counsel that when the plaintiff's agent was appointed receiver and took possession of the leased premises, thereby ousting the tenant, the landlord was restored to its original estate, and, this being so, no charge in excess of $3,000, the amount of rent in arrears when this suit was commenced, could legally have been impressed on the mortgaged personal property, and an error was committed in decreeing a recovery of $5,000, the face value of the larger note. It is insisted by, plaintiff's counsel, however, that since the receiver was appointed with the appellant's consent, the rule invoked by him is not applicable herein. It will be remembered that the defendant Gardner F. Elliott was the tenant in possession of the leased premises, April 18, 1913, when this suit was commenced, and that he did not acquiesce in the appointment of the receiver. A receiver is a ministerial officer of the court of equity which appoints him. He is presumed to be indifferent as between the parties to the suit, and holds the property committed to fenses thus interposed are deemed immate- MOORE, C. J. (after stating the facts as rial to any question to be considered herein. above). [1] It is contended by appellant's The defendants the Princess Hotel, Elliott and Wyatt, though each was duly served with process, failed to appear or answer. The averments of new matter in the several answers were put in issue by replies, and, the cause having been tried, a decree was rendered February 6, 1914, awarding the plaintiff $5,000, the principal of the note, since the rent then due it exceeded that sum, and $300 as attorney's fees, and commanding that the mortgage given to secure the payment of that note be foreclosed, and the personal property described therein be sold, as upon execution, and the proceeds arising from the sale be applied to the satisfaction of the sums awarded the plaintiff, and if any surplus remained, it be paid over to the Princess Hotel, the mortgagor, but if any deficiency remained, that the plaintiff have a decree therefor over against the latter defendant. It was further decreed that the cross-bill of Anderson be dismissed as against Prigmore, Thacher, Younger, and Ward & Younger, and that they recover from him their costs and disbursements. Another de-him in trust for all the parties interested cree was signed February 18, 1914, wherein therein; his title and possession being that State v. Norfolk, etc., R. Co., the personal property was described as in of the court. the first chattel mortgage, but in all other 152 N. C. 785, 67 S. E. 42, 26 L. R. A. (N. respects no important modification was made S.) 710, 21 Ann. Cas. 692. in the preceding decree. Based upon these decrees the personal property so described was sold to the plaintiff for the sum of $5,000. A nunc pro tunc decree was also made April 4, 1914, as of February 6th of that year, the time the original decree was giv-an appointment clearly for the best interest of en, awarding Anderson a recovery against Wyatt, the maker of the smaller note, and Elliott his successor in interest, of $1,450, with interest at 7 per cent. per annum from December 1, 1912, and the further sum of $150 as attorney's fees, and decreeing a foreclosure of the chattel mortgage given to se The plaintiff herein, being a corporation, cure the payment of that note, providing, could act only by its agents, one of whom however, that such modification of the origi- was Paul Dauschel, its treasurer. Though nal decree should not affect any prior pro- the defendants Anderson, Paget, and Thachceedings had thereunder, except as to the er consented to the appointment of a receivapplication of the funds derived from the er, it cannot be said, from an inspection of sale of the personal property, in the event the transcript before us, that they acquiany sum remained of the proceeds after pay-esced in Dauschel's selection, or waived any ing the plaintiff's award. From this decree objection they might have had against him the defendant Anderson appeals. the books," says Mr. Chief Justice Winslow in "The general principle, very well settled in Bartelt v. Smith, 145 Wis. 31, 129 N. W. 782, Ann. Cas. 1912A, 1195, 1197, "is that a party to the cause will not ordinarily be appointed receiver unless both parties consent, or there are special circumstances present which make such all concerned. The reason is that the receiver is an officer of court, whose business it is to administer his trust impartially for the benefit of all concerned, and hence he should have no special interests which might influence him in interests and the interest of any party to the his conduct of the trust in matters where his action may clash." by reason of his interest in the subject-matter of the suit as the plaintiff's representa tive. [2, 3] The lease under which Elliott held possession of the building until he was evicted by the receiver, pursuant to the order of the court, is not before us, and hence it can not be stated with certainty that the demise contained any express covenants on the part of the lessor. A text-writer, in discussing this subject, remarks: "It is immaterial in all cases whether or not a lease contains an express covenant of quiet enjoyment so far as the rights of the tenant are concerned. For a covenant of quiet enjoyment| is implied in every lease for a term, by whatever form of words the lease is created. In other words, from the fact of the letting together with the entry by the tenant into possession with the consent of the lessor, it will be implied or presumed, not only that the landlord had a right to lease, but that he covenanted to secure the lessee against eviction by a paramount title, as well as against his own acts, which would destroy the beneficial enjoyment which the lessee expects to have of the demised premises." 2 Underhill, Landlord & Tenant, § 427. The legal principle thus asserted does not contravene the provision of our statute that no covenant shall be implied in any convey ance of real estate (L. O. L. § 7105), for a lease of land is not a conveyance within the meaning of this section, and hence every demise, unless expressly negative words are contained therein, embraces an implied cove- nant that the lessor will protect the lessee in the quiet enjoyment for the term of the lease. Edwards v. Perkins, 7 Or. 149. [4] When Elliott, the tenant in possession of the building, was evicted by the receiver, pursuant to the order of the court, the consideration for the payment of any rent there after accruing, as long as the possession of the premises was withheld from him, failed. Osmers v. Furey, 32 Mont. 581, 590, 81 Pac. 345. In such case he was not liable for the rent during that time. Mariner v. Chamberlain, 21 Wis. 253, 256. In that case Downer, J., speaking for the court, said: "The order of a court of equity appointing a receiver and requiring a tenant to deliver possession to him, when he takes possession under it, as effectually ousts the tenant during the possession of the receiver as the execution of a writ of possession on a judgment at law; and the same effect must be given to it as a protection or defense to the tenant in an action by his landlord for rent accruing during such possession of the receiver." In Yuen Suey v. Fleshman, 65 Or. 606, 133 Pac. 803, Ann. Cas. 1915A, 1072, it was ruled that the election of the lessor to terminate a lease for the nonpayment of rent, and to eject the lessee, put an end to the term so as to release the tenant from liability for rent not due when he was ousted. Analogous to the principle invoked in the case at bar, it has been held that a receiver of a decedent's estate, who takes possession of real property under a lease to the deceased, becomes liable, but not personally, for the rent of the premises, which compensation for such use must be paid out of any funds lawfully coming to his hands. 2 Underhill, Landlord & Tenant, § 666. The tenant herein having been evicted, no charge for rent subsequently accruing could have been legally impressed by the receiver upon the personal property described in the second chattel mortgage so as to augment the amount due when possession was taken. The sum of $3,000, so due at that time, limits the plaintiff's recovery as against Elliott the evicted tenant and Anderson the holder [5-7] It is argued by plaintiff's counsel that though the mortgaged property at the sale thereof was bought by their client for $5,000, such purchase price exceeded the worth of the goods by $2,000, and, this being so, the sale should be set aside and a resale of the personal property decreed. If the sale had been of real estate, which is subject to redemption, a reason might be given for bidding the full sum awarded by the decree. A sale of personal property under an execution, or pursuant to a decree, generally transfers the legal title, and no redemption is allowed by law. A receiver being a ministerial officer, sales of property conducted by him are in effect made by the court, and must be confirmed by it in order to be valid. In the case at bar, if the furniture, etc., had been bid in for an insufficient consideration, the sale might thus have been set aside, to avoid which it is reasonable to infer that the plaintiff bid for the property nothing more than its reasonable value. Anderson is therefore entitled to recover of the plaintiff $1,450, with interest thereon from December 1, 1912, at the rate of 7 per cent. per annum. The attorney's fee of $150, allowed him upon the foreclosure of his mortgage, should not be recovered from the plaintiff, since it was not responsible for the payment of his promissory note, and is not held liable therefor only on the ground that it has obtained property upon which that defendant had a right to rely for security. The conclusion thus reached renders it unnecessary to consider whether or not the indorsers of the note held by Anderson are liable for the payment thereof. The decree will therefore be modified in accordance with the view here expressed, and no disposition of the surplus of $2,000, if any remain after discharging Anderson's demand, will be made, since the parties entitled thereto have not appealed. BEAN and EAKIN, JJ., concur. HARRIS, J. (dissenting in part). The plaintiff bid $5,000 at the foreclosure sale; the amount of the judgment now awarded to the Northern Brewery Company is less than $5,000; and the difference between the judgment and the sum bid would ordinarily be paid into court for distribution. Anderson alone appealed. Conceding that no one has a right to complain except the appellant, and assuming that the plaintiff is answerable to Anderson to the extent of any claim held by him, but not exceeding an amount representing the difference between the bid made by the Northern Brewery Company and the judgment obtained by it, then Anderson should, in my opinion, have a judgment against plaintiff for attorney's fees, as well as for the balance of the principal and interest due on the note. If the amount bid by The substance of the complaint is that about January 9, 1911, the plaintiff sold to the defendant a stock of groceries, store fix was paid into court, then Anderson would unquestionably be entitled to have his judgment paid in full, or at least to the extent of the available proceeds; and the rights main-tures, and some active accounts due to the tainable by Anderson should not be limited or curbed merely because the plaintiff is made directly accountable to Anderson. (78 Or. 466) HYDE v. KIRKPATRICK. (Supreme Court of Oregon. Nov. 23, 1915.) 1. REFORMATION OF INSTRUMENTS 19-MUTUALITY OF MISTAKE. Where plaintiff, suing to reform an instrument whereby he sold his stock of groceries, was not mistaken when making the contract about any of the terms included therein, he could not have a reformation thereof, since only mutual mistake of the parties will authorize correction of a written instrument. [Ed. Note.-For other cases, see Reformation of Instruments, Cent. Dig. §§ 74-78; Dec. Dig. 19.] 2. REFORMATION OF INSTRUMENTS TAKE DUE TO NEGLIGENCE. 17-MIS Where plaintiff's mistake, as to a term of the written contract whereby he transferred to another his stock of groceries, was the result of his own heedlessness and inattention, since, though possessed of written evidence of the data that should have been used to make up the written agreement, he neglected to avail himself of it for purposes of comparison, he could not have a reformation of the instrument. [Ed. Note.-For other cases, see Reformation of Instruments, Cent. Dig. §§ 69-71; Dec. Dig. 17.1 3. REFORMATION OF INSTRUMENTS 20 FRAUD. Plaintiff, suing to reform his written conveyance of his stock of groceries, claiming that through his transferee's fraud he had been mistaken about a term thereof, could have such reformation only if the transferee had made a knowingly false representation, which plaintiff believed, relied on, and was deceived by, as to a matter relating to the contract, which, if true, would have been to his advantage, but, being false, caused him damage. [Ed. Note.-For other cases, see Reformation of Instruments, Cent. Dig. §§ 79, 80; Dec. Dig. 20.] 4. PLEADING 8-ALLEGATIONS — CONCLUSIONS-FRaud. A complaint, in suit to reform an instrument for mistake of one party caused by the fraud of another, which makes a mere general averment of fraud, is not good, since the facts upon which fraud is predicated must be specifically pleaded. [Ed. Note.-For other cases, see Pleading, Cent. Dig. §§ 12-282, 68; Dec. Dig. 8.] In banc. Appeal from Circuit Court, Baker County; Gustav Anderson, Judge. former in the business for which the latter agreed to pay $5,880.17; that in the transaction it was stipulated that the defendant was to pay some debts, 20 in number, to wholesale merchants owing by the plaintiff, a list of which is set out in the complaint, including one to the Oregon Mill & Grain Company of $535.62. He says that afterwards, about March 10, 1911, the defendant requested him to execute a bill of sale for the merchandise and business included in the transaction; that accordingly the parties repaired to the office of an attorney who drew up the bill of sale to correct which this suit is brought. The allegation then proceeds as follows: "That when the said sale was made as above alleged, on or about January 9, 1911, and when the defendant assumed and agreed to pay the wholesale accounts and creditors of the plaintiff as above alleged, there was no misunderstanding about the amounts or as to the names of the persons and firms; but the same were definitely understood, determined, and agreed upon by both parties. That when the aforesaid bill of sale or contract was drawn the plaintiff had no knowledge whatever as to what wholesale accounts contained in the aforementioned list had been paid either fully or partially; and that the who prepared the same, was given entirely by information given to Mr. Smith, the attorney the defendant and that the defendant gave to him the list of persons and the amounts due of said wholesale accounts which he, the defendant was to pay. And that at that time the defendant represented to the plaintiff and to Mr. Smith, the attorney, that any and all of the balance of said accounts mentioned in the foregoing list had been by him paid and discharged, and that of the list that the defendant had agreed to pay as hereinbefore alleged he, the defendant had paid any and all of the remainder of said account save and except the particular accounts mentioned in said instrument. That up to said date the defendant had paid to the plaintiff in cash on account of said sale the sum of $1,050, and had executed his note and delivered to the plaintiff for the further sum of $500, and that said amounts was any and all of the cash or consideration that plaintiff had up to said time received from the defendant on lowing the said $500 note as a credit in favor account of the above alleged sale. of defendant, on the said 10th day of March, 1911, there remained due on said sale from defendant to plaintiff the sum of $126.15, provided the defendant should pay to and discharge any and all of the obligations of plaintiff that the defendant had assumed and agreed to pay as herein above set out. That in supplying the information to the attorney who drew the bill of sale at said time, the defendant, either through mistake or with the intention to wrong and defraud the plaintiff, omitted to mention to the attorney the certain of said wholesale accounts (which he had not paid), which in said instrument and by the terms thereof he agreed to pay. That al "That the said instrument above referred to after the same was prepared was executed by both plaintiff and defendant, and that the following is a true and correct copy of the same: Suit by H. G. Hyde against Chauncey Kirk-Know all men by these presents, that H. G. patrick. Decree for plaintiff, and defendant appeals. Reversed, and suit dismissed. Hyde, party of the first part, for and in consideration of the sum of five hundred ($500) dollars to him in hand paid by Chauncey Kirkpat For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes M. D. Clifford, of Baker (Clifford & Correll, of Baker, on the brief), for appellant. W. L. Patterson, of Baker, for respondent. BURNETT, J. (after stating the facts as above). [1] In Hughey v. Smith, 65 Or. 323, 133 Pac. 68, the rule about the correction of a mistake in a written instrument is thus declared by Mr. Justice Moore: rick, the party of the second part, the receipt | Oregon Mill & Grain Company's account, with whereof is hereby acknowledged, and for the interest thereon since March 10, 1911, and further consideration of the payment by the said party of the second part of the following for costs and disbursements. The defendant wholesale accounts at or before the time the appeals. same become due, to wit: Allen and Lewis, $394.58; Baker City Grocery Company, $1,998; Clossett & Devers, $30.72; J. A. Folger & Co., $132.35; Hills Brothers, $254.53; North Powder Milling Company, $118.60; Pioneer Mill, $213.25; and Schillings, $28.20. The party of the first part does hereby grant, bargain, sell, and set over unto the party of the second part, his heirs, executors, administrators, successors, and assigns, the following described personal property, to wit: All that certain stock of goods, wares, and merchandise in storeroom now occupied by H. G. Hyde and in warehouses used "The right of a court of chancery to reform or in connection therewith and used in conducting annul a written contract, the execution of which a general grocery business known as H. G. was induced by the fraud of the defendant, or Hyde's Grocery, and being situate on Center resulted from the mutual mistake of both parstreet in the city of Baker, Baker county, Ore- ties, is a well-recognized principle of equitable gon. To have and to hold the same unto the jurisprudence. Such being the case, the only said party of the second part, his heirs, execu-question to be considered is whether or not the tors, administrators, successors, and assigns for- complaint herein states facts sufficient to constiever. And the said party of the first part, for tute a cause of suit. The rule is settled in this himself, his heirs, executors, administrators, and state that, in a suit to reform a written instruassigns, does hereby covenant and agree to and ment on the ground of misapprehension of the with the said party of the second part that he facts involved, the complaint must distinctly is the owner and in possession of the above- allege what the original agreement of the pardescribed personal property, and that the same ties was, or point out with clearness and preciis free from all legal claims whatsoever except sion wherein there was a misunderstanding, and those above mentioned. In witness whereof, the that such mistake was mutual and did not arise parties hereto have hereunto set their hands and from the gross negligence of the plaintiff, or scals this 10th day of March, 1911.'' that his misconception originated in the fraud of the defendant. Evarts v. Steger, 5 Or. 147; Lewis v. Lewis, 5 Or. 169; Stephens v. Murton, 6 Or. 193; McCoy v. Bayley, 8 Or. 196; Foster v. Schmeer, 15 Or. 363, 15 Pac. 626: Iyland v. Hyland, 19 Or. 51, 23 Pac. 811; Meier v. Kelly, 20 Or. 86, 25 Pac. 73; Epstein v. State Ins. Co., 21 Or. 179, 27 Pac. 1045: Kleinsorge v. Rohse, 25 Or. 51, 34 Pac. 874; Osborn v. Ketchum, 25 Or. 352, 35 Pac. 972; Thornton v. Krimbel, 28 Or. 271, 42 Pac. 995; Mitchell v. Holman, 30 Or. 280, 47 Pac. 616; Sellwood v. Henneman, 36 Or. 575, 60 Pac. 12; Stein v. Phillips, 47 Or. 545, 84 Pac. 793; Bower v. Bowser, 49 Or. 182, 88 Pac. 1104; Smith v. Interior Warehouse Co., 51 Or. 578, 94 Pac. 508, 95 Pac. 499; Howard v. Tettelbaum, 61 Or. 144, 120 Pac. 373." This contract was signed by the parties. The complaint further alleges: "That at this time the plaintiff does not know as to what amounts and what creditors contained in said list that the defendant has paid, and that it is a fact that the defendant now denies that he assumed or agreed to pay the account of the Oregon Mill & Grain Company, which on January 9, 1911, amounted to the sum of $535.62." The pleading concludes with the prayer that the instrument executed on March 10, 1911, be reformed so as to read as follows: "Know all men by these presents, that H. G. Hyde, party of the first part, for and in consideration of the sum of $126.15 which Chauncey Kirkpatrick, the party of the second part, hereby agrees to pay to the party of the first part, upon demand, and for the further consideration of the payment by the said party of the second part of the following wholesale accounts at or before the time the same become due, to wit, the same having been heretofore assumed and agreed to be paid by the said Chauncey Kirkpatrick, a portion of said accounts the said Chauncey Kirpatrick representing have already been by him paid." Then is inserted the list of 20 accounts as set out as before alleged. The remainder of the document is the same as the original. A general demurrer to the complaint was overruled. The answer denies all the allegations about the mistake and the fraud charged, and states the defendant's understanding of the transaction in conformity with the bill of sale actually executed. Other defenses are interposed, but it is not necessary to consider them. The reply traverses the new matter in the answer. A trial was had before the court in which a decree was entered, not only reforming the contract as prayed for, as well as in other particulars, but also giving a judgment against the defendant The plaintiff does not assert that he himself was mistaken about any of the terms to be included within the contract. It is true that he pleads that he was ignorant of whether the defendant had paid any of the accounts at the time the instrument was executed, but, as avowed in his brief, the object of the negotiation in March was to prepare a written memorial of the stipulation orally made in January, and not to make any new contract. In that view of the matter the representations of the defendant about his payments of accounts would have nothing to do with the case. They would not affect the plaintiff's knowledge of the transaction that occurred in March. In brief, while the complaint imputes mistake to the defendant in the alternative with an intent to defraud, it does not aver any mistake on the part of the plaintiff. It is only a mutual mistake of the parties that will authorize a correction of a written instrument within the rule of Hughey v. Smith, supra. [2] Moreover, there is nothing to show the court that the action of the plaintiff in signing the bill of sale did not arise from his interests, and this is condemned by the prec-[the Mill & Grain Company and did not keep edent last cited. Besides all this, as a mat- his promise, it would be a breach of the conter of evidence, it is without dispute that at tract for which an action of damages would the time of the January transaction both par-lie if the plaintiff in fact were damaged. But ties made an inventory of the stock of goods unless the plaintiff had paid the debt himself, and of the fixtures involved, together with a either voluntarily or by compulsion, he could schedule of the accounts due the plaintiff not be injured. The complaint is utterly siwhich the defendant took over, and a list lent on this subject, and it is believed that of the wholesale accounts against the plain- nothing is alleged authorizing the court to tiff which the defendant was to assume. All award the plaintiff judgment for damages these were preserved by each party, and at for a breach of the contract. The defect of the time of the execution of the instrument the complaint as against a general demurrer in question the plaintiff had his set of those obviates the necessity for a detailed analysis papers in his possession. Possessed of writ- | of the testimony of which it is enough to say ten evidence of the data that should have it is confusing and unsatisfactory. been used to make up the written agreement The decree of the circuit court is reversed, he utterly neglected to avail himself of it so and the suit is dismissed. that the conclusion of his negligence is inevitable. (78 Or. 429) SOMERS v. HANSON.* [3, 4] Neither is the complaint sufficient to reform the instrument on the ground of fraud (Supreme Court of Oregon. Nov. 23, 1915.) perpetrated by the defendant. In Anderson v. Adams, 43 Or. 621, 74 Pac. 215, 217, Mr. Chief Justice Moore' stated the principle thus: 1. PLEADING 307-WRITTEN INSTRUMENT ATTACHMENT. Where a copy of any writing, designated as an exhibit, or otherwise sufficiently identified in "To constitute a fraud by false representa- a pleading, is attached thereto, the effect of the tions, so as to entitle the plaintiff to relief, three instrument so displayed is the same as though things must occur: (1) There must be a know-it were incorporated in the body of the pleading. ingly false representation; (2) the plaintiff must [Ed. Note.-For other cases, see Pleading, have believed it to be true, relied thereon, and Cent. Dig. §§ 930-934; Dec. Dig. 307.] have been deceived thereby; and (3) that such 2. BILLS AND NOTES 488 representation was of matter relating to the NOTE-COMPLAINT-SURPLUSAGE. contract about which the representation was made, which, if true, would have been to plaintiff's advantage, but, being false, caused him damage and injury." See, also, McFarland v. Carlsbad Sanatorium Co., 68 Or. 530, 137 Pac. 209, Ann. Cas. 1915C, 555. It is quite as forcibly enunciated in Leavengood v. McGee, 50 Or. 233, 239, 91 Pac. 453: "The rule is that the facts upon which fraud is predicated must be specifically pleaded. A mere general averment of fraud is nothing but the averment of a conclusion, and will not suffice. It presents no issue for trial, and is bad on demurrer. Such an averment not only renders the bill or complaint demurrable, but it will not even sustain a decree." Tested by these standard precedents the complaint does not sufficiently charge fraud upon the defendant. It is said in the pleading that the defendant "omitted to mention to the attorney the certain of said wholesale accounts (which he had not paid) which in said instrument and by the terms thereof he agreed to pay." It is impossible to understand how the defendant could omit from the instrument accounts which by the terms of the very paper itself he promised to pay. It was error to overrule the general demurrer. [5] As already stated, the court not only corrected the instrument by inserting an entirely different consideration and a list of 20 accounts stating that some of them had already been paid, but also gave judgment against the defendant for the amount of the Oregon Mill & Grain Company's account of $535.62. Semble, if the defendant agreed with the plaintiff to pay the latter's debt to ACTION ON Where a copy of the note on which suit was based was attached to the complaint as an exhibit, allegations in the complaint as to the legal effect of the instrument are surplusage, and should be disregarded; it being the duty of the court to determine the instrument's effect from its averments. [Ed. Note.-For other cases, see Bills and Notes, Cent. Dig. §§ 1584-1586; Dec. Dig. ☺ 488.] In Banc. Appeal from Circuit Court, Wallowa County; J. W. Knowles, Judge. Action by F. P. Somers against Erastus Hanson, begun in justice court, and appealed by defendant to circuit court. From a judgment dismissing the action in that court, plaintiff appeals. Affirmed. This action was commenced in the justice's court of Wallowa county. The initiatory pleading, as far as deemed material herein, reads: "Comes now the plaintiff, by leave of court first had and obtained, and files this, his amended complaint, and for cause of action against the defendant says: That on the 17th day of August, 1914, at Enterprise, Or., for value received, the defendant and one Thomas Hanson made and delivered to plaintiff and A. S. Allen For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes |