Opinion
Argued February 17, 1932
Affirmed April 29, 1932
Appeal from Circuit Court, Klamath County, W.M. DUNCAN, Judge.
Suit by Pearl M. Young against D.B. Clay, John Gordon, and others. From a decree for plaintiff, defendant Gordon appeals.
AFFIRMED.
W.P. Myers, of Klamath Falls (D.E. Fletcher, of Klamath Falls, on the brief), for appellant.
N.G. Wallace, of Bend, for respondent.
This is a suit brought by the plaintiff against defendants Clay, Benz, Ceboff, Gordon, and Russel, to reform a certain mortgage upon real property described in the complaint and to foreclose this mortgage upon the land of defendant Gordon and subject it to sale for the satisfaction of a mortgage debt; to procure a judgment against defendants Clay, Benz, and Ceboff for $1,875, with interest at 8 per cent per annum from October 18, 1928, less $625 paid on July 1, 1929, for $200 attorney's fees, and for costs.
For her cause of suit the plaintiff alleged, among other things, that, prior to October 18, 1928, she made a contract with one Otto F. Boye whereby she agreed to purchase and Boye agreed to sell certain real property situate in Klamath county, Oregon, described in the complaint; that, thereafter, at an agreed price of $1,875, she sold and assigned to defendants Clay, Benz and Ceboff a three-fourths interest in and to the contract and certain personal property at that time on the premises covered thereby, their indebtedness to plaintiff therefor being evidenced by their joint and several promissory note executed on October 18, 1928, in the amount of $1,875, secured by mortgage duly executed and recorded on the same date, which mortgage is set out in and made a part of the complaint, and which was intended by these defendants to mortgage to plaintiff the equitable interest possessed by them in and to the above-mentioned property and all personal property thereon, but that, through inadvertence and mistake of the attorney employed to prepare the mortgage the real property was erroneously described and the error in description was not discovered by or known to plaintiff until November, 1929.
She alleged that subsequent to October 18, 1928, defendant Ceboff sold and assigned to defendant Gordon all of his interest in and to both the real and personal property, subject to plaintiff's lien thereon, and that this plaintiff and defendant Clay sold and assigned to defendants Benz and Gordon all their right, title and interest in and to the property, subject to the lien of the plaintiff; that she believes that, during the year 1929, defendant Russell obtained a leasehold interest in and to the premises described in the complaint, but that such leasehold interest is subsequent in time and inferior in right to plaintiff's lien thereon. She further alleged that no part of the promissory note secured by mortgage has been paid except the sum of $625.
Plaintiff asked that the mortgage be reformed to conform to the true and correct description of the real property, and that the same be foreclosed. She alleged that she was entitled to judgment against defendants Clay, Benz and Ceboff in the sum of $1,875 with interest from October 18, 1928, less $625 paid on July 1, 1929, and for $200 attorney's fees, together with her costs and disbursements.
Defendant Gordon, answering plaintiff's complaint, admitted that defendant Ceboff sold and assigned to him all of his right, title and interest in and to the premises in question, and that defendant Clay and this plaintiff sold and assigned to defendants Benz and Gordon all of their right, title and interest in and to the premises, both assignments being subject to the lien of the plaintiff upon the premises and the personal property situate thereon. He averred that he had not sufficient information from which to form a belief as to the remaining allegations of the complaint, and denied the same.
The suit came on for trial upon the complaint and answer, and the court decreed that the plaintiff have and recover from defendants Clay and Benz the sum of $1,875 with interest at 8 per cent per annum from and after October 18, 1928, until paid, less $625 paid on July 1, 1929, and the further sum of $200 attorney's fees, and her costs and disbursements. It was further decreed that the sum of money found to be due the plaintiff from defendants Clay and Benz should be a first and prior lien upon the following real and personal property:
"All the portion of Lot 2 in Section 3 in Township 37 South of Range 14 East of the Willamette Meridian, more particularly described as follows:
"Commencing at the quarter corner common to sections 2 and 3 in Township 37 South of Range 14 East of the Willamette Meridian, and sections 34 and 35 in Township 36 South of Range 14 East of the Willamette Meridian, thence West 1605 feet, thence South 222 feet to the place of beginning; then West 100 feet, thence North 50 feet, thence East 100 feet, thence South 50 feet to the place of beginning, situate in Klamath County, State of Oregon.
"Also all the furniture, fixtures and equipment that was on the 18th day of October, 1928, located in the building situated on the foregoing described property."
It was further decreed:
"That said lien is represented by a mortgage on * * * the above described property dated October 18, 1928, executed by D.B. Clay, A.J. Benz and Pete Ceboff, which said mortgage was recorded at page 480, volume 41, Record of Mortgages for Klamath County, Oregon * * *.
"* * * That said mortgage be and the same is hereby reformed to conform to the description of the real property hereinabove described * * * and * * * that said mortgage be and the same is hereby foreclosed. * * *"
From the decree, defendant Gordon alone appeals.
By his first assignment of error, the appellant contends that the complaint is insufficient to maintain the suit against him or to subject his land to the mortgage, because, he says, it fails to disclose that the plaintiff ever entered into a valid contract in writing for the purchase of the land, or that any consideration passed from her for the land, or that she had a salable interest therein.
The pleadings admit, and the parties by stipulation agreed, that the plaintiff's interest in the property was acquired under an executory contract with one Otto F. Boye, the original owner in fee thereof, an interest in which contract had been sold and assigned by plaintiff to Clay, Benz and Ceboff, and by Ceboff to Gordon. It is likewise admitted that Gordon accepted the assignment, entered into possession under the original executory contract, and that he acquired such rights and assumed such burdens thereunder as were theretofore possessed and assumed by his assignors in the premises. Moreover, he paid the remainder of the purchase price with both constructive and actual notice of the mortgage. The contention that the complaint "merely states inferences instead of facts" is untenable. The statute provides that a complaint shall contain "a plain and concise statement of the facts constituting the cause of action, without unnecessary repetition." Oregon Code 1930, § 1-604. Measured by this statutory provision the complaint is sufficient, and particularly so after verdict.
Counsel for appellant urges that there is a fatal variance between the allegations of the complaint and the proof as to the identity of the parties to the original contract. We cannot follow counsel. The complaint alleges that a valid contract was entered into between the plaintiff and Boye, and that defendants Clay, Benz and Ceboff thereafter purchased from plaintiff a certain interest in that contract, and that defendant Gordon later acquired from Ceboff all his right, title and interest therein. Moreover, it was stipulated at the trial that this was the contract under which Gordon acquired his interest and right of possession.
The appellant insists that the court erred in making its findings of fact because it followed "practically word for word of the complaint." From the record herein it appears not only that defendant Gordon alone appealed, but it likewise appears that he offered no testimony. He tried the case in the lower court on the theory that the mortgage lien on the real property was null and void for the alleged reason that the original mortgagor never obtained record title to the property. In this connection we note that during the course of the trial the court asked the following question:
"The Court: I mean, you people agreed practically on all the facts but differed just on the construction of law. Is that it?"
to which Mr. Fletcher, one of appellant's attorneys, answered:
"Yes, absolutely."
We are convinced that the position of the appellant is not warranted by the facts. Clearly, the mortgage in question was a valid and subsisting lien on the property the subject of the contract. As bearing upon this subject, we direct attention to 41 C.J., 478, where the editors of that work have written:
"A mortgage given by one holding land under an executory contract for the purchase covers his interest, whatever it may be, at the date of the mortgage, giving the mortgagee the right to complete the purchase if his mortgagor refuses to do so; and the mortgagee cannot be ousted of his rights by a rescission of the contract of sale by the original parties to it. But the mortgagee will take no other or greater rights than the vendee had, that is, he will acquire simply a right to purchase the property for the consideration stipulated in the contract of purchase, or to require a conveyance of the estate from the vendor according to the terms of the agreement, on completing the payment of the purchase price. * * *
"It is a general rule that, where a mortgage contains full covenants of warranty, a title acquired by the mortgagor after its execution inures to the benefit of the mortgagee and is bound by the mortgage lien."
We subscribe to this doctrine.
The validity of the mortgage lien having been established, we deem further consideration unnecessary. We have, however, examined the several propositions of law alluded to by appellant, but find no valid ground for reversing the case. Hence we direct its affirmance.
BEAN, C.J., and CAMPBELL, J., concur.
BELT, J., absent.