First Savings Bank v. Linnhaven Orchard Co.

174 P. 614, 89 Or. 354, 1918 Ore. LEXIS 131

• Court: Oregon Supreme Court
• Decided: July 23, 1918
• Status: Published

Opinion

BEAN, J. —

1, 2. There is no allegation as to the time of payments on the contracts of purchase contained in the answer of these defendants except as shown above: Title Ins. & Trust Co. v. Northwestern Long-Distance Telephone Co., 88 Or. 666 (173 Pac. 251). It will therefore be seen that no dates of such payments are fixed. The payments for which the purchasing defendants claim a lien may have been made at any time between the dates of their respective contracts, and the time when they each ceased making payments, which is not definitely stated. According to the weight of authority, a purchaser of real estate has, in equity, a lien upon the real property for the amount of the purchase price paid upon a contract for the purchase thereof. "Where the executory contract fails by reason of the vendor’s default, and without any fault of the purchaser, such lien will be enforced by decree, for the sale of the property: Howard v. Linnhaven Orchard Co., 228 Fed. 523; Tyler v. Cate, 29 Or. 515 (45 Pac. 800); 39 Cyc. 2031, and note.

3. The appealing defendants invoked the rule that as between a mortgage of real property and other liens or claims, which may attach as liens upon the premises, the general rule is that, that which is first in time is first in right: 27 Cyc. 1171,- and note 46. Also that this lien of the purchaser exists as against subsequent purchasers, or mortgagees with notice of the payment: 39 Cyc. 2040, and note.

In order for the appealing defendants to be benefited by this equitable rule, it was incumbent upon them to allege and prove as a basis for their claim that the payments made by them upon their respective tracts of land were made prior to plaintiff’s mortgages, or prior to the other liens.

These defendants are not claiming an equitable right to purchase the land, by virtue of their contracts to purchase, but assert an equitable claim of lien by reason of the partial payments made for the tracts of land. Therefore, their equities would arise, not at the time of the execution of the contract as alleged in their answer, but at the time of the partial payments made by them.

4. Section 7129, L. O. L., provides:

“Every conveyance of real property within this state hereafter made, which shall not be recorded as provided in this title within five days thereafter, shall be void against any subsequent purchaser in good faith, and for a valuable consideration of the same real property, or any portion thereof, whose conveyance shall be first duly recorded.”

Before the plaintiff would be required to show that its mortgages were acquired in good faith, without knowledge or notice of the equities of the appealing defendants, it would be necessary for such defendants to allege that the payments for which they claim an equity were made prior to plaintiff’s mortgages.

Defendants and appellants have not done this, and therefore have not brought themselves within the rule announced in the cases of: Baker v. Woodward, 12 Or. 3 (6 Pac. 173); Raymond v. Flavel, 27 Or. 219 (40 Pac. 158); Rhodes v. McGarry, 19 Or. 222 (23 Pac. 971); Barnes v. Spencer, 79 Or. 205, 214 (153 Pac. 47).

The question here involved, as to the dates of the payments upon these contracts, is identical with that discussed by Mr. Justice Benson in the case of Green v. Linnhaven Orchard Company et al., in which an opinion has this day been rendered, to which reference is hereby made. It is shown that the plaintiff’s mortgages were executed by the Orchard Company to secure a loan of $14,500, of which $9,500 was obtained to satisfy prior mortgages given for the purchase price of the land. The loan was made, and the security taken in good faith. .

It follows that the decree of the lower court must be affirmed, and it is so ordered. Aeeirmed.

McBbide, O. J., Benson and Johns, JJ., concur.