Pedro v. Vey

• Decision Date: 11 June 1935
• Citation: 46 P.2d 582,150 Or. 415
• Parties: PEDRO et al. v. VEY et al.
• Court: Oregon Supreme Court

46 P.2d 582

150 Or. 415

PEDRO et al. v. VEY et al.

Supreme Court of Oregon

June 11, 1935

In Banc.

Appeal from Circuit Court, Umatilla County; Calvin L. Sweek, Judge.

Action by Mary M. Pedro and another against Joe Vey, Rita Vey, and others, wherein named defendants filed a cross-bill in equity. From the judgment entered, plaintiffs appeal, and defendants cross-appeal.

Modified and remanded.

See also, 39 P.2d 963.

In lessees' action for conversion of leasehold wherein lessees did not plead special damages, it was proper in determining value of leasehold interest to offer evidence showing costs of production and operation and profits derived from sale of sheep and wool, where evidence of anticipated profits was too speculative to be admitted.

S. H. Burleigh, of La Grande (James F. Ailshie, of Coeur d'Alene, Idaho, R.I. Keator, of Bonners Ferry Idaho, J. B. Perry, of Pendleton, and Burleigh & Burleigh, of La Grande, on the brief), for appellants.

J. R Raley and J. F. Kilkenny, both of Pendleton (Raley, Kilkenny & Raley, of Pendleton, on the brief), for respondents.

BELT Justice.

Plaintiffs commenced an action at law to recover damages in the sum of $100,000 for the conversion of certain property leased by them from the defendants Joe Vey and his wife, Rita Vey, an aged couple who have extensive land holdings in eastern Oregon. Mary M. Pedro, a daughter of the defendants Vey, and August Stad had for many years been engaged in the cattle and sheep business as copartners. On October 29, 1932, the plaintiffs leased from the defendants Vey approximately 60,000 acres of land in Morrow, Union, and Umatilla counties, together with 10,656 head of sheep, at a rental of $10,000 per year. The lease expired on October 1, 1936. It is the contention of the plaintiffs that the defendants, in violation of the terms of the lease, took possession of such property on October 11, 1933, and exercised dominion over the same inconsistent with their rights as lessees. Plaintiffs ask compensation for the loss sustained by them in the operation of their sheep business. No special damages were pleaded.

To the amended complaint the defendants Vey filed a cross-bill in equity setting forth verbatim the lease and alleging numerous violations of its terms by the plaintiffs. The Veys aver that at the time they took possession of the property on October 13, 1933, the plaintiffs had, among other things, failed and refused to pay the rent due amounting to a balance of $11,900, and had permitted taxes on the property to become delinquent in a large amount. It is their contention that they took possession under and by virtue of the terms of the lease.

The defendants Vey also allege that, prior to the commencement of the action, the plaintiff August Stad had turned over to them all his right, title, and interest in the lease. Defendants further allege that the plaintiffs failed to keep on hand the number of sheep specified in the lease under the age of five years, and the amount of hay as provided therein, and that, by reason thereof, an accounting is necessary. It is further alleged that the plaintiffs are insolvent, and if they cannot offset their claims against those of the plaintiffs, "these defendants will be without a remedy and will be unable to satisfy judgments obtained against the plaintiffs." It is further alleged, in substance, that, by virtue of the lease, the defendants Vey had a lien and mortgage on the interest of the lessees in the personal property described in the lease, to secure payment of rental and the faithful performance of the other terms and conditions provided therein. Defendants Vey, in their prayer, ask: (1) That the action at law be restrained and enjoined; (2) that they have judgment and decree against the plaintiffs for sums covering rental due, amounts paid by them to obtain release of herders' and camp tenders' liens, and for sums paid by them covering taxes due in Morrow, Union, and Umatilla counties; (3) that the foregoing sums be declared a first and prior lien upon the interest of the plaintiffs in the property described in the lease, and that the mortgage lien be foreclosed; (4) that the plaintiffs account for the missing sheep, hay, and other personal property, and that, in the event the plaintiffs are unable to account for the same, judgment be awarded for the reasonable value thereof; (5) that the amounts found to be due from plaintiffs be offset against any claim that the plaintiffs may have against them; and (6) for such further relief as to a court of equity may seem meet and proper.

The defendants Monese and Boylen, by separate answer, in substance admitted that they took possession of some of the property described in the plaintiffs' complaint, but that they did so "under the direction and pursuant to the order of the defendants Joe Vey and Rita Vey." They further deny that the plaintiffs have been damaged by reason of the alleged conversion. In their prayer, they ask that equity jurisdiction be assumed, and that plaintiffs' complaint be dismissed.

The plaintiffs demurred to the cross-bill of the defendants Vey and the further and separate answer of the defendants Monese and Boylen, for the reason that neither of them stated a cause of defense to an action for conversion and that equity did not have jurisdiction of the cause. The court overruled the demurrers, whereupon plaintiffs filed a reply, thus putting the case at issue.

The trial court, over the objection and protest of the plaintiffs, assumed equitable jurisdiction, and, upon hearing, found that the leasehold interests of the plaintiffs were of no value, but allowed damages against all the defendants in the sum of $1,085 for the conversion of 875 head of old ewes owned by the plaintiffs. The court also allowed as a set-off against such award various claims of indebtedness against plaintiffs and accordingly entered a decree in favor of the defendants Vey and against the plaintiffs in the sum of $25,713.75, together with interest thereon at the rate of 6 per cent. per annum, and for the further sum of $450 as interest due and owing on the principal sum to July 18, 1934. From this decree, the plaintiffs appeal, and the defendants cross-appeal.

On Motion to Dismiss Appeal.

Counsel for defendants strongly urge that the appeal of the plaintiffs be dismissed for the reason that the order extending the time for filing the transcript in this court was made without having first given three days' notice of such application, as required by subdivision 2 of section 7-507, Oregon Code 1930. Mr. Chief Justice CAMPBELL, speaking for the court, denied this motion as shown by opinion reported in 39 P.2d 963. We have again carefully considered the question as to whether this court lost jurisdiction by reason of the premature entry of the order for extension of time and are convinced that the conclusion reached in the above opinion is sound. A judgment entered before expiration of time for answering after service of summons is, according to the great weight of authority, irregular, but not void. Freeman on Judgments (5th Ed.) § 357; Paramount Publix Corporation v. Boucher, 93 Mont. 340, 19 P.2d 223. To hold that an order prematurely entered concerning a matter of procedure would be void, and that a judgment so entered would be only irregular, does not comport with our views concerning the proper administration of justice. Defendants had their remedy in a motion to set aside the order, but, having failed to avail themselves of it, we think they are precluded from complaining at this time. We are not dealing with a case where no notice whatever was given as in Simpson v. Winegar, 122 Or. 297, 258 P. 562.

On the Merits.

At the very threshold of the case it is urged by the plaintiffs that equity had no jurisdiction of the cause, and that it should have been tried as an action at law. The matters alleged in the crossbill are clearly not beyond the pale of equitable cognizance, and we think it was not beyond the inherent power of equity to grant relief as demanded in the crossbill. In other words, equity had jurisdiction of the subject-matter. The real objection of the plaintiffs is that the defendants had adequate relief at law, and it was not a cause for the proper exercise of equitable jurisdiction. This point, however, we think was waived when, after the overruling of the demurrer to the crossbill, plaintiffs filed a reply thereto. After having submitted to such forum, plaintiffs at this time are not in a position to assert that adequate relief could have been obtained at law. The precise question was considered by this court in South Portland Land Co. v. Munger, 36 Or. 457, 54 P. 815, 60 P. 5, 7, and in Wollenberg v. Rose, 41 Or. 314, 68 P. 804, and decided adversely to the contention of the appellants. In both the cases cited, the plaintiffs therein followed the same procedure as plaintiffs in this case, and the same contentions were made with reference to the exercise of equitable jurisdiction. Mr. Chief Justice Wolverton, speaking for the court in the Munger Case, said: "By answering, the defendants have made the equitable forum a matter of their own selection, and have thereby waived the right to insist that the cause should be first tried out at law." The same language was used by this learned jurist in the Wollenberg Case. We are not unmindful of the elementary rule that the parties cannot confer jurisdiction of the subject-matter. That does not mean that there can be no waiver of the right to object to the forum.

The defendants are charged as joint tort-feasors with having converted property in which the plaintiffs had a special or limited interest by virtue of a lease. Whether the defendants are guilty of conversion depends upon a...