Kelley v. Mallory
| Decision Date | 15 December 1954 |
| Citation | 202 Or. 690,277 P.2d 767 |
| Parties | Gerald B. KELLEY and Irene Kelley, Appellants, v. Fred N. MALLORY and Loretta P. Mallory, Respondents. |
| Court | Oregon Supreme Court |
John F. Conway, Portland, argued the cause and filed briefs for appellants.
James P. Powers, Portland, and George G. Van Natta, St. Helens, argued the cause for respondents. With them on the briefs were Joseph & Powers and D. C. Bond, Portland.
Before LATOURETTE, C. J., and WARNER, BRAND and PERRY, JJ.
This is a suit for an accounting. From a decree dismissing the plaintiffs' complaint with prejudice, they appeal.
On April 2, 1948, the respondents as the first parties and the appellants as the second parties entered into an agreement (hereinafter referred to as 'the agreement'), the pertinent parts of which read as follows:
'That said parties of the second part agree to pay as the total purchase price for said assets and business the price of Twenty Thousand Dollars ($20,000.00), payable as follows:
'The sum of One Thousand Dollars ($1,000.00) on the date of the execution of this agreement, receipt of which is hereby acknowledged by said parties of the first part and the further sum of not less than Four Thousand Dollars on or before the 1st day of January, 1949, and the said parties of the second part further agree that they will, in addition to the aforesaid payments, pay the further sum of Five Thousand Dollars ($5,000.00), as soon as possible and on or before two years from the date of this agreement, and said parties of the second part further agree that the balance of the said purchase price, to-wit:
'Ten Thousand Dollars ($10,000.00) shall be paid by the said parties of the second part to the said parties of the first part on or before the 31st day of December, 1951, there shall be no interest charged on any balance, save and except after the first twelve months, any balance remaining unpaid shall bear interest at two per cent per annum.
'The said parties of the second part shall have the right and privilege of paying any further and additional payments or the total balance due on said contract at any time on and after the date of the execution of this agreement.
'It is mutually covenanted and agreed that any profits or increases in the assets of said Mallory Chevrolet Company over and above that, as shown in the inventory hereto attached, shall at all times during the period of this contract belong in equal shares to the said parties, subject to the terms and conditions as herein agreed upon.
'It is further stipulated and agreed that as soon as said parties of the second part are ready and willing to make their final payment of the total purchase price, and when said parties believe that said parties of the second part can produce a financial statement, which in their opinion will satisfy General Motors Corporation that a transfer by said corporation of the franchise, now owned by said parties of the first part can safely be made by said corporation to the parties of the second part, then said parties of the first part agree to make application to the General Motor[s] Corporation for the transfer of the Chevrolet franchise, the Maytag Company franchise, the Frigidaire franchise, which they now own, to the said parties of the second part, and said parties of the first part promise and agree that they will make such application and will make every reasonable effort to have transfers of such franchises made to the said parties of the second part on or before twelve months from the date that said parties of the second part elect to pay the remaining Ten Thousand Dollars ($10,000.00) of said purchase price.
* * *
* * *
'That upon the payment of the total purchase price, the parties of the first part agree to convey by good and sufficient Bill of Sale, title to all of the aforesaid personal property, assets and good will, as herein described, of said Mallory Chevrolet Company, now owned by said concern, to the said parties of the second part, free and clear from all liens and encumbrances as of this date.
Notwithstanding that the respective wives of the plaintiff Kelley and the defendant Mallory were parties to the agreement, they rendered no services to the Mallory Chevrolet Company which are in any way involved in this litigation, nor, so far as the record here is concerned, did they participate in any phase of the management or matters giving rise to this suit. We will, therefore, hereafter refer to Kelley and Mallory as if they were the only persons executing the contract and the only persons concerned with subsequent transactions referred to hereinafter.
There were two suits between the parties, predicated upon the above contract, wherein Kelley as plaintiff sought an accounting with Mallory as defendant. The first suit was instituted on November 6, 1950, and resulted in a decree of dismissal. Later, we will refer to the first suit more fully. The instant or second suit was filed February 5, 1952.
In the second suit Kelley argues that the agreement creates the relationship of employer and employee and that he, as an employee of Mallory, is entiled to receive wages at the rate of $400 per month, plus one half of the profits of the company during the period of his employment.
On the other hand, Mallory asserts that the agreement was terminated on February 29, 1949, by reason of Kelley's failure to pay when due the sum of $4,000 on the purchase price on or before January 1, 1949; that he thereafter offered to hire Kelley at a straight salary of $400 per month; that Kelley accepted the offer and was fully paid at that rate for the entire period of his employment ensuing after February 29, 1949.
Mallory also pleads as an estoppel the decree of dismissal in the first suit as being res judicata as to all matters pleaded by the plaintiff in the second suit.
It is this defense of res judicata which first challenges our interest. When we examine the complaints in the two suits, we are immediately struck by their similarity. Both are between the same parties and both plead the entire agreement of April 2, 1948, as the basis for plaintiff's claim for relief. In both suits the relief sought is for an accounting between Kelley and Mallory predicated upon the theory that the agreement created a fiduciary relationship between them. In the first suit, however, plaintiff pleads as a conclusion of law that the agreement creates a partnership in the business known as Mallory Chevrolet Company; but a conclusion of law is not issuable, requires no denial and does not...
To continue reading
Request your trial
-
Barber v. Gladden
...determined in a prior proceeding but also matters which could properly have been determined in such earlier proceeding. Kelley v. Mallory, 1954, 202 Or. 690, 277 P.2d 767; Yuen Suey v. Fleshman, 1913, 65 Or. 606, 133 P. 803. Frequently res judicata is defined simply in terms of matters prev......
-
Libby Creek Logging, Inc. v. Johnson
... ... a copy of the contract to the answer. The contract attached prevails over the allegations as to its legal effect. Kelley et ux. v. Mallory et ux., 202 Or. 690, 697, 277 P.2d 767; Strong et al. v. Moore et al., 118 Or. 649, 245 P. 505; Young v. Evans, 104 Or. 619, 208 P ... ...
-
Nadeau v. Power Plant Engineering Co.
...of law in a pleading is not issuable, requires no denial, does not aid the pleading and amounts to a nullity. Kelley v. Mallory, 202 Or. 690, 697, 277 P.2d 767; Mattoon v. Cole, 172 Or. 664, 669, 143 P.2d 679. We therefore conclude that the questioned phrase is a nullity and does not presen......
-
Karoblis v. Liebert
...and submit the matter to the trial court on its merits. Newman v. Stover, 187 Or. 641, 643, 213 P.2d 137 (1950); Kelley v. Mallory, 202 Or. 690, 702, 277 P.2d 767 (1954). The use of the equity procedure in law actions tried without a jury will insure a final determination in the trial court......