DAILY CAPITAL JOTOXiL, SALEM, OREGOX. THURSDAY, OCTOBER 19, 101 1.
PAOB THKRS
OREGON SUPREME COURT DECISIONS
Fill Text Published bj Courtesy of F. A. Tamer, Exporter of the
Supreme Court
Jion mini t. Sberill and Sherill, Unsh
liielon County.
Decided, October 3, 1911.
Benton Bowman, trustee In bank
ruptcy of the estate of W. E. Sherill
respondent, v. W. Sherill and Liz
zie M. Sherill appellants. Appeal
from the circuit court for Washing
ton county.- The Hon. J. V. Camp
bell, judge. Argued and submitted
Sept. 20, 1911. John A. Jeffrey (and
M. B. Bump, on brief) for appellants.
V. G Hare (Bagley & Hare.on brief)
for respondents. McBrlde, J. Modi
fled. In January, 1909, W. E. Sherill
was adjudged a voluntary bankrupt,
and plaintiff was appointed his trus
tee in bankruptcy. Prior to this- on
October 28, 1908, Sherill without con
sideration, conveyed to V. P. Dyke
certain land described In the com
plaint and hereinafter called for
convenience, "a part of the Moore
claim." On the same day Dyke con
veyed the land without any actual
consideration to Mrs. Sherill. On the
13th of November, 1908, Sherill trad
ed a team of horses to one Weisen
beck for lot 6, in block 37, South
Coast Addition to the City of Hills
boro. taking a deed therefor in his
wife's name.
Plaintiff brings this suit to have
the deed declared fraudulent as to
creditors, and praying that the prop
erty be sold and the proceeds applied
upon the proved debts of ". E. Sher
ill. Defendants answered, denying
all allegations of intent to cheat or
defraud creditors and further set up
that the land situated in the Moore
claim is a homestead and, therefore,
exempt from execution and sale.
McBrlde. J. Where a party, fraud
ulently conveying land Is Insolvent
or has been adjudged a bankrupt,
the issuance of an execution is not
necessary.
We are satisfied from the testimony
that both the conveyances were made
or procured with Intent to defraud
creditors and that Mrs. Sherill did
not contribute anything toward the
purchase of either tract. Either of
the defendants had a right to claim
a homestead in the property on the
muore ciaim ana tms right is not
defeated by a conveyance from one
to the other. A decree, such as is
sought in this case, would operate
practically as an execution anil we
see no reason why this exemption
should not be claimed and urged in
this proceeding. The decree should
be so modified as to provide that
plaintiff should have a lien upon the
tract In the Moore claim for the
amoifnt of the proved debts, subject
to the right of defendants or either
of them' to occupy It as a homestead,
with leave to apply to the court for
an order of sale whenever it shall
cease to be so occupied. In all other
respects the decree will be affirmed.
Neither party will recover costs in
this court.
Dowd. et nl, vs. Anterlcnn Surety Co.
of Xew York, Multnomah Ooiinfy.
Decided, October 10, 1911.
James Dowd, executor, and Kate
Dowd, executrix of the last will and
testament of James Barry, deceased
respondents., v. American Surety
Company, of New York, appellant.
Appeal from the circuit court for
Multnomah county. The Hon. Robert
G. Morrow judge. Argued and sub
mitted Sept. 28, 1911. John T. Mc
Kee and (Cake & Cale, on brief) for
respondents. M. A. Zollinger (Kol
lock f- Zollinger, on brief) for appel
lant. McBrlde, J. Reversed and re
manded. The complaint alleges that James
Barry died on September 10. 1908;
that plaintiffs are his executors; that
in 1906 the Pence Company, a cor
poration, began an action to condemn
a right of way for a ditch, flume or
canal across the land of Barry, and,
desiring to commence the Immediate
construction of the ditch made and
executed with defendant as surety,
the body of which, after stating the
title of the action, is as follows:
"Whereas, the above named plaintiff
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M Tirill fUava Qo f iivrlmr fri m n Lro o Kirl. Anrfirm will Y( riol4 nn fVio r-vrr-iri4-vr
has brought an action in the above
entitled court against the defendant
for the purpose of condemning a
right of way for Its use in the con
struction of a ditch flume or canal
across and over the lands of th said
;aeienaant; and. whereas, the plaln
' tiff desires to commence the immedi
ate construction, operation and main
tenance or Its proposed ditch, flume
or canal and build the same at an
early date, which is necessary for its
use for the coming season: Now,
ni ' ....
iuereiure, me piaintin Herein, as
principal, and The American Surety
Company of New York, as surety are
hereby bound unto the defendant, his
heirs and assigns, conditioned for the
payment of any and all damages and
compensation that may be awarded
to the defendant In the above entitled
action and to which the said plain
tiff and the said surety hereby bind
themselves, their heirs, executors and
administrators firmly by these pres
ents. In witness whereof we have
hereunto set our hands and seals this
29th day of December, 1906."
That the undertaking was served
on Barry "on January 5. 1907; that
immediately thereafter the Pence
company took possession of the land
necessary for the construction of the
ditch, which it constructed across the
land: that Barry filed his answer to
the complaint of the Pence company
in which he claimed $ damages
for taklnsr the land: that thereafter
in June, 1907. the parties to the ac
tion, through their attorneys of
record, entered Into an agreement of
arbitration, which Is as follows:
"In the Circuit Court of the State bf
Oregon, for Multnomah County.
The Pence Company plaintiff, v.
James Barry, defendant.
Whereas, the plaintiff has institut
ed proceedings against the defendant
to condemn a certain tract of land
belonging to the defendant, situated
in Multnomah county, Oregon and
particularly described in the com
plaint herein, to which reference Is
hereby made as a part hereof, said
condemnation to be for the use and
occupation of said land for the pur
pose of construction thereon a ditch.
flume or canal; and whereas, the
parties are desirous of submitting the
question of the value of said land and
the damages to the remaining por
tions of defendant's property affect
ed by the construction of said ditch,
flume or canal to a board of arbitra
tion. Now, therefore, it is agreed by and
between the parties hereto, acting by
and through their respective attor
neys of record as follows, to-wlt:
(1) That for the purpose of this
agreement, the plaintiff is a corpora
tion duly organized and existing un
der and by virtue of the laws of the
state of Oregon and among other
things, the object and purposes for
which said corporation was organ
ized and which It proposes to engage
In, were to divert and appropriate
water from lakes, rivers and streams
conveying the same in reservoirs,
and to use the same for domestic
purposes, sluicing, irrigation and de
veloping electric power.
(2) That the defendant is the own
er in fee simple and in possession of
the southwest quarter of section 30.
township 2 north, range 1, west of
the Willamette meridian, Multnomah
county, state of Oregon. ,
(3) That the plaintiff has done
every and all things necessary under
the laws of the state of Oregon to
acquire the right to appropriate wa
ter to its use in order to carry Into
effect the object and purposes of its
formation as a corporation, and it is
necessary to conduct water by means
of ditches, flumes and canals over
and across the lands of the defend
ant. (4) That the said ditch, canal or
flume Is now constructed upon the
lands of the defendant and that the
land actually taken is as described
in paragraph 4 of the complaint here
in, to which reference is hereby
made for a particular description
thereof.
(.i) That the plaintiff and defen
dant have not been able to agree
upon the value of the right of way
as shown In the complaint and which
is necessary for the use of plaintiff,
nor have plaintiff and defendant been
able to agree upon the damages sus
tained by defendant aside from the
amount of land actually taken by the
plaintiff.
(6) That In order to determine and
fix the damages sustained by defen
dant on account of the taking of the
land described in the complaint and
the damages sustained by the defen
dant on account of the construction
of said ditch, canal or flume, it Is
agreed that the same shall be sub
mitted to a board of arbitration com
posed of three persons, one of said
persons to be chosen by the plain
tiff, another by defendant, and the
third by the two persons so chosen
as aforesaid by plaintiff and defen
Boulevard and
dant, and that said three persons
shall proceed to view said nremlaes
and said ditch, canal or flume, de
termine the damages sustained by the
defendant on account of the taking of
said land and the construction of
said canal, ditch or flume, withov.
the taking of testimony or the argu
ment or assistance of counsel, except
as the same may be requested by snlii
board of arbitration, and said finding
of said board of arbitration or a ma
jority thereof, shall be final as to
said damages sustained by defen
dant.
And it Is further agreed that the
selection of said three persons shall
be concluded by Saturday the 8th
day of June. 1907, and in case said
three, persons are not chosen on or
before said last mentioned date this
agreement shall be null and void and
of no force or effect.
And It Is further agreed that an
award of said board of arbitration of
a majority thereof shall be made on
or before Wednesday, the 12th day of
June, 1907, and that the same shall
be Immediately filed with the clerk of
the above entitled court, and when so
filed. It Is agreed by the parties here
to that the defendant may take judg
ment against the plaintiff for the
amount of said award, and said judg
ment may be entered upon the rec
ords of this cause as any other Judg
ment rendered upon the verdict of a
jury or the findings of the court, and
the same as if said cause had been
tried by the court and jury, and
shall be final and binding upon the
parties hereto as any other Judgment
rendered In this cause upon all of
the matters referred to herein arid in
said complaint."
That pursuant to the agreement of
arbitration, the Pence Company chose
one arbitrator; Barry chose the sec
ond, and these two met and chose a
third, who, after consideration, filed
in the action an award In the amount
of $3425; that Bince the filing of the
award the company has been dis
solved by proclamation of the gover
nor and is wholly insolvent, and has
no assets nor property; that, upon
the death of Barry plaintiffs were
substituted as defendants in the con
demnation proceedings.
A demurrer to this complaint was
overruled, and defendant filed an an
swer, which substantially admits the
agreement of arbitration, the return
and filing of the award, and the in
solvency and dissolution of the Pence
Company, and sets up that defendant
had no knowledge or notice of the
arbitration, nor of the meeting of the
arbitrators, nor of the filing of the
award, and did not consent to such
proceedings in any way. The answer
further alleges that James Barry
died on September 10, 1907; that his
heirs at law were not substituted as
defendants within one year from that
date nor have they ever been substi
tuted; that after Barry's death an
alleged award of arbitration was filed
in the circuit court but no Judgment
was taken against the owners of the
real property, vesting the occupation
and right to possession of the prop
erty In the Pence Company.
At the time of filing the foregoing
answer, the defendant also filed in
the action a cross complaint In
equity, setting up substantially the
same facts that appear in its answer
at law and claiming the privilege of
being subrogated to any rights the
Pence Company might have In the
ditch across the land of Barry.
Plaintiff demurred to the answer In
the action at law and also to the
cross complaint in equity on the
ground that the answer did not state
facts sufficient to constitute a de
fense and that the cross complaint
did not state facts sufficient to jus
tify any equitable relief. Both de
murrers were sustained. Judgment
was rendered In favor of plaintiffs
for the amount prayed for in the
complaint. Defendant appeals.
McBrlde, J. The demurrer to the
defendant's cross complaint was
properly sustained. Every legitimate
defense therein, urged had been set
up in Its answer in the law action
and the cross complaint set up no
equity. It asks to be subrogated to
any rights that the Pence Company
have In the land, but does not allege
that It has any such rights and, In
fact, contends that It has not ac
quired any.
The court erred in sustaining the
demurrer to defendant's answer.
The submission being made In an ac-
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tlon pending and being for he pur
pose of ascertaining a particular
fact, namely, the amount of dan ages,
the rights obtained under it could be
no greater than stipulated In the
agreement of submission. Dy that
agreement the award was to be died
In the court and the court was then
to enter judgment upon It. When
this Judgment was entered the award
was complete. The defendant had
his. remedy by execution only when
the Judgment was entered imrsuant
to the stipulation. Here it is alleged
in the answer that no Judgment was
ever rendered. The intent and pur
pose of the submission went no fur
ther than to substitute the decision
of the arbitrators for the verdict of
the Jury and to dispense with the
calling of witnesses.
If we treat this as a submission in
an action pending, then before it
can have the effect to create a lia
bility against the plaintiff, there
must be a judgment of the court in
accordance with the stipulation. If,
on the other hand, we treat it as a
common law arbitration, to have ef
fect Irrespective of any action of the
effected a discontinuance of the ac
tion and released the surety from
any obligation on Its undertaking
given therein: (3 Cyc 605, and cases
there cited.) The agreement by Its
terms required a Judgment uf the
court before the award should be
come complete. These considerations
render It unnecessary to discuss the
other questions so ably argued by
the respective counsel.
The Judgment will be reversed and
the cause remanded with directions
to overrule the demurrer to defen
dant's answer.
Tole v. Willow River Lund & Irrln
Hon Co., et nl( t. Cole, Malheur
County.
Decided, October 10, 1911.
Leonard Cole, respondent, v. Wil
low River Land & Irrigation Com
pany, a corporation, appellant, and
North American Security Company,
appellant, v. Ieonard Cole respond
ent. Appeal from the circuit court
for Malheur county. The Hon. Dal
ton Ulggs, Judge. On Petition for
Rehearing. Motion to dismiss over
ruled July 6, 1911. John L. Rand and
M. D. Clifford, for respondent. W. T.
Slater, Ueo. E. Davis, Wheeler &
Hurley, and Richards & Haga, for
appellant. Per Curiam. Appfal re
instated and motion to dismiss de
nied. We will consider these two cases
together Bince the question involved
Is the same In each case.
Per Curiam. On petition of appel
lant for a rehearing upon the motion '
to re-Instate the appeal, and in resls-;
tance of the motion to dismiss. The
motion of respondent to dismiss was
allowed on July 5, 1911, and (he mo-;
tlon to reinstate the appeal was de- i
nled on September 12. This petition ;
was filed on September 29, 1911.
Upon reconsideration of the whole
case, we are of the opinion that the
appeal should be re-Instated, and the
motion to dismiss denied. It ap
pears that the appellant was prose
cuting his appeal in good faith and
It is a case of great importance to
It. The brief was filed within the
time prescribed by the rules, cs coun
sel interpreted or understood them,
being confirmed in that understand
ing by the language of the statement
in the case of Shafer v. lieeiher, M
Or. 273, namely, that the 30 days in
which he must lile the brief com
menced from the time of the filing of
the transcript. The time of filing tlio
transcript bad been extended until
April 13, but It was actually filed
April 10. The appeal was perfected
on February 13 and the brief was
will be sold to
filed on May I. Counsel for the aD
pellant mailed to the clerk of this
court an application for an extension
of time to file his brief, but later
withdrew It, for the reason that he
concluded his 60 days would begin to
run on April 10. That circumstance
cannot aid htm now, but It tends to
show diligence on his part. In Nep
pach v. Jones, 2S Or. 286, 2S9, It is
said: "While the court expects and
will require counsel to substantially
observe the rules In the preparation
and service of abstracts and briefs,
yet If, through excusable neglect, the
service Is not made In time, the court
may relieve the party In default, on
a proper showing, from the conse
quence thereof. The rules were de
signed and intended to facilitate the
business and simplify the practice,
and are not so arbitrary or inflexi
ble as to work an Injustice, or pre
vent a hearing In this court, when
the failure to comply therewith Is
owing to the excusable neglect of the
party."
We are satisfied from the showing
in this case that the default, in filing
the brief within the time proscribed
by rule 36, was by reason of excusa
ble neglect and that appellant should
be relieved from his default; Wood
v. Flsk, 45 Or. 276; Johnson v. White,
(Or.) 112 Pac. 1083; Kearney v. O.
R. & N. Co. (Or.) 112 Pac. 10S3.
The appeal will be re-Instated and
the motion to dismiss denied.
lterniird t. Hassan and Allln, Marlon
County.
Decided. October 10, 1911.
L. Bernard, respondent, vv Sarah A.
Hassan and William R. Allln, appel
lants. Appeal from the circuit court
for Marion county. The Hon Win.
Galloway, judge. Argued and sub
mitted Sept 20, 1911. J. G. Heltzel
and John ilayne, for respondent M.
E. Pogue (and W. M. Kaiser, on
brief) for appellants. McBrlde, J.
Suit dismissed.
Suit to foreclose a mechanic's lien.
Decree for plaintiff. Defendants ap
peal. The facts appear in the opin
ion. McBrlde, J. Defendant Allin was
the owner of a house and lot In Sa
lem, Oregon, which were occupied by
defendant, Mrs. Hassan. In the
spring of 1908, Mrs. Hassan entered
Into a contract with plaintiff to make
certain alterations and repairs en
the dwelling house which consisted,
substantially, in putting a Becond
story and roof on a portion of the
building; dividing It Into four rooms
with partitions; clothing, papering
and finishing them, and painting the
woodwork one coat; covering the
roof with P. & B roofing; putties In
doors and windows; building a porch
on the second story and erecting a
stairway from the ground floor to the
porch. The contract price of this
work was $150. Mrs. Hassan was to
furnish all the materials for the
work, Including doors, windows and
frames.
Plaintiff placed workmen upon tho
building and began the work, but
Mrs. Hassan subsequently changed
her mind and concluded to have six
rooms instead of four, and continued
to suggest changes and deviations
from the original plan, until finally
It was agreed that plaintiff Bhould go
Continued on Page 6.)
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