Bates v. Oregon-American Lumber Co.

• Decision Date: 21 January 1924
• Docket Number: 4063.
• Citation: 295 F. 1
• Parties: BATES v. OREGON-AMERICAN LUMBER CO.
• Court: U.S. Court of Appeals — Ninth Circuit

295 F. 1

BATES v. OREGON-AMERICAN LUMBER CO.

No. 4063.

United States Court of Appeals, Ninth Circuit.

January 21, 1924

Wilbur Beckett & Howell and F. S. Senn, all of Portland, Or., for plaintiff in error.

Wm. A Munly, Wm. P. Richardson, and James G. Wilson, all of Portland, Or., and De Vine Howell Stine & Gwilliam, of Ogden Utah (A. W. Agee, of Ogden, Utah, of counsel), for defendant in error.

Before HUNT and RUDKIN, Circuit Judges, and BOURQUIN, District Judge.

BOURQUIN District Judge.

Error is assigned, for that the court below struck out the testimony in behalf of plaintiff, rejected his offer of proof, and directed verdict for defendant. The complaint in a single count upon contract alleges that in August, 1917 defendant 'did hire and employ this plaintiff to assist and aid in developing and marketing' certain timber land and timber thereon, 'and agreed to pay plaintiff for his services and to reimburse him for his expenses' therein.

Then follow 15 paragraphs, in each of which is alleged a separate item of service at different, but overlapping, periods of time from August, 1917, to February, 1921, its reasonable value and expense incurred, and that it was rendered by plaintiff by defendant's directions and 'under the general contract of hiring heretofore mentioned. ' These items of service embrace negotiations for railway transportation facilities in connection with lumbering the land and removing the timber, including therein lease or purchase of railways, and sales of land or corporate capital stock.

The evidence at the trial consists of admissions in defendant's answer, certain documents, and the testimony of one Early. From the admissions and documents it appears that in June, 1917, defendant was incorporated in Utah, with capital stock consisting of 35,000 $100 shares, and powers literally to do any lawful corporate act and to carry on any lawful corporate business anywhere. In July, 1917, it qualified to do in Oregon 'a general lumbering business and anything connected therewith,' and then began, and at all material times thereafter continued to do, such business.

Its president was one Eccles, who was also a director and general manager, with power 'to look after and superintend all of the affairs of the company, and subject to such regulations as may be imposed by the board of directors, to employ all assistance and labor necessary therefor. ' Early was its vice president, a director, and in Oregon was its general and managing agent and attorney in fact for service of process. Of the corporate capital stock, Eccles held legal title to 32,000 shares, and Early owned 500 shares.

Plaintiff's first witness was Early, and he testified in substance as follows: What may be characterized as the Eccles interests of Utah had operated in corporate capacity in lumbering and railroading in Oregon for more than 28 years prior to June, 1917. During that time, and in Oregon, Early had been in their employ, the latter part of which he had been their vice president and general manager. In 1917 these interests bought some 27,000 acres of timber land in Oregon, organized this defendant, and to it transferred said land, its only property.

Early was its only officer resident in Oregon, there attended 'to the handling and operation of the property,' 'handled here the business of this company, ' and he 'always understood' he was its general manager in Oregon. Defendant's intent was to develop the property, and at once set about it. It had no means of transportation to and from the land, and to secure them were its first activities. In August, 1917, Early for defendant and plaintiff entered into a 'general contract of hiring,' the latter to render services to the defendant in the matter of development of its property, in return for which his 'expenses were to be paid and he would be properly compensated for his time.'

This general contract of hiring was or in part at least included the first item of service in point of time and alleged in the complaint, and to that extent was made or directed by both Early and Eccles. It required plaintiff to investigate railways, to negotiate for transportation to and from the land, and to secure an option on a property that apparently was a logging railroad. Thereafter followed the other services of like and other kind. When this general contract of hiring was made, no sale of land by defendant was in contemplation, save in reference to part of the acreage, and in the making of said contract no mention was made of sale of land or corporate stock. But as time passed defendant determined to sell all, instructed Early to sell, and the contract with plaintiff developed into more transactions, both in respect to transportation and to sale, than originally contemplated.

All the items of service counted on by plaintiff were to some extent rendered, and by Early's directions, with Eccles' prior or subsequent sanction in the main. Early attended no meetings of the directors until late in 1920, and after most of plaintiff's services had been rendered, and then only did he report them to the board, even as he then did his other hirings for defendant in the same period and paid for by it. But at all times save one he contemporaneously advised Eccles thereof, who approved and joined in the directions to plaintiff. Of the later services all officers and directors of defendant were contemporaneously aware, and made no objection, though in respect to the chief and last service the board changed the transaction from a sale of land to one of corporate stock, to escape paying commissions to plaintiff or any one. During the time involved, Early received all his compensation from the Eccles corporations other than defendant.

At the conclusion of Early's testimony (counsel for plaintiff theretofore stating the purpose was but to disclose the witness' relationship to the parties and Early to be recalled), counsel for defendant moved to strike all of it 'concerning any contract between' the parties, upon the ground of lack of authority in Early to represent defendant therein. The court granted the motion, for that:

'It seems to me, as the evidence now stands, if we are to take the record as it now stands, that there is no sufficient evidence to show that Mr. Early had authority to enter into this contract. It was made within a month of the organization of the corporation, and the only evidence of his authority is his own statement that he assumed that he was general manager and was in the employ of the company, but there is no evidence of any employment by the company, or that he ever received any compensation from the company, or that the company had held him out, up to the time this contract was entered into at least, as representing it in any way, and this particular contract, made in August, 1917, is the

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