Dorr v. Janssen

• Decision Date: 06 March 1963
• Citation: 233 Or. 505,378 P.2d 999
• Parties: Elmer H. K. DORR and Zelinda M. Dorr, Appellants, v. Agnes Scott JANSSEN and Pioneer Trust Company, as joint executors of the Estate of John Martinus Janssen, Respondents, and Agnes Janssen, Defendant.
• Court: Oregon Supreme Court

Page 999

378 P.2d 999

233 Or. 505

Elmer H. K. DORR and Zelinda M. Dorr, Appellants, v. Agnes Scott JANSSEN and Pioneer Trust Company, as joint executors of the Estate of John Martinus Janssen Respondents, and Agnes Janssen, Defendant.

Supreme Court of Oregon, Department 1.

Argued and Submitted Feb. 8, 1963.

Decided March 6, 1963.

Charles D. Burt, Salem, argued the cause and filed a brief, for appellants.

Sam Speerstra, Salem, argued the cause for respondents. With him on the brief were William B. Wyllie and Rhoten, Rhoten & Speerstra, Salem.

Before McALLISTER, C. J., and ROSSMAN, SLOAN, GOODWIN and LUSK, JJ.

GOODWIN, Justice.

This is an action for damages for alleged fraud in the sale of a cattle ranch. The plaintiff-purchasers appeal from a directed verdict for the defendant-vendor.

The transaction out of which this litigation arose began with an exchange of property. The purchasers, hereinafter referred to as Dorr, exchanged certain equities which they owned in Oregon real property for an equity in the vendor's ranch in California. The vendor, hereinafter referred to as Janssen, who to be paid the sum of $165,000 for the difference between the agreed value of Dorr's interests in Oregon property and that of the California ranch.

Dorr had no capital and could not obtain credit with which to operate the ranch. The periodic payments to Janssen at the beginning of the contract period were to be slightly under $1,000 per month, plus such additional sums as would fall due on notes for money advanced to Dorr by Janssen. The payments were scheduled to increase substantially in the future. It soon became obvious to all parties that Dorr could not make even the contract payments, much less finance the operations of the ranch. He made five payments, three of them with money borrowed from Janssen, during the eleven months he was in possession.

After falling six payments in arrears, Dorr reconveyed all the real and personal property to Janssen. The reconveyance was supported by valuable consideration, although the equities previously transferred by Dorr to Janssen were all retained by Janssen. There is no evidence that Dorr requested their return. In this connection, it may be observed that there was, therefore, no mutual rescission and restoration of the status quo as those terms are ordinarily understood. See Bridgmon et al. v. Walker et al., 218 Or. 130, 344 P.2d 233 (1959). We cannot treat the reconveyance as an election to rescind. See Scott v. Walton, 32 Or. 460, 464, 52 P. 180 (1898). The reconveyance, however, is not without legal effect. What that legal effect is becomes the pivotal question in this case.

After reconveying the ranch to Janssen, Dorr filed his complaint in this action. He alleged that he had been induced to buy the ranch by false representations concerning the value of the ranch, its livestock-carrying capacity, the availability of local bank loans for operating capital, and the like. There was a failure of proof on all the allegations of fraud except, perhaps, the one concerning the carrying capacity of the ranch. Without rehearsing the details, it is sufficient to observe that there may have been a jury question on that score. Accordingly, we may assume, without deciding, that it might have been mandatory to submit the cause to the jury unless the trial court correctly analyzed the legal effect of the transaction which resulted in the reconveyance of the ranch to Janssen. If the evidence proved facts from which it could be said, as a matter of law, that Dorr had lost his right to bring the action, then the trial court was free from error in any event.

Dorr challenges first the ruling of the trial court which permitted Janssen, after his evidence was in, to amend his answer to allege a waiver of the alleged fraud. The original answer had alleged that Dorr had voluntarily returned the property to Janssen to avoid the costs of litigation. The amended answer, by interlineation, alleged that Dorr had knowledge of and had waived any fraud that may have been perpetrated. The amendment merely asserted a legal conclusion the pleader drew from evidence that had come in without objection. While the amendment may have been redundant, it did not substantially change the theory of the defense. The voluntary return of the property, as a factual matter, had been alleged by the original answer. The legal effect of reconveyance had not been pleaded, but the circumstances surrounding the reconveyance had been. Dorr had responded to these facts in his reply (by alleging new fraud). There was no surprise on any allegation of fact. In permitting the amendment, the court did not abuse its discretion. See ORS 16.390; Baker v. Brookmead Dairy, Inc. et al., 230 Or. 384, 370 P.2d 235 (1962); Smith v. Jacobsen, 224 Or. 627, 356 P.2d 421 (1960). The evidence was not entirely free from conflict upon what the parties said or intended to say at the time of the reconveyance, but it was clear that the reconveyance was voluntary and was motivated by Dorr's...