Campbell's Gas Burner Co. v. Hammer

— 617 — Opinion by Mr. Chief Justice Moore. 1. The important question to be considered is whether or not the failure of the gas company to allege in its answer, in the law action to recover commissions, the settlements made with Harry G. Mourer and Jesse C. Luker, which compromises were consummated before that plea was interposed, precludes the gas company from maintaining this suit. The rule of res judicata, which was designed to promote the peace of society, allows to each party a day in court, and demands that in the trial of issues between the same parties all matters of judicial controversy shall be settled and determined in the same suit or action, if such causes can legally be joined and an opportunity is afforded to plead them. As a corollary deducible from this legal principle, it follows that if a final judgment is rendered, or a decree given on the merits, it is conclusive as to the rights of the parties and bars all subsequent legal proceedings between them upon the same cause of action or suit, not only as to the issues actually adjudicated, but also as to every other matter that might have been' put forth and decided as relating thereto or necessarily associated therewith, either as a cause of action or a ground of defense. When, however, the cause of suit or action or the ground of defense therein is founded upon a different claim or demand, the former judgment or decree constitutes an estoppel only as against matters actually litigated: Barrett v. Failing, 8 Or. 152; Applegate v. Dowell, 15 Or. 513, 516 (16 Pac. 651); La Follett v. Mitchell, 42 Or. 465 (69 Pac. 916, 95 Am. St. Rep. 780); Neil v. Tolman, 12 Or. 269 (7 Pac. 103); Morrill v. Morrill, 20 Or. 96 (25 Pac. 362, 23 Am. St. Rep. 95, 11 L. R. A. 155); Belle v. Brown, 37 Or. 588 (61 Pac. 1024); White — 618 — v. Ladd, 41 Or. 324 (68 Pac. 739, 93 Am. St. Rep. 732); Ruckman v. Union Ry. Co., 45 Or. 578 (78 Pac. 748, 69 L. R. A. 480); Yuen Suey v. Fleshman, 65 Or. 606 (133 Pac. 803, Ann. Cas. 1915A, 1072); Colgan v. Farmers & Mechanics’ Bank, 69 Or. 357 (138 Pac. 1070). 2. The persons appointed sole agents by the gas company to sell its stock may not have formed a partnership, bnt their united efforts to effect such disposal of the principal fund of the corporation made each a participant in a joint venture which, as between them, created a fiduciary relation tantamount to a partnership. In the absence of any showing to the contrary, it must be presumed that each party engaged therein had an equal interest in the enterprise, was compelled to bear a ratable part of the burdens imposed and the losses sustained, and permitted to share an equitable part of the profits derived from pursuing the business: 22 Am. & Eng. Ency. Law (2 ed.), 101; 23 Cyc. 459; Gius v. Coffinberry, 39 Or. 414 (65 Pac. 358); Eilers Music House v. Reine, 65 Or. 598 (133 Pac. 788). All the commissions having been earned before any interests therein were assigned to Harry G-. Mourer or Jesse O. Luker, the joint venture had thus terminated, and each succeeded to a 11 the rights and became subject to all the burdens resting upon his assignor. 3. It is fairly to be inferred from the agreed statement of facts, hereinbefore referred to, that if no settlement or compromise had been made, Jesse C. Luker would have been entitled to five twelfths and Harry Gr. Mourer to one twelfth of the amount of the ‘judgment rendered against the gas company. This stipulation of facts rebuts the presumption of an equal — 619 — interest of their assignors in the commissions so earned. “Courts of equity,” says an author, “have jurisdiction over all trusts for the purpose of compelling an accounting, and the existence of any confidential or fiduciary relation is sufficient to invoke such jurisdiction whenever the duty arising out of such relation rests upon one of the parties to render an account to the other”: 1 C. J. 621. Another text-writer, discussing this matter, observes : “In the absence of statutory provisions on the subject, a court of equity has exclusive jurisdiction of actions for the dissolution and settlement of partnerships”: 30 Cyc. 716 4. The remedy at law which will defeat the maintenance of a suit in equity must be as full, adequate, complete and efficient as is the means by which the violation of a right is prevented, redressed or compensated in the latter forum: South Portland Land Co. v. Munger, 36 Or. 457 (54 Pac. 815, 60 Pac. 5); Benson v. Keller, 37 Or. 120 (60 Pac. 918); Wollenberg v. Rose, 41 Or. 314 (68 Pac. 804); Hall v. Dunn, 52 Or. 475 (97 Pac. 811, 25 L. R. A. (N. S.) 193); Dose v. Beatie, 62 Or. 308 (123 Pac. 383, 125 Pac. 277). 5. The relation existing between the persons jointly engaged in selling, the corporate stock being fiduciary and in the nature of a partnership, the dissolution of which, and the settlement .of the accounts thereof, could be secured only in a court of equity, the gas company was not obliged to allege in its answer in the law action the fact of the assignments which it had secured. It is possible that after interposing an answer in that action the gas company, as plaintiff, — 620 — could have filed a cross-bill in equity and set forth such assignments, and thereby secured a stay in the prosecution of the action until the suit was finally determined: Section 390, L. O. L. It was not essential, however, that such a course of practice should have been pursued, for a party may safely rely upon a legal defense in an action without being precluded from asserting his equitable right in an original suit: Hill v. Cooper, 6 Or. 181; Starr v. Stark, 7 Or. 500; Spaur v. McBee, 19 Or. 76 (23 Pac. 818); McMahan v. Whelan, 44 Or. 402 (75 Pac. 715); Fire Association v. Allesina, 45 Or. 154 (77 Pac. 123); Clark v. Hindman, 46 Or. 67 (79 Pac. 56); Bowsman v. Anderson, 62 Or. 431 (123 Pac. 1092, 125 Pac. 270). We consider, therefore, that the answer of the gas company in the action against it to recover commissions did not bar the maintenance of this suit. The stipulation of facts seems to concede that the only question involved in this suit is the right of the attorney to recover his stipulated compensation with respect to the claims so assigned, notwithstanding their transfer. 6. An attorney has no lien for his services before judgment or decree, and until such final determination of the cause has been made, the client may compromise the case without reference to any contract with the attorney: Jackson v. Stearns, 48 Or. 25 (84 Pac. 798, 5 L. R. A. (N. S.) 390). In Stearns v. Wollenberg, 51 Or. 88, 92 (92 Pac. 1079, 1080, 14 L. R. A. (N. S.) 1095), in discussing this subject, it is said: “It would appear, therefore, that,- where there is no lien upon the cause of action, either by contract or by statute, the plaintiff’s attorney has no vested right which the court is bound to protect at the request of the attorney; but even then the court may, in its discretion, exercise such arbitrary power, and — 621 — doubtless will do so, when it can see that, through the exercise of the usual and ordinary powers vested in a court over its judgment as to the form and effect thereof, or as to its satisfaction, it may aid the attorney in the collection of his fees.” The authority of .a court thus to protect an attorney from an act of his client in assigning or compromising a cause of suit or action must necessarily depend upon the client’s fraud, which, to become available as a ground of relief, must have been knowingly participated in by the adverse party who secured the transfer or settlement of the demand. An examination of the agreed statement of facts upon this subject, as hereinbefore detailed, fails to show any fraudulent acts or conduct which would warrant a court of equity in imposing upon the gas company any part of Mr. Upton’s fees predicated upon the assignments so made. The decree will therefore be reversed, and one entered here granting the relief prayed for in the complaint. Reversed. Decree Rendered.