Court Opinion

ID: 3838375
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:07:22.103661+00
Date Added: 2024-06-11T13:45:36.711374
License: Public Domain

In the original opinion herein, we held that the state court had been deprived of jurisdiction by the proceedings in the federal court under the Frazier-Lemke Act. By a petition for rehearing defendants have called our attention to an affidavit by defendant C.H. Leonard, which on October 30, 1939, was filed in the United States District Court for the District of Oregon wherein said defendant stated:
"That the said Leonard has asserted in the proceedings now pending before this court and still contends that this court is without jurisdiction to determine the true amount of the indebtedness to him and that this question can only be determined upon application to the circuit court where the decree was made, because it is asserted that the said C.H. Leonard has instituted a suit to foreclose the said mortgages in the circuit court of the state of Oregon for Harney County; that a judgment was rendered in said suit fixing the amount of the indebtedness, and that the said judgment is binding upon this court, and therefore, this court is precluded from enquiring into the amount of the indebtedness."
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"That in view of the question raised by the said C.H. Leonard as to the power of this court to determine the extent of the indebtedness and the effect to be given to the said judgment and decree, I desire to institute a proceeding in the said circuit court to vacate said decree and to contest therein the issue of the amount of the indebtedness and the kind of decree to be entered therein, if any is to be entered at all, in order to avoid any question as to the proper tribunal to determine the issues referred to herein." *Page 172 
Defendants have also filed a certified copy of an order made by the judge of said United States District Court, the final paragraph of which is as follows:
"It is further ordered that pending the hearing before the conciliation commissioner provided for in said subsection (s)," [of Section 75 of the Bankruptcy Act], "all judicial or official proceedings in any court or under the direction of any official, against the debtor or any of his property shall be and they are temporarily stayed, not intending however to stay any motions or other proceedings available to the debtor under any law or statute of the United States or of the state of Oregon."
We are now of the opinion that, by the federal court's order, above quoted, the state court is given jurisdiction to determine the questions presented herein, namely, whether the order of default and decree of foreclosure should be vacated; whether defendants should be permitted to file their answer to plaintiff's complaint, and we also think that, if defendants are permitted to file such answer, the order of the federal court contemplates and consents to the determination by the state court of the issues therein tendered.
It is urged by defendants that the order of default and decree of foreclosure should be vacated because no notice was given to defendants of plaintiff's intention to apply to the court for an allowance in addition to the specific sums mentioned in plaintiff's prayer as set forth in his complaint; and no opportunity was afforded defendants to meet plaintiff's claim therefor.
It is also urged that said decree should be vacated because it awards a recovery in a lump sum instead of setting forth the respective amounts due upon each of the mortgages respectively and rendering separate judgments accordingly. *Page 173 
It is further urged that the said decree of foreclosure should be vacated because it directs the sale of the various tracts mortgaged all together and not separately.
We think that approved procedure is in accordance with defendants' contentions.
The amount for which plaintiff prayed judgment in his complaint is $9,440.29 with accruing interest at eight per cent from January 1, 1938. The amount awarded in said decree is $9,912.13 with accruing interest on the principal involved at eight per cent per annum from December 1, 1938.
The additional allowance in excess of the principal prayed for, amounting to $471.84, is based upon the amount alleged by plaintiff to be due him on account of the expenditures he made in managing the property in suit over and above the receipts derived therefrom.
Plaintiff cites section 2-1101, Oregon Code 1930, in support of the course thus taken. There, the judgment authorized after default of defendant in an action arising upon contract is restricted to the amount specified in the summons. In other actions, if it be necessary, to enable the court to give judgment or carry the same into effect, to take proof of any matter of fact, the court may order the entry of judgment to be delayed until such proof be taken and thereafter enter judgment in accordance with its own findings.
This court, in considering a somewhat similar issue, said:
"It is shown that default was taken without notice to either defendant or his attorney, while the case was under negotiations for an amicable compromise."
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"Where a defendant, against whom a default has been taken, when he thought that negotiations for a *Page 174 
settlement were still pending and he continued to so believe until proceedings upon execution were begun, afterwards promptly files his motion to vacate the default, he is entitled to relief: Li Sai Cheuk v. Lee Lung, 79 Or. 763 (146 P. 94, 156 P. 254). Courts are more favorable toward a defendant than a plaintiff in default. Plaintiff, who begins the litigation, generally may withdraw his suit and begin again without material prejudice, while the defendant cannot abandon the case against himself: Capalija v. Kulish, 101 Or. 666 (201 P. 545." McAuliffe v.McAuliffe, 136 Or. 168, 298 P. 239.
It is admitted that the parties agreed herein that further proceedings would not be taken until after the current [1938] haying year. The decree in suit was entered on November 26, 1938. Defendants argue that the agreement to forbear until the end of the haying year included the time reasonably necessary to sell the crops. Plaintiff understood the agreement to mean that he should wait only until the hay had been harvested before proceeding further.
The entry of a judgment for a sum not included in the prayer of plaintiff's complaint based upon the affidavit of plaintiff should not have been made until defendants had been given notice of the claim asserted by plaintiff, and thereafter afforded an opportunity to contest it. This is said without in the least intending to question the veracity and integrity of either party, but merely as a proper rule of procedure.
We think also that separate judgments should be entered for the respective amounts due upon each of the mortgages respectively, 42 C.J., Subject: Mortgages, p. 143, § 1738, citing Knight v.Heafer, 79 Ill. A. 374; Rader v. Ervin, 1 Mont. 632.
Where, as in the instant case, separate mortgages on different parcels are foreclosed at the same time, *Page 175 
a sale of the property en masse should not be ordered. 42 C.J. Subject: Mortgages, p. 149, § 1747, citing Home Loan Assoc. v.Wilkins, 66 Cal. 9, 4 P. 697; Strode v. Miller, 7 Idaho 16,59 P. 893; Snow v. Haberer, 170 Ill. A. 265; Bailey v. Green, 68 Ill. A. 632; Brown v. Kennicott, 30 Ill. A. 89; Hull v. King,38 Minn. 349, 37 N.W. 792; Pancoast v. Duval, 26 N.J. Eq. 445;Ross v. Carroll, 33 S.C. 202, 11 S.E. 760; Hurxthal v.Hurxthal, 45 W. Va. 584, 32 S.E. 237.
It is urged that defendants' motion to vacate the foreclosure decree and for permission to file an answer herein was not seasonably made. Defendants, acting under advice of counsel, sought the forum of the federal court under the Frazier-Lemke Act in which to litigate the issues herein tendered. Plaintiff objected upon the ground that the state court had exclusive jurisdiction. We are unwilling to hold that defendants were not diligent in their attempts to gain an adjudication of the issues in suit.
The original opinion herein is overruled, the sale of the mortgaged property upon execution and the judgment and decree of foreclosure rendered by the circuit court are vacated and set aside; the order of the circuit court overruling defendants' motion to vacate said judgment and decree and for leave to file an answer is reversed; and this cause is remanded for further proceedings not inconsistent herewith. It is further ordered that neither party recover costs or disbursements.
BEAN, J., not sitting. *Page 176