Court Opinion

ID: 6903316
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:57:10.494561+00
Date Added: 2024-06-11T16:06:14.829774
License: Public Domain

Mr. Justice Bean
delivered the opinion of the court.
It is plaintiff’s contention that he informed defendant fully in regard to the complicated deal and that all he did was for the best interests of defendant, and necessary to consummate the transaction and obtain the money required by the defendant; that it was an honest arrangement. It is stipulated that, in order to enhance the security of the bond issue, the Oregon-Washington Timber Company, in which the defendant held shares of stock, entered into a contract on June 9, 1910, with the Washington-Northern Bailroad Company and the Mississippi Yalley Trust Company. It appears that in organizing the new railroad company plaintiff took one share of stock and became a dir7 ,tor, as he states, at the instance of defendant Blaz: and the attorneys attending to the affair. The qu ,stion as to whether or not defendant had full know’edge from the plaintiff, Franck, in regard to the latter’s interest in the matter negotiated was an issue upon .the trial. The Circuit Court found in favor of the plaintiff, in effect, that it was a fair transaction, and that plaintiff performed all of his obligations, and caused the sale to be consummated. Defendant excepted to the findings made, and requested the court to make certain findings in favor of defendant, in substance, the reverse, for the reason that the evidence showed that plaintiff, by becoming a member of the syndicate which took over the old railroad without defendant’s knowledge, rendered the contract for a commission void.
1. In an action at law, tried by the court without the intervention of a jury, upon an appeal to this court, we can only examine the testimony to ascertain whether or not there is any competent evidence to support the findings. If there is such evidence, the findings of fact, which are of the same force as a verdict (Section 159, L. O. L.), should not be disturbed: Sun Dial Ranch v. *381May Land Co., 61 Or. 205 (119 Pac. 758); Brown & Co. v. Sharkey, 58 Or. 480 (115 Pac. 156). Plaintiff and defendant both testified, giving their versions of the matter, which conflict as to the conclusions and understandings. It appears that, in order to interest the parties and make the deal, it was necessary for the defendant and others to guarantee a certain amount of timber to be transported over the railroad at fixed prices. Mr. Franck was in control of some timber belonging to certain heirs. When it was concluded to abandon the attempt to obtain a loan and sell the railroad, Blazier, on January 15,' 1910', wired Franck from Portland, Oregon, as follows: “Will sell road for two hundred seventy five thousand cash. J. E. Blazier.” Franck then wired Blazier from Detroit, Michigan, on January 17, 1910, the following: “Plan is * * party to put in eighteen thousand dollars per mile for fifteen miles of new road * * will be under my control which will insure you fair treatment. Will’you contract to furnish forty million and Wiest twenty after first year must guarantee eighty million Leadbetter and me to furnish balance. * * [Signed] L. S. Franck.” Also, on same date Blazier received the following telegram from Franck: ‘ ‘ On this plan you will have to allow me the ten thousand dollars commission as agreed on other, only want this understood as I must take care of party here to get this through. L. S. Franck.” Blazier answered thus: “Will allow you ten thousand have your people got to come out and investigate before closing deal, if so must be at once have Omaha deal on. J. E. Blazier.” Several other communications passed between them. The lengthy correspondence between plaintiff and defendant during the progress of the negotiations is contained in the record. Franck and the party with whom he was negotiating then came to Portland, Oregon, and the deal was closed *382with, defendant. From the statement in the message to Blazier, above quoted, to the effect that the railroad, as proposed to be extended, would be under the control of Franck, thus insuring fair treatment of defendant, who was interested in obtaining a means for the shipment of his logs, and the proposition of plaintiff and another to furnish the balance of the timber required to be secured for hauling over the road, and the information to the defendant that Franck had “to take care of party,” as well as from plaintiff’s evidence, the court, acting as a trier of facts, might reasonably conclude that defendant knew that plaintiff was, according to the plan proposed, to be interested in the railroad and the operation thereof, and that plaintiff was dealing with different persons in order to obtain their aid in selling the railroad, reorganizing and securing a sufficient amount' of traffic to make the bonds of the road valuable, as an inducement for the payment of the money to defendant. Indeed, it is difficult to conjecture how the correspondence referred to could be construed otherwise than that it was intended plaintiff was to be interested in the purchase and future management of the properties sold, and that defendant desired and consented to a culmination of the deal with that understanding. Unless Franck was to have an interest in the property sold, we fail to see how it could be expected that it would be under his control. Whether or not the venture was profitable would not change the contract if defendant understood the details and consented thereto.
2. It is a salutary rule that, in order to insure good faith and loyalty, an agent employed to sell cannot generally make himself a purchaser, or become interested in the purchase, without the full knowledge and consent of his principal: 31 Cyc. 1437, 1438; Mechem, Agency, § 643; Hammond v. Bookwalter, 12 Ind. App. *383177 (39 N. E. 872, 873); Porter v. Woodruff, 36 N. J. Eq. 174. "Where the agent openly and fairly hnys the property, or is interested as one of the purchasers, at a price fixed by the principal, with full and complete knowledge that the agent is one of the purchasers, according to the weight of reason and authority the transaction is valid: 31 Cyc. 1439; Jameson v. Coldwell, 23 Or. 144 (31 Pac. 279); Mechem, Agency, § 644.
3. It appears that Franck negotiated mainly with one Noble, who was to sell the bonds of the "Washington & N. E. E., and defendant complains that plaintiff agreed with Noble to pool commissions; Noble and another to have two thirds of plaintiff’s commission, and plaintiff to have one third of the commission on the sale of the bonds, if any were sold after the organization of the new company. Plaintiff explains that this was necessary to make the trade, and was what he referred to when he stated in his message to defendant that he had to take care of a party, and exacted the $10,000 as commission, and that defendant was informed in regard thereto. This matter is not pleaded in the answer, and is mentioned only incidentally in plaintiff’s testimony. The illegality or secrecy of a contract must be specially pleaded to be available as a defense. Evidence of such matter is not admissible unless so pleaded: Buchtel v. Evans, 21 Or. 315 (28 Pac. 67); Thorne v. Barth (Sup.), 114 N. Y. Supp. 900.
4. Franck had a right to act with both parties in the deal and receive commission from both, provided the business was open, fair, and honest, and each party knew of the employment by the other: Jameson v. Coldwell, 23 Or. 144 (31 Pac. 279); Rice v. Wood, 113 Mass. 133 (18 Am. Rep. 459); McLure v. Luke, 154 Fed. 647 (84 O. C. A. 1, 24 L. R. A. (N. S.) 659).
It was plaintiff’s contention upon the trial, and there was evidence to fairly support the theory, that defend*384ant was fully informed in regard to the facts, and consented to the termination of the deal with an understanding of the true conditions. The trial judge saw and heard the witnesses, and was in a better position to pass upon the conflicting claims than is this court, and the finding should not be disturbed on account of a conflict in the evidence: Article VII, Section 3, of the Constitution as amended (see Laws 1911, p. 7).
The judgment of the lower court will be affirmed.
Affirmed : Rehearing Denied.
Mr. Chief Justice McBride, Mr. Justice Eakin and Mr. Justice McNary concur.