Court Opinion

ID: 6908285
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:04:15.55732+00
Date Added: 2024-06-11T16:06:27.248997
License: Public Domain

ON REHEARING.
(229 Pac. 1100.)
This was a suit for an accounting and for injunctive relief. The issues were joined, testimony taken, and the court, after making findings of fact and conclusions of law, decreed:
“It is now therefore considered, ordered, decreed and adjudged that the appointment of D. H. Sphier, under date of February 4, 1920, as agent to collect rents on the Sphier Block and more particularly described as Lot No. 7 of Block No. 10 of Bend, in Deschutes County, Oregon, and to rent said property and to pay the operating expenses of said building signed by John Michael, is in full force and effect and the said D. H. Sphier is entitled to and authorized from and after the first day of September, 1922, to act as such agent of and for said real property, and that the plaintiff, D. H. Sphier, is hereby awarded, allowed, and given judgment against said John Michael for the sum of Four Hundred Ninety Nine and 66/100 Dollars, the same being ten per cent, of the gross receipts from said building between February 5, 1920, and December 31, 1921, less five per cent, thereof paid by said John Michael to J. F. Arnold, which said sum the said John Michael shall pay out of the funds in his hands from the rentals received from said property; and that the said John Michael shall forthwith and not later than the first day of September, 1922, furnish to the plaintiff, D. H. Sphier, a complete and accurate account of all moneys collected and all disbursements made therefrom, from the first day of January, 1922, up to the first day of September, 1922, and that he shall pay out of the gross amount of money received from said building to the said D. H. Sphier ten per cent, thereof from said January 1, 1922, up to and *309including the first day of September, 1922, less the five per cent, that has been paid to said J. F. Arnold as acting agent of said building; that the defendant, John Michael, and the defendant, J. F. Arnold, and each of them, their agents, servants and employees, and any other person or persons be and they are hereby commanded to restrain and to refrain from collecting any rent, or managing or operating said building and property herein described from and after the first day of September, 1922, and that from and after said date the said D. H. Sphier is hereby given the right and privilege to collect rents from said property, rent said property, pay the operating and current expenses thereof, and to deduct ten per cent, of the gross receipts from said building as compensation therefor and to remit to the said John Michael the balance of rents so collected on the 10th day of each month.”
For appellants there was a brief over the names of Mr. B. S. Hamilton and Messrs. Bevelle & Bevelle.
For respondent there was a brief over the name of Mr. Jay H, Upton.
From this decree the defendants appealed to this court. In an opinion reported in 227 Pac. 1062, decided July 22, 1924, we found the facts to be averred by plaintiff, but held that he had mistaken his remedy, and ordered the case reversed. Plaintiff petitions for a rehearing. Former Opinion Modified.
BROWN, J.
The plaintiff owned a lot and building in the City of Bend, of the approximate value of $35,000. He became involved in litigation with his contractors, supply houses and other creditors, and was unable to meet his obligations. In order to secure the necessary amount to meet his indebtedness, he attempted, but failed, to negotiate a loan *310upon his property. He then journeyed to Seattle and interested his wealthy countryman, the defendant herein, in the; Bend property. For the nominal consideration of $1, the plaintiff and his wife executed a deed of the Bend property to the defendant Michael, who borrowed $15,000 which he secured by ,a mortgage on that property, and, by advancing $5,000 from his personal funds, satisfied Sphier’s -obligations.
It was agreed that the plaintiff was to act as the manager of the building and collect the rents, and that he was to receive as compensation therefor ten per cent of the rental. It was further agreed:
“That out of the net income there shall be paid: First, the taxes and assessments; second, interest upon the two mortgages.”
The agreement contained a provision for the satisfaction of the principal of the mortgages, and further provided that as soon as the mortgages were paid out of the income from the property the defendant was to reconvey to Sphier an undivided one-half interest therein.
For a further statement of the facts, see Sphier v. Michael, supra.
In our former opinion, after a review of the evidence we found that the agency contract that Michael would repudiate was entered into for a valuable consideration, and that the plaintiff was the equitable owner of an undivided one-half interest in the Bend property and had a greater amount of money invested therein than had Michael. We there held, however, that—
“An action for damages is the remedy for the breaching of the foregoing contract.”
*311The plaintiff has supported his petition for rehearing by a well-prepared brief. We have again carefully reviewed the evidence and the pleadings, and investigated and considered the law; and, from such consideration, we believe that a court of equity has jurisdiction of the subject matter in controversy. The plaintiff came into equity. The defendant appeared and answered and has never questioned the jurisdiction of the court to hear the cause as a suit in equity.
The facts averred in plaintiff’s petition conferred jurisdiction upon a court of equity to hear and determine this cause upon its merits.
This court, speaking through Mr. Justice McBride, in the case of Phez Co. v. Salem Fruit Union, 103 Or. 514 (201 Pac. 222, 205 Pac. 970, 25 A. L. R. 1090), said:
“The fact that the remedy (injunction) was not applied and that defendants by selling their products to other parties have now put it out of their power to comply, ought not to oust equity of the jurisdiction it had when this suit was instituted, but the court should retain the case, and if the allegations of the complaint and the supplemental complaint are found to be true, it should compel the defaulting parties to make good in damages the losses directly sustained by plaintiff by reason of their default.”
In Gantenbein v. Bowles, 103 Or. 277 (203 Pac. 614), Mr. Justice Bean, in writing for the court, said:
“The facts disclosed in the suit render it appropriate for equitable cognizance. Moreover, the defendants, by their answer, have submitted the facts in the case to the equity jurisdiction of the court.”
In Ward v. Mid-West & Gulf Co., 97 Okl. 252 (223 Pac. 170), the Supreme Court of Oklahoma said:
*312“The contention of the plaintiff in error that a court of equity will settle the entire controversy before it, even to the extent of adjudicating matters of purely legal cognizance, is of course well settled.”
In Brown v. Winne et al., 92 Okl. 289 (219 Pac. 114), the court wrote:
“It is further hornbook law that a court of equity, having once obtained jurisdiction of a controversy, will retain such jurisdiction for the purpose of administering complete relief.
Treating of the terminable character of agency contracts, in 2 Ency. L. & P. 1247, the editors say:
“If no term of service has been agreed upon, the principal may, at any time, revoke the authority of his agent so far as it relates to things to be done and remaining unexecuted, unless the authority is coupled with an interest, or is conferred for a valuable consideration to the principal, or is part of a security.”
The highest court of a sister state has written:
“The existence or nonexistence of an interest in the thing itself on which the power is to operate is the universally accepted test.” Brown v. Skotland et al., 12 N. D. 445 (97 N. W. 543).
Again: “A power, coupled with an interest, must create an interest in the thing itself upon which the power is to operate. The power and estate must be united, or be coexistent, and this class of powers survive the principal, and may be executed in the name of the attorney.” Bonney v. Smith, 17 Ill. 531.
For a valuable discussion of the subject of the power of a principal to revoke a private agency, see 1 Mechem on Agency, Sections 561-586.
Pertaining to an irrevocable agency, it is said by the Supreme Court of Alabama in Chambers v. Seay, 73 Ala. 372 (5 A. R. C. 1366):
*313“To be irrevocable, it seems now well settled that tbe power conferred mnst create an interest in the thing itself, or in the property' which is the subject of the power. In other words, ‘the power and estate must be united and coexistent,’ and, possibly, of such a nature that the power would survive the principal in the event of the latter’s death, so as to be capable of execution in the name of the agent: Blackstone v. Buttermore, 53 Pa. St. 266 (5 A. R. C. 1409); Bonney v. Smith, 17 Ill. 531; Mansfield v. Mansfield, 6 Conn. 559 (6 Am. Dec. 76); Hunt v. Rousmanier, 8 Wheat. (21 U. S.) 174 (5 L. Ed. 590, 5 A. R. C. 1401, see, also, Rose’s U. S. Notes); Evans on Agency (Ewell), marg. p. 83, note, and p. 85; Raleigh v. Atkinson, 6 Mees. & W. 670 (151 Eng. Repr. 581.)”
In order to constitute a power coupled with an interest, there must be an interest in the subject matter of the agency itself, and not a mere interest in the result of the execution of the agent’s authority: Hunt v. Rousmanier, 8 Wheat. (U. S.) 174 (5 L. Ed. 590); Taylor v. Burns, 203 U. S. 120 (51 L. Ed. 116, 20 Sup. Ct. Rep. 40).
It has frequently been held that a mere interest arising from commissions or out of the proceeds of a transaction is not an interest which will prevent revocation. To constitute an agency coupled with an interest, both agency and interest must be derived from the same source: Black v. Harsha, 7 Kan. App. 794 (54 Pac. 21).
The lower court made a finding of fact, which is amply supported by the evidence, to the effect that contemporaneously with the execution of the agreement referred to, and for a valuable consideration, John Michael, defendant herein, appointed Sphier his agent in the management of the “Sphier block” and placed him in charge thereof; and that, as the *314owner of an interest in the subject matter of the agency, such agency was coupled with an interest. It follows that our former opinion, in so far as it conflicts with this, is set aside and withdrawn, and the decision of the lower court is affirmed.
Former Opinion Modified.
McBride, O. J., and Bean, J., concur.