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 O. 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. The trial court rendered a decree in favor of plaintiffs, and defendants appeal.

All the Justices concur.

By their answer the defendants admit the execution of the notes and mortgage. For an affirmative defense they allege in effect that in the month of December, 1910, plaintiff Whitney was the owner of the premises and sold the same to defendants for $14,500, $3,000 of which was paid in cash, $4,000 by the conveyance of certain property in Minneapolis, Minnesota, subject to a mortgage of $700, and the balance by three promissory notes; that defendants at the time were sojourning in Florida and never saw the property until after the purchase, all the negotiations being conducted by correspondence through the mails and by telegraph with L. W. Zimmer and J. W. Dressler, agents of plaintiff Whitney; that the defendants refused to purchase the property until plaintiffs advised them of the value of the products of the premises for the year 1910; that, in order to induce the defend

payment by seller of commis- ants sion to buyer's agent.

2. The agreement by a property owner to pay a broker a commission for selling the property, knowing that he was employed by the buyer, is a fraud upon the rights of the buyer, if the agreement was not assented to by him.

to make the purchase, Whitney, through his agents, stated that the income from the property for that year was $3,000; but that the returns were not yet complete; that they should be $3,500 for 1911. It is alleged that the defendants relied on such information and purchased the property; that the representation was false and Whitney knew the same to be so; that the premises for 1910 returned no greater sum than $700, which is an average. The defendants aver that they only recently made the discovery of the fraud, and promptly notified plaintiff Whitney in writing that on account thereof they rescinded the contract, demanded the repayment of the $3,000, a rethe cancellation of defendants' notes. They conveyance of the Minneapolis property, and offered to reconvey the premises to Whitney and account to him for the rents, issues, and profits during their incumbency. The

APPEAL by defendants from a judgment reply denies the false representation about

of the Circuit Court for Jackson County, in plaintiffs' favor in a suit to foreclose a mortgage given to secure payment of certain promissory notes. Affirmed.

circumstances of the transaction were about as follows: L. W. Zimmer formerly resided in Minneapolis, Minnesota, and defendant Dr. Bissell was also from that city. Having heard of the former through mutual friends and having seen his advertisement, in November, 1910, Dr. Bissell wrote to him in regard to property near Medford. Zimmer inquired of J. W. Dressler, a real estate dealer who had the orchard in question

listed for sale. Dressler mentioned the

Whitney orchard, and Zimmer wrote and recommended the same to Dr. Bissell, who

answered asking numerous questions; among them, as to what the crop returns for 1910 had been. He afterwards requested the same information by wire, suggesting changes in the proposition. Zimmer consulted with Dressler and Whitney, and on December 13th sent Dr. Bissell the following telegram:

Dr. J. H. Bissell, Sarasota, Florida: Your proposition acceptable, provided you agree to pay your first two notes in case you sell the orchard in the meantime. Income should be about $3,000 this year. Returns not in. Next year 3,500 or more. Porter J. Neff, city attorney, Jackson County Bank, and I at your service.

L. W. Zimmer.

Dr. Bissell accepted the proposition of sale on the basis set forth in the answer.

During the negotiations Dressler and Zimmer, with the knowledge of Whitney, agreed

to divide the commission of 5 per cent on the

sale equally. On January 9, 1911, a preliminary contract of sale was executed containing the following stipulation: "It is further covenanted and agreed between the parties that L. W. Zimmer, who has negotiated this contract for the parties hereto, and has acted as agent for the second party, shall be paid by the first party a commission of 5 per cent upon the purchase of $14,500, to be received by him in full payment for his services for both parties hereto."

This agreement was signed by Whitney and by J. H. Bissell, by Zimmer as his agent. Afterwards the same was forwarded to Dr. Bissell and ratified and signed by

him.

Messrs. Gus Newbury and B. F. Piatt, for appellants:

Plaintiff Whitney defrauded defendants by the false and fraudulent misrepresentations as to the produce of the lands for the

year 1910.

Fraud is a question of fact, and may be established by inference like any other disputed fact.

915, 96 Pac. 1095, 97 Pac. 538; Cawston v. Sturgis, 29 Or. 335, 43 Pac. 656.

Zimmer was either an agent of Whitney or a subagent, and in either capacity the principal is responsible to third persons for the acts of such agent, as he ratified the acts of Zimmer in negotiating the contract. Tynan v. Dullnig, Tex. Civ. App.

25 S. W. 466; Mechem, Agency, § 197; McKinnon v. Vollmar, 75 Wis. 82, 6 L.R.A. 121, 17 Am. St. Rep. 178, 43 N. W. 800; Davis v. King, 66 Conn. 465, 50 Am. St. Rep. 104, 34 Atl. 107; Mayer v. McLure, 36 Miss. 389, 72 Am. Dec. 190; Craig v. Ward, 1 Abb. App. Dec. 454; 31 Cyc. 1257, subdiv. f; Busch v. Wilcox, 82 Mich. 337, 21 Am. St. Rep. 563, 47 N. W. 328; Mayer v. Dean, 115 N. Y. 556, 5 L.R.A. 540, 22 N. E. 261.

Whitney's representations as to the produce of the ranch for the year 1910 were fraudulent and made for the purpose of inducing defendant to purchase the property.

39 Cyc. 1259; 20 Cyc. 18; Miller v. Voorheis, 115 Mich. 356, 73 N. W. 383. Messrs. Neff & Mealey for respondents.

Bean, J., delivered the opinion of the court:

It is admitted that the statement of the

returns for the crop of 1910 was greatly in excess of the amount realized, which was about $700. Whitney asserts that he did not furnish Zimmer with the information, but that he stated that he had not then re

ceived the returns from the fruit associa

tion of Medford which marketed the crop, and could not state the amount; that Zimmer, the agent of Dr. Bissell, was the authority for the representation. Zimmer testified positively that he obtained the information from Whitney. Dressler at first by affidavit corroborated Zimmer, but upon further consideration and reflection testified in substance the same as Whitney. According to our view of the case, this statement in regard to the proceeds of the crop of 1910 was made in behalf of plaintiff Whitney as an inducement to Dr. Bissell to make the deal. The latter, relying upon the representation, consummated the purchase of the fruit orchard. Plaintiff, having accepted the benefit of the contract negotiated by his agents, is not in a position to repudiate that part of the transaction by means of which the agreement was obtained. He cannot ratify the contract in part and repudiate it in part. When a principal elects to ratify any portion of an unauthorized act of an agent, he must ratify the whole of it. He cannot avail himself of such acts so far as 39 Cyc. 1259; 20 Cyc. 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

Porter v. O'Donovan, 65 Or. 9, 130 Pac. 393; Kabat v. Moore, 48 Or. 198, 85 Pac. 506; Clough v. Dawson, 69 Or. 52, 133 Pac. 345, 138 Pac. 233; Williamson v. North Pacific Lumber Co. 42 Or. 160, 70 Pac. 387,

532.

There was no justification for a statement that the premises returned $3,000 for the year 1910, or that they would return $3,000 for said year.

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 apparent scope of his authority cannot be enforced by the principal against the party misled, even though the principal did not authorize the agent to act fraudulently or to misrepresent."

When Whitney agreed to pay Zimmer a commission, if he had knowledge that Zimmer was already employed by Dr. Bissell, and if the latter did not assent thereto, Whitney and Zimmer were both guilty of a wrong committed against the first employer, as such employment would be a temptation to the agent not to give his best efforts to Dr. Bissell. A contract entered into through such means is in fraud of the rights of the defendant Bissell. Bell v. McConnell, 37 Ohio St. 396, 41 Am. Rep. 528. Whitney was responsible for the misrepresentation made to Dr. Bissell by which he was induced to make the agreement, and the contract was voidable. Kreshover v. Berger, 135 App. Div. 27, 119 N. Y. Supp. 737.

180, a party induced by fraud to make a contract has, upon the discovery of the fraud, an election of remedies either to affirm the contract and sue for damages, or disaffirm it and be reinstated in the position in which he was before it was consummated. The adoption of one of these remedies, which are wholly inconsistent, is the exclusion of the other. If he desires to rescind, he must act promptly and return, or offer to return, what he has received under the contract. He cannot retain the fruits of the contract awaiting further developments to determine whether it will be more profitable for him to affirm or disaffirm it. Any delay on his part, especially in remaining in possession of the property received by him under the contract and dealing with it as his own, will be evidence of his intention to abide by the contract. See also Vaughn v. Smith, 34 Or. 54, 55 Pac. 99; Sievers v. Brown, 36 Or. 218, 56 Pac. 170; Elgin v. Snyder, 60 Or. 297, 302, 118 Pac. 280.

The purpose of obtaining the information as to the returns of the orchard for 1910 was obviously to base thereon an estimate of the value of the real property and the income that might be expected therefrom. When Dr. Bissell arrived upon the ground in the spring of 1911, this was not his only source of information. It is well known that the products and the net returns from the fruit industry vary with the seasons and prices. It is not suggested why the crop of 1910 would be any better criterion by which to estimate the income than that of 1911 or 1912. General information in the usual way in regard to the value of orchards and the income therefrom was available to the defendant Bissell, and by the use of due diligence he could have discovered the fraud during the season of 1911. It seems somewhat strange that for about two and one-half years Bissell should have relied upon the statistics for 1910, without apparently making any effort to inform himself in regard to the value of the property or the income therefrom, until about the time of suit upon his notes.

Defendant J. H. Bissell testified that he came to Oregon the next season after the deal was made, cared for the orchard, and set out about 50 new trees, receiving but little returns from the orchard the first two years; that the first year he lost a part of the crop by frost, and the second the apples were not thinned enough; that in 1913, he received as returns from the orchard some over $1,200, after deducting the expenses for three years, not taking into consideration his own labor; that in May, 1913, he first learned that the representation made to him in regard to the crop of 1910 was false; and that he thereupon notified plaintiff Whitney that he rescinded the contract, offered to reconvey the orchard, demanded a return of the money paid and the notes, and a reconveyance of the Minneapolis property. He states that he was injured on account of the small income from the investment, but that he does not know whether or not he paid too much for the fruit orchard; that the tract is about the same as others in the neighborhood, except that the kind of fruit is different and needs cross pollenizing 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.

It is contended by counsel for plaintiffs that, by the delay in attempting to rescind

ably diligent inquiry would disclose. 6 Cyc. 305; Clark, Contr. p. 236. During the season of 1911, Dr. Bissell had sufficient in

to transact a messenger business within
the city to secure a license and furnish a
bond for the faithful performance of the
duties incident to such business.
Messenger service what constitutes
scope of undertaking.

dent to its business, undertaken to furnish 2. A telegraph company which has, incimessengers to carry notes, packages, and similar matter for patrons, transacts a messenger business within the meaning of a municipal ordinance requiring the procurement of a license therefor, although its offer to transact such business states that its sole undertaking is to furnish messengers, and not to deliver the packages. Evidence violation of ordinance

sufficiency.

formation to put him, as a man of ordi- corporation may require one undertaking nary prudence and intelligence, upon inquiry. If he had made investigation, he could have secured all the essential details regarding the income from this orchard, or could have obtained the amount of returns for 1910 from the fruit association in Medford which handled the product and kept the accounts. Indeed, his evidence does not disclose that he is yet thoroughly convinced that with the administration of his skill as a horticulturist he will not be able to produce an abundant crop and realize a profitable return on his investment, provided he is allowed sufficient time. He appears to think the money is in the land, and the only complaint he makes is in getting it out or in regard to the income. Under the circumstances of this case, it does not appear that defendant Bissell indicated a desire to rescind the contract within a reasonable time after he could have discovered the alleged 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 matter, retained the possession of the land, tultivated the same for a long time, set out fruit trees, speculated upon a rise in the market both as to crops and real estate, and asked and obtained an extension of time for the payment of a portion of the interest, a part of which he paid on his notes, without making any complaint after he knew or should have known the condition of affairs. We think he should be deemed to have af

firmed the contract and waived his right to rescind. See Strong v. Strong, 102 N. Y. 69, 5 N. E. 799; Kingman & Co. v. Stoddard, 29 C. C. A. 413, 57 U. S. App. 379, 85 Fed. 740; Van Gilder v. Bullen, 159 N. C. 291, 74 S. E. 1059; Simon v. Goodyear Metallic Rubber Shoe Co. 44 C. C. A. 612, 52 L.R.A. 745, 105 Fed. 573.

The decree of the lower court is therefore

affirmed.

tion for the penalty for transacting a busi3. In an action by a municipal corporaness without license, a preponderance of the evidence is sufficient to show violation of the ordinance, and the proof need not

(February 16, 1915.)

PPEAL by defendant from a judgment
of the Circuit Court for Multnomah

A'
County in plaintiff's favor in an action to
recover from defendants a penalty for trans-
acting a general messenger business with-
out a license in violation of an ordinance
of the city. Affirmed.

Statement by Moore, Ch. J.:

graph Company, a corporation, and W. A. The defendants, the Western Union TeleRobb, its manager, were accused in the

Note. While an extensive search has disclosed no case, aside from PORTLAND V. WESTERN U. TELEG. CO., upon the subject of the regulation of the messenger business, the decision in this case seens to be correct, of business by a municipality in the exercise under the general rules as to the regulation 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.

OREGON SUPREME COURT. (Department No. 1.)

CITY OF PORTLAND, Respt.,

V.

WESTERN UNION TELEGRAPH
PANY et al., Appts.

(Or. - 146 Pac. 148.)

Municipal corporation senger service bond.

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 accordingly, the regulation involved in PORTLAND v. WESTERN U. TELEG. Co. being, as held therein, reasonable in its terms, and not otherwise objectionable, was a proper exercise of the power expressly given, or granted by necessary implication, to the municipalCOM-ity.

license -mes

1. Under charter authority to regulate Occupations within its limits, a municipal

For notes upon other phases of the general subject of regulation of business by municipal corporations, see Index to L.R.A. Notes, "Municipal Corporations," §§ 42-50.

As to the duty and liability for the conduct of messengers furnished for the use of others, see note to Haskell v. Boston Dist. Messenger Co. 2 L.R.A. (N.S.) 1091.

municipal court of Portland of violating city ordinance No. 25667, in that they in the year 1913 wilfully engaged within the municipality in the general messenger business for hire, and that, without having first procured a license therefor, they unlawfully delivered letters, packages, etc., contrary to the provisions of such ordinance and against the peace of the city. Pleas of not guilty were interposed to the complaint, whereupon the cause was tried and the defendants found guilty as charged. From such judgment they appealed to the circuit court of the state of Oregon for Multnomah county, where the cause was retried without the intervention of a jury, upon an agreed statement of facts, and the defendants, having again been convicted, appealed from the resulting judgment to this court.

Moore, Ch. J., delivered the opinion of the court:

The questions to be considered are whether or not the ordinance referred to, requiring corporations doing a messenger business to execute to the city a bond, is valid, and, if so, does the service performed by the Western Union Telegraph Company bring it within the provisions of such municipal legislation? The ordinance referred to provides generally that no person, firm, or corporation shall engage in the messenger business for the delivery of packages, notes, letters, etc., or the purchase or delivery of merchandise, or "other service incident to what is commonly known as a general messenger business or service for hire" within the city of Portland without first having obtained a license therefor from the municipality. Section 1. The fee for such license shall be $100 a year payable in advance. Section 2. Each recipient of a license is requested to execute to the city and file with the auditor, at the time the license is de

Messrs. Dolph, Mallory, Simon, & Gearin and Hall S. Lusk, for appellants: The defendants in the conduct of their messenger business do not contract to deliver packages, notes, etc.; their sole un-livered, a satisfactory bond in the sum of dertaking is to furnish messengers and to use ordinary care in that particular.

Haskell v. Boston Dist. Messenger Co. 190 Mass. 189, 2 L.R.A. (N.S.) 1091, 112 Am. St. Rep. 324, 76 N. E. 215, 5 Ann. Cas. 796, 19 Am. Neg. Rep. 289; Hirsch v. American Dist. Teleg. Co. 112 App. Div. 265, 98 N. Y. Supp. 371.

$1,000, conditioned that he will faithfully deliver any goods, packages, notes, etc., that may be intrusted to him, and pay to the party entitled thereto any damages that may accrue from his failure so to do, and any person aggrieved by such neglect is granted a right of action upon the bond in the name of the city. Section 3. Nothing in the ordinance shall prevent any licensee from employing servants to assist in carrying on the messenger business. Section 4. All messengers in the employ of any licensee are required, when on duty, to wear, con& Cable Co. 25 App. D. C. 364, 4 Ann. Cas.spicuously displayed, a badge of their em

The messenger business of defendants is

not that of a common carrier.

American Dist. Teleg. Co. v. Walker, 72 Md. 454, 20 Am. St. Rep. 479, 20 Atl. 1, 1 Am. Neg. Cas. 645; White v. Postal Teleg.

767.

Under the pretense of regulating, a city may not destroy a legitimate business.

Dill. Mun. Corp. 5th ed. § 665; Carrollton v. Bazzette, 159 Ill, 284, 31 L.R.A. 522, 42 N. E. 837; Peoria v. Gugenheim, 61 Ill. App. 374.

Messrs. Walter P. LaRoche and Lyman E. Latourette, for respondent:

The ordinance is applicable to defendants. The provision of the ordinance requiring a bond to be given for the faithful delivery of parcels is not unconstitutional or void.

6 Cyc. 369; Moore, Carr. 2d ed. § 28; Sanford v. American Dist. Teleg. Co. 13 Misc. 88, 34 N. Y. Supp. 144; Gilman v. Postal Teleg. Co. 48 Misc. 372, 95 N. Y. Supp. 564; Johnson Exp. Co. v. Chicago, 136 Ill. App. 368; Lloyd v. Haugh & K. Storage & Transfer Co. 21 L.R.A. (N.S.) 188, and note, 223 Pa. 148, 72 Atl. 516; State v. Chadwick, 10 Or. 465; Grand Rapids v. Braudy, 105 Mich. 670, 32 L.R.A. 116, 55 Am. St. Rep. 472, 64 N. W. 29; St. Paul v. Lytle, 69 Minn. 1, 71 N. W. 703.

ployer. Section 5. Any person, firm, or corporation violating any of the provisions of the ordinance shall upon conviction thereof in the municipal court, be punished by a fine of not less than $5, nor more than $100. Section 6.

"The provisions of this ordinance shall not apply to any company soliciting or delivering messages or merchandise in the city of Portland which messages or merchandise is a part of their own business." Section 7.

The stipulation of facts, upon which this cause was tried, shows that the Western Union Telegraph Company is a corporation and maintains at Portland, Oregon, an office where messages are transmitted and received. Communications by its wires for patrons in that city are delivered to them, and, in order to facilitate the despatch of such service, messengers are kept for that purpose. The company issues advertisements which read:

"Telegraph and Cable. Western Union.