Jones v. Waring

JOHNS, J. 1. The defendant did not move against or demur to the complaint and admits that on August 15, 1918, the plaintiff furnished and paid $1,450, one fifth of the original purchase price of the property. In her further and separate answer she alleges in substance that she was to pay the plaintiff one fifth of the net proceeds from the operation of the apartment house until such time as the [408] plaintiff should he paid in full and that in the event of a sale of the property prior to such payment, the defendant was to then pay the plaintiff “one-fifth of the net profits derived from the sale” and that the $1,450 was in the nature of a loan. It appears from the record that the net profits from August 15, 1918, to July 15, 1919, were about $500 a month, out of which the defendant paid the plaintiff $100 a month as her share during that time. The defendant contends that in July of 1919, she sold the property to H. S. Collins for $7,500, out of which she then paid plaintiff $1,500 in full settlement of her interest in the property. In other words, that between August 15, 1918, and July 15, 1919, defendant claims she paid the plaintiff $1,100 on account of net profits derived from the operation of the property and that when she made the sale to Collins in July, 1919, she paid her the further sum of $1,500 in full settlement. Under her own theory the defendant thus recognizes the right of the plaintiff to share in the net profits pending any sale of the property and affirmatively alleges that from and out of the proceeds of any sale “the defendant would pay to the plaintiff one fifth of the net profits derived from the sale. ’ ’ The following is from the record: “The Court: I think there is some issue in the pleadings in regard to the relationship. You deny there was a partnership relation existing, in the pleadings; I think plaintiff is entitled to show, if she can, there was a partnership relation, on the basis of an accounting. “Mr. McCurtain: Well, I don’t know; I don’t want to admit in terms there was a partnership relation— “The Court: Will you admit she would be entitled to an accounting of the rents and profits? ' [409] “Mr. McCurtain: There is no dispute about that, your Honor can’t try an accounting; if they can show this sale was fraudulent, she is entitled to one fifth of the net proceeds on that, I will admit she would be entitled to one fifth of the excess in the sale price over and above the $7,500 price that we settled with her for. * * “Mr. McCurtain: * * I want to keep the court’s mind on the issue in this case and that is if they prove this was a fake or fraudulent sale to Dr. Collins, they are entitled to a decree in accordance with the complaint.” 2. Having tried the case upon such issues in the lower court, in the absence of a demurrer to the complaint the defendant cannot for the first time in this court raise the question of equitable jurisdiction; Kitcherside v. Myers, 10 Or. 21. The Collins sale was a sham. The record is conclusive that the $1,500 paid the plaintiff was the money of the defendant; that Collins never had a dollar invested and that in the making of such payment, he represented and was acting for the defendant; that he never did pay any money on the purchase price; that after the alleged purchase, the defendant remained in the possession and control of the property and continued to manage and operate it in the same manner as she did before the sale and that Collins never did claim it or exercise any acts of ownership over it; that on March 1, 1920, the defendant personally made an actual sale of the property to Russell and Crawford for which she received from them $10,000 cash, a note and chattel mortgage on the property for $5,000 taken in her owu name; and that Collins was never consulted about this sale, and never had anything to do with it. [410] Although the opinion of the lower court expressed at the trial may have been more forcible than elegant, it is fully sustained by the facts shown in the record. 3. In the inception of the transaction, the relations of the sisters were pleasant and harmonious, yet it is very apparent that the defendant later conceived the plan to force her sister out of the business and take her share of the profits, and that was the purpose and intent of the sham sale to Collins. There is no merit in the defense. In her cross-appeal, the plaintiff contends that she should have a decree for $258.25 more, and under the actual facts that might be true, but upon the record before us it is hard to determine the amount of net profits from July 1919, to March 1, 1920. The accounts are not intelligible and were crudely kept. The trial court saw and heard the witnesses testify. The decree is affirmed. Aeitrmed. Burnett, C. J., and Harris and Brown, JJ., concur.