Case Name: KOEHLER v. DENNISON
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1914-07-28
Citations: 72 Or. 362
Docket Number: 
Parties: KOEHLER v. DENNISON.
Judges: Mr. Chief Justice McBride, Mr. Justice Eakin, Mr. Justice Bean and Mr. Justice McNary concur.
Reporter: Oregon Reports
Volume: 72
Pages: 362–377

Head Matter:
Argued April 2,
reargued June 15,
affirmed July 28,
rehearing denied September 22, 1914.
KOEHLER v. DENNISON.
(143 Pac. 649.)
Cancellation of Instruments — Sales — Remedy at Law — Remedies of Purchasers — Nature and Form — Law or Equity.
1. Por fraud in inducing tlie purchase of a barber-shop, the person aggrieved has a remedy at law for the recovery of the consideration paid, treating the transactions as rescinded, or in equity to cancel the bill of sale.
[As to cancellation notwithstanding remedy at law, see note in 9 Am. St. Rep. 859.]
Fraud — Representations of Agent — Liability to Principal.
2. Where a barber practically represented to plaintiff that he was engaged in finding suitable locations for persons desiring places to conduct their 'business, and plaintiff acted upon information given by the barber by going into a barber-shop which was for sale, he thereby made the barber his agent, establishing a relation of trust and confidence, rendering the barber liable for deceit in stating that a lease of the premises would be obtained.
[As to liability of principal for fraud of agent as dependent on whether fraud is committed for benefit of principal, see note in Ann. Cas. 1913B, 829.]
Sales — Excessive Consideration — Fraud.
3. The fact that a seller of a barber-shop received much more than its reasonable value affords no justification for setting aside the sale, when assented to by a party who is sui juris, unless the assent was induced by fraud.
Sales — Fraud of Seller — “Lease.”
4. Where the seller of a barber-shop represented to the purchaser that a lease of premises could be obtained, the parties unquestionably understood by “lease” a writing executed by the owner evidencing a demise for a reasonable term, and not merely the acceptance of rent for a month.
Sales — Fraud of Seller.
5. A seller of a barber-shop and a broker prosecuting the sale, who represented that a lease of the premises would be secured, which they knew would not be done, are liable for the misstatements.
[As to action to recover for false representations, see note in 18 Am. St. Eep. 555.]
Sales — Remedies of Purchaser — Recovery of Price — Conditions Precedent.
6. Where the seller of a barber-shop notified the purchaser that he would not repay any of the money received from him, the purchaser need not make a demand therefor before suing for its recovery.
Sales — Remedies of Purchaser — Recovery of Price Paid — Conditions Precedent.
7. A delay of six weeks by the purchaser of a barber-shop, before offering to return the property, during which time he was trying to realize the profits which the seller and broker represented to him would be made, was not unreasonable.
From Multnomah: Henry E. McGinn, Judge.
In Banc. Statement by Mr. Justice Moore.
This is a suit by A. E. Koehler against E. Dennison and J. I. Hull to cancel a bill of sale of personal property and to recover the sum of money paid therefor. The complaint charges, in effect, that the defendants, having previously learned that the plaintiff had on hand money exceeding $1,025, conspired to cheat and defraud him out of that sum; that on February 17, 1913, the plaintiff was ill, and in consequence thereof was weak in body and mind, at which time the defendants overpersuaded him to deliver to Dennison $1,025 for a bill of sale of barber chairs, glasses, fixtures, etc., which property was then practically valueless; that, pursuant to such conspiracy, the money was obtained by fraud, in that the defendants falsely represented to plaintiff that if he would pay that sum for the property and take possession of the barber-shop at No. 205 Morrison Street, Portland, Oregon, then conducted by Dennison, he would, as soon as the sale was consummated, secure a lease of the premises, and by continuing the business, be able to earn therefrom $5 and $10 a day above all expenses; that such representations were false and so known to be by the defendants, who made them for the purpose of defrauding the plaintiff; that he was ignorant thereof, but, relying thereon, was induced to pay the sum stated for the property; that after obtaining the title thereto he discovered, by conducting the business, that, instead of daily clearing the sums so asserted, he lost from $10 to $15 a week; that he was unable to secure a lease of the premises, and soon after taking possession thereof he was ejected therefrom; that he tendered to Dennison a good and sufficient bill of sale retransferring to him the title to the property mentioned, and deposited such written instrument with the clerk of the Circuit Court for him.
A motion to make the complaint more definite and certain and to strike out parts thereof was denied, and a demurrer to the initiatory pleading, on the ground that it did not state facts sufficient to constitute a cause of suit, was overruled, whereupon the defendant Dennison filed an answer admitting the sale of the property for the consideration stated, but denying all other averments of the complaint. For a further defense it is alleged that the plaintiff has an adequate remedy at law; that he has rendered it impossible to place Dennison in statu quo, in that his misconduct caused him to be dispossessed of the barber-shop, thereby destroying the goodwill of the business; that by reason of the sale the plaintiff remained in the possession and control of the business more than six weeks, during which time he made no complaint to Dennison, by reason whereof he acquiesced in the transaction and is es-topped by his laches from asserting that he was defrauded.
The reply put in issue the allegations of new matter in the answer, and, the cause having been tried, findings of facts were made substantially in conformity with the averments of the complaint, and a decree having been given as prayed for therein, Dennison appeals.
Affirmed. Rehearing Denied.
For appellants there was a brief over the names of Messrs. Joseph & Haney and Mr. B. H. Goldstein, with oral arguments by Mr. Bert E. Haney and Mr. Goldstein.
For respondent there was a brief with oral arguments by Mr. Morris A. Goldstein and Mr. Frank S. Senn.

Opinion:
Mr. Justice Moore
delivered the opinion of the court.
It is contended that errors were committed in denying the motion and in overruling the demurrer. The averments of the complaint as hereinbefore given are not arranged in the same order as. originally set forth, but it is believed that the allegations of the pleading thus assailed are substantially stated, and that the facts narrated -are not so vague or uncertain that the meaning thereof could not have been readily comprehended, or that any parts of the complaint should have been stricken out.
For a redress of his grievance the plaintiff had a concurrent remedy at law and in equity. In an action at law for affirmative relief he might have treated the transaction as rescinded and recovered back the consideration paid for the property. By this means he would still have held the written evidence of a transfer of the title to the goods, to cancel which bill of sale, though not under seal, the remedy at law was not so adequate and complete as that which equity affords: Benson v. Keller, 37 Or. 120 (60 Pac. 918); Olston v. Oregon Water Power & Ry. Co., 52 Or. 343 (96 Pac. 1095, 97 Pac. 538, 20 L. R. A. (N. S.) 915). What is here said is not intended to contravene the rule which permits a party who seeks defensive relief at law to set up in his answer the plaintiff's fraud, and thereby defeat an action brought to enforce the alleged fraudulent obligation: Mael v. Stutsman, 60 Or. 66 (117 Pac. 1093). No error was committed in overruling the demurrer.
Considering the case on its merits, the testimony shows that at the time of the trial the plaintiff was 73 years old. He was not a barber. He had been engaged in raising fruit, but, having lost a leg, he was obliged to seek other employment, which he found in conducting at Portland a confectionery store. Having sold that business, he tried to find a new location where he could pursue the same occupation. While seeking another place he on February 15,1913, met the defend ant Hull, a barber, wbo said he was engaged in securing for others business locations, and could find a place for him, if he would wait, thereupon taking him into a barber-shop conducted by Dennison, where the latter told him he intended to quit the business in order that he might deal in horses. The plaintiff testified that Dennison then said to him:
"If you buy this shop you can make from $5 to $10 a day clear. All you have to do is to sit here and count your money. ' '
This witness, referring to the defendant Hull, said:
"I told him that if I bought it [the shop] I should want a lease. Well, he asked Mr. Dennison and Mr. Dennison asked Mr. Soloman [the lessee of the premises]. They had talked it over, and Mr. Soloman said: 'Why, of course, you will get a lease whenever you ask for it.' He said: 'Whenever you ask for a lease there will be a lease forthcoming.' 'I don't want to cheat a cripple like you.' I said: 'I don't want to be cheated either. ' When I made up my mind to buy this barber-shop I made up my mind never to buy it without a lease, and I bought it with that understanding."
The sale was concluded February 17, 1913, whereupon plaintiff paid the sum agreed upon for the property, took possession of the shop, and paid Mr. Soloman $90, as the rent in advance for a month. The plaintiff, during that time, was offered $800 for the property which he had secured from Dennison, and, desiring a lease of the premises, he applied to Soloman, who refused to grant the request, and on March 15, 1913, two days prior to the expiration of the term for which he had paid the rent, Soloman commenced an action against him to secure possession of the shop. This action, however, was subsequently dismissed.
The plaintiff, referring to one of the defendants, who at the time the sale was made promised to remain in the shop and assist in condncting the business, testified as follows:
"And this Joe Hull, he was trying all the time to get me out of there, to get another place; and then him and another man they went up and they rented a place on Sixth and Burnside, and I went up there, and I didn't make anything up there neither. I didn't make the rent on either place."
The value placed by Hull on the entire property was only $700, while another man who knew the worth of the goods estimated it to be not mom than $300. The profits of the business were not what the defendants had represented. Their witnesses, explaining the reason therefor, stated that the plaintiff increased the price of shaving from 10 cents, the cost prevailing when, he secured the property, to 15 cents, and that he permitted five of the eight barbers employed by Dennison to leave the shop, and did not get others to take their places.
The plaintiff did not make any demand upon Dennison to repay any part of the money which he had received before bringing this suit. He testified that he told Dennison that he'had misrepresented the property and the yalue of the business, whereupon the latter remarked that, having sold the goods, he paid Hull a commission for finding a purchaser, and he would not return the money.
It appears that after plaintiff quit the shop the premises were immediately leased to another barber. Dennison, soon after concluding the sale with the plaintiff, obtained another barber-shop and conducted that business, though it will be remembered he told Koehler when he made the hill of sale that he was retiring in order to deal in horses.
Soloman, as defendants' witness, admits that he told the plaintiff he did not desire to cheat a cripple. The defendants deny nearly all the testimony given by the plaintiff, and each asserts upon oath that no commission was paid to Hull.
No testimony was offered tending to show that when the bill of sale of the property was concluded the plaintiff was ill or weakened in body or mind. A perusal of his testimony, however, shows that he is peevish and irascible, evidencing senility. Neither of the defendants made any representations respecting the value of the goods sold, but only as to the future profits that could be obtained by conducting the barber business. Nor did they in any manner do anything to prevent the plaintiff from making a careful examination or due inquiry as to the value of the property or the receipts obtained from the prior management of the shop. It will be assumed, without deciding the question, that the representations about the profits were not statements of past or present material facts, amounting to a warranty, and that they were nothing more than expressions of opinion relating to' uncertain future gains; yet it is believed that the relation existing between the plaintiff and Hull, who assumed to act as a broker, was confidential, requiring from the latter a full disclosure, and that Hull's connection with Dennison makes them legally responsible for the consequences resulting from the failure to obtain a lease of the premises.
The plaintiff's testimony on this subject is as follows : '
"This spring when I was looking for a confectionery store I ran across Joe Hull, and he said that he was engaged in that kind of business, and that he would find me one. If I would wait he would help me find one. He looked around and commenced to talk about a certain place, and then he took me in and asked me how I would like a barber-shop. I told him: 'I am no barber. I don't know anything about the business.' He said: 'In this case you wouldn't have to be a barber, because this is a good place here, and the money would be coming in without your working.' I said: 'I don't understand it, and I would sooner have a confectionery. ' And he took me up, and we faced the other party, Mr. Dennison."
It will thus be seen that Hull, who was a barber, prac tically represented to the plaintiff that he was engaged in finding suitable locations for persons desiring places where they could conduct their business. The plaintiff acted upon this information by going into the barber-shop to meet Dennison, thereby making Hull his agent, establishing the relation of trust and dependence between them, and rendering the latter liable for the deceit: Shute v. Johnston, 25 Or. 59 (34 Pac. 965).
Though there is no direct evidence upon this subject, it is believed to be reasonably inferable from the testimony that the defendants by concert of action obtained a purchaser, of whom Dennison said after the sale was made, as reported by a witness: "I found a sucker." The declaration thus imputed to Dennison is referred to only as tending to show that he received from his goods and business a sum of money which he evidently considered to be much greater than their reasonable value. Such fact, however, affords no justification for setting aside a sale of property when assented to' by a party who is sui juris. A court cannot relieve from the consequences of an improvident bargain a person who was easily duped, unless his as sent to the transaction was induced by fraud as a basis for equitable intervention.
These defendants, knowing that it was unlawful for Koehler himself "to pursue the business of a barber, or to conduct any barber-shop" (Section 4814, L. O. L.), undertook to get from him all the money possible to secure which they, as a part of the conspiracy alleged, made to him, as inducements to the sale of the property, statements which were not expected to be carried out so far as they related to obtaining a lease from Soloman, whose promise to that effect was not given until after the money had been paid for the property. Soloman accepted from Koehler the stipulated rent in advance for a month thereby entitling bim to the possession of the barber-shop for that time. The parties unquestionably understood by the use of the word "lease," as employed by plaintiff, that it meant a writing executed to him by Soloman evidencing a demise of the premises for a reasonable term. Dennison and Hull, after conferring with Soloman, agreed with plaintiff that a lease should be executed to him, and their promise in this respect, though it related to the future, and was to be executed by another person, was somewhat in the nature of a covenant for further assurance. It was not capable of specific performance, but, the representations having been made for the purpose of effecting a sale of the property, the defendants are liable for the consequences of their misstatements, which they evidently knew would never be performed. Pursuant to their unlawful agreement Hull persuaded the plaintiff to vacate the premises, and soon thereafter he quit working for him.
If Dennison did not intend to repay any of the money received from the plaintiff, and so notified him, as he testified, he was not obliged to do a vain thing; and hence it was unnecessary to make a demand therefor.
The plaintiff was somewhat tardy in offering to return the property, but when it is kept in mind that he was trying to realize the profits represented, which could not at once be determined, the delay in demonstrating the experiment was not unreasonable.
We do not think it essential further to quote from or comment upon the testimony or to advert to any reason the court may have given for the conclusion which it reached, for, deeming the decree proper, it should be affirmed, and it is so ordered.
Affirmed. Rehearing Denied.
Mr. Chief Justice McBride, Mr. Justice Eakin, Mr. Justice Bean and Mr. Justice McNary concur.