Schetter v. Southern Oregon Co.

19 Or. 192 | Or. | 1890

Strahan, J.,

delivered the opinion of the court.

Upon the argument of this case in this court, the respondent’s counsel did not claim that he had made such a case as entitled him to a specific performance of the alleged contract with the Southern Oregon Improvement Company. The most that he claims is to be reimbursed for his alleged improvements. What is said in this opinion will therefore be devoted to the consideration of that subject. In Bright v. Boyd, 2 Story, 607, Judge Story laid down the rule which the plaintiff seeks to invoke, in this case, and which met the approval of this court in Hatcher v. Briggs, 6 Or. 31. In the former case the learned justice said: ‘ T wish, in coming to this conclusion, to be distinctly understood as affirming and maintaining the broad doctrine as a doctrine of equity, that so far as an innocent purchaser, for a valuable consideration, without notice of any infirmity in his title, has by his improvements and meliorations added to the permanent value of the estate, he is entitled to a full remuneration, and that such increase of value is a lien and charge on the estate which the absolute owner is bound to discharge before he is to be restored to his original rights in the land.” Applying the doctrine of this case and- the many subsequent cases which have followed it to the facts of the plaintiff’s case and *e is entitled to no relief.

In the first place, the plaintiff is not a Iona fide purchaser, for value, of said lots. He has paid nothing thereon. He obtained no deed, and he is chargeable with notice of every defect in Metcalf’s authority. This court has so recently and so often stated the requisites of a bona fide purchaser of lands within the equity rule, that it would be simply superfluous to restate them. It suffices to say the plaintiff was not such purchaser. If he had paid value and taken a deed he must fail for another reason. He was one of the directors of the Southern Oregon Improvement Company, and was, therefore, chargeable with notice of the extent of Metcalf’s powers as manager. He knew that Metcalf had no authority to sell the company’s land. Pie knew also that before any contract in relation to the sale of any of those lands could bind the company, it must first receive the indorsement or approval of the three nonresident directors, and this, more particularly and especially where the company was dealing with one having knowledge oí snch. regulation. And finally, being a director of the company, he was acting in a trust capacity towards all the stockholders of the corporation, and in respect to all of its property. The rules of equity applicable to the dealings by a trustee with trust property are therefore to be applied to this transaction. Equity would not permit the plaintiff to deal with this property so as to make a profit for himself. His duty as trustee required him to exert his best judgment in handling this as well as all other property of the company, so as to make the best profit possible for the stockholders. This he could not do if he was trying to acquire the company’s property for himself. One privilege which is always accorded to the cestui que trust in such case is to rescind the contract in a reasonable time, by restoring what had been paid thereon. In this case as nothing had been paid no question as to the terms could arise.

One other objection I think equally fatal to the plaintiff’s recovery, The lot upon which the improvements were placed was bargained by the plaintiffs to the Odd Fellows lodge named as defendant in the original action, and the plaintiff covenanted with the lodge to protect its possession. The evidence shows that it was the lodge which placed the improvements on the lot for which the plaintiff seeks to recover, and not the plaintiff, and he seems to proceed on the assumption, because he covenanted to protect the lodge’s possession, that, therefore, he has succeeded to its rights, whatever they may be, in respect to the improvements placed on the lot by it. No authority is cited to support this contention, and it is believed that none has gone so far-

I have not thought it necessary to cite authorities for what has been said in disposing of the main points in this case for the reason the propositions stated are elementary and incontrovertible.

So much of the decree appealed from as is specified in the notice of appeal must therefore be reversed and the plaintiff’s cross-bill be dismissed.