Muir v. Morris

• Decision Date: 11 January 1916
• Citation: 154 P. 117,80 Or. 378
• Parties: MUIR v. MORRIS ET AL.
• Court: Oregon Supreme Court

154 P. 117

80 Or. 378

MUIR v. MORRIS ET AL.

Supreme Court of Oregon

January 11, 1916

Department 2.

Appeal from Circuit Court, Multnomah County; Henry E. McGinn, Judge.

Action by Jane W. Muir, as executrix of the estate of William T Muir, deceased, against James H. Morris and Fred S. Morris individually and as partners doing business under the firm name and style of Morris Bros. From a judgment for defendants, plaintiff appeals. Affirmed.

William T. Muir, plaintiff's deceased husband, whom for brevity we style "Muir," began this action to recover $65,000 as money had and received by the defendants to his use, which he claimed was the proceeds of a sale by the defendants of 1,000 shares of stock in the Oregon Water Power & Railway Company held by them in trust for him. Muir died November 4, 1911, and the present plaintiff was substituted in his stead. Other personages figuring in the transactions culminating in this litigation may be thus described: Morris & Whitehead was a Colorado banking corporation which we designate as "the bank," the stock of which was owned by the defendants Morris. It engaged in promoting and operating various railway and water enterprises, and dealt in corporate and municipal bonds and other securities. Morris Bros. & Christensen was a partnership composed of James H Morris, Fred S. Morris, and Julius Christensen, which we call "the firm," and which took over all the assets and business of the bank, continuing its existing enterprises and engaging in new ones. Among the concerns promoted by the bank and the firm was the Oregon Water Power & Railway Company, an Oregon corporation called herein the "Power Company" with 20,000 shares of stock, each of the par value of $100, all of which, except 4 shares issued to that number of individuals, including Muir, to enable them to qualify as directors, was originally issued to Fred S. Morris as a representative of the bank. The latter concern and its successor, the firm, always owned a very large majority of the stock of the Power Company until it and its property were sold to the Portland Railway, Light & Power Company, another corporation in this state.

In substance, the complaint states that Muir served the bank and the firm as an attorney until the dissolution of the latter and afterwards performed the same duty to the defendants at an agreed monthly salary in money which all his employers frequently said was inadequate compensation for the services he rendered, and that if he would continue in their employment he should receive additional compensation in the form of an interest in the property shares of stock, profits, and business of the Power Company and other corporations owned and operated by them, provided the enterprises were successful, the amount of which reward was to be afterwards determined. It is charged that this stipulation was made both by the bank and its successor, the firm, that Muir continued to work for the small salary, and that he fully performed all the conditions of his employment on his part until the Power Company was finally sold as stated. Substantially, the plaintiff avers that about November 7, 1904, the members of the firm agreed among themselves that Muir's additional compensation should consist in the issuance to him of 1,000 shares of the Power Company stock, but that although stock was issued to other employés of the firm, none was issued to him. The foregoing is a condensation of a very extended recitation of matter of inducement leading up to the crux of the complaint found in the thirteenth paragraph which we adapt to the limits of an opinion thus: That thereafter about June 26, 1905, the firm was dissolved; that before and at the time of such dissolution, as an inducement thereto and as part of the contract of dissolution, it was then agreed between Christensen on the one hand and the defendants herein, on the other, that the 1,000 shares of Power Company stock which the firm had determined to deliver to Muir should be and was his property, to which he was entitled in payment of the extra compensation mentioned; that defendants here should issue the same to him, and that in consideration thereof Christensen agreed to satisfy certain eastern creditors of the firm, and did then and there assign to these defendants all his stock and interest in the Power Company. It is further averred that about that time the defendants formed the partnership of Morris Bros. through which they acquired and assumed control of the Power Company and all its stock and so continued until about April 27, 1906, when they sold all the stock to the Portland Railway Light & Power Company at $65 per share, which was paid to them, and that they retained the sum of $65,000 received for the 1,000 shares they had agreed to issue to Muir. For this amount, with interest, judgment is demanded.

The answer admits that Muir was in the employment of the bank, the firm, and Morris Bros. successively; that the firm succeeded to all the interests of the bank; that Morris Bros. took over from the firm part of the Power Company stock being all the firm's interest therein agreeing to pay part of the firm's liabilities, and that afterwards Morris Bros. sold all the Power Company stock owned by them, and did not pay Muir the $65,000 claimed by him. Otherwise the complaint is traversed, in all material particulars.

Affirmatively the defendants allege that about December 18, 1908, they had an accounting with Muir covering all the transactions described in the complaint, as a result of which they paid and discharged all demands which he had against them. A second defense is in substance as follows: That about February 15, 1901, Muir entered the employment of the bank at an agreed monthly salary, later serving the firm in the same capacity until its dissolution, and afterwards the defendants, composing a firm of Morris Bros. until May 1, 1906, all at a stipulated compensation per month; that during all this time he was working under contract for an agreed salary and for no other compensation, and that long prior to the beginning of this action Muir had been paid in full for all the services rendered as set out in the complaint.

It is further stated that these defendants and Muir were personal friends, and that on account of a desire to help him and not because of any legal obligation resting upon them, Fred S. Morris, representing in Oregon the bank and the firm, told Muir that if the Oregon ventures proved profitable he would not be forgotten, but would be enabled, out of the various enterprises mentioned, to reap benefit above and beyond the agreed salary which he was paid; that when the firm was dissolved, the defendants were owners of all the stock of the Power Company, except 1387 shares; that 5,000 shares had been deposited with Eugene Ivins as collateral for $100,000 loaned by him to the firm; that Ivins had an option also to purchase the stock while still unredeemed for $50 per share; that on account of the friendship to Muir and in pursuance of the statement they had made to him, Fred S. Morris indorsed his note for $25,000, with which Muir took up 1,000 shares of stock pledged to Ivins, applying the money in payment of the Ivins loan, and that afterwards the defendants sold the stock with their own, paid Muir's note and gave him $15,000 of money realized from the sale, being the $15 per share in excess of the option price extended to Ivins. The reply traversed the new matter of the answer in important particulars. In his testimony, however, Muir admitted receiving the $15,000 as profit on the sale of the 1,000 shares of Power Company stock redeemed from Ivins, but contended it was a transaction distinct from the one on which this action is founded. At a trial before a jury, the circuit court at the close of the testimony for the plaintiff entered a judgment of nonsuit on the motion of the counsel for the defendants, and the plaintiff appeals.

Bean J., dissenting.

Ralph E. Moody and Kenneth L. Fenton, both of Portland (Wm. D. Fenton and Ben O. Dey, both of Portland, on the brief), for appellant. Wirt Minor, John M. Gearin, and C. W. Fulton, all of Portland (Teal, Minor & Winfree and W. A. Johnson, all of Portland, on the brief), for respondents.

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

The precise question to be determined is whether there was any competent evidence to take the case to the jury. Besides the writings hereinafter mentioned, the evidence is found in the deposition of the decedent and the testimony of Julius Christensen and W. H. Hurlburt, the former a member of the firm, and the latter president and general manager of the Power Company while under control of the bank and the firm. Muir admitted as a witness that he entered the employment of the bank in February, 1901, at a salary of $200 per month, which was agreed upon in advance. He continued under that arrangement until April, 1902, from which date to December 31st of that year he drew a salary of $275 per month. During the year 1903 he received a monthly compensation agreed upon in advance of $400, and afterwards until the Power Company was sold, he received $275 per month. He says:

"During this entire time it was frequently stated by Mr Fred S. Morris, who had charge of the business here and the operations of Morris & Whitehead, bankers, Morris Bros. & Christensen, and Morris Bros.,

in this territory, that I was inadequately compensated, the statement being commonly that Mr. Brown, Mr. Hurlburt, and myself were all working for inadequate salaries; that

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