Johnson v. Prineville

BURNETT, C. J.

1. It is argued in the defendant’s brief that—

“A complaint on a contract, which sets out the contract in full but fails to allege plaintiffs’ performance of its conditions, does not state a cause of suit or action, and this objection may bе raised for the first time in the appellate court.”

This is sound in principle, but it is not applicable to the pleadings, for we find the allegation already quoted from the complaint, that the work was donе by the plaintiffs in accordance with the terms of the contract.

It is contended that the complaint shows that an engineer, Mr. Huson, was selected by the parties to arbitrate the differences from stаtion 0 to station 343, and that he made an award. We do not so construe the complaint. The substance of that pleading, in that respect, is that negotiations were had looking to an arbitration, but that thеy came to naught and no arbitration was in fact had. Indeed, it is stated in the defendant’s fourth separate defense appearing in its answer that no arbitration was had or agreed upon by the parties.

2. It is urged, also, that the contract was entered into by the plaintiffs as a copartnership and that they had not filed in the office of the county clerk a certificate as required by Section 7777, Or. L. That sеction reads thus:

“No person or persons shall hereafter carry on, conduct or transact business in this state under any assumed name or under any designation, name or style, corporate or othеrwise, other than the real and true name or names of the person or persons conducting such business or having an interest therein, unless such person or all of such persons conducting said business or having аn interest therein, shall file a certificate in the office of the county clerk of the county or counties in which said business is to be conducted, which certificate shall set forth the designation, name оr style under which said business is to be conducted, and the true and real name or names of the party or parties conducting or intending to conduct the same, ‍​‌‌‌‌​‌‌‌‌‌‌‌‌​​‌​​‌​‌‌​​‌​‌‌​‌‌​​​​​‌‌​‌‌​‌​‌‌‌‍or having an interest therein, together with the pоstoffice address or addresses of said person or persons. Such certificate shall be executed and acknowledged by the party or parties conducting, or intending to conduct said business, оr having an interest therein, before an officer authorized to take acknowledgment of deeds.”

As already noted, the contracting parties of the second part are E. T. Johnson and H. M. Johnson. Thе instrument was signed, “E. T. Johnson & Son, by E. T. Johnson.” The attesting clause recites that “E. T. Johnson and H. M. Johnson do sign and seal the same.” This statute is substantially copied from the legislation of our sister state, Washington. In the Sutton Case, 49 Wash. 694 (96 Pac. 428), the firm name under consideration was “A. E. Sutton & Company.” In the Hale-Tindall Case, 66 Wash. 459 (119 Pac. 837), the firm name was “Hale-Tindall Company.” In the Merrill Case, 70 Wash. 482 (127 Pac. 122), the firm name wаs “George W. Merrill Automobile Company.” In all of those cases the Supreme Court of Washington exempted the partnership thus styled from the effects of the act. The principle is that the true names of the parties appear in the instrument and there is no fictitious name involved. The same doctrine was announced in Patterson v. Byers, 17 Okl. 633 (89 Pac. 1114, 10 Ann. Cas. 810), involving the firm name of Patterson Furniture Company; and in Bolen v. Ligett, 49 Okl. 788 (154 Pac. 547, L. R. A. 1916D, 355), concerning the firm name of Bolen Brothers. In California “Lamberson and Lamberson” was sustained as a firm name exempted ‍​‌‌‌‌​‌‌‌‌‌‌‌‌​​‌​​‌​‌‌​​‌​‌‌​‌‌​​​​​‌‌​‌‌​‌​‌‌‌‍from tbe operation of tbe statute, in tbe case of Lamberson v. Bashore, 167 Cal. 387 (139 Pac. 817). In Carland v. Heckler, 233 Fed. 504 (147 C. C. A. 390), it is said tbat tbe names of partners given in tbe body of tbe сontract take it out of tbe miscbief forbidden by tbe statute. Tbe firm name under consideration there was “Lakeside Dredging Company.” In Missaukee Co. v. Ferriss, 193 Mich. 286 (159 N. W. 490), it was held tbat in equity, where tbe defendants knew with whom they were dealing, tbe statute did not apply. Here, tbe recitation of tbe individual names of tbe partners in the body of tbe contract, and tbe fact tbat there is no assumed name or any other than tbe real, true name of tbe individuals conducting tbe business, take the case entirely out of tbe operation of tbe statute. Only one precedent is cited by tbe defendant on this subject, namely, that of North v. Moore, 135 Cal. 621 (67 Pac. 1037), a California case which has beеn overruled by tbat court on more than one occasion. Aside from tbe principle tbat no fictitious name is employed, we should be bound by tbp construction of tbe statute given it by tbe courts of tbe state from which we copied it.

3. It may well be conceded tbat at law tbe plaintiffs, suing on a contract containing a clause making tbe engineer tbe arbiter or umpire between tbe parties and giving cоnclusiveness to bis award, must show tbat tbat provision of tbe contract has been complied with as well as any other. But it is well recognized tbat in equity tbe award may be set aside, where tbe classification is sо grossly erroneous as to amount to fraud upon tbe contractor. This principle was enunciated in tbe opinion of Mr. Justice Bean in Sweeney v. Jackson County, 93 Or. 96 (178 Pac. 365, 182 Pac. 380). It is also taught in Oregon-Wash. R. & N. Co. v. Spokane, Portland & Seattle Ry. Co., 83 Or. 528 (163 Pac. 600, 989, Ann Cas. 1917C, 991), in an opinion by Mr. Justice McCamant. A careful reading of the contract discloses that the engineer may order a discontinuance of the work for four several causes: First, delay; second, bad faith violation of its terms by the contractor; third, because the same was not begun on time; and, fourth, because it was not completed within the time specified- — in •either of which cases the engineer may cause the contractor to discontinue all work, or in the аlternative he may himself enter upon the premises and complete the same and “adjust any difference in price,” or damage, and on all such matters the decision of the engineer shall be final. In respect to this, the contract provides that an appeal may be taken in writing to the city engineer and the city council; that neglect to make such written appeal within the time speсified forfeits all claims; and that all such “differences” (meaning evidently the differences arising in case the engineer takes charge of the work) shall be adjusted by arbitration, the contractor and the сity engineer to select a third arbiter. Evidently the clause in the contract quoted at the beginning of this opinion refers to a situation where the engineer himself has entered upon and taken charge of the work. Otherwise, we cannot construe as effectual the other clause later in the contract, that ‘ ‘ all prior partial estimates and payments shall be subject to correction in the finаl estimate and payment.” It is true that according to the admitted stipulations attached to the contract the engineer’s decision as to amount or quantities to be paid for shall be final and cоnclusive, and that he is the umpire; but this, as already indicated, is subject to the equitable rule that if the error is so gross as to amount to a showing that it is not an honest ‍​‌‌‌‌​‌‌‌‌‌‌‌‌​​‌​​‌​‌‌​​‌​‌‌​‌‌​​​​​‌‌​‌‌​‌​‌‌‌‍judgment and operates fraudulently upon the contractor, it may be set aside and a new award made. This is consonant with well-recognized principles of equity.

4. The defendant relies considerably upon its fourth affirmative defense, based upon the following writing:

“It is understood that the City Council is to decide what amount if any is still due E. T. Johnson & Son on R. R. Grade east of River. Mr. Johnson and Mr. Kelly to present the respective sides in the controversy; upon this decision rests the acceptance of the final payment to Mr. Johnson as offered.

“E. T. Johnson & Son,

“By E. T. Johnson.

“D. F. Stewart, Mayor.”

We may well doubt whether the agreement is sufficient to amount to any submission to arbitration. More than that, it does not appear that the mayor had authority to execute any binding agreement on the subject. The record shows that the minutes of the meeting of the city council of the defendant on January 7, 1918, contain the folloYYing:

“On motion a committee composed of Mayor Stewart and two members to be selected by the mayor and as many more members of the council that will serve, were authorized to act in conjunctiоn with the city engineer on the matter of adjusting the differences in connection with classifications on the right of way grade, with full power to make final settlement.”

It does not appear that any committеe was appointed or that any action was taken by a committee. The ‍​‌‌‌‌​‌‌‌‌‌‌‌‌​​‌​​‌​‌‌​​‌​‌‌​‌‌​​​​​‌‌​‌‌​‌​‌‌‌‍writing mentioned would indicate that the mayor usurped the whole authority thus delegated, and assumed to act without reference to any associates. It is apparent that the council did not take any action under the agreement and that, whatever may have been its value as an adjusting instrument, it was abandoned by both pаrties.

5. It will be noted that by adding together the amounts found due to the plaintiffs in the findings of fact, we achieve an aggregate of $39,705.33, deducting from which the admitted payments of $25,019.71, there would remain a balance оf $14,685.62 due the plaintiffs. The court, however, in its conclusions of law, put down this final balance at $14,245.72, making a discrepancy between the findings of fact and the conclusions of law, of $439.90. In their brief, the plaintiffs say that this was not discovered by them until they came to prepare their brief. None the less, it is an error in the decree of the Circuit Court constituting cause for appeal. In other words, the decree doеs not correspond with the findings of fact; but not having appealed from it, the plaintiffs must be deemed to be satisfied with it. We cannot give them further relief on this appeal taken by the defendant. It is true that under Section 556, Or. L., on an appeal from a decree the suit shall be tried anew upon the transcript and evidence accompanying it; but it is also said in Section 556 that—

“Upon an appeal the аppellate court may affirm, reverse or modify, * * the decree appealed from, in the respects mentioned in the notice, but not otherwise.”

Consequently, there must be a notice by the pаrty aggrieved, as a basis for any modification in his favor. This is substantially the doctrine taught by a long line of authorities, beginning with Shook v. Colohan, 12 Or. 239 (6 Pac. 503). Some of the precedents are collated in Crumbley v. Crumbley, 94 Or. 617 (186 Pac. 423).

The testimony has been carefully read and if the case were properly here upоn an appeal by the plaintiffs, it is possible that a greater amount would be allowed to them than that given ‍​‌‌‌‌​‌‌‌‌‌‌‌‌​​‌​​‌​‌‌​​‌​‌‌​‌‌​​​​​‌‌​‌‌​‌​‌‌‌‍by the Circuit Court; but we are limited by the principle announced in the authorities last stated. The result is that the decree of the Circuit Court must be affirmed. Affirmed.

Bean, Benson and Brown, JJ., concur.

Case Details

Case Name: Johnson v. Prineville

Court Name: Oregon Supreme Court

Date Published: Apr 5, 1921

Citation: 196 P. 817

Court Abbreviation: Or.