Benson v. Johnson

• Decision Date: 26 June 1917
• Parties: BENSON v. JOHNSON. [*]
• Court: Oregon Supreme Court

165 P. 1001

85 Or. 677

BENSON v. JOHNSON. ^[*]

Supreme Court of Oregon

June 26, 1917

Department 1.

Appeal from Circuit Court, Douglas County; G. F. Skipworth, Judge.

Action by E. C. Benson, as trustee of C. F. Smith and Dee Howard individually and as partners under the firm name of the Roseburg Garage, against Harley L. Johnson. Judgment for defendant, and plaintiff appeals. Affirmed.

The plaintiff, as trustee in bankruptcy of C. F. Smith and Dee Howard, both as individuals and as partners under the firm name of the Roseburg Garage, brought this action in replevin in the ordinary form to recover the possession of certain personal property said to have been owned by Smith prior to plaintiff's election as trustee. The answer admits the official character of the plaintiff and his demands for the custody of the chattels, but otherwise denies the complaint. The defendant alleges that he himself is the owner of all the effects in dispute, with two minor exceptions, which were laid out of the case by stipulation. He claims that the property was taken from him by virtue of the plaintiff's writ, and demands its restoration. The allegation of the defendant's ownership is denied by the reply, which final pleading contains no allegation of new matter. A jury trial resulted in a verdict for the defendant, and from the ensuing judgment the plaintiff appeals.

B. L Eddy, of Roseburg, for appellant. Albert Abraham and O. P Coshow, both of Roseburg, for respondent.

BURNETT J. (after stating the facts as above).

A minor exception will be first determined. It is to the effect that the court erred in refusing to instruct the jury, in substance, that it is presumed that things in the possession of a person are owned by him; that a person is the owner of property from exercising acts of ownership over it; and that until these presumptions are overcome by other evidence, the jury is to accept them as binding so far as they apply to the facts of the case. It is true that section 799, L. O. L., gives these in the list of disputable presumptions. The requests of the plaintiff to instruct the jury about them would have been proper, except for the fact that he sought to make them binding and conclusive. Such legal probabilities are sufficient to support a prima facie case, but the qualification appended would impart to them a quality not mentioned in the statute. For that reason the court was not in error for refusing the direction as propounded.

It is contended by the plaintiff that the testimony was to the effect that Howard and Smith were doing business as partners under an assumed name of the Roseburg Garage, and that Smith as an individual was trading under the assumed name of Duffy Auto Company, all without having registered the same as provided by chapter 154 of the Laws of 1913, p. 270. This statute requires such business names to be certified to the county clerk of every county in which the traffic is to be conducted. After making certain declarations about procedure and to whom the act shall apply, it is said in section 5:

"No person or persons carrying on, conducting or transacting business as aforesaid, or having any interest therein, shall hereafter be entitled to maintain any suit or action in any of the courts of this state without alleging and proving that such person or persons have filed a certificate as provided for in section 1, and failure to file such certificate shall be prima facie evidence of fraud in securing credit."

The plaintiff claims that Smith alone constituted the Duffy Auto Company; that he transferred the property in question to the defendant, who continued under the same name, both without conforming to the statute mentioned. This enactment was construed in Beamish v. Noon, 76 Or. 415, 149 P. 522. The substance of that decision was that the statute merely disqualified the party from bringing an action, and that the defect was waived by failing to answer or demur in case it appeared upon the face of the pleadings. A demurrer lies when the pleading attacked shows on its face, among other things, that the plaintiff has not legal capacity to sue. L. O. L. § 68. By section 71, L. O. L., we find that, when any of the matters enumerated in section 68 do not appear upon the face of the complaint, the objection may be taken by answer; and section 72 reads:

"If no objection be taken, either by demurrer or answer, the defendant shall be deemed to have waived the same, excepting only the objection to the jurisdiction of the court, and the objection that the complaint does not state facts sufficient to constitute a cause of action."

In alleging the property to be his own and demanding its redelivery, the defendant practically instituted a cross-complaint in replevin. If, on account of having acquired the title from one acting under an unregistered, assumed business name, or on account of his own like conduct, he was disqualified to maintain the action, his adversary should have pleaded it either by demurrer or reply. Not having done so, he has waived the same and cannot now urge it.

The plaintiff maintains also that, in making the alleged sale to the defendant, Smith violated what is known as the Bulk Sales Law (L. O. L. §§ 6069-6072), which in its amended form is found in chapter 281, p. 537, Laws of 1913. The substance of the charge in this respect is that Smith transferred practically all his property in trade to the defendant without making a sworn statement of the names and addresses of his creditors, together with the amounts of indebtedness due to each of them, and that on the other hand the defendant here did not notify such creditors of his intention to buy. The act merely attaches to such conduct a conclusive presumption that the purchase, sale, or transfer is fraudulent and void as to any and all creditors of the vendor. The effect of this law is to create a statutory fraud. Upon such a deceit the plaintiff essays to rely before us, and contends that the court was in error in refusing to instruct the jury on the subject or to allow evidence that the sale was in violation of the statute. The pleadings, however, are utterly silent on this subject. It is said in 20 Cyc. 734:

"Where fraud is an essential ingredient of the cause of action or defense, it must be pleaded and

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