Dufur Oil Co. v. Enos

Mr. Justice Moore delivered the opinion of the court. 1. The testimony clearly shows that on June 1, 1907, when the written agreement was signed by the parties, Enos was then engaged in business as the Pacific Well Drilling Company. It is evident from an examination of the contract that it was intended to charge particular property with the payment of a debt to be created by advances made to enable Enos to secure the necessary machinery with which he could perform the work undertaken. An equitable lien was thus expressly contemplated by the parties, whereby the boiler, engine, tools, appliances, etc., should constitute security for the repayment of $2,500 advanced on account thereof: Marquam v. Sengfelder, 24 Or. 2, 11 (32 Pac. 676). Whether or not, by invoking the maxim that equity will regard as done what was intended, the lien arose when the machinery was purchased is unnecessary to determine; for the charge imposed upon the specific property attached when the boiler, engine, etc., were consigned to plaintiff in accordance with the terms of the agreement. Jones, Liens (2 ed.) § 64. Testimony was offered by witness who appeared for defendants tending to show that some of the machinery, tools, etc., described in the complaint was never consigned to plaintiff, and such being the case no lien could be imposed thereon. In a deposition Enos stated, upon .oath, that after consigning to the Dufur Oil Company machinery, with sight drafts attached, and on account of which $2,500 was paid by plaintiff, he shipped in his own name other appliances, saying: “There were blocks and tackle worth probably in the neighborhood of $50 or $60; wrenches, $20; there was a lubricator, $16 — maybe less — $12; bits, $70; pipe casing tongs, $135.” [534] Thereupon he was cross-examined as follows: “These things which you shipped after the $2,500 had been advanced were simply in completion of your well-drilling outfit?” “A. Yes.” “Q. You understood, and everybody else understood, that they were held as security for the $2,500 advanced?” “A. Yes; that was the understanding, and considered a part of it.” 2, 3. “Subsequent purchasers and creditors,” says an author, “are bound by equitable liens, if they acquire their rights with either actual or constructive notice of them.” Jones, Liens (2 ed.) § 96. The evidence shows that the contract to which plaintiff and Enos became parties was duly recorded in the miscellaneous records of Wasco County, and that the defendants knew that the agreement had been entered into. We think the tools shipped by Enos were intended by the parties as a part of the security for the payment of the sum advanced, and such being the case the equitable lien attached thereto. The deposition of Enos further shows that the Oregon Drilling Company was incorporated October 16, 1907, and on December 10th following it entered into an agreement with one of the defendants, in referring to which be was asked: “Then, as I understand you, at the time that this contract before mentioned was entered into by and between the Oregon Drilling Company and John Marsh, the Ore^ gon Drilling Company owned all the well-drilling machinery, supplies, tools, apparatus, and appliances that were used in the drilling of the well or wells contracted for by the Dufur Oil Company and you, as the Pacific Well Drilling Company?” Without objection or exception, Enos replied: “Yes; and also the contract with the Dufur Oil Company was assigned by the Pacific Well Drilling Company to the Oregon Drilling Company.” [535] 4. No issue was involved to which this answer was responsive, unless it related to the denial in the answer of Marsh of the allegation of the complaint to the effect that the Oregon Drilling Company, against which Marsh had secured a judgment, “had not at any time and has not now any right, title, or interest whatsoever in or to said personal property, or any part thereof.” No articles of incorporation of the Oregon Drilling Company, nor any bill of sale executed to it by Enos, as the Pacific Well Drilling Company, nor any copy of either, was offered in evidence. If Marsh had desired to challenge plaintiff’s right to foreclose its equitable lien upon the machinery, on the ground that Enos was not then the owner of the property, a plea in abatement should have been interposed: Derkeny v. Belfils, 4 Or. 259; Bump v. Cooper, 20 Or. 527 (26 Pac. 848); Sutherlin v. Bloomer, 50 Or. 398 (93 Pac. 135). 5. The tenth averment of the complaint anticipated a special defense of that character, but when that allegation was controverted by the answer the denial was equivalent to joining matters in abatement with a plea in bar, thereby waiving the subject of abatement: Hopwood v. Patterson, 2 Or. 49; Chamberlain v. Hibbard, 26 Or. 428 (38 Pac. 437); Rafferty v. Davis, 54 Or. 77 (102 Pac. 305). It will be remembered that the decree provides that upon a sale of the machinery, if the sum of money realized therefrom be sufficient to satisfy plaintiff’s demand, the remainder should be applied to Slusher’s judgment, after liquidating which, if any money then remained, it should be given to Marsh on account of his judgment. The evidence shows that Slusher’s action was commenced February 29, 1908, when he secured a writ of attachment by which the machinery was seized, but such possession was soon thereafter surrendered, and the lien of the levy released. A notice of garnishment, however, was served [536] at Slusher’s direction upon the plaintiff, on the theory that it had constructive possession of the property, but no answer appears to have been made in response to the demand. 6. It further appears that on March 17, 1908, plaintiff took and thereafter retained actual possession of. the machinery, so that when executions were subsequently issued on the judgments respectively secured by Slusher and Marsh, no levy could have been made upon the personal property, except by leaving with plaintiff’s agent, who had charge of the machinery, certified copies of the writs and notices, specifying the particular property thereby rendered applicable to the executions. Sections 238, subd. 4, and 300, subd 3, L. O. L. The “attempted” levy of the executions by the sheriff assuming to take possession of the personal property, which was then in plaintiff’s possession, created no lien upon the machinery, and if the judgments respectively secured by Slusher and Marsh were rendered against the same defendant no preference right should have been allowed by the seizure which was undertaken. It will be kept in mind that Slusher’s judgment was given against Enos, while Marsh’s judgment was against the Oregon Drilling Company, which was not a party to this suit, and, so far as disclosed by the pleadings herein, was not in privity with either party. In view of the pleading and of the prayer of the complaint, the decree awarding to Slusher a right superior to that of Marsh was not erroneous in that particular. There is no averment in the answers filed herein by Slusher or Marsh, whereby plaintiff could be rendered liable to pay any part of their judgments by reason of the stipulation in the contract with Enos that it would pay on account of labor, fuel, and necessary expenses incurred by him in drilling, “but not to exceed the sum of two and one-half ($2.50) dollars for each foot such well may be bored.” [537] Believing that no errors were committed, the decree should be affirmed, and it is so ordered. Affirmed : Rehearing Denied.