Ashley & Rumelin v. Lance

171 P. 561, 88 Or. 109, 1918 Ore. LEXIS 12
CourtOregon Supreme Court
DecidedMarch 19, 1918
StatusPublished
Cited by4 cases

This text of 171 P. 561 (Ashley & Rumelin v. Lance) is published on Counsel Stack Legal Research, covering Oregon Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ashley & Rumelin v. Lance, 171 P. 561, 88 Or. 109, 1918 Ore. LEXIS 12 (Or. 1918).

Opinion

MOOEE, J.

A witness for the plaintiff having identified the promissory note referred to, the appellant’s counsel objected to the giving of any further testimony on the grounds that the complaint did not state facts sufficient to constitute a cause of action, because no mention was made in the initiatory pleading of any deficiency in respect to an application of the proceeds of the mortgaged property to the debt thereby secured, and that the reply constitutes a departure. In support of the legal principle involved reliance is had upon the case of Rein v. Callaway, 7 Idaho, 634 (65 Pac. 63), where it was held that if a mortgagee seized the mortgaged personal property and sold it at private sale under a stipulation in the mortgage authorizing him to do so, he could not maintain an action on the note for the remainder due on the mortgage debt. In deciding that case Mr. Justice Sullivan, speaking for the court, says:

“In this state, as in the State of California, the mortgaged property becomes the primary security, and the personal obligation of the mortgagor a secondary one. The mortgagor, under our statutes, is personally liable only after foreclosure, and then only for the balance shown to be due by the return of the sheriff, unless it is made to appear that the property has been destroyed or otherwise become valueless without the fault of the mortgagee.”

Further in the opinion it is observed:

“A mortgagee cannot waive his security and sue upon the debt.”

[114]*114Our statute, regulating the foreclosure of chattel mortgages, reads:

“Whenever in any mortgage of goods and chattels the parties to such mortgage shall have provided the manner in which such mortgage may be foreclosed, such mortgage, upon breach of the conditions thereof, may be foreclosed in the manner therein provided, and not otherwise; and if in any such mortgage the manner in which the same may be foreclosed shall not be provided, then upon breach of the conditions thereof, in case the consideration of such mortgage shall not exceed the sum of $500, the same may be foreclosed, and the mortgaged property sold by the sheriff or any constable of the county in which such mortgage has been filed, upon the written request of the mortgagee, his agent, or attorney, upon such notice, and in the manner provided by law for the sale of personal property upon execution; and if the consideration of such mortgage shall exceed the sum of $500, the same may be foreclosed by an action at law in the Circuit Court of the county in which such mortgage may have been filed”: Section 7411, L. O. L.

There were received in evidence at the trial the original chattel mortgages executed to the plaintiff by the Y. D. Smith Fuel Company, August 1, 1912, by Y. D. Smith, its president, and the defendant F. A. Lance as its Secretary, to secure the payment of the promissory note for $2400, and by the defendants Charles Weeks and H. Massman May 8, 1913, for the same purpose. These mortgages contain a clause which so far as important herein reads:

“To Have and to Hold the said goods and chattels unto the' said party of the second part, (plaintiff herein) or its assigns forever. Provided, nevertheless, and these presents are on the express condition, that if the said party of the first part, (the mortgagor in the first mortgage and the mortgagors in the second) or its assigns, shall well and truly pay unto the [115]*115said party of the second part, or its assigns, the sum of twenty-four hundred dollars, and interest thereon at the rate of ten per cent per annum, in accordance with the terms of a certain promissory note, of which the following is substantially a copy (setting forth a duplicate of the negotiable instrument), then these presents shall be void. But in case default shall be made in the payment of the principal sum or interest, * * or if any claims, charges or demands which can be made prior liens to this mortgage upon said property, are not paid or discharged at maturity, or if said property is attached or levied upon, taken possession of, or detained by any person other than the mortgagee, for any cause, or is removed or attempted to be removed by any one from the aforesaid premises or be sold, transferred or assigned or attempted to be sold, transferred or assigned, then said promissory note shall, at once, become due and payable, and it shall and may be lawful for, and the said party of the first part does hereby authorize and empower the party of the second part or his assigns with the aid and assistance of any person or persons, to enter the aforesaid premises and such other.place or places as the goods and chattels are, or may be placed, and take or carry away the said goods and chattels, and sell or dispose of the same at private sale with or without notice to the mortgagor, or may sell the same at public auction upon giving one week’s notice of the said sale in a newspaper of general circulation published in said County (Multnomah) and State, and out of the money arising therefrom, to retain and pay the said sum above mentioned, and interest as aforesaid, and all charges touching the same, and reasonable counsel fees * * rendering the overplus, if any, unto the said party of the first part.”

Upon a breach of either of these conditions, the plaintiff under the provisions of the statute herein-before quoted, was empowered and legally authorized to take possession of the mortgaged property and to sell sufficient thereof to pay the mortgage debt, or if [116]*116as in this instance the property was inadequate for that purpose to sell the entire chattels and from the proceeds arising therefrom to pay the costs and expenses incident to the sale and to indorse the remainder upon the promissory note.

A text-writer discussing this subject remarks:

“A sale under a power contained in the mortgage, and purchase by the mortgagee of the mortgaged property, without a resort to court, does not bar the mortgagee’s right to look to the mortgagor or other securities for a deficiency, and is not an extinguishment of the debt”: Cobbey, Chat. Mort., § 988.

To the same effect see, also, Griffin and Curtis, Chat. Mort., p. 160.

Another author observes:

“In some jurisdictions, by statute, there can be but one action to recover a debt secured by a chattel mortgage; and it is held that the mortgagee cannot waive the security and sue for the debt, but must bring his action of foreclosure”: 11 C. J. 746, note 20.

In support of the text, decisions are cited from the Supreme Courts of California, Idaho and Montana. The statute thus referred to was first enacted by the legislative assembly of California and subsequently adopted by the law-making bodies of the other states. The enactment reads:

“There shall be but one action for the recovery of any debt, or the enforcement of any rights, secured by mortgage upon real estate or personal property, which action shall be in accordance with the provisions of this chapter,”

referring to the part of the Code containing such statute: Largey v. Chapman, 18 Mont. 563 (46 Pac. 808); Rein v. Callaway, 7 Idaho, 634 (65 Pac. 63). Prom the care exercised by the editors of Corpus Juris in [117]

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Appliance Buyers Credit Corp. v. Mason
153 S.E.2d 3 (Supreme Court of North Carolina, 1967)
Associates Financial Services Corp. v. Welborn
153 S.E.2d 7 (Supreme Court of North Carolina, 1967)
Glaser v. Slate Construction Co.
251 P.2d 441 (Oregon Supreme Court, 1952)
Westerman v. Oregon Automobile Credit Corp.
122 P.2d 435 (Oregon Supreme Court, 1942)

Cite This Page — Counsel Stack

Bluebook (online)
171 P. 561, 88 Or. 109, 1918 Ore. LEXIS 12, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ashley-rumelin-v-lance-or-1918.