upon, redemption of the tnort- We are told In DeLashmutt v. Sell- Base." wood, 10 Or. 326, that the true doc- Conceding, as we must, for the trine in this state is that a junior I purposes of this opinion, that the Hen holder is not in any way affected ' plaintiff was the residuary devisee by the proceedings to foreclose, to under the McCullough, will within which he Is not a party; that his the meaning of the excerpt just right to sell on execution and con-' quoted, it had an Interest in the H H - H it n in hi en vey the title remains unimpaired and that as to the purchaser at the sale under his judgment, the pur chaser at the prior sale under the de cree of foreclosure must be consid ered as an assignee of the mortgage, and successor in interest of the mort gagor, simply, and as in the same po sition he would have occupied had he taken a simple assignment of the mortgage from the owner, and a con veyance of title from the mortgagor, and made no attempt to foreclose. In that case, the purchaser at a sale under an execution, issued uuon to have no estate ini the a junior judgment, the owner of which had not been made a party to the foreclosure, was sustained in his possession of the land as against the purchaser at the foreclosure sale, al though the mortgage foreclosed was prior in effect to the ludgment. This learning Is further exempll- been dead nearly six years when this fled in Sellwood v. Gray in 11 Or. suit was commenced. The defen-1 539. This case grew out of the same dants answered, giving the history of proceeding in question in DeLash- thelr title, deralgning the same from mutt v. Sellwood, supra, and it was Jacob Kees, under his sheriff's deed, held in the later case, that when the and alleged that they had been in plaintiff in the foreclosure suit ob' possession, claiming to own the prop- talned a decree for the sale of prop erty under color of title, adversely to erty without making the defendant all persons, for more than 10 years. Gray a party, the proceeding as to The cause being at Issue, the circuit him was a nullity; but that the sale court rendered a decree In favor of effected some Important results. In the plaintiff, In substance, that it is this: that as to the defendant Gray, the owner in fee and entitled to the it stood as if no such sale had been possession, use, and enjoyment of an made. He had a right to redeem by undivided half interest in the prem- paying the amount of the encunv Ises, free of all encumbrance, and brance. The plaintiff as purchaser barred the defendants from claiming at the forec'osure and sale took all any interest In the same. From this the rights of his senior mortgagee, decree, the defendants have appealed, and so much of the mortgagor s equi Burnett, J. The bill has some ot ty of redemption as was not bound by the aspects of a complaint to deter- the subsequent lien of the defendant mine an adverse interest in lands, Gray. under Lord's Oregon Laws Sec. 516, Still further, in Osborn v. Logus, as indicated by the extract quoted 28 Or. 310, this court says that the above, but It cannot be entertained as owner of the equity or redemption is such, because It falls to allege that an indispensable party and without the land is not in actual possession him the suit cannot proceed. Subse- of another. It is contended in the quent lienors are considered neces argument on the part of the plaintiff sary parties, but their absence from that it is a suit against the defen- the record does not perforce of that dants as co-tenants with the plain- fact render the proceedings a nullity, tiff for an accounting for the rents In Wilson v. Tartar, 22 Or. 504, a and profits, but it nowhere alleges purchaser at a foreclosure sale, in mortgaged premises. Indeed, it stood in the shoes of one of the mort gagors, to-wlt: 'its testator. As such, it had a right to sue for the redemp tiontion of the premises, that, right not having been barred by the fore closure suit. Jonsiderlm? It even as a tenant In common, it still had a ngni 10 bus ior redemption, under the authority of Merritt v. Hosmer 11 Gray 276; 71 Am. Dec. 713. An analysis of the cases quoted will show that the right of the pur chaser at the sale to compel a re demption on the one hand, and of a person interested in the premises to sue for redemption, on the other, do not depend on the decree of the fore closure being wholly void as to all claimants. in all the cases men tioned, the decree was valid as to some of the defendants In the suit, but, of course, ineffectual as to par ties in interest who were not made defendants. The right of a purchaser at such a sale to compel a redemption by strict foreclosure is a right which is the complement of the right on the part of one claiming a subsequent inter est in the land to bring a suit to re deem. The situation is this: The tenant in common, not being made a party to the suit to foreclose, finds some one in possession of the whole of the land with whom he has no privity, who is not a tenant in com mon under the original holding and his suit to redeem is an effort to rid the land of the one who has thus in truded. The result of his effort if successful is to terminate the effect of the sale and restore the estate to its former owners, for his redemption Inures to their benefit. Dray v. Dray 21 Or. 59. What must he do to ef fect that purpose? He must do equi ty by redeeming the land, and to do so, in the language of Williams v. Wilson, 42 Or. 307, he muBt pay the entire mortgage debt and interest un der the equitable rule, and not under the statute as from a sale under the decree." All the decisions of this court above noted, so far as the sum to be The Business you can get to-day by wire may be gone by the time that letter gets there to-morrow. "Day Letters" should be on your selling force. THE WESTERN UNION TELEGRAPH COMPANY I'v. -J H it paid Is concerned, contemplate noth ing less that the full amount of the mortgage debt It must be so. for the object of redemption la not to estab lish cotenancy with the purchaser, but rather to terminate the effect of the sale and exclude him from par ticipation in the title. He must, therefore, have his full debt with in terest without deducting the amount bid at the sale or any part thereof. Neither should the amount required for redemption, if allowed in this case, be diminished by the $350 form ing the consideration paid to Kees to induce him to quit claim the tract to Mary and Ellen Zigler. If those two grantees were claiming under the bond for deed from McCulloueh and Talbott to M. L. Zigler, their interest was subsequent and subordinate to both the Kees morteaees. the latest of which bore date August 25, 1891,1 wnue the zigler bond was executed August 1, 1892. Moreover, although Zigler was made a party to the Kees foreclosure suit as a junior' incum brancer under the bond, he withdrew his answer and the decree barred and foreclosed him from any further ln teres In he premises. By his pur chase at the foreclosure sale, Kees took the land free from any claim on the part of Zigler. In a paraphrase upon the language of Williams v. Wil son, 42 Or. 308, there must have been some purpose in making Zigler a party to the foreclosure suft and what purpose can be subserved thereby if the decree denied or cur tailed none of his rights under his junior bond for a deed? The tiilehe contracted for having been extin guished by the foreclosure, not only because of the Juniority of his bond for a deed, but also because he did not set it up as his defense In that suit, he might have had recourse upon his obligors to recover what ho had paid them, but he had no claim upon the purchaser at the sale tor the latter tbok a title by paramount to Zigler's bond. Kees had the right to sell whatever he had acquired by the sale to Zigler or Keene or any one else but the deal would not in ure to the benefit of the plaintiff, a stranger to the transaction. To charge the $350 against the present defendants, if a redemption is permitted here, would be in effect to declare that notwithstanding the Zigler bond was subsequent to thf Kees mortgages and was foreclosed! and its effect terminated by the de cree yet it survives the grave of foreclosure and is resurrected into a position paramount to that of the purchaser at he sale. Of course, if the plaintiff in this suit had alleged that Kees or his grantees had re ceived anything from the land in ex cess of maintenance and taxes, it might by that much reduce the amount to be paid for redemption, within the principle laid down in Cartwright v. Savage, 5 Or. 397; but nothing of that kind appears In the complaint. Manifestly, in this case, the plain tiff is not trying to redeem Its own undivided halt separately, for as we have seen, its title is not affected by the foreclosure suit to which it was not a party; but in order to do equity, it must redeem the whole property by paying the whole mort gage debt. The property was pledged as a whole, the plaintiffs teBtator was liable for the whole debt, and (Continued on Page 6.) ROSTEIN & GREENBAUM CLOTHING See the Goods and Prices SHOES Men's All-Wool Suits New Styles, Neat Patterns $10.00 Men's $10,00 Suits,. 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