Pulkrabek v. Bankers' Mortg. Corp.

• Decision Date: 28 July 1925
• Citation: 115 Or. 379,238 P. 347
• Parties: PULKRABEK v. BANKERS' MORTGAGE CORPORATION.
• Court: Oregon Supreme Court

238 P. 347

115 Or. 379

PULKRABEK v. BANKERS' MORTGAGE CORPORATION.

Supreme Court of Oregon

July 28, 1925

Department 1.

Appeal from Circuit Court, Multnomah County; W. N. Gatens, Judge.

Action by J. E. Pulkrabek against the Bankers' Mortgage Corporation.Judgment for plaintiff, and defendant appeals.Affirmed.

J. P. Winter, of Portland (Winter & Maguire, of Portland, on the brief), for appellant.

Martin L. Pipes and H. L. Lyons, both of Portland (Martin L. PipesJohn M. Pipes, and Henry L. Lyons, all of Portland, on the brief), for respondent.

RAND J.

This is an action upon a contract for the sale by defendant to plaintiff and Pulkrabek Bros. of certain sawmill machinery and equipment.This contract is in writing, and is evidenced by two papers, one of which is a bill of sale purporting to sell, assign, and transfer said machinery and equipment, and the other is an agreement stipulating the time and manner in which delivery of said chattels shall be made, and also providing for the termination of the contract in case one of the boilers mentioned in the contract and bill of sale should not stand the test stipulated for in the contract.In part and so far as material, the bill of sale and contract read as follows:

"Know all men by these presents: That the Bankers' Mortgage Corporation, of Portland, Oregon, the party of the first part, for and in consideration of the sum of eight thousand dollars ($8,000.00), to be paid in the following manner: Two thousand dollars ($2,000.00) of which said sum has been paid in cash, the receipt whereof is hereby acknowledged, and the remainder of six thousand dollars ($6,000.00) to be paid by certified check made out to the Bankers' Mortgage Corporation and placed in escrow with the Ladd & Tilton Bank of Portland, Oregon, to be turned over to said Bankers' Mortgage Corporation immediately upon the arrival of the machinery at White Salmon, Washington, to it in hand paid by Pulkrabek Brothers and J. E. Pulkrabek, of the same place, the parties of the second part, does by these presents grant, bargain, sell, convey, and deliver unto the said parties of the second part all of the following described personal property, in its present location and condition, situated near Sherwood, Oregon, as follows: * * * It is intended by this bill of sale to convey to the Pulkrabek Brothers and J. E. Pulkrabek all the tools, machinery and equipment now owned by the Bankers' Mortgage Corporation at the Tappendorf mill, near Sherwood, Oregon, except one pony sawmill and engine used therewith, one large planer, lumber, buildings, and logging equipment. * * *

"This agreement, made and entered into this 5th day of January, 1920, by and between the Bankers' Mortgage Corporation, a corporation, incorporated under the laws of the state of Oregon, with its principal place of business in the city of Portland, Oregon, party of the first part, and Pulkrabek Brothers and J. E. Pulkrabek of the same place, parties of the second part, witnesseth: That for and in consideration of the sum of one dollar ($1.00) and other good and valuable considerations, the party of the first part hereby agrees to employ James Hall and others to carefully dismantle the Tappendorf mill, situate near Sherwood, Oregon, and the first party further agrees to have same hauled and loaded on cars by April 1, 1920, to be shipped to White Salmon, Washington, freight prepaid, in a like and similar condition and state of repair as to its present condition, and also agrees to have the large boiler tested to 150 pounds pressure, and furnish to said Pulkrabek Brothers a certificate of test.In the event said boiler does not stand said Hartford test, the first party is to pay the second party $2,000 and the sale is null and void, and agrees to use reasonable care and discretion in the handling of the machinery and equipment, the dismantling of the mill and to be commenced by James Hall at once."

Both of these papers were executed by the defendant corporation and by plaintiff, who, in addition to signing his own name thereto, signed the name of Pulkrabek Bros. to each of said instruments.At the time this contract was entered into, plaintiff intended to construct and operate a sawmill at White Salmon, Wash., and was purchasing the machinery and equipment for use in said contemplated mill, and intended that his two sons should be associated with him in the operation thereof.To that end he executed the contract and bill of sale, not only for himself but also for his sons, designating them under the name of Pulkrabek Bros.Neither of them, however, advanced any money for the purchase of said chattels or acquired any interest in the contract, and at the trial there was admitted in evidence, over defendant's objection and exception, written disclaimers signed by the sons disclaiming upon the part of each any interest in the contract, or in the damages recoverable for defendant's alleged breach thereof.

Defendant knew, when entering into the contract, that plaintiff was purchasing the machinery and equipment for use in the operation of his proposed mill at White Salmon, Wash., and with such knowledge entered into the contract for the sale thereof to plaintiff.Plaintiff performed the contract upon his part by paying defendant the sum of $2,000, and by delivering to the Ladd & Tilton Bank a certified check for $6,000, payable to the order of the defendant.Defendant failed to perform its part of the contract, in that only a part of the chattels were loaded on the cars within the time stipulated, and no certificate of a test of the boiler, as required by the contract, was ever furnished to plaintiff.Because of such failure upon defendant's part plaintiff rejected such of the chattels as had been delivered to him and demanded of the bank the return of the certified check.The bank refused to deliver the check to plaintiff, and thereupon plaintiff, without joining his sons as partiesplaintiff, commenced this action as sole plaintiff, seeking to recover as general damages the $8,000 he had parted with, and also $10,000 as special damages for loss of profits in the operation of the mill, by reason of his inability to get the equipment within the stipulated time, and for expenditures made in reliance upon defendant's performance of the contract.He was compelled at the trial, however, to elect whether to prosecute his claim for loss of profits or for expenditures made in reliance upon defendant's performance of the contract, and elected to enforce his claim for the alleged expenditures.A verdict and judgment was rendered in favor of plaintiff for the sum of $9,619.21, from which judgment the defendant appealed.

Defendant's first contention is that Pulkrabek Bros. were indispensable parties to the prosecution of this action, and that because of their nonjoinder in the action there was a defect of partiesplaintiff which entitles the defendant to a reversal of the judgment and a dismissal of the action.

At common law every action upon contract was required to be brought by the contracting party, if living, or by his legal representative, if dead, but this rule has never obtained in this state.The Code provides that every action must be prosecuted in the name of the real party in interest, except actions brought by an executor or administrator, a trustee of an express trust, or a person authorized by statute to sue; in which actions it is unnecessary to join as plaintiff the person for whose benefit the action is prosecuted.Sections 27and29, Or. L.Under this statute the action must be prosecuted in the name of the real party in interest, and the real party in interest is the party who is to be benefited or injured by the judgment in the case.In an action for breach of contract, the party who will be directly benefited by the successful prosecution of the action, and who will be entitled to receive the damages recovered, is the proper party to be made plaintiff in the action.If, in the trial of a cause, the defense can show that the plaintiff in the action is not the real party in interest, the action must fail unless it is one that is brought by an executor or administrator, a trustee of an express trust, or a person expressly authorized by statute to sue.The fact that the plaintiff is the real party in interest may be proved in a judicial proceeding as any other fact is proven, and no higher degree of proof is necessary to establish that fact than is required to establish any other fact in the case.Barbre v. Goodale,28 Or. 465, 473, 38 P. 67, 43 P. 378.

Here it was both pleaded and proved that the whole consideration for the contract passed from plaintiff, and that, although the contract was executed in the name of Pulkrabek Bros. as well as in that of plaintiff, Pulkrabek Bros. had no interest in the result of the litigation.This was established by the testimony of plaintiff, and without the aid of the written disclaimers.Defendant objected to the admission of the disclaimers, upon the ground that they would not constitute an assignment of any interest of the disclaimants in the contract.These disclaimers were admissible in support of plaintiff's testimony that he was the sole party in interest.While it is true that if disclaimants had had an interest in the contract the disclaimers would not have operated to assign such interest, nevertheless they were admissible in support of plaintiff's testimony that he was the sole party in interest, and their admission was likewise proper for the protection of the defendant, since they will operate to estop the disclaimants from ever claiming or asserting any right or interest under the contract.

But for another reason defendant's contention cannot be maintained.A full copy of the bill of sale...