White v. Gordon
| Decision Date | 16 July 1929 |
| Parties | WHITE v. GORDON ET AL. |
| Court | Oregon Supreme Court |
Appeal from Circuit Court, Multnomah County; T. E. J. Duffy, Judge.
Action for deceit by Alice White against Sam Gordon and another. From a judgment for plaintiff, defendants appeal. Reversed and remanded, with directions.
Arthur A. Goldsmith, of Portland (O. A. Neal, of Portland, on the brief), for appellants.
D. D Hail, of Portland, for respondent.
This is an action for deceit based upon alleged fraudulent representations of the defendants. The defendant Sam Gordon and Ida Gordon were partners engaged in the real estate business in the city of Portland, under the firm name of Gordon Mortgage Company. The defendant Mrs. A. V. Bailey was employed by the Gordons as the manager of the "Business Chance Department." Mrs. Ruth Shaler operated a business in the city known as the "Rose Gate Tea Room." She secured the services of the Gordon Mortgage Company for the purpose of finding a suitable partner in the business. In response to an advertisement, the plaintiff came to the offices of the Gordon Mortgage Company. Plaintiff never became a partner of Mrs. Shaler, but, as alleged in the complaint, she entered into a contract to loan her $1,500 in cash, to put certain furniture in the business and to enter her employ for one year at a salary of $100 per month. It is alleged that "such loan and salary were to be secured by the execution by Ruth Shaler of a note and mortgage upon all the business and assets of the aforesaid business, the assignment by Ruth Shaler of her leases upon the aforesaid buildings and the insurance on such furniture." Plaintiff alleges that, pursuant to the terms of the above contract, she loaned Ruth Shaler $1,500 put furniture into the business amounting to $500, and entered her employ for a period of three months, whereupon she was discharged. Mrs. Shaler became heavily involved financially, and defaulted in payments on the note, and also failed to pay plaintiff for services rendered. Plaintiff instituted a suit for appointment of a receiver, and, after a decree of court, the property was sold to satisfy the demands of the creditors. Plaintiff realized $600 from this sale.
Plaintiff avers that she was induced to enter into the contract, as alleged in the complaint, by reason of the false and fraudulent representations of Mrs. Bailey, acting as agent for the Gordon Mortgage Company. Mrs. Bailey is alleged to have represented that Ruth Shaler's business was free and clear of all indebtedness excepting $1,000 due Meier & Frank Company; that the furniture used therein had been paid for in full; that such business was being operated at a net profit of $600 per month and was reasonably worth $12,000 and that Mrs. Shaler held valid leases on the buildings where such business was being operated. Plaintiff says that these representations were false, in that the business was being operated at a loss of about $350 per month, that the property was heavily incumbered, and that Ruth Shaler was, at the time these representations were made, insolvent.
Plaintiff asked judgment for $1,500, less $600 paid on March 28, 1927 $300 for services rendered; $500 for furniture; $600 for services rendered in caring for property while receivership proceedings were pending; and $400 paid for attorney fees. Defendants interposed a general denial to the charge of fraud and the damages alleged to have been sustained. Verdict and judgment were had for plaintiff in the sum of $2,700. Defendants appeal.
Defendant Gordon denies liability as principal, for the reason that, if the alleged fraudulent representations were made by Mrs Bailey, it was done while she was acting beyond the scope of her authority. He asserts that the Gordon Mortgage Company dealt in real estate mortgages, and, in addition thereto, operated a business chance department, but that the partnership never negotiated loans on chattel security. Assuming that Mrs. Bailey had no express authority to negotiate this loan, it does not follow that she was acting beyond the scope of her apparent authority. The transaction was closed in the offices of the Gordon Mortgage Company with the aid and assistance of an attorney employed by the Gordons, and the commission of $150 was paid by plaintiff to the company for the...
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