Court Opinion

ID: 6907616
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:03:10.987235+00
Date Added: 2024-06-11T16:06:25.138655
License: Public Domain

*547Denied April 11, 1922.
On Petition for Rehearing.
(205 Pac. 970.)
Rehearing Denied.
Mr. Oscar Eayter and Mr. Roy F. Shields, for the petition.
Mr. John E. McNary, Mr. W. G. Winslow and Mr. William E. Trindle, contra.
PER CURIAM/
— The defendants have presented a petition for rehearing, in which they earnestly insist that the conclusions reached by the court in its opinion heretofore filed herein (ante, p. 514 (201 Pac. 222), are contrary to the evidence and are beyond the scope of the issues made by the pleadings. A reexamination of the record in the case and a careful reconsideration of the questions presented thereby satisfies us that the result announced in the opinion is correct.
10. The trial court sustained' a general demurrer interposed by the defendant growers to plaintiffs complaint. In reviewing that decision, the rule supported by many decisions of this court was discussed and applied, that where two persons make a contract for the benefit of a third party, such third party may maintain a suit or action directly against the promisor to enforce such contract. In the opinion care was taken to recognize the elements essential to a contract that may be enforced by a third party: (1) There must be an intention to benefit the third party. (2) The promisee must owe some obligation to the third party.
*548In Vrooman v. Turner, 69 N. Y. 280 (25 Am. Rep. 195), the court said:
“To give a third party who may derive a benefit from the performance of the promise, an action, there must be, first, an intent by then promisee to secure some benefit to the third party, and second, some privity between the two, the promisee and the party to be benefited, and some obligation or duty owing from, the former to the latter which would give him a legal or equitable claim to the benefit of the promise, or an equivalent from him personally.”
The court continued:
“It is true there need be no privity between the promisor and the party claiming.the benefit of the undertaking, neither is it necessary that the latter should be privy to the consideration of the promise, but it does not follow that a mere volunteer can avail himself of it. A legal obligation or duty of the promisee to him, will so connect him with the transaction as to be a substitute for any privity with the promisor, or the consideration of the promise, the obligation of the promisee furnishing an evidence of the intent of the latter to benefit him, and creating a privity by substitution with the promisor. A mere stranger cannot intervene, and claim by action the benefit of a contract between other parties. There must be either a new consideration or some prior right or claim against one of the contracting parties, by which he has a legal interest in the performance of the agreement.”
The case of Vrooman v. Turner was cited or referred to with approval in the following Oregon cases: Parker v. Jeffery, 26 Or. 186 (37 Pac. 712); Brower Lumber Co. v. Miller, 28 Or. 565 (43 Pac. 659, 52 Am. St. Rep. 807) (above rule quoted); The Home v. Selling, 91 Or. 428, 436 (179 Pac. 261) (above rule quoted); Y. M. C. A. v. Croft, 34 Or. 106, 110 (55 Pac. 439, 75 Am. St. Rep. 568) (above rule *549quoted and decision in Brower Lumber Co. v. Miller said to be based thereon).
That the rule is accurately stated in the opinion is not seriously questioned, but defendants contend that the application of the rule is limited to executed contracts under which some fund or property has come into the hands of the promisor, in consideration of which the promisor agrees to pay a debt or discharge a legal obligation which the promisee owes to a third party; in support of this contention, defendants cite the cases of Washburn v. Interstate Investment Co., 26 Or. 436 (38 Pac. 620); Brower Lumber Co. v. Miller, 28 Or. 565 (43 Pac. 659, 52 Am. St. Rep. 807). Those cases expressly recognize the rule as stated in the opinion in this case and as defined in the case of Vrooman v. Turner. In applying the rule in the cases mentioned, the court used the language which defendants claim limits the rule; in Brower Lumber Co. v. Miller, 28 Or. 565 (43 Pac. 659, 52 Am. St. Rep. 807), Mr. Justice Wolverton in the opinion quotes from the decision in Parker v. Jeffery, 26 Or. 186 (37 Pac. 712), as follows:
“ * * in nearly if not quite every case coming under our notice in which the action has been sustained, * * there has been some property, fund, debt, or thing in the hands of the promisor upon which the plaintiff had some equitable claim, and from which the law, acting upon the relationship of the parties, or the fund, established the privity, implied the promise, and created the duty upon which the action was founded. ’ ’
And in Washburn v. Interstate Investment Co., 26 Or, 436 (38 Pac. 620), Mr. Chief Justice Bean, said:
“But where there is no such fund, debt, or obligation in the hands of or owing from, the promisor, but only an executory contract by one person to advance *550his own money to pay the debts of another, who is a, party to neither the contract or consideration, it is difficult to see upon what principle the doctrine can be applied.”
In this case there was an obligation owing from the defendant growers to the plaintiff; by exhibit “C” the growers expressly undertook to deliver the berries grown by them direct to the plaintiff and to thereby discharge the obligation of the fruit union to make such deliveries, and the defendant growers controlled loganberries which were the subject of the contract (exhibit “A”) between plaintiff and the defendant fruit union, and moreover the plaintiff to all intents and purposes was a party to the consideration of the contract between the growers and the fruit union, so that the rule may properly be invoked to sustain the complaint, even under the limitations placed upon its application in the cases relied upon by defendant. Those cases, however, do not purport to establish limitations upon the application of the rule for all cases.
11. Plaintiff’s complaint, however, may be sustained upon other grounds. The contract for the. sale of loganberries (exhibit “A”) was entered into by the fruit union in behalf of the growers and as their exclusive agent, under the terms of, and the authority given by, the contract (exhibit “B”). The defendant growers were referred to and named in exhibit “A,” with the acreage devoted by each to the raising of loganberries and the estimated tonnage raised by each grower. The defendant growers were all members of the fruit union; the latter was organized by the defendant growers to facilitate the sale and delivery of the fruit products raised by them; the contracts under consideration were made pursuant to *551that purpose and to effect and carry it out. The sellers in the contract of sale (exhibit “A”) were the ■ defendant growers, and the fruit union was their agent, with express authority from them to make the contract, and this was known to plaintiff’s assignor at the time the contract was made. The agent and principals mentioned, acting together, shortly before harvest, declared that they would not comply with the contract, and that they intended to sell and deliver elsewhere the berries to which plaintiff was entitled under the contract. Defendant growers were properly made parties to the suit, and the complaint was sufficient as to them, under the doctrine (considered in the original opinion) that the principal is bound by the contracts of the agent made within the scope of his authority, even though the contract is in writing and executed in the name of the agent alone, in cases where the body of the instrument clearly shows that the party executing the contract is acting as agent, and for whom he is acting: 2 C. J. 671, 674; 25 R. C. L. 657; 27 C. J. 298.
12. If the defendants be regarded as strangers to the contract of sale between the fruit union and plaintiff, as contended by defendants, the complaint is still sufficient as to the defendant growers under the rule that where a stranger wrongfully induces another to commit a breach of contract, or intentionally disables such other from discharging the obligations of his contract, the wrongdoer is liable in damages, or in a proper case may be enjoined from carrying out his wrongful purposes: 15 R. C. L. 54, 64; Angle v. Chicago etc. R. Co., 151 U. S. 1 (38 L. Ed. 55, 14 Sup. Ct. Rep. 240, see, also, Rose’s U. S. Notes); Doremus v. Hennessy, 176 Ill. 608 (52 N. E. 924, 54 N. E. 524, 68 Am. St. Rep. 203, 43 L. R. A. *552797); Gore v. Condon, 87 Md. 368 (39 Atl. 1042, 67 Am. St. Rep. 352, 40 L. R. A. 382); Knickerbocker Ice Co. v. Gardiner Dairy Co., 107 Md. 556 (69 Atl. 405, 16 L. R. A. (N. S.) 746 and note); Beekman v. Marsters, 195 Mass. 205 (80 N. E. 817, 122 Am. St. Rep. 232, 11 Ann. Cas. 332, and note, 11 L. R. A. (N. S.) 201); Wheeler-Stenzel Co. v. American Window Glass Co., 202 Mass. 471 (89 N. E. 28, L. R. A. 1915F, 1076 and note); Joyce v. Great Northern R. Co., 100 Minn. 225 (110 N. W. 975, 8 L. R. A. (N. S.) 756); Schonwald v. Ragains, 32 Okl. 223 (122 Pac. 203, 39 L. R. A. (N. S.) 854); Raymond v. Yarrington, 96 Tex. 443 (72 S. W. 580, 73 S. W. 800, 97 Am. St. Rep. 914 and note, 62 L. R. A. 962); Thacker Coal etc. Co. v. Burke, 59 W. Va. 253 (53 S. E. 161, 8 Ann. Cas. 885 and note, 5 L. R. A. (N. S.) 1091); South Wales Miners’ Federation v. Glamorgan Coal Co., [1905] App. Cas. 239 (2 Ann. Cas. 436, 74 L. J. K. B. 525, 53 W. R. 593, 92 L. T. N. S. 710, 21 Times L. Rep. 441, 1 British Rul. Cas. 1).
13. In discussing the sufficiency of plaintiff’s complaint as to the defendant growers, it is said in the opinion:
“It [fruit union] had an agency coupled with an interest, to the extent of being permitted to deduct from the sum received for the berries, a compensation for its services and expense in marketing them, and therefore irrevocable, to make the very contract it did make with plaintiff’s predecessor.”
Defendants except to the foregoing statement upon two grounds: First, that in order to constitute a power coupled with an interest, a property in the thing which is the subject of the agency or power must be invested in the person to whom the agency or power is given so that he may deal with it in his *553own name: 2 C. J. 531, 532, and cases cited in notes. Second, the interest which an agent might derive from compensation for his services as agent, even though this compensation is to be paid out of the property to which the agency relates is not a sufficient interest within the meaning of the rule: Williston on Contracts, § 280, pp. 537, 538.
The language to which exception is taken was used to express the situation as it existed before and when the writing (exhibit “C”) was executed. Perhaps it would have been more accurate to say that the fruit union had an “agency coupled with an obligátion,” and that such agency upon that account could not be revoked by the act of the principal.
In Mechero, on Agency (-2 ed.) Volume 1, Section 569, it is said:
“There may be cases in which the agent has been induced to assume a responsibility, or incur a liability, in reliance upon the continuance of the authority, under such circumstances that, if the authority be withdrawn, the agent will be exposed to personal loss or injury.’-’
Section 579. “The case of the authority, given to secure the agent against some obligation assumed or liability incurred on the principal’s account,- referred to in the preceding section, has been sometimes termed, for the sake of distinction, a ‘power coupled with an obligation,’ with the resulting rule that both ‘powers coupled with an interest’ and ‘powers coupled with an obligation’ are irrevocable. No objection can be raised to this nomenclature, ■ if it contributes to the determination of the question, though if the distinctions suggested in the preceding sections, as to the nature of the interest which the agent may have in the continuance of the power, are sound, that interest does not depend upon whether the authority is given to enable him to enforce some affirmative right, or to protect him against an obligation assumed. *554In either event the authority would he irrevocable by the principal.”
In support of the text the author cites in addition to English cases, the following American cases: Hunt v. Rousmanier, 8 Wheat. (U. S.) 174 (5 L. Ed. 589, see, also, Rose’s U. S. Notes); Hess v. Rau, 95 N. Y. 359; Chapman v. Bates, 61 N. J. Eq. 658 (47 Atl. 638, 88 Am, St. Rep. 459); Wiger v. Carr, 131 Wis. 584 (11 Ann. Cas. 998, 11 L. R. A. (N. S.) 650).
The defendant fruit union had entered into a contract binding it to sell and deliver the loganberries raised by the defendant growers during the years 1917 to 1921, inclusive, and had subjected itself to liability for damages for failure to make such deliveries; the defendant growers had authorized the fruit union to make the contract and incur in their behalf the liabilities mentioned.
In Story on Agency (9 ed.), Section 466, we find the situation of the parties in this case aptly discussed as follows:
“But let us suppose that the authority has been in part actually executed by the agent; in that case the question will arise, whether the principal can revoke the authority, either in the whole or as to the part which remains unexecuted. The true principle would seem to be, that if the authority admits of severance, or of being revoked, as to the part which is unexecuted, either as to the agent or as to third persons, then, and in such case, the revocation will be good as to the part unexecuted, but not' as to the part already executed. But if the authority be not thus severable, and damage will thereby happen to the agent on account of the execution of the authority pro tanto, there the principal will not be allowed to revoke the unexecuted part, or, at least, not without fully indemnifying the agent. As to the rights of the other contracting party in this last case, they are not *555affected by tbe revocation; but be will retain tbem all, as well as all tbe remedies consequent upon any violation of tbem, in tbe same manner as if no revocation bas taken place.”
These authorities fully sustain tbe result reached in tbe original opinion as to tbe sufficiency of tbe complaint, and at tbe same time qualify and explain tbe sense in which it was intended to use tbe phrase “power coupled with an- interest” in tbe original opinion.
Tbe remaining specifications of error set out in defendants’ petition for rehearing do not require specific notice.
Petition denied. Rehearing Denied.