Weber v. Richardson

• Decision Date: 30 March 1915
• Parties: WEBER ET AL. v. RICHARDSON ET AL. [*]
• Court: Oregon Supreme Court

147 P. 522

76 Or. 286

WEBER ET AL. v. RICHARDSON ET AL. ^[*]

Supreme Court of Oregon

March 30, 1915

Department 1.

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

Action by Joseph Weber and another against A. B. Richardson and others. From a judgment for plaintiffs, certain of the defendants appeal. Modified and affirmed.

This is a suit by Joseph Weber and Frank I. Weber against A. B Richardson, the Richardson Investment Company, a corporation and John P. Sharkey, for an accounting and to impress a lien on real property. From a decree for the plaintiffs as prayed for, the defendants Richardson and the corporation appeal.

R. A Leiter, of Portland (Griffith, Leiter & Allen, of Portland on the brief), for appellants. Sanderson Reed, of Portland (Reed & Bell, of Portland, on the brief), for respondents.

MOORE C.J.

The evidence shows that a contract was made July 20, 1908, whereby Ellis G. Hughes engaged, upon the payment of a stipulated consideration, to sell and convey to the defendant Sharkey certain real property in Waverly, a suburb of Portland, Or. Mr. Hughes died testate August 27, 1909, leaving as his sole heirs at law Maria L. Hughes, his widow, and Mrs. Louise J. Martin, a daughter. At the time of Mr. Hughes' death there was past due on account of the purchase price of the land $8,800 and, on unmatured installments thereof, the further sum of $16,900. Evidently to obtain money with which to pay the obligations in arrears, a written contract was made September 30, 1909, by the plaintiffs and Sharkey, whereby he secured from them $10,000, and agreed to complete the purchase of such land, to take the title in his name, but to hold an undivided half of the premises for them and to execute a declaration of such trust. The contract further provided that he should sell the land, receive payments therefor, retain 15 per cent. thereof as commission, and on the first day of each succeeding month render an accurate statement of the sums so obtained to the plaintiffs, who were entitled to one-half of the money, less such brokerage. It was guaranteed by the writing that from the profits to be derived from such sales the plaintiffs would double their money, and if they failed to do so Sharkey would make up the deficiency. This contract was never recorded. The last testament of Mr. Hughes was duly admitted to probate October 18, 1909, and Mrs. Hughes was regularly appointed administratrix with the will annexed and thereupon qualified for the trust. Pursuant to an order of the county court of Multnomah county, Or., and in consideration of the payment of a sum of money by Sharkey on account of the debt that was past due, and the giving by him and his wife of a mortgage of the premises, to secure $14,881.23, the remainder of the purchase price, Mrs. Hughes in her representative capacity and individually, and Mrs. Martin and her husband on November 8, 1909, executed to Sharkey a deed conveying all such real property. In consideration of the release by the defendant Richardson of Sharkey's promissory note for $3,500 and interest and the payment by Richardson of the remainder of $10,000, Sharkey agreed to convey to a corporation to be formed by them an undivided half of such lands. G. W. Holcomb, Richardson, and Sharkey on April 22, 1910, incorporated the Richardson-Sharkey Company, with a capital stock of $25,000, divided into 250 shares of the par value of $100 each. Of these Richardson subscribed for 100 shares, Sharkey for a like number, and Holcomb for 1 share. The company was organized the next day by electing as directors each of such stock subscribers who after having duly qualified chose Sharkey president, Holcomb vice president, and Richardson secretary and treasurer. Sharkey and his wife, on April 23, 1910, for the expressed consideration of $20,100, evidenced by the capital stock subscribed for, executed to the Richard son-Sharkey Company a deed to all such real property that remained unsold, subject, however, to the lien of the mortgage referred to, and also transferred to the corporation all the contracts that had been made for the sale of land and the right to the money then remaining due thereon, amounting to $23,468.47, whereupon shares of capital stock were issued and delivered as subscribed for.

The plaintiffs have received on account of the $10,000 which they furnished to Sharkey only $924.28. He on May 9, 1911, caused to be conveyed, by a corporation in which he was interested, to the plaintiff Frank I. Weber, 76 lots in Waverleigh Heights, a suburb of Portland, which real property was then heavily incumbered with liens. This deed was not recorded until August 9th of that year, when the culmination of threatened suits against Sharkey evidently induced the filing of the conveyance in the proper office. The grantee last named testified that such deed was executed and recorded without his knowledge, while Sharkey stated upon oath that the conveyance was made pursuant to an agreement with such witness who accepted the land in full settlement of all claims on account of the $10,000 so furnished. Based on this testimony the trial court found that the conveyance was intended only as a mortgage to secure the plaintiffs' demand. That court not only saw these witnesses but, as indicated by an expression in the transcript, personally knew them, and hence the finding in this particular must be upheld.

A. B. Richardson testified that on July 14, 1911 Sharkey transferred 90 of his 100 shares of the capital stock of the corporation, but it does not appear to whom they were assigned, or what sum of money or value in property, if any, was given for them. It appears from the record of a stockholders' meeting, held August 30, 1911, that the following named persons were present and held corporate stock, viz.: A. B. Richardson, 197 shares, J. P. Sharkey, 2 shares, J. P. Mattingly, 1 share, and G. W. Holcomb, 1 share. From this entry it is fair to infer that Richardson had secured 97 shares of the stock originally held by Sharkey, but whether he paid anything therefor is not disclosed by the...