Obermeier v. Mortgage Co. Holland-America

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 471 AFFIRMED. This is an action by plaintiff, as lessee, to recover damages from a lessor for failure to deliver possession of a certain farm in Washington County, under the terms of a written lease. It is the third time that the case has been here on appeal. The first trial resulted in a verdict of $2,500 in favor of plaintiff, but the judgment was reversed on *Page 472 appeal and the cause remanded for a new trial: 98 Or. 195 (192 P. 283, 193 P. 915). On the second trial, after certain amendment of the pleadings, the cause was submitted to a jury and a verdict rendered in favor of defendants. On motion of the plaintiff, the trial court set aside this verdict and granted a new trial. Defendants appealed from this order, but the action of the lower court in setting aside the verdict was sustained and the cause remanded for another trial: 111 Or. 14 (224 P. 1089). On the third trial, the defendants filed a cross-bill in equity but, after demurrer was sustained thereto, answered and the cause proceeded as an action at law, the trial court being of the opinion that the facts pleaded by defendants did not warrant the interposition of equity. On this trial a verdict was returned in favor of plaintiff, against the Mortgage Company Holland-America, a corporation, in the sum of $1,400, but no reference therein was made to the other defendants. The mortgage company and Van Zante appeal. This controversy arose as follows: On November 13, 1917, defendant Van Zante, as agent and attorney in fact for the Mortgage Company Holland-America, a corporation, entered into a written agreement with plaintiff leasing a farm to him for a period of three years, commencing November 30, 1917. The stipulated rental for the entire term was $2,900, $1,500 of which sum was paid upon execution of the lease. This was remitted by Van Zante to his principal, the Mortgage Company Holland-America. It is necessary at this juncture to state that, prior to the execution of the lease, the mortgage company *Page 473 foreclosed its mortgage on the land in question. Upon execution sale, the property was bid in by Van Zante and a certificate of sale was issued to him in his name, although from the evidence it appears without contradiction that he held the title as trustee. The lease was made by Van Zante after the execution sale, but before time for equity of redemption had expired. This, however, is really immaterial in view of the fact that the mortgagor consented to the lease. Plaintiff undertook to take possession of the farm leased by him but found it occupied by a man named Rowe, who was holding over under the terms of a lease which expired November 1, 1917. The plaintiff was unable to secure possession and notified Van Zante to that effect. Numerous attempts were made to get Rowe and his family off of the farm, but without success until ousted February 24, 1918, through a forcible entry and detainer action instituted by the defendant Esther Mattison, who had purchased the property, subject to plaintiff's lease, from Van Zante, as agent of the mortgage company. On January 11, 1918, while the controversy relative to the removal of Rowe was pending and after the defendant Mattison had obtained title, a new lease was executed by and between the plaintiff and the defendant Mattison, It is apparent that the parties intended to adopt the provisions of the old lease with certain modifications relative to the rights of the tenant in the event of the sale of the property. The new lease, referred to in the record as Exhibit "B," upon which the present controversy centers, recites: "It is further understood and agreed that as a full and complete settlement of any delay in obtaining *Page 474 possession of said premises, and as full settlement of any controversy that might grow out of said matters between said lessee and John Van Zante, or the lessor named herein, the said lessee accepts the sum of $100 in cash upon the signing of this modification of the lease, the receipt whereof is hereby acknowledged." Plaintiff alleges that he was induced to execute this lease by reason of false and fraudulent representations of defendants that "said premises were unoccupied excepting by themselves and that the plaintiff could at once enter upon the possession thereof." Defendants deny the charge of fraud and assert that plaintiff was not misled or deceived, as he knew, at the time of the execution of the lease, that the premises were still occupied and in all probability would be for two or three days thereafter. For a more complete recital of the issues under the pleadings, reference is made to the former opinions of this court. It is believed that the statement here given is sufficient for consideration of the legal questions involved. It is to be remembered that judgment was entered only against the defendant Mortgage Company Holland-America. The record does not disclose any reason for appeal by Van Zante as no judgment was entered against him. In determining whether this cause should again be reversed, the court will consider the various assignments of error as affecting the rights of the mortgage company. As stated in the former opinion on rehearing by Mr. Justice BURNETT: "The language releasing Van Zante is plain. There are no ambiguities in it to explain, and unless *Page 475 fraud is properly alleged and proved, the release must stand as stated in this action at law." It is plain that the mortgage company could not be liable for failure to deliver possession of the property to plaintiff if the new lease is not vitiated by fraud. If the instrument is what it purports to be, plaintiff had entered into contractual relations with a new landlord. If the lease was procured through fraud, then the mortgage company's liability, if any, must be predicated upon the old lease. Relative to the issue of fraud, plaintiff testified that he signed the lease, Exhibit "B," because Van Zante had told him that "the place was vacant and all I had to do was to move out there." The great preponderance of the evidence, however, is, in our opinion, that Van Zante never made this statement, but that, in the presence of plaintiff and others, he talked to Rowe on the telephone about vacating the farm and repeated, in plaintiff's hearing, that Rowe would get off in two or three days. As much as we disbelieve this charge of fraud against Van Zante, who is an attorney of good repute and long standing at the bar, we are not permitted to substitute our judgment on questions of fact for that of the jury. Article VII, Section 3c, of the Constitution of Oregon forbids. There was evidence to submit to the jury on this phase of the case and its finding in reference thereto is conclusive. The jury having found that plaintiff was induced to execute the lease designated as Exhibit "B" by reason of fraudulent representations, such cannot be relied upon by the mortgage company as a release of liability. *Page 476 We now direct our attention to the original lease. It is contended by the mortgage company that there is no competent evidence of Van Zante's authority to execute this instrument. It relies upon Section 808 (subdivision 7), Or. L. (Statutes of Frauds), which provides that the authority of an agent to make contracts relating to real property must be in writing and that the agreement is void unless it be in writing and subscribed by the party to be charged or by his lawfully authorized agent. It is argued that, since there was no proof of written authority authorizing Van Zante to execute this lease, it is absolutely void as against the mortgage company. This theory is inconsistent with the position of the company as declared by its answer and by its attitude during the course of the trial. In the answer of the company it is alleged: "that in making said lease defendant John Van Zante was acting for the aforesaid mortgage company as its agent, attorney in fact and trustee." The trial court made inquiry as to the purpose for which a certain receipt was offered in evidence and was told by counsel for the mortgage company that it was "to show the principal was disclosed at that time; that he (plaintiff) knew the mortgage company was the principal in this matter." Indeed, there was no serious dispute about Van Zante's being the agent of the mortgage company, as it accepted from him the initial payment of $1,500 on the lease. It will not do to try the case upon one theory in the lower court and take an entirely different position here. This is a court of review. All of this is aside from the question as to whether the statute of frauds has any application. *Page 477 There is evidence tending to show that, at the time of the execution of the original lease, Van Zante disclosed to the plaintiff that, although the lease was made in his name, he was acting as agent for the mortgage company. In the opinion by Mr. Justice BENSON in this case, 98 Or. 195, it was held that an agent, who leases land and who discloses to the lessee the existence of such agency, cannot be held liable for failure to put the lessee in possession and that the party injured must look to the principal. This principle was also announced in Frank v.Woodcock, 72 Or. 446 (143 P. 1105). Since there was evidence of a disclosure of agency there is legal basis for the finding of the jury relieving Van Zante from liability and holding his principal, the mortgage company, to account. It is urged that the court erred in sustaining the demurrer to the cross-bill in equity. An examination of the pleading does not convince us that the facts alleged constitute ground for equitable relief. This question was presented inGellert v. Bank of California Nat. Assn., 107 Or. 162 (214 P. 377). It was there said: "An appeal from a decree of dismissal rendered in the suit in equity would not have enabled the appellate court to review a judgment entered in the action at law; nor would an appeal from a judgment entered in the action at law have permitted the appellate court to review a decree of dismissal entered in the suit in equity." It is true that no formal decree was entered dismissing the cross-bill but the cause proceeded as an action at law and this had the legal effect of a denial of defendants' right to be heard in equity. *Page 478 The distinction between actions at law and suits in equity still subsists in this jurisdiction. Error is predicated in permitting plaintiff, in response to the question: "In regard to this one hundred dollars set out in the complaint here, what was that for?" to answer, "It was paid up until we drawed up that second agreement." The examination thus continued: "Q. For anything before that time? A. Yes, sir. "Q. With regard to damages for what? A. For being kept out." Defendants insist that this allowed the witness to give his interpretation of a written contract which was plain and unambiguous in its terms. We agree, as stated in our former opinion, that the contract was plain in its terms as affecting the rights of Van Zante and the mortgage company and was not susceptible of explanation, but such cannot be said concerning it relative to the rights of the defendant Mattison. We think it was not the intention of plaintiff to relieve his new lessor of liability for failure to deliver possession of the premises to him after the execution of the new lease. When she purchased the property from Van Zante as trustee for the mortgage company, credit for $1,500, the amount paid when the lease was executed, was given to her upon the purchase price. Certainly, plaintiff did not intend to permit the keeping of this initial payment and be deprived of the right to the use of the property which he had leased. The evidence was admissible as affecting the right of the defendant Mattison, but should not have been received as against Van Zante or the mortgage company. However, defendants did not properly reserve this question for review. *Page 479 As stated by Mr. Justice BEAN in Bingham v. Lipman, 40 Or. 363 (67 P. 98): "If irrelevant or incompetent as to the other defendants, the remedy was by a request for an instruction from the court limiting its operation to the defendant Wolfe alone: * *." In other words, if the evidence be admissible for any purpose, a general objection will not suffice. Defendants complain because of exclusion of the testimony of Herbert W. Rowe and Sarah Rowe given upon former trial, notwithstanding there was proof that the witnesses were absent from the state. This question was considered on the second appeal and decided adversely to the contention here made by appellants. What was said there by Mr. Justice BEAN was no doubt relied upon in the court below in sustaining the objection to the admission of this evidence and such ruling will not be disturbed. It is the law of the case. The former verdict is challenged by reason of the failure to include therein other defendants. There was no basis for liability against the defendant Mattison, if Exhibit "B" be eliminated on account of fraud. Neither could the defendant Van Zante be held to account if, at the time of the execution of the original lease, he disclosed to the plaintiff that he was acting only in the capacity of an agent and trustee for the mortgage company. The effect of the verdict returned and the judgment entered thereon was an adjudication that defendants Mattison and Van Zante were not liable although not specifically named in the verdict. If, at the time of the reception of this verdict, defendants had objected to its form, the jury would, no doubt, have been instructed *Page 480 to use another form of verdict more specific in its findings as to the defendants found liable. Other assignments of error have been considered but we see no reason again to reverse this case which has worked its long and tedious way through the courts for many years. The judgment of the lower court is affirmed. AFFIRMED. RAND, C.J., and McBRIDE and COSHOW, JJ., concur.