Case ID: or_123/html/0079-01.html
Source: Caselaw Access Project
Author: {"author": "COSHOW, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Argued at Pendleton, November 4,
    
    reversed November 15, 1927.
    GRACE E. MORGAN, Administratrix, v. ELMER NISWONGER et al.
    (260 Pac. 1010.)
    Mortgages — Mortgagor, Covenanting to Pay Debt Secured, Though not Signing Note, is Personally Liable for Debt Without Suit Being Instituted to Foreclose Mortgage.
    Mortgagor, who signs mortgage containing covenant to pay debt secured by mortgage, is personally liable for debt, though he did not sign note, without suit being instituted and maintained to foreclose mortgage.
    Courts, 15 C. J., p. 939, n. 59, p. 941, n. 78, 79, 80, p. 947, n. 41, p. 949, n. 49.
    Mortgages, 41 C. 3\, p. 393, n. 60, p. 394, n. 61, 70.
    See 19 R. C. L. 513.
    From Deschutes: T. E. J. Duffy, Judge.
    Iu Banc.
    This is an action on a covenant in a mortgage to pay the mortgage debt. May 6, 1916, defendants Elmer Niswonger and Jessie L. Niswonger executed and delivered to F. A. Hunnell their promissory note in the principal sum of $5,300, payable one year after date with interest at the rate of 8 per cent per annum. For the purpose of securing the payment of said promissory note the makers thereof together with the defendants C. P. Niswonger and Sadie Niswonger duly executed and delivered their mortgage on real property therein described. Said mortgage contained the following covenant:
    “But in case default shall be made in the payment of the principal or interest, * * , and the said parties of the first part for their heirs, executors and administrators, doth covenant and agree to pay unto the said party of the second part his executors, administrators, or assigns, the said snm of money and interest as above mentioned.”
    The defendants were parties of the first part and plaintiff’s decedent party of the second part. After the delivery of said note and mortgage the payee and mortgagee died. Plaintiff is his duly qualified and acting administratrix. The complaint contains the nsnal allegations, sets out the note in full and has attached thereto the mortgage as Exhibit “A” which is thereby made a part of said complaint. Defendant C. P. Niswonger and Sadie Niswonger demurred to the complaint on the ground that it did not state sufficient facts. The other defendants did not appear. The demurrer was sustained. Plaintiff refusing to further plead, judgment was duly entered against plaintiff dismissing her complaint and awarding to the appearing defendants costs. The only question presented by the demurrer and this appeal is, Are the defendants O. P. Niswonger and Sadie Niswonger who signed the mortgage but did not sign the note personally liable on the covenant contained in the mortgage hereinabove quoted without a suit being instituted and maintained to foreclose said mortgage ?
    Reversed.
    For appellant there was a brief over the names of Mr. B. 8.-Hamilton and Mr. M. B. Meacham, with an oral argument by Mr. Meacham.
    
    For respondents there was a brief over the names of Mr. H. H. Be Armond and Mr. Jay TJpton, with an oral argument by Mr. B. B. Parson.
    
   COSHOW, J.

We believe the law to be well settled in this state that a mortgagor who signs a mortgage containing a covenant to pay the debt secured by tbe mortgage is personally liable for tbat debt: 41 C. J. 393, 394, §§ 221, 223; The Home v. Selling, 91 Or. 428, 439, 440 (179 Pac. 261, 21 A. L. R. 403); Manley v. Smith, 88 Or. 176, 191 (171 Pac. 897); Marshall v. Middleton, 100 Or. 258 (91 Pac. 886, 196 Pac. 830, 19 A. L. R. 1421). Defendants rely upon tbe cases of Wright v. Wimberly, 94 Or. 1 (184 Pac. 740), and Myer v. Beal, 5 Or. 130. Tbe Wright v. Wimberly case was an action to recover judgment for tbe deficiency remaining after foreclosure of a purchase price mortgage and sale of tbe land covered by tbe mortgage. It quotes in page 24 of tbe official report with approval tbe case of Myer v. Beal, above. Tbe opinion in tbe latter case partially supports tbe contention of tbe defendants. It is conceded by defendants tbat tbe language quoted from Myer v. Beal in Wright v. Wimberly was not necessary to a decision of tbe Myer case. Tbe case of Manley v. Smith, above, seems to us to be directly in point. In tbat case tbe defendant Tbad Sweek signed tbe mortgage but did not sign tbe note just as tbe answering defendants in tbe instant case did. There was a covenant in tbe mortgage very similar to if not identical with tbe covenant in the mortgage in tbe case at bar. In the Manley case tbe court used this language:

“Tbe argument of tbe defendant tbat tbe contested clause does not operate to charge Tbad Sweek with tbe debt, even if allowed to remain as part of tbe mortgage, is ingenious but not convincing. In our judgment it binds him and tbat seems to have been ibis opinion when be put in bis answer.”

We believe tbe Manley case to be decisive of the case at bar. Certainty of tbe law involving titles is most desirable. It would be necessary to overrule the case of Manley v. Smith, above, in order to sustain the ruling of the learned Circuit Court in the case under consideration. We do not feel justified in doing that.

Our conclusion does not conflict with either Wright v. Wimberly, above, or Myer v. Beal, above. The case under consideration does not involve a purchase price mortgage as did the case of Wright v. Wimberly. The plaintiff in the case under consideration could have foreclosed the mortgage, sold the land and recovered any deficiency in her judgment after applying the proceeds of said sale. Myer v. Beal does not directly rule that a mortgagee cannot maintain an action to collect amount due on a covenant in a mortgage. That question was not involved in that case.

The judgment of the Circuit Court is reversed and the cause remanded to that court with further proceedings consistent with this opinion.

Reversed and Remanded.