Repass v. Estacada State Bank, Inc.

McBRIDE, C. J. The evidence, taken as a whole, does not indicate that defendant received, in fact, $17,500, either in cash or its equivalent, for the prop [144] erty in question. It is somewhere stated in the briefs that Vick valued his property in the trade at $20,000, or thereabouts, and that this valuation was accepted as the true value by defendant; but, taking the few scraps of testimony in the transcript together, we fail to find where there was any valuation suggested or accepted which would amount to more than $15,500 net. That defendant ever intended to give property of the actual value of $17,500 or $12,500 net, after deducting the mortgage thereon which Vick assumed, and in addition thereto add an equity of $1,000 in property owned by Cobb and as further addition a perfectly good note for $2,000, for property accepted and agreed to be worth only $15,500 plus Vick’s promissory note for $683.50, would be to impute to the defendant absolute imbecility. That each party was inflating values for the purpose of driving a bargain is clear, whether we call the transaction a “sale,” as contended by plaintiff, or an “exchange of properties” as contended by defendant. The practice of exaggerating the value of one’s own goods and depreciating that of the other party to a proposed trade is as old as trade itself. “It is naught, it is naught, saith the buyer; but when he has gone his way, then he boasteth.” Proverbs, xx. 14. Or, as Mr. Bishop remarks (Bishop on Contracts, § 664): “The law, departing from the rule in morals, tolerates a good deal of lying in trade, when in the nature of merely puffing one’s own goods or depreciating those of another; * * .” While, in a general way, this transaction has many of the characteristics of an exchange of properties, or as a barter of lands, “with boot given,” as remarked by DuRelle, J., in Ross v. Barr’s Exr., 21 Ky. Law Rep. 974 (53 S. W; 658), it must be held technically to have been a sale, under the definition given by this court in Wind [145] sor v. Collinson, 32 Or. 297 (52 Pac. 26), which is supported by the weight of authority generally. But it does not follow that because there was a technical sale the prices which the parties attached to their properties during the preliminary negotiations should be held to be the absolute value of the property conveyed as between the trustee and his cestui que trust. The agreement in this case is amply broad to authorize a disposal of the land in the manner that it was conveyed to Vick. Defendant was authorized to “dispose” of it for “cash or its equivalent.” So long as defendant acted in good faith,— and it is expressly stated that no fraud is imputed to defendant, — it had a right to dispose of it either for cash or property. If defendant disposed of it for goods it must account for plaintiff’s share in the value of the goods, and if, by inflating the value of the property, it succeeded in getting more goods in payment for the property than it otherwise would, thereby swelling the value of plaintiff’s share, plaintiff ought not to be heard to say that defendant should account to him on the basis of such inflation. If anyone has a right to complain, it is Vick, and he has not complained. There is no competent evidence as to the value of the Leaburg farm, if indeed it had any real market value. Plaintiff says that he considered it worth $20,000, but he is an interested witness and gives no data as the basis of his estimate. It appears that this farm is situated somewhere on the McKenzie River, with somewhere from 18 to 50 acres of land in cultivation, which was actually cultivated by defendant and Cobb for one year at a net loss of $762; that defendant had made many efforts to sell it, without avail; that there was a $5,000 mortgage on the property, the interest on which was eat [146] ing into its value each year, and that, in fact, everybody connected with it had a white elephant on his hands. Under the circumstances, the trade with Vick was a good one all around, and the fact that defendant, in order to effectuate it, put an inflated value on the property ought not to be used to make defendant pay more for the value of the land than it actually received. Defendant’s trust was not discharged when the conveyances were made. It could not make an accounting of the expenses it had incurred and pay plaintiff any share in the proceeds in dry-goods, or town lots, or buildings. It remained for it to turn these into their equivalent in money before accounting, and this seems to have been done; and this sum, and not the fictitious or inflated value made for the purposes of trade, is the amount which should be used as the basis of the accounting. This is the real doctrine enunciated in Grace v. McDowell, 60 Or. 577 (120 Pac. 413), and in Boyd v. Watson, 101 Iowa, 214 (70 N. W. 120). On the basis here indicated, we are of the opinion that the statement of account rendered by the defendant, which indicates that the sum of $956.64 is the balance that should be credited to plaintiff as his share in the profits of the transaction, should be increased by adding thereto the sum of $393.55, charged as commission on the sale of the farm. There is nothing in the agreement between plaintiff and the bank that justified the bank in charging the commission. Cobb simply purchased a half interest in the contract made by the bank. He was a coadventurer, or pseudo-partner, with the bank in the deal, and his rights as between himself and plaintiff rose no higher than those of the bank. Adding this amount to the [147] $956.64 makes plaintiff’s total credit $1,350.19, which amount should he deducted from the sum of $2,584.43 due from plaintiff to defendant on his note dated April 6, 1917. Defendant should be allowed interest on its note from its date until July 7, 1920, when this suit was commenced, at which date plaintiff should have a credit of $1,350.19, having the effect of a partial payment, which would leave at that date $1,699.45 due defendant from plaintiff, for which sum defendant should have a decree, with interest at 6 per cent from July 7, 1920. As the contentions of both parties were partly wrong, the decree of the Circuit Court will be modified as above, and neither party will recover costs in either court. Modified. Rehearing Denied. Bean, Brown and McCourt, JJ., concur.