Page images

- Or.

Lincoln county, as may be necessary to ac- , about 10 acres of orchard land near Medcommodate fully and adequately the public, ford, Jackson county, Oregon, given by deand the court is further directed to proceed fendants to plaintiff 0. D. Whitney to in said matter in accordance with the views secure the payment of three promissory herein expressed. It is so ordered. notes aggregating $7,500, a portion of which

mortgage was assigned to plaintiff Parker. All the Justices concur.

The trial court rendered a decree in favor

of plaintiffs, and defendants appeal. Petition for rehearing denied January 26, By their answer the defendants admit the 1915.

execution of the notes and mortgage. For an affirmative defense they allege in effect that in the month of December, 1910, plain

tiff Whitney was the owner of the premises OREGON SUPREME COURT.

and sold the same to defendants for $14,500, (Department No. 2.)

$3,000 of which was paid in cash, $4,000 by 0. D. WHITNEY et al., Respts.,

the conveyance of certain property in Min

neapolis, Minnesota, subject to a mortgage J. H. BISSELL and Wife, Appts.

of $700, and the balance by three promissory

notes; that defendants at the time were 146 Pac. 141.)

sojourning in Florida and never saw the

property until after the purchase, all the Principal and agent ratification of negotiations being conducted by correspond

representation of value' by broker. ence through the mails and by telegraph

1. A property owner cannot accept the with L. W. Zimmer and J. W. Dressler, benefits of a contract for sale negotiated agents of plaintiff Whitney; that the deby a broker finally compensated by him, fendants refused to purchase the property although he acted originally for the pur. until plaintiffs advised them of the value of chaser without ratifying the statements as to the income of the property made by

the products of the premises for the year the broker to effect the sale.

1910; that, in order to induce the defendFrand payment by seller of commis- ants to make the purchase, Whitney, sion to buyer's agent.

through his agents, stated that the income 2. The agreement by a property owner from the property for that year was $3,000; to pay a broker a commission for selling but that the returns were not yet complete; the property, knowing that he was employed that they should be $3,500 for 1911. It is by the buyer, is a fraud upon the rights of alleged that the defendants relied on such the buyer, if the agreement was not assented

information and purchased the property; to by him.

that the representation was false and WhitContract - fraud – rescission - delay

ney knew the same to be so; that the premratification. 3. A delay of two and one-half ises for 1910 returned no greater sum than

years after taking possession of real estate which $700, which is an average. The defendants was bought upon the faith of a representa- aver that they only recently made the dig. tion that the income had been a certain covery of the fraud, and promptly notified sum for a year before the transfer, before plaintiff Whitney in writing that on acseeking a rescission, is unreasonable, where count thereof they rescinded the contract, the exercise of due diligence would have demanded the repayment of the $3,000, a redisclosed the fraud during the first season after the purchaser entered into possession conveyance of the Minneapolis property, and

the cancellation of defendants' notes. They of the property.

offered to reconvey the premises to Whit(February 16, 1915.)

ney and account to him for the rents, issues, and profits during their incumbency. The


of the Circuit Court for Jackson Coun- circumstances of the transaction were about ty, in plaintiffs' favor in a suit to foreclose as follows: L. W. Zimmer formerly resided a mortgage given to secure payment of cer- in Minneapolis, Minnesota, and defendant tain promissory notes. Affirmed.

Dr. Bissell was also from that city. Having

heard of the former through mutual friends Statement by Bean, J.:

and having seen his advertisement, in NoThis is a suit to foreclose a mortgage on vember, 1910, Dr. Bissell wrote to him in Note. – A search has failed to disclose inquired of J. W. Dressler, a real estate

regard to property near Medford. Zimmer any other cases passing on the effect upon the vendor's responsibility for representa

aler who had the orchard in question tions by a broker, of the fact that the listed for sale. Dressler mentioned the broker was originally employed by the ven- Whitney orchard, and Zimmer wrote and dee.

recommended the same to Dr. Bissell, who

[ocr errors]

answered asking numerous questions; among 915, 96 Pac. 1095, 97 Pac. 538; Cawston v. them, as to what the crop returns for 1910 Sturgis, 29 Or. 335, 43 Pac. 656. had been. He afterwards requested the same Zimmer was either an agent of Whitney information by wire, suggesting changes in or a subagent, and in either capacity the the proposition. Zimmer consulted with principal is responsible to third persons for Dreseler and Whitney, and on December the acts of such agent, as he ratified the 13th sent Dr. Bissell the following telegram: acts of Zimmer in negotiating the contract.

Tynan v. Dullnig, Tex. Civ. App. Dr. J. H. Bissell, Sarasota, Florida: 25 S. W. 466; Mechem, Agency, § 197; Mc

Your proposition acceptable, provided you Kinnon v. Vollmar, 75 Wis. 82, 6 L.R.A. 121, agree to pay your first two notes in case you 17 Am. St. Rap. 178, 43 N. W. 800; Davis sell the orchard in the meantime. Income v. King, 66 Conn. 465, 50 Am. St. Rep. 104, should be about $3,000 this year. Returns 34 Atl. 107; Mayer v. McLure, 36 Miss. 389, not in. Next year 3,500 or more. Por. 72 Am. Dec. 190; Craig v. Ward, 1 Abb. ter J. Neff, city attorney, Jackson County App. Dec. 454; 31 Cyc. 1257, subdiv. f; Bank, and I at your service.

Busch v. Wilcox, 82 Mich. 337, 21 Am. St. L. W. Zimmer. Rep. 563, 47 N. W. 328; Mayer v. Dean, 115

N. Y, 556, 5 L.R.A. 540, 22 N. E. 261. Dr. Bissell accepted the proposition of

Whitney's representations as to the pro

duce of the ranch for the year 1910 were sale on the basis set forth in the answer. During the negotiations Dressler and Zim- fraudulent and made for the purpose of inmer, with the knowledge of Whitney, agreed ducing defendant to purchase the property.

39 Cyc. 1259; 20 Cyc. 18; Miller V. to divide the commission of 5 per cent on the sale equally. On January 9, 1911, a prelim- Voorheis

, 115 Mich. 356, 73 N. W. 383.

Messrs. Neff & Mealey for respondents. inary contract of sale was executed containing the following stipulation: "It is further

Bean, J., delivered the opinion of the covenanted and agreed between the parties

court: that L. W. Zimmer, who has negotiated this

It is admitted that the statement of the contract for the parties hereto, and has acted as agent for the second party, shall returns for the crop of 1910 was greatly in be paid by the first party a commission of about $700. Whitney asserts that he did

excess of the amount realized, which was 5 per cent upon the purchase of $14,500, to be received by him in full payment for his but that he stated that he had not then re

not furnish Zimmer with the information, services for both parties hereto."

ceived the returns from the fruit associaThis agreement was signed by Whitney tion of Medford which marketed the crop, and by J. H. Bissell, by Zimmer as his and could not state the amount; that Zimagent. Afterwards the same was forwarded to Dr. Bissell and ratified and signed by mer, the agent of Dr. Bissell, was the au

thority for the representation. Zimmer him.

testified positively that he obtained the in

formation from Whitney. Dressler at first Messrs. Gus Newbury and B. F. Piatt, by affidavit corroborated Zimmer, but upon for appellants:

further consideration and reflection testified Plaintiff Whitney defrauded defendants in substance the same as Whitney. Accordby the false and fraudulent misrepresenta ing to our view of the case, this statement tions as to the produce of the lands for the in regard to the proceeds of the crop of

1910 was made in behalf of plaintiff WhitFraud is a question of fact, and may be ney as an inducement to Dr. Bissell to make established by inference like any other dis- the deal. The latter, relying upon the repputed fact.

resentation, consummated the purchase of Porter v. O'Donovan, 65 Or. 9, 130 Pac. the fruit orchard. Plaintiff, having accept393; Kabat v. Moore, 48 Or. 198, 85 Pac. ed the benefit of the contract negotiated by 506; Clough v. Dawson, 69 Or. 52, 133 Pac. his agents, is not in a position to repudiate 345, 138 Pac. 233; Williamson v. North that part of the transaction by means of Pacific Lumber Co. 42 Or. 160, 70 Pac. 387, which the agreement was obtained. He can532.

not ratify the contract in part and repudiate There was no justification for a statement it in part. When a principal elects to ratify that the premises returned $3,000 for the any portion of an unauthorized act of an year 1910, or that they would return $3,000 agent, he must ratify the whole of it. He for said year.

cannot avail himself of such acts so far as 39 Cyc. 1259; 20 Oyc. 17, subdiv. 5, 55, beneficial to him and repudiate the resubdiv. (B); Miller v. Voorheis, 115 Mich. mainder. La Grande Nat. Bank v. Blum, 356, 73 N. W. 383; Olston v. Oregon Water 27 Or. 218, 41 Pac. 659; McLeod v. Despain, Power & R. Co. 52 Or. 356, 20 L.R.A. (N.S.) | 49 Or. 536, 552, 19 L.R.A. (N.S.) 276, 124

year 1910.

Am. St. Rep. 1066, 90 Pac. 492, 92 Pac. , and by his treating the contract as effectual 1088; Grover v. Hawthorne, 62 Or. 77, 96, and occupying the property for about two 114 Pac. 472, 121 Pac. 808. It is stated in and one-half years, defendant Bissell for31 Cyc. 1603, as follows: "A contract in- feited his right to rescind the contract. As duced by the fraud or misrepresentation of held in Scott v. Walton, 32 Or. 460, 52 Pac, an agent while acting within the real or 180, a party induced by fraud make a apparent scope of his authority cannot be contract has, upon the discovery of the enforced by the principal against the party fraud, an election of remedies either to misled, even though the principal did not affirm the contract and sue for damages, or authorize the agent to act fraudulently or disaffirm it and be reinstated in the position to misrepresent.”

in which he was before it was consummated. When Whitney agreed to pay Zimmer a The adoption of one of these remedies, which commission, if he had knowledge that Zim- are wholly inconsistent, is the exclusion of mer was already employed by Dr. Bissell, the other. If he desires to rescind, he must and if the latter did not assent thereto, act promptly and return, or offer to return, Whitney and Zimmer were both guilty of a what he has received under the contract. wrong committed against the first employer, He cannot retain the fruits of the contract as such employment would be a temptation awaiting further developments to determine to the agent not to give his best efforts to whether it will be more profitable for him Dr. Bissell. A contract entered into to affirm or disaffirm it. Any delay on his through such means is in fraud of the rights part, especially in remaining in possession of the defendant Bissell. Bell v. McConnell, of the property received by him under the 37 Ohio St. 396, 41 Am. Rep. 528. Whitney contract and dealing with it as his own, was responsible for the misrepresentation will be evidence of his intention to abide made to Dr. Bissell by which he was induced by the contract. See also Vaughn v. Smith, to make the agreement, and the contract was 34 Or. 54, 55 Pac. 99; Sievers v. Brown, 36 voidable. Kreshover v. Berger, 135 App. Or. 218, 56 Pac. 170; Elgin v. Snyder, 60 Div. 27, 119 N. Y. Supp. 737.

Or. 297, 302, 118 Pac. 280. Defendant J. H. Bissell testified that he The purpose of obtaining the information came to Oregon the next season after the as to the returns of the orchard for 1910 deal was made, cared for the orchard, and was obviously to base thereon an estimate set out about 50 new trees, receiving but of the value of the real property and the little returns from the orchard the first two income that might be expected therefrom. years; that the first year he lost a part of When Dr. Bissell arrived upon the ground the crop by frost, and the second the apples in the spring of 1911, this was not his only were not thinned enough; that in 1913, he source of information. It is well known received as returns from the orchard some that the products and the net returns from over $1,200, after deducting the expenses the fruit industry vary with the seasons and for three years, not taking into considera- prices. It is not suggested why the crop tion his own labor; that in May, 1913, he of 1910 would be any better criterion by first learned that the representation made to which to estimate the income than that of him in regard to the crop of 1910 was false; 1911 or 1912. General information in the and that he thereupon notified plaintiff usual way in regard to the value of orchards Whitney that he rescinded the contract, and the income therefrom was available to offered to reconvey the orchard, demanded a the defendant Bissell, and by the use of return of the money paid and the notes, and due diligence he could have discovered the 2 reconveyance of the Minneapolis property. fraud during the season of 1911. It seems He states that he was injured on account somewhat strange that for about two and of the small income from the investment, but one-half years Bissell should have relied that he does not know whether or not he upon the statistics for 1910, without appaid too much for the fruit orchard; that parently making any effort to inform himthe tract is about the same as others in self in regard to the value of the property the neighborhood, except that the kind of or the income therefrom, until about the fruit is different and needs cross pollenizing time of suit upon his notes. in order to bear abundantly. Plaintiff The rule as to the knowledge of the fraud Whitney asserts that the place was cheap before there would be an acquiescence thereat $14,500. Dr. Bissell listed the property in is subject to the principle that notice for sale for about one year at $17,000, and of acts and circumstances which would put afterwards lowered the price to $13,500. He a man of ordinary prudence and intelligence applied to Whitney and was granted an ex- | upon inquiry is equivalent in the eyes of the tension of time for the payment of interest | law to knowledge of all the facts a reasonon the notes.

ably diligent inquiry would disclose. 6 It is contended by counsel for plaintiffs Cyc. 305; Clark, Contr. p. 236. During the that, by the delay in attempting to rescind' season of 1911, Dr. Bissell had sufficient in

[ocr errors]

[ocr errors]

formation to put him, as a man of ordi- , corporation may require one undertaking nary prudence and intelligence, upon in to transact a messenger business within quiry. If he had made investigation, he the city to secure a license and furnish a could have secured all the essential details bond for the faithful performance of the regarding the income from this orchard, or

duties incident to such business. could have obtained the amount of returns Messenger service what const ates for 1910 from the fruit association in Med

scope of undertaking. ford which handled the product and kept dent to its business, undertaken to furnish

2. A telegraph company which has, incithe accounts. Indeed, his evidence does not messengers to carry notes, packages, and disclose that he is yet thoroughly convinced similar matter for patrons, transacts a mesthat with the administration of his skill as senger business within the meaning of a a horticulturist he will not be able to pro municipal ordinance requiring the procureduce an abundant crop and realize a profit- ment of a license therefor, although its able return on his investment, provided he is offer to transact such business states that allowed sufficient time. He appears to think its sole undertaking is to furnish messenthe money is in the land, and the only com- gers, and not to deliver the packages. plaint he makes is in getting it out or in

Evidence violation of ordinance regard to the income. Under the circum


3. In an action by a municipal corporastances of this case, it does not appear that tion for the penalty for transacting a busidefendant Bissell indicated desire to ness without license, a preponderance of rescind the contract within a reasonable the evidence is sufficient to show violation time after he could have discovered the al of the ordinance, and the proof need not leged fraud by the use of due diligence,

be direct. which amounts to the same thing as a discovery. He failed to act promptly in the

(February 16, 1915.) matter, retained the possession of the land, tultivated the same for a long time, set out

PPEAL by defendant from a judgment A

of the Circuit Court for Multnomah fruit trees, speculated upon a rise in the County in plaintiff's favor in an action to market both as to crops and real estate, and

recover from defendants a penalty for transasked and obtained an extension of time for

acting a general messenger business withthe payment of a portion of the interest, a

out a license in violation of an ordinance part of which he paid on his notes, without of the city. Afirmed. making any complaint after he knew or should have known the condition of affairs.

Statement by Moore, Ch. J.: We think he should be deemed to have af

The defendants, the Western Union Telefirmed the contract and waived his right to

graph Company, a corporation, and W. A. rescind. See Strong v. Strong, 102 N. Y. Robb, its manager, were accused in the 69, 5 N. E. 799; Kingman & Co. v. Stod. dard, 29 C. C. A. 413, 57 U. S. App. 379, 85 Note. - While an extensive search has Fed. 740; Van Gilder v. Bullen, 159 N. C. disclosed no case, aside from PORTLAND V. 291, 74 S. E. 1059; Simon v. Goodyear Me-WESTERN U. TELEG. Co., upon the subject tallic Rubber Shoe Co. 44 C. C. A. 612, 52 of the regulation of the messenger business,

the decision in this case seens to be correct, L.R.A. 745, 105 Fed. 573. The decree of the lower court is therefore of business by a municipality in the exercise

under the general rules as to the regulation affirmed.

of its police power. As stated in 28 Cyc.

721, 722: "In the exercise of its authorized Moore, Ch, J., and Burnett and Har- police power to that effect, a municipality ris, JJ., concur.

may regulate an occupation or business which it may not prohibit; and for this purpose it may require a license where it has no power of taxation.” And accord

ingly, the regulation involved in PORTLAND OREGON SUPREME COURT,

v. WESTERN U. TELEG. Co. being, as held (Department No. 1.)

therein, reasonable in its terms, and not

otherwise objectionable, was a proper exerCITY OF PORTLAND, Respt., cise of the power expressly given, or granted

by necessary implication, to the municipalWESTERN UNION TELEGRAPH COM. ity. PANY et al., Appts.

For notes upon other phases of the gen

cral subject of regulation of business by I- Or. — 146 Pac. 148.)

municipal corporations, see Index to L.R.A.

Notes, “Municipal Corporations," $$ 42-50. Municipal corporation license

As to the duty and liability for the consenger service bond.

duct of messengers furnished for the use of 1. Under charter authority to regulate others, see note to Haskell v. Boston Dist. occupations within its limits, a municipal | Messenger Co. 2 L.R.A.(N.S.) 1091.



municipal court of Portland of violating Moore, Ch. J., delivered the opinion of city ordinance No. 25667, in that they in the court: the year 1913 wilfully engaged within the The questions to be considered are whethmunicipality in the general messenger busi. er or not the ordinance referred to, requirness for hire, and that, without having ing corporations doing a messenger business first procured a license therefor, they un to execute to the city a bond, is valid, and, lawfully delivered letters, packages, etc., if so, does the service performed by the contrary to the provisions of such ordinance Western Union Telegraph Company bring and against the peace of the city. Pleas of it within the provisions of such municipal not guilty were interposed to the complaint, legislation ? The ordinance referred to whereupon the cause was tried and the de provides generally that no person, firm, or fendants found guilty as charged. From corporation shall engage in the messenger such judgment they appealed to the circuit business for the delivery of packages, notes, court of the state of Oregon for Multnomah letters, etc., or the purchase or delivery of county, where the cause was retried with merchandise, or “other service incident to out the intervention of a jury, upon an what is commonly known as a general mesagreed statement of facts, and the defend-senger business or service for hire” within ants, having again been convicted, appealed the city of Portland without first having obfrom the resulting judgment to this court. tained a license therefor from the munici

pality. Section 1. The fee for such license Messrs. Dolph, Mallory, Simon, & shall be $100 a year payable in advance. Gearin and Hall S. Lusk, for appellants: Section 2. Each recipient of a license is

The defendants in the conduct of their requested to execute to the city and file with messenger business do not contract to de- the auditor, at the time the license is deliver packages, notes, etc.; their sole un livered, a satisfactory bond in the sum of dertaking is to furnish messengers and to $1,000, conditioned that he will faithfully use ordinary care in that particular. deliver any goods, packages, notes, etc.,

Haskell v. Boston Dist. Messenger Co. that may be intrusted to him, and pay to 190 Mass. 189, 2 L.R.A. (N.S.) 1091, 112 the party entitled thereto any damages that Am. St. Rep. 324, 76 N. E. 215, 5 Ann. Cas. may accrue from his failure so to do, and 796, 19 Am. Neg. Rep. 289; Hirsch v. Amer any person aggrieved by such neglect is ican Dist. Teleg. Co. 112 App. Div. 265, 98 (granted a right of action upon the bond in N. Y. Supp. 371.

the name of the city. Section 3. Nothing The messenger business of defendants is in the ordinance shall prevent any licensee not that of a common carrier.

from employing servants to assist in carry. American Dist. Teleg. Co. v. Walker, 72 ing on the messenger business. Section 4. Md. 454, 20 Am. St. Rep. 479, 20 Atl. 1, 1 all messengers in the employ of any licensee Am. Neg. Cas. 645; White v. Postal Teleg.

are required, when on duty, to wear, con& Cable Co. 25 App. D. C. 364, 4 Ann. Cas.

spicuously displayed, a ba of their em767. Under the pretense of regulating, a city

ployer. Section 5. Any person, firm, or may not destroy a legitimate business.

corporation violating any of the provisions Dill. Mun. Corp. 5th ed. § 665; Carroll of the ordinance shall upon conviction thereton v. Bazzette, 159 111, 284, 31 L.R.A. 522, of in the municipal court, be punished by a 42 N. E. 837; Peoria v. Gugenheim, 61 111. fine of not less than $5, nor more than $100. App. 374.

Section 6. “The provisions of this ordiMessrs. Walter P. LaRoche and Lyman nance shall not apply to any company soE. Latourette, for respondent:

liciting or delivering messages or merchanThe ordinance is applicable to defendants. | dise in the city of Portland which messages

The provision of the ordinance requiring or merchandise is a part of their own busia bond to be given for the faithful delivery ness.” Section 7. of parcels is not unconstitutional or void. The stipulation of facts, upon which this

6 Cyc. 369; Moore, Carr. 2d ed. $ 28; cause was tried, shows that the Westerr. Sanford v. American Dist. Teleg. Co. 13 Union Telegraph Company is a corporation Misc. 88, 34 N. Y. Supp. 144; Gilman v. and maintains at Portland, Oregon, an office Postal Teleg. Co. 48 Misc. 372, 95 N. Y. where messages are transmitted and reSupp. 564; Johnson Exp. Co. v. Chicago, ceived. Communications by its wires for 136 111. App. 368; Lloyd v. Haugh & K. patrons in that city are delivered to them, Storage & Transfer Co. 21 L.R.A. (N.S.) and, in order to facilitate the despatch of 188, and note, 223 Pa. 148, 72 Atl. 510; such service, messengers are kept for that State v. Chadwick, 10 Or. 465; Grand Rap

purpose. The company issues advertiseids v. Braudy, 105 Mich. 670, 32 L.R.A. 116, 55 Am. St. Rep. 472, 64 N. W. 29: St. ments which read: Paul v. Lytle, 69 Minn, 1, 71 N. W. 703. “Telegraph and Cable. Western Union.

« PreviousContinue »