Court Opinion

ID: 6905970
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:00:23.485634+00
Date Added: 2024-06-11T16:06:20.890933
License: Public Domain

Denied November 6, 1917.
On Petition for Rehearing.
(168 Pac. 298.)
Messrs. Bagley & Hare, for the petition.
Mr. A. E. Clarh and Messrs. Peters <& Turner, contra.
Opinion
Per Curiam :
The defendant has petitioned for a rehearing and he insists with much earnestness that the original opinion, reported in (Or.), 167 Pac. 586, “shows a misapprehension of the facts.” The facts must be ascertained from an inspection of the pleadings. In the action at law J. W. Shute states two causes of action, one arising out of a promissory note for $50 and the other relating to the advances made by Shute for the *216purchase of the King lauds. The cause of action concerning the note may be dismissed from further consideration for the reason that it is not connected with any transaction involving the King lands, and, moreover, the defendant in the action admits his liability on the note. In substance the answer filed by F. M. Heidel in the action at law admits that the parties agreed that Shute was to pay “$2,500 as option money” on the King lands and that Heidel would reimburse Shute “for one half of the amount so advanced”; and it is alleged that Shute has received from moneys belonging to Heidel a sum greatly in excess of the amount advanced for Heidel.
3. The complaint in equity, for convenience called a cross-bill because it is in the nature of one, relates the facts relied upon by Heidel; and, for the purposes of this discussion, it must be assumed that the cross-bill correctly states the facts since the decree appealed from involves only the cross-bill, a demurrer to the cross-bill and a ruling sustaining the demurrer. The cross-bill relates all the transactions involving the King lands from the time Shute and Heidel agreed to purchase the property until the final disposition of the premises. In June, 1907, Shute and Heidel concluded to purchase the King lands, and it was agreed that Shute would advance $2,500 on the purchase price and that Heidel would repay Shute one-half of the sum so advanced “out of the profits to be derived from the sale of said land and premises.” A third party, M. J. Kinney, became interested in effecting a sale of the property, and it was agreed between Shute, Heidel, and Kinney that Kinney should have 50 per cent, Shute 25 per cent and Heidel 25 per cent of the net profits. From time to time Shute made advances which in the aggregate amounted to $2,335; and, hence, Heidel owed *217Shute $1,167.50 on account of moneys advanced by the latter. In November, 1909, the King lands, together with other lands, were sold to the Washington County Abstract, Title & Trust Company for the agreed price of $84,000. The conveyance to the Abstract Company included not only the King lands embracing about 1,445 acres, but also an additional 655 acres. Shute was entitled to share in the profits realized from a sale of the King lands, but he was not entitled to share in any profits accruing from a sale of the additional 655 acres.
The Abstract Company had no money with which to pay for the land transferred to it, and it was agreed that the company would mortgage the premises and by that means raise sufficient funds to pay for the property. The plan was carried out by giving a mortgage on the King lands, the 655 acres and also on an additional 4,000 acres to Benjamin Schofield for $94,000. The extra 4,000 acres were “put in by” Kinney and Heidel for the purpose of making the mortgage more readily marketable. It is not claimed that $94,000 was actually paid for the mortgage but, according to the averments of the cross-bill, it was agreed between Shute, Heidel and Kinney that Schofield should have a bonus of $10,000, and hence of the $94,000, expressed as the consideration for the mortgage, $10,000 represented the bonus to Schofield and the remaining $84,000 represented the sum needed to pay for the 2,100 acres of land. Heidel alleges in his cross-bill that he and Kinney understood and believed that Schofield was a bona fide mortgagee, and, as such, furnished whatever funds were raised on the mortgage, but that instead of acting for himself Schofield was in reality acting as the secret representative of Shute; and that therefore the $10,000 allowed to Schofield as a bonus should be treated as a profit received by Shute on the sale of the *218premises. After alleging that the “-King lands, and other lands” were sold for $84,000, the following averment is found in paragraph II of the cross-bill:
“That out of the proceeds of said sale there was paid to and retained by the defendant to apply upon the one-half of the amount to be paid by the plaintiff to the defendant on account of the advance made by the defendant in connection with the F. C. King land, the sum of $1,299.45, which was considerably in excess of the amount due to the defendant from the plaintiff in the premises.”
In paragraph VII the following appears:
“That, as heretofore stated, the defendant received and undertook to distribute the proceeds of the so-called Schofield mortgage received upon the conveyance of the said property, as aforesaid, and in the making of said distribution wrongfully withheld and appropriated to his own use, not only the $10,000.00 bonus or discount on the mortgage, one-fourth of which equitably belonged to this plaintiff, but in addition thereto, one-fourth of the profits upon the King lands, and in addition thereto the sum of $1,299.45, of the moneys belonging to the plaintiff herein as his share of the profits and proceeds of the F. C. King land, and in addition thereto retained and appropriated to his own use wrongfully one-fourth of the profits upon the land hereinbefore described, which were not included among the F. C. King lands; which amount of profits so retained and appropriated by the defendant did not belong to him, in whole or in part, but in truth belonged to and should have been paid over to this plaintiff.”
Paragraph VIII contains the following unambiguous allegation:
“This plaintiff does not know, and'therefore cannot state with certainty the amount of the profits retained and appropriated by the defendant for his own use out of the sale of the F. C. King lands.”
*2194, 5. The foregoing statement is only an outline of the cross-bill and yet it is sufficient to enable an examination of the points made by the defendant. Shute contends that the doctrines announced in Haaland v. Miller, 67 Or. 346 (136 Pac. 9), and in Tooze v. Heighten, 79 Or. 545 (156 Pac. 245), are decisive of the instant case and preclude the maintenance of the cross-bill. The rules applied in both these precedents are recognized here as the settled law and cannot be violated. The instant cross-bill states a cause of suit and yet that is not enough to sustain it as a cross-bill. The pleading avers a counterclaim and still that is not sufficient to support it as a cross-bill. Turning to the answer in the action at law it will be observed that Heidel relies upon payment as a defense. Again noticing the cross-bill it will be seen that Heidel continues to maintain the position that the debt has been paid. It must be remembered at all times, too, that the stipulation to repay Shute out of the profits is not found in an agreement separate and apart from the agreement for the advances, but a single agreement included the two stipulations, one that Shute should advance $2,500 and the other that one-half of the advances should be repaid out of Heidel’s share of the profits. The plaintiff here rests his cross-bill upon the claim that the very agreement, which created the debt, has by the operation of one of its terms liquidated the debt so that the debt no longer exists. The cross-bill charges that Shute retained $1,299.45 “of the moneys belonging to the plaintiff herein as his share of the profits and proceeds of the P. C. King land.” If this allegation is to be construed as a statement that Heidel’s share of the profits on the King lands amounted to $1,299.45 it would be a complete defense to the action and the cross-bill could not be maintained *220even though Heidel might be entitled to pro secuto a suit in equity for an accounting of the proceeds derived from- the 655 acres. If the $10,000 is to be treated as money had and received, and if it stood alone, it would be available as a complete defense to the action and would not be enough to support the cross-bill even though Heidel might be entitled to maintain a suit in equity for an accounting of the moneys received for the 655 acres of land. As we understood his argument, counsel for the defendant takes the position that an accounting is not necessary to determine how much of Heidel’s share of the, profits from the King lands was retained by Shute since the cross-bill specifically states that Shute retained $1,299.45.
The defendant says in his petition for a rehearing that the cross-bill shows that $2,500 “by way of bonus’ ’ and “$1,299.45 by way of profits” were all the sums that Heidel “was entitled to out of the King deal.” If the pleading states that the total amount of Heidel’s share of the profits was $1,299.45 and if the $10,000 bonus is to be treated as money had and received then it would necessarily follow that the defenses would be complete at law and the cross-bill could not be maintained. But as we read the cross-bill Heidel alleges that he does not know and cannot tell without an accounting just how much his share of the profits on the King lands is, although he does know that of the total amount of his share Shute has retained at least $1,299.45. If paragraphs II and YII stood by themselves and the language of those paragraphs were construed more strictly against the pleader there would probably be room for the contention that the cross-bill states that Heidel’s share of the profits was $1,299.45; but when paragraphs II and VII are read in connection with paragraph VIII all possible doubt is removed, *221for in one paragraph the pleader says that Shute retained ‘ ‘ $1,299.45 of the moneys belonging to the plaintiff herein as his share of the profits and proceeds of the F. C. King land, ’ ’ and in the following paragraph he directly and unequivocally avers that he does not know the amount of the profits retained by Shute. If Heidel knows that Shute retained $1,299.45 and also more, but does not know how much more and cannot know how much more without an accounting, it is plain that Heidel is entitled to make his defense complete, practical and efficient; He is not restricted to a partial defense, but he is entitled to avail himself of his whole defense. If we read the cross-bill aright only a part of his whole defense would be available in the action whereas the whole of the defense could be employed in the suit. The petition for a rehearing is denied.
Rehearing Dented.