Title: Dowling v. Albany Planing Mill
Citation: 238 Or. 425, 395 P.2d 143
Docket Number: N/A
State: Oregon
Issuer: Oregon Supreme Court
Date: September 10, 1964

Affirmed September 10, 1964.
*426 John S. Horton, Albany, argued the cause for appellant. On the brief were Weatherford, Thompson &amp; Horton, Albany.
Richard Kropp, Albany, argued the cause for respondent. On the brief were Willis, Kyle &amp; Emmons, Albany.
Before McALLISTER, Chief Justice, and PERRY, O'CONNELL, DENECKE and LUSK, Justices.
AFFIRMED.
PERRY, J.
The plaintiffs brought this suit for an accounting and for such relief as in equity appears just and proper in the circumstances. The facts are as follows:
The plaintiff C.B. Dowling was engaged in the construction of homes in the city of Albany and purchased lumber and building supplies from the defendant. In 1955, plaintiffs had become indebted to the defendant for lumber and building supplies, and had also created considerable indebtedness to other suppliers. On the 27th day of January, 1956, the plaintiffs and defendant entered into the following agreement:
Pursuant to the agreement, on July 21, 1956, plaintiffs by warranty deed conveyed to defendant the property described in the agreement. This property consisted of the residence then occupied by the plaintiffs as their homestead, and a building leased for use as a grocery store. There was a mortgage upon each piece of property which the defendant assumed and agreed to pay as part of the consideration for the conveyances.
Subsequently, the defendant on December 1, 1957, refinanced the residence property and applied to the defendant's indebtedness the sum of $6,463.23. Thereafter, the defendant on February 15, 1961, sold the *430 store building and credited to the plaintiff's account the sum of $6,935.02.
The trial court found that the plaintiffs were indebted to the defendant for the sum of $3,785.02, less interest charged, upon the original debt, and for expenditures of $2,505.11 for taxes and mortgage payments made by the defendant. The trial court then found that, since the defendant should not recover interest upon the account from the date prior to and subsequent to the agreement, the amount due and owing from plaintiffs to defendant was the sum of $2,313.18, and thereupon entered a decree directing that the defendant recover from the plaintiffs the sum of $2,313.18. The trial court further decreed that defendant reconvey the residence property to the plaintiffs subject to the mortgage thereon.
The defendant has appealed, contending that the trial court was in error in failing to allow interest upon the debtors' account from the 27th day of January, 1956.
It is apparent from the decree, and from the position taken by the defendant, that the trial court treated this as a suit for an accounting and to redeem the residential property upon which a mortgage still exists.
It clearly appears from the agreement entered into between the parties and from the circumstances then existing that the parties intended to and did enter into a written accord which in itself provided the means for the discharge or satisfaction of the debt. See Restatement, 2 Contracts 785, 789, §§ 417 and 418.
The contract provides that the debt shall be liquidated either by the refinancing or sale of the property, for nowhere is there an agreement that in the *431 event the mortgaging or sale of the property fails to satisfy the amount of the debt the plaintiffs will be liable for the balance, if any.
1, 2. The defendant contends that even so it is entitled to interest by reason of ORS 82.010 (1) (d), which provides:
This statute substitutes an implied contractual obligation to pay interest so that no express agreement of the parties upon reaching a settlement of matured accounts is ncessary to charge interest. For, in the absence of an agreement to pay interest, interest can be recovered only in those circumstances authorized by statute. Holtz v. Olds, 84 Or 567, 164 P 583, 164 P 1184.
In the matter before us, however, the parties substituted an express agreement, that the matured account should be liquidated from the mortgage or sale of the real property, for the implied contract provided by statute.
3. The plaintiffs complied with all of the conditions mandatory upon them for the payment of the amount agreed upon when they conveyed the real property to the defendant, and the defendant assented to look to the property alone for the liquidation of the debt when it accepted the deeds.
*432 The debt of defendant as represented by the matured account was, therefore, satisfied by the new agreement of the parties, and there remained only the means or method of liquidation of the property to pay the amount agreed upon.
The express contract of the parties effected a change in the position of the parties as contemplated under ORS 82.010 (1) (d). This agreement does not fall within any of the provisions of ORS 82.010. Therefore, if the parties desired that interest should be paid, it was necessary that they should include such a provision in the express contract. See 1 Eng Ruling Cases 393.
The decree of the trial court is affirmed. Plaintiffs shall recover their costs and disbursements.