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tinue and do the very best we could to co-operate with him, making things a success, and upon the successful issue that we would receive substantial reward, putting it in the light that upon the failure, as I looked upon it, we would not be expected to be additionally compensated, we were urged in that way, at least I was, to but upon the issue of success we would be, and do the very best we could to see that things were made a success."

Muir and in pursuance of the statement they | preciated, that they desired me and them to conhad made to him, Fred S. Morris indorsed his note for $25,000, with which Muir took up 1,000 shares of stock pledged to Ivins, applying the money in payment of the Ivins loan, and that afterwards the defendants sold the stock with their own, paid Muir's note and gave him $15,000 of money realized from the sale, being the $15 per share in excess of the option price extended to Ivins. Giving this testimony its utmost weight it The reply traversed the new matter of the is plain there was nothing in the contemplaanswer in important particulars. In his tes- tion of the parties except a possible honotimony, however, Muir admitted receiving rarium unsupported by any legal obligation. the $15,000 as profit on the sale of the 1,000 Under the contract of employment his servshares of Power Company stock redeemed ices were met by the consideration of his from Ivins, but contended it was a transac-monthly salary settled upon in advance. tion distinct from the one on which this ac- Having already agreed to render these servtion is founded. At a trial before a jury, ices, he was bound to perform them, and they the circuit court at the close of the testimony could not, as a consideration, support any adfor the plaintiff entered a judgment of non-ditional or different contract. suit on the motion of the counsel for the defendants, and the plaintiff appeals.

Ralph E. Moody and Kenneth L. Fenton, both of Portland (Wm. D. Fenton and Ben U. Dey, both of Portland, on the brief), for

appellant. Wirt Minor, John M. Gearin, and

C. W. Fulton, all of Portland (Teal, Minor & Winfree and W. A. Johnson, all of Portland, on the brief), for respondents.

It should be observed that in the thirteenth allegation of the complaint, to which reference has been made, the plaintiff founds her cause of action upon the contract for the dissolution of the firm, and it is stated as an inducement thereto and as part of the agreement of dissolution the defendants promised to issue 1,000 shares of Power Company

stock to Muir. The record discloses four written agreements affecting the liquidation of the firm. The first was dated January 31, BURNETT, J. (after stating the facts as 1905, and provides in general terms that the above). [1] The precise question to be deter- partnership should terminate by July 1, 1905, mined is whether there was any competent unless continued by mutual written consent; evidence to take the case to the jury. Be- that the indebtedness and liabilities of the sides the writings hereinafter mentioned, the firm should be reduced and paid off as rapevidence is found in the deposition of the idly as possible without sacrificing the interdecedent and the testimony of Julius Chris- ests or assets of the concern; and that no tensen and W. H. Hurlburt, the former a more business should be undertaken, the member of the firm, and the latter president general purpose being to enter upon a course and general manager of the Power Company of liquidation and settlement of the affairs while under control of the bank and the of the firm. The original agreement of partfirm. Muir admitted as a witness that he en-nership provided that Christensen should be tered the employment of the bank in Febru-owner of one-fifth of the firm's property, and ary, 1901, at a salary of $200 per month, which was agreed upon in advance. He continued under that arrangement until April, 1902, from which date to December 31st of that year he drew a salary of $275 per month. During the year 1903 he received a monthly compensation agreed upon in advance of $400, and afterwards until the Power Company was sold, he received $275 per month. He says:

each of the two Morris brothers should own two-fifths of the same, and that the partners should be liable for the firm's indebtedness in like proportion. The next agreement affecting the winding up of the firm's affairs was dated June 26, 1905. By its terms Morris Bros., the defendants here, assumed the payment of the Ivins note of $100,000, turned over to Christensen 647 shares of Catawba Power Company, 6% shares of Warren & "During_this_ entire time it was frequently stated by Mr. Fred S. Morris, who had charge Jamestown Street Railway Company, and of the business here and the operations of Mor- 2,383 shares of York Haven Water & Power ris & Whitehead, bankers, Morris Bros. & Chris- Company, for which Christensen transferred tensen, and Morris Bros., in this territory, that to them 49 shares of Land Company of OreI was inadequately compensated, the statement being commonly that Mr. Brown, Mr. Hurlburt, gon, 2,096 shares of Power Company stock, and myself were all working for inadequate sal- and all his interest in the 5,000 shares of aries; that this was recognized by our em- the latter stock pledged to Ivins, subject to ployers, and the purpose was to see that we the terms of the pledge and his option to received additional compensation. There was never anything definite said to me, just how this compensation would be paid; there was no promise of any definite amount, or any particular thing, but there was a continual statement and promise that there was recognition of the fact that I and the other two men spoken of other assets of the firm still on hand. The were very much underpaid; that this was ap-next agreement was dated June 27, 1905, and

This purchase the same at $50 per share. agreement does not purport to affect the remaining interests of Christensen or Morris Bros. in the Power Company stock or the

JL

154 PACIFIC REPORTER

(Or.

the paper which the latter exhibited to him. N. P. R. R. Co., 20 Or. 425, 26 Pac. 272, 23 In the light of such cases as Wiseman v.

provided that the defendants here, on or be
fore August 1, 1905, should personally dis-
charge without using any of the partnership
assets, all the firm's obligations represented Am. St. Rep. 135, Jones v. Teller, 65 Or. 328,
by several of its promissory notes, required
Christensen to discharge certain other of its
obligations, and generally provided for the
disposal of the remainder of the firm's assets.
The fifth paragraph states that:

"None of the funds or assets of the partnership shall be in any way used by any of the liquidating partners, except as provided herein. The said funds shall be kept separate and apart from and be in no wise commingled with any other funds or assets. nership shall be deposited in the name of and to All moneys of the partthe credit of Morris Bros. & Christensen."

133 Pac. 354, and Parker v. Smith Lumber Co., 70 Or. 41, 138 Pac. 1061, the witness, though clearly remembering the same, could not be permitted to state the contents of the count for not producing it. Much less, in the paper, unless some showing was made to acabsence of such explanation, could he substitute his own memorandum of his remembrance of its terms

plaint, was part of, and hence, as a matter
[3] All this, however, as stated in the com-
ment and cannot affect the conditions there-
of law, was merged in, the written agree-
of as thus finally settled.

L. O. L.:
We here recite the oft-quoted section 713,

reduced to writing by the parties, it is to be
"When the terms of an agreement have been
considered as containing all those terms, and
therefore there can be, between the parties and
no evidence of the terms of the agreement, oth-
their representatives or successors in interest,
er than the contents of the writing, except in the
following cases:

writing is put in issue by the pleadings;
"1. Where a mistake or imperfection of the

fact in dispute. But this section does not ex-
"2. Where the validity of the agreement is the
clude other evidence of the circumstances under
relates, as defined in section 717, or to explain
which the agreement was made, or to which it
an ambiguity, intrinsic or extrinsic, or to estab-
includes deeds and wills as well as contracts be-
lish illegality or fraud. The term 'agreement'
tween parties."

Finally, on November 1, 1905, the members of the firm made their last written stipulation, so far as the record discloses, winding up its affairs in detail according to schedules annexed to the document, and apportioned among themselves the liabilities assumed by each. In all these written contracts affecting liquidation of the firm, no mention whatever is made of any obligation to Muir or of his ownership of or right to any of the stock of the Power Company. On the contrary, as quoted above, they expressly interdicted any use of the assets except as prescribed in the language of their stipulations. There is no attempt whatever to prove the averment of the complaint that as early as November 7, 1904, the partners of the firm had determined to issue any stock to Muir. [2] Plaintiff offered oral testimony to show that in the negotiations culminating in the agreement of June 26, 1905, the partners set aside 1,000 shares each for Muir, Brown, and Hurlburt, and one share each for J. Frank Watson and A. B. Croasman. Such proffered evidence is found in the deposition of Muir, wherein he speaks of having seen a certain yellow paper memorandum shown him in Philadelphia in April or May, 1908, by James II. Morris, whereon were set down in the latter's handwriting 1,000 shares each for Muir and Hurlbut, and he thinks 2,000 for Brown, which Morris told him were made when the agreement of June 26, 1905, was framed so as to determine what would be left of the Power Company stock to be disposed of between the partners. The witness Christensen also testified about the same memorandum all over the objections of the defendants. paragraph. The plaintiff relies upon this paper to prove the fixing of the then yet undetermined amount of extra remuneration to be awarded to her decedent. If it was of any value as proof, the paper itself was the best evidence; but curiously enough, no effort appears to have been made to produce it or to account the operation of the law. for its absence. Not only so, but Muir, avow-visions of section 713, L. O. L., no other eviing his complete forgetfulness of it, offered dence is admissible to declare the terms of as evidence of its contents part of a written statement made by himself May 30, 1908, when, as he says, the matter was fresh in his memory, covering his recollection of the conversation with Morris and the terms of

titled to show the actual consideration of
[4] The plaintiff argues that she was en-
the contract in question; that she is not
bound by its terms, and may show other
conditions supporting her claim.
be admitted that the talk about other pos-
It must
sible additional compensation was not defi-
nite enough to constitute a legal obligation.
As a corollary to this, it is plain that the
amount and manner of additional pay rested
solely in the discretion of the employers, and
without some definite stipulation supported
by sufficient consideration, no liability would
accrue against them.
therefore, for the plaintiff to show some such
It is indispensable,
contract. Indeed, this is the avowed theory
of the complaint, as stated in the thirteenth

claim under the contract of dissolution or
The plaintiff must therefore
not at all.
its source.
Her demand cannot rise above
is sound, Muir was in every sense of the
If the theory of the complaint
word a privy to the contract of dissolution.
both by the allegations of that pleading and
Under the pro-

the contract, except the writing itself. The
partners had a right to contract as they
chose concerning the assets of their own
firm.
plaintiff, they could have disposed of the
It is true enough, as argued by the

[5] The plaintiff cannot import into them any additional stipulation inuring to her benefit on the pretense that she is merely inquiring into the consideration. The provisions of the agreements constituting the consideration are contractual in their nature, and not merely monetary. Within the meaning of Sutherlin v. Bloomer, 50 Or. 398, 93 Pac. 135:

personalty of the concern by oral agreement, [ plete in themselves, leaving nothing more to and have fastened upon it a trust in favor be said. of any one they chose to mention. But although it is competent to create a trust in chattels by parol, yet it is equally true that when parties have reduced their contract to writing, even about a matter that might have been left to recollection, that instrument is the exclusive standard to which their obligation must be referred. Taken altogether, the contracts already mentioned constitute a complete disposition of all the assets of "The consideration specified in the written the firm in detail. They are binding not on- contract consists of certain acts to be performed, ly upon the parties themselves, but also up-in holding that, where the statement in the and the authorities are practically unanimous on those who claim under them. The writ- written instrument as to the consideration is ings left nothing to determine respecting the of a contractual nature, as where the considerastock in question. All the shares were final- tion consists of a specific and direct promise by ly and effectively disposed of, nothing reone of the parties to perform certain acts, it cannot be changed or modified by parol or exmaining to be done. In other words, the con- trinsic evidence." tract was complete within itself about all such matters. Therefore it cannot be varied

All the assignments of error upon which by parol testimony. The case is essentially the plaintiff relies are bottomed upon an controlled by Oregon Mill Co. v. Kirkpatrick, effort to go behind the written contract of 66 Or. 21, 133 Pac. 69, where a similar question was involved. In brief, unless Muir was privy to the contracts involving disposition of the shares in question he cannot

claim the benefit of them. On the other

hand if he was privy to them, he must take them as he found them. In them, however, as before stated, there is no provision for his benefit.

The principle is stated thus by Mr. Chief Justice Moore in Pacific Biscuit Co. v. Dugger, 42 Or. 513, 70 Pac. 523:

"The rule that an instrument in writing cannot be contradicted or varied by parol evidence applies only between the parties and their privies, and cannot be invoked in controversies between third parties and any of the parties to the

contract."

dissolution and prove by oral testimony an agreement for the benefit of the plaintiff's decedent. They must all yield to the rule declared by section 713, L. O. L., and cannot avail the plaintiff at this juncture. The judgment of the circuit court was right, and must be affirmed.

MOORE, C. J., and HARRIS, J., concur, BEAN, J., dissents.

CITY OF PORTLAND et al. v. AMERICAN
SURETY CO. OF NEW YORK et al.

(Supreme Court of Oregon. Jan. 18, 1916.)
1. COSTS 13 - EQUITY PROCEEDING

CRETION.

DIScosts and disbursements rests in the discreIn an equitable proceeding the allowance of tion of the court.

[Ed. Note. For other cases, see Costs, Cent. Dig. §§ 21, 25; Dec. Dig. 13.] 2. APPEAL AND ERROR -ENFORCING PARTY.

323-MATERIALMEN

CLAIMS-APPEAL-NECESSARY

Where, in a suit by a materialman against a contractor and his surety other subcontractors were made parties so as to determine their participation in the unpaid portion of the contract price, one subcontractor was denied participation and appealed, the other subcontractor defendants were necessary and proper parties to the appeal.

In that case a son had executed to his mother a bill of sale of a stock of goods in his possession absolute on its face, but in reality as a mortgage to secure her for moneys which she had advanced to him. The plaintiff, claiming that the son in control of the business was her agent, sued her for the price of certain goods delivered to him and which he had included in the bill of sale. The paper was offered to prove her absolute ownership of the stock of goods. This document was thus drawn in question collaterally between parties, one of whom was a stranger to it, and it was held that she might show the real object of the contract as against the stranger. In such cases as the American Contract Co. v. Bullen Bridge Co., 29 Or. 549, 46 Pac. 138, only the rate of payment and 8. COSTS 230-PREVAILING PARTY SEVquality of the property to be delivered was ERAL CLAIMANTS-APPEAL. specified in the offer and acceptance of the parties, nothing being said about the quantity to be furnished. It is plain in such a case that not all the contract is included in the writing, and that the remainder of the terms may be proven by parol. In the instant case, however, the contracts are com

[Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. §§ 1796, 1798-1805; Dec. Dig. 323.]

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Where in such appeal appellant obtained a reversal, with costs against the contractor's surety, the other defendant subcontractors will not be awarded costs against appellant on motion, he was a prevailing party against them tion therefor, since, in being allowed participato that extent.

[Ed. Note.-For other cases, see Costs, Cent. Dig. §§ 869-876; Dec. Dig. 230.]

4. COSTS 240-SEVERAL CLAIMANTS-AD-] other claimants were satisfied therefrom. VERSE POSITION-APPEAL.

Neither will they be awarded costs against the contractor's surety, since as between them and such surety there was no dispute.

The Western Electric Company appealed, serving notice on all other parties to the suit, secured a reversal of the decree of the

[Ed. Note.-For other cases, see Costs, Cent. circuit court and established its right to parDig. §§ 922-926; Dec. Dig. 240.]

Department 1. Appeal from Circuit Court, Multnomah County; Henry E. McGinn, Judge.

Action by the City of Portland, on the relation of the Van Emon Elevator Company, and the Van Emon Elevator Company, against the American Surety Company of New York and others, Title Guaranty & Surety Company and others, and the contractor for whom they were surety, to recover for materials furnished in the erection of a building. The Western Electric Company and others were joined as materialmen and subcontractors for the purpose of determining and adjusting their rights of participation in the unpaid balance of the contract price. From a decree of the circuit court denying it participation until the claims of the other materialmen were satisfied, the Western Electric Company appealed, securing a reversal on that point. On motion by defendant Westinghouse Pacific Coast Brake Company to modify the decree, so as to allow it costs against appellant, Western Electric Company, and respondent Title Guaranty & Surety Company. Motion overruled.

See, also, 153 Pac. 786.

Moser & McCue and Wm. A. Williams, all of Portland, for appellant. W. P. La Roche, City Atty., for respondent city of Portland. Reed & Bell, of Portland, for respondent Van Emon Elevator Co. Kollock & Zollinger, of Portland, for respondent Title Guaranty & Surety Co. Chas. J. Schnabel and J. B. Ofner, both of Portland, for Westinghouse Pacific Coast Brake Co. J. A. Beckwith, of Portland, for A. G. Electric & Manufacturing Co.

ticipate in the balance unpaid of the contract price and to recover from the contractor's surety. The decree of this court awarded costs and disbursements in favor of the Western Electric Company against the Title Guaranty & Surety Company, but denied such indemnity to all other parties. The defendant Westinghouse Pacific Coast Brake Company now moves for a modification of the decree so as to allow it costs and disbursements against the appellant, Western Electric Company, and the Title Guaranty & Surety Company.

[1] Let it first be set down that in equitable proceedings the allowance of costs and disbursements rests in the discretion of the court.

[2-4] As influencing the exercise of this prerogative in this instance, it will be observed that the decree of the circuit court in favor of all the claimants except the appellant Western Electric Company excluded the latter from participation in the city fund until the claims of the former were satisfied. In this court this preference was overturned, and the appellant was admitted to share in the fund like all other claimants. They were proper and necessary parties to the appeal, and the appellant prevailed against This is a sufficient them in that respect. reason for denying any of them costs or disbursements against the appellant. It might properly have been ground for awarding costs against them. There was no dispute in this court between them and the Title Guaranty & Surety Company; hence no equitable ground exists here for giving any of them costs or disbursements against it.

The principal dispute before us was between the Title Company and the Western Company wherein the latter contended for BURNETT, J. Under a clause of the char- the allowance of its claim against the former ter of the city of Portland the relator insti- which had been wholly denied by the circuit tuted a suit against a contractor for the erec- court. Having succeeded in establishing its tion of a city building and his surety to re-entire demand against the Title Company, it cover for materials furnished by it and in- would ill accord with equitable consideracorporated in the structure. Other material- tions, in the absence of any unusually differmen and subcontractors were made defend-ent conditions, to deny costs in favor of the ants, so that, among other things, their rights appellant and against the Title Company. to participate in the balance of the contract In the adjustment of costs in this court the price remaining unpaid and in possession of other claimants fared quite as well as they the city might be determined and adjusted. had any reason to expect and must be conThe circuit court denied relief to the Western tent. Electric Company, a defendant materialman, as against the contractor's surety, the Title Guaranty & Surety Company, and postponed its participation in the city fund until all

The motion is overruled.

MOORE, C. J., and McBRIDE and BENSON, JJ., concur.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

complete contract between the parties and specCARKONEN v. COLUMBIA & P. S. R. CO. ifying highway paving brick at $17.85 per thou

(No. 12325.)

sand net, evidence for the buyer that the brick actually delivered to him was No. 2 brick at (Supreme Court of Washington. Jan. 7, 1916.) $13.75 per thousand was admissible, as the buyDepartment 1. Appeal from Superior er in a suit for the purchase price of goods may show that they were not what he contracted for. Court, King County; John E. Humphries, [Ed. Note.-For other cases, see Sales, Cent. Judge. Dig. 88 473-491; Dec. Dig. 181.] On motion for rehearing. Rehearing de-3. SALES 285- BREACH OF WARRANTY

nied.

For former opinion, see 150 Pac. 1162. Brady & Rummens, of Seattle, for appellant. Farrell, Kane & Stratton and Stanly J. Padden, all of Seattle, for respondent.

ACCEPTANCE-RIGHT TO DAMAGES.

In a seller's action for the price of brick sold and delivered as provided by a shipping order constituting a complete contract between the parties warranting that the brick would be highway paving brick, the buyer, who had accepted and used the brick delivered without notifying the seller, before the action, that they were of a quality inferior to that contracted for, and who was not himself seeking to rescind the contract, was entitled to set off the difference in price between the quality warranted and the quality actually received.

285.]

PER CURIAM. Respondent has applied for rehearing en banc, and urges, among other things, that the motion for judgment notwithstanding the verdict was granted before the decision of this court in Forsyth v. Dow, 81 Wash. 137, 142 Pac. 490, which was decided August 14, 1914, while the notice of appeal herein was filed June 15, 1914. We DAMAGES FOR INFERIOR QUALITY. make this additional statement in justice to counsel for respondent, that it may not appear that the making of the motion at such time was a careless oversight of a question of practice on the part of counsel.

[Ed. Note. For other cases, see Sales, Cent. Dig. §§ 806-808, 810; Dec. Dig. 4. SALES 179 RIGHT TO INSPECTION

It is also urged that we should have followed the precedents set in Pierce v. Seattle Electric Co., 83 Wash. 141, 145 Pac. 228, and Boyce v. Chicago, Milwaukee & Puget Sound Ry. Co., 82 Wash. 204, 144 Pac. 27, decided after the Forsyth Case, in which cases we for the time being suspended the operation of the rule established in the Forsyth Case, because of the fact that the practice condemned by the Forsyth decision had not always been understood, and the cases cited were pending when the Forsyth Case was decided. Such was true in this case also. But the great number of such cases coming here has impelled us to adhere to the rule established by the Forsyth Case; otherwise the continual exceptions would require endless distinguishing decisions, or result only in additional confusion. Hence we have decided to hereafter in all cases hold to the rule adopted in the Forsyth Case.

PETERSON et al. v. DENNY-RENTON

CLAY & COAL CO. (No. 12518.)

(Supreme Court of Washington. Jan. 8, 1916.)

1. EVIDENCE 442-PAROL EVIDENCE-CONTRACT OF SALE.

Where a shipping order for brick was upon its face a complete contract between the parties, covering all the terms of the order, the buyer's offer of parol evidence to prove a different contract, not tending to establish fraud in the procurement of the shipping order but only to modify it, was inadmissible.

ing for an inspection, but containing no warWhere goods are sold, by contract providranty, the buyer's right to recover damages for defects, etc., does not survive his acceptance after opportunity to discover such defects, unless notice is given to the seller, or the buyer returns or offers to return the goods.

[Ed. Note.-For other cases, see Sales, Cent. Dig. §§ 456–468; Dec. Dig. 179.]

Appeal

Department 2.
from Superior
Court, King County; John E. Humphries,
Judge.

Action by the National Surety Company against Andrew Peterson, the Denny-Renton Clay & Coal Company, and others, with cross-action by the Denny-Renton Clay & Coal Company. Judgment for the DennyRenton Clay & Coal Company against Peterson and the National Surety Company, and they appeal. Reversed and remanded.

John W. Roberts and George L. Spirk, both of Seattle, for appellants. Ballinger, Battle, Hulbert & Shorts, of Seattle, for respondent.

MORRIS, C. J. This is an appeal from a judgment in favor of the Denny-Renton Clay & Coal Company, respondent herein, against Andrew Peterson for the price of a quantity of paving brick, bought by Peterson from the company and used by him in building a portion of state highway No. 4, north

of the city of Seattle, for the construction of which he held a contract with King county.

After the contract was completed a number of liens were filed against the work, and the National Surety Company, surety on Peterson's bond to the county, instituted this action to have determined the rights of the various lien claimants to the funds in the hands of the county commissioners due to Peterson. The respondent was, among In an action for the price of brick sold un- others, named as defendant, and appeared der a shipping order constituting on its face a by answer and cross-complaint, seeking to

[Ed. Note. For other cases, see Evidence, Cent. Dig. 88 1874-1897; Dec. Dig. 442.] 2. SALES 181-ACTION FOR PRICE-EVIDENCE.

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