Bloech v. Hyland Homes Co.

• Decision Date: 13 February 1929
• Parties: BLOECH v. HYLAND HOMES CO. ET AL.
• Court: Oregon Supreme Court

274 P. 318

128 Or. 292

BLOECH v. HYLAND HOMES CO. ET AL.

Supreme Court of Oregon, En Banc.

February 13, 1929

Appeal from Circuit Court, Clatsop County; J. A. Eakin, Judge.

Action by Victor Bloech against the Hyland Homes Company and others. Decree for plaintiff, and defendants appeal. Affirmed.

Edward E. Gray and Norblad & Hesse, all of Astoria for appellants.

Lewis, Lewis & Finnigan, of Portland, for respondent.

RAND J.

This is a suit to enforce an alleged trust growing out of a written contract for the sale of lot 8, block 41, Taylor's addition to the city of Astoria. The written contract was entered into by defendant Hyland Homes Company, a corporation, and plaintiff on January 11, 1917. Subsequently and on March 3, 1920, said defendant conveyed said lot to the defendants Edward E. Gray and Edna Ida Gray, husband and wife, and the deed was placed of record on March 16, 1920, by said grantees, who now hold the legal title thereto.

This is the second time this case has been appealed to this court. The first was an appeal by plaintiff from an order and decree of the circuit court sustaining a demurrer to the second amended complaint, and resulted in a reversal. See Bloech v. Hyland Homes Co., 119 Or. 297, 247 P. 761. Defendants now appeal from a decree decreeing that Edward E. Gray and Edna Ida Gray hold the legal title to said lot in trust for plaintiff.

The material facts are as follows: In the fall of 1916, the Hyland Homes Company, the defendant corporation, while engaged in the construction of three houses in the city of Astoria, entered into a parole contract with plaintiff, in which it was stipulated that plaintiff should furnish the work and material for painting and tinting said houses, and was to be paid therefor the sum of $700. Plaintiff entered into the performance of the contract, and, after completing a considerable portion of the work, requested defendant to pay for the work done, and was informed by said defendant that it had no money with which to pay the same, and thereupon the defendant corporation offered to enter into a written contract to convey the lot in question to plaintiff upon plaintiff's completion of the work, and, at the same time, offered to advance to plaintiff the sum of $150 to apply upon other work to be furnished by defendant. This offer was accepted, and the written contract in question was entered into. On its face, it recites that the contract was entered into on August 1, 1916, and that it was not executed or signed by either party until January 11, 1917. So far as material here, the written contract provides:

"That for and in consideration of a warranty deed to Lot 8 (eight) Block 41 (Forty-one) Taylors Astoria according to the recorded plat thereof and the sum of One Hundred and Fifty (150) dollars in hand paid, receipt of which is hereby acknowledged by the party of the second part.

"The said second party agrees to do all painting and tinting * * * of three houses (describing them) in a workmanlike manner and to the satisfaction of the party of the first part; and further agrees to do such additional work as the said party of the first part may designate in the sum of One Hundred and fifty (150) dollars. Should such additional work not be ordered or arranged for by the time of the completion of the three houses above described, then said party of the second part shall repay to said party of the first part the said sum of One hundred and fifty (150) dollars at which time the aforementioned warranty deed together with a receipt in full for the payment of all street improvements shall be issued by the said party of the first part to the party of the second part."

Pursuant to said written contract, the defendant corporation gave plaintiff a check for said sum of $150, which check, when presented, was not paid for want of funds. The amount, however, was subsequently paid in cash. There was a delay by the corporation in the construction of the houses, and this delay prevented plaintiff from completing his contract until the fall of 1918, at which time the work contracted to be performed by plaintiff was fully completed. The defendant furnished no additional work upon which the $150 paid plaintiff was to apply, and, at the commencement of the suit, that sum of money was tendered into court to be paid over to defendants upon plaintiff's obtaining the relief demanded in the complaint. The defendant corporation became insolvent, and failed to pay its annual license fees, and, on account thereof, was dissolved by proclamation of the governor. During its existence, George M. Hyland was president and general manager of the corporation and in control of its affairs, and his wife was the secretary thereof. If any one else had any interest in the corporation, the record fails to disclose that fact. Before plaintiff's performance of the contract, Hyland had removed from Astoria, and for some time thereafter plaintiff was unable to ascertain his whereabouts. Nothing has been paid to plaintiff for his performance of the work in painting the three houses mentioned in the contract, and, so far as he is concerned, he has completely performed his contract. The defendant Edward E. Gray is an attorney at law, and resides in the city of Astoria. According to his testimony, he purchased lot 7, block 41, which adjoins the premises in controversy in September, 1919, and has since resided there. He testified that, after purchasing lot 7, he decided that he wanted more ground, and first contemplated the purchase of lot 6, which adjoins him on the north. But, after looking it over, it had too much slope and was too rocky to answer his purpose. He then examined the lot in controversy, and concluded to purchase it. He then inquired as to its ownership, and was informed that it belonged to plaintiff. He testified that he then went to plaintiff and offered to pay him $1,000 in cash for the lot, and was informed by plaintiff that he had a deed for the lot, but that he refused to sell. Plaintiff's testimony is that he informed Gray that he did not have a deed for the lot, but that he had a contract for its purchase from the Hyland Homes Company. Shortly thereafter Mr. Gray met Hyland and told him about his attempt to purchase the lot from plaintiff, and was informed by Hyland that plaintiff had not performed his contract to the satisfaction of Hyland, and that the contract had been forfeited by plaintiff, and that Hyland advised him to examine the record, and stated to him that the record would show that the Hyland Homes Company was the owner of the record; that he then examined the record, and found that the title was in the Hyland Homes Company; and that he then purchased the lot from the Hyland Homes Company, and received a deed therefor upon payment to the Hyland Homes Company or Hyland of the sum of $150 in cash and promising to pay in legal services and cash $850 in all for the lot. His testimony in respect thereto is as follows:

"So Mr. Hyland said that he would sell me this property for Seven Hundred Dollars. I forget just at the present what the part payment was, the amount I was to pay down for the lot. I believe I actually paid down One Hundred and Fifty Dollars on the lot, with the understanding there would be no strings attached to the deal, for I wanted a clear title to the property.

"It was further agreed that my legal services for the company were to apply on the purchase price of the property. I also agreed with Mr. Hyland at that time that I would reimburse him--I believe it was to the amount of Eight Hundred and Fifty Dollars, less the amount I had paid on the lot, and less my amount of legal services--that I would reimburse him to that amount, or to any amount up to that amount, or to any amount up to that, in case Victor Bloech sued. Mr. Bloech had stated that he was going to sue, and that he knew that he could not get more than the original contract price, but that he was going to sue for One Thousand Dollars, and I agreed that I would reimburse the Hyland Homes Company up to the amount of Eight Hundred and Fifty Dollars, in that event, less what I paid in cash and less what I had earned in services as attorney for the Hyland Homes Company.

"So I took the property and prepared a written notice of the cancellation of the contract between Mr. Bloech and the Hyland Homes Company, and I myself put it in the mail-box, addressed to Mr. Victor Bloech."

Upon hearing that the plaintiff had stated that Hyland and Gray "were cheating him out of his money and lot," Gray wrote a letter to plaintiff, stating "that the Hyland Homes Company was then out of business, and I was...