Seeck v. Jakel

• Decision Date: 28 April 1914
• Citation: 141 P. 211,71 Or. 35
• Parties: SEECK ET AL. v. JAKEL ET AL. [d]
• Court: Oregon Supreme Court

141 P. 211

71 Or. 35

SEECK ET AL. v. JAKEL ET AL. ^[d]

Supreme Court of Oregon

April 28, 1914

Department 1.

Appeal from Circuit Court, Linn County; Percy R. Kelly, Judge.

Action by F. W. Seeck and another against A. Jakel and others. From a judgment for defendants, plaintiffs appeal. Reversed.

This is an action at law in the nature of ejectment to recover the possession of real property, with damages for withholding the same. On a trial by the court, without a jury, judgment was rendered dismissing the action, and the plaintiffs appeal. The case is more fully stated in the opinion.

N. M Newport, of Lebanon, and Weatherford & Weatherford, of Albany, for appellants. G. C. H. Corliss, of Portland (H. B Chess, of Lebanon, and Corliss & Skulason, of Portland, on the brief), for respondents.

BURNETT J.

It appears by the complaint, and is admitted by the answer, that on June 29, 1907, the plaintiffs were the owners of two separate tracts of land in Lebanon, Linn county Or., on one of which they were conducting a general livery and feed stable business, and on the other, which they conveyed to the defendant Jakel, a feed stable, without any livery service. For convenience one tract will be designated as the livery stable, and the other as the feed stable. On the date mentioned the plaintiffs, with the wife of the married one, conveyed the feed stable to the defendant Jakel in the usual form of bargain and sale deed, but with the following forfeiture clause:

"The above-described real property shall divert back to the grantors, without any cost or expense, if any person or persons shall conduct or allow to be conducted any livery business in or on said described premises, unless by quitclaim deed or written consent of the grantors of this deed."

This deed is set out in full in the complaint, and is said to have been recorded October 2, 1907. After stating that the term "livery business" had a certain clearly distinct local meaning in and about Lebanon, Or., which, however, is not different from the generally accepted signification of that term, that the property was sold to Jakel for less than the market value, with the understanding that the forfeiture clause should be embodied in the deed as stated, and that the only claim the defendants have to the property is by virtue of the deed, the plaintiffs charge that, in violation of the condition set out in the conveyance, the defendants have continuously, wrongfully, and willfully, since about February 1, 1912, conducted and permitted and allowed to be carried on and conducted at the feed stable a livery stable business and livery business, and that by reason thereof the title to the feed stable has reverted to the plaintiffs in fee simple. They conclude with the allegation that "the plaintiffs are entitled to the possession of the said lots and premises and barn and the whole thereof, and that the defendants wrongfully withhold the same from them to their damage in the sum of $1,000." They pray for the immediate possession and restitution of the property, together with $1,000 as damages for withholding the same, and for the costs and disbursements. The original ownership of the property and the execution and delivery of the conveyance are admitted by the answer. The defendant Jakel says that since December 1, 1911, he has not been in possession or control of the feed stable, but that the same has been in the exclusive control and possession of the other defendants under and by virtue of a lease which he executed to them, and that whatever use of the premises the other defendants have made was without his authority. The answer also contains this statement:

"And all of the defendants herein allege that since about the 1st of October, 1911, the defendants A. J. Newman and J. W. Newman, without the authority or consent of the said A. Jakel, have in a small way conducted the business of renting and hiring horses and vehicles to third persons from the barn and buildings upon the said premises."

Further answering, the defendants allege in substance that all the real property mentioned is situated in Lebanon, Or., a city of about 2,000 population, and that, for the purpose of securing a monopoly of the livery business in said city, and of preventing competition by the defendant A. Jakel in that business, there was incorporated in the deed the provision mentioned; that the real estate was not so situated with reference to other property in the city as to make a restriction upon the use thereof mentioned a reasonable restriction; and that the provision was inserted in the deed for no other purpose than that of preventing Jakel, or any party who might succeed to his title, from competing upon the said premises with the livery business so carried on by the plaintiffs aforesaid. Again the defendants allege:

"That as a part of the said agreement in restraint of competition it was, before the said deed of conveyance was delivered and said sale consummated, agreed between the plaintiffs and the said A. Jakel that the plaintiffs would not carry on the feed business upon the property owned by them and described in the second paragraph of the complaint herein; that the said defendant A. Jakel was induced to consummate said deal and purchase said property relying upon the said agreement made by plaintiffs aforesaid, and that the plaintiffs caused the said agreement to be reduced to writing, and that the same was signed by the plaintiffs and the defendant A. Jakel; that the defendant A. Jakel was at said time unable to read written English, and that the plaintiffs, knowing said fact, fraudulently inserted in said written agreement a provision allowing plaintiffs to carry on the feed business on the said premises at all times, and that the plaintiffs, for the purpose of deceiving and defrauding the defendant, caused the said contract to be so read to the defendant A. Jakel before the same was signed by him as to omit in the reading thereof the provisions allowing said feed business to be carried on by plaintiffs at all times, and that the agreement as so read to defendant A. Jakel was an absolute agreement on the part of the plaintiffs not to carry on the said feed business on said premises at any time; and defendants allege that the said plaintiffs, in violation of their said agreement not to carry on the feed business upon the premises described in the second paragraph of the complaint, have ever since the execution and delivery of the deed set forth in the third paragraph of said complaint been engaged in carrying on the feed business upon the said premises described in said paragraph in said complaint."

Alleging that the sole purpose of the condition in the deed was to protect plaintiffs against damage to their livery business from the use by defendant A. Jakel of the feed barn for a livery business, the defendants "offer and tender to the plaintiffs any damage which the plaintiffs may have sustained by reason of a livery business being carried on on said premises by the defendants A. J. Newman and J. W. Newman, in case the court adjudges that the said provision against carrying on said business on said premises is a lawful provision." It is charged, also, by the answer that previous to the commencement of the action the plaintiffs had not demanded possession of the feed barn from any of the defendants, nor made any claim that the condition of the deed was being violated. The answer closes with the statement, in substance, that the defendant A. Jakel, in addition to the payment of $3,000 as the purchase price of the feed barn, has put improvements thereon amounting to $3,500, and that the premises are now worth $8,000. The prayer of the answer is in substance that the action be dismissed; that the defendants have judgment declaring the condition in the deed to be void; that, if the court adjudges the condition to be lawful, the defendants be relieved from any forfeiture, upon paying to the plaintiffs such damages as they may have sustained; and, lastly, for such other and further relief in the premises as may be just and equitable. The answer is traversed by the reply, except as stated in the complaint.

Practically the only material dispute on the facts is about the alleged fraud in the agreement restricting the plaintiffs' right to carry on the feed business. The case is determinable principally upon the pleadings. The first question is whether the forfeiture clause is a lawful condition subsequent. In Wittenberg v. Mollyneaux, 60 Neb. 583, 83 N.W. 842, the transaction in question was an exchange of two hotel properties in a certain city. The conveyance made by one party to the other provided that the premises therein described should not be used for hotel purposes for a period of two years. Concerning the legality of such a provision the court said:

"Contracts which impose unreasonable restraints upon the exercise of any business, trade or profession are said to contravene sound public policy; but partial restraints are not deemed to be unreasonable when they are ancillary to an actual purchase of property, made in good faith, and are apparently necessary to afford fair protection to the purchaser. * * * Upon this branch of the case our conclusion is that the restrictive covenant was valid when made; that events subsequently arising could not, and did not, render it invalid, and that, therefore, the trial court did not err in excluding evidence offered, and instructions requested, on the hypothesis that such covenant was null in its inception, or else became null by reason of the failure of Mollyneaux to furnish fair and reasonable entertainment to all comers."

In the note to the case of Clemons v. Meadows, 6 L. R. A. (N. S.) 847, it is said:

"The early rule was that any

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