Heidel v. Shute

167 P. 586, 86 Or. 210, 1917 Ore. LEXIS 113

• Court: Oregon Supreme Court
• Decided: September 25, 1917
• Status: Published

Opinions

Mr. Justice Benson

delivered the opinion of the court.

1. The sole question presented for our consideration is: Does the cross-bill state facts entitling plaintiff to equitable relief? The pleading under consideration is quite long and contains an elaborate recital of many involved transactions, which we find it unnecessary to mention in detail. Defendant contends that all of these matters are purely counterclaims and therefore not defenses and consequently not proper matters in a cross-bill. The first paragraph of the complaint herein reads as follows:

“That on or about the 20th day of June, 1907, the plaintiff and the defendant entered into an agreement wherein and whereby it was agreed that the defendant should advance the sum of twenty-five hundred dollars ($2500) in connection with the purchase of a large quantity of land known as the F. C. King land; and it was understood and agreed in connection there-' with that plaintiff should repay to the defendant one-half of the amount advanced, out of the profits to be derived from the sale of said land and premises; and about the same time, in connection with the same lands it was agreed, between plaintiff and the defendant and one M. J. Kinney, that upon the sale of said lands the profits- made upon the sale, over and above the purchase price and all legitimate expenses, should be divided as follows: To M. J. Kinney, fifty per cent; to J. W. Shute, twenty-five per cent; and to F. M. Heidel, twenty-five per cent.”

This is followed by allegations to the effect that the lands in question were sold for $84,000; that these lands and others were combined as mortgage security for the purchase price; that the defendant, for himself and coadventurers, received the $84,000 kept the accounts himself, distributed the funds according to his own will and without consulting his associates, has at all times refused to render an account, and plaintiff does not know and therefore cannot state the amount of profits derived from the sale of the lands; but, upon information and belief alleges that plaintiff’s share thereof “exceeds the sum of $-.” The prayer is for an accounting, and that the court determine the amounts due to plaintiff and defendant and for general relief. As already suggested, the history of the transactions is much more extensive than we have now outlined and many matters are pleaded in which affirmative relief is sought, hut enough is indicated to disclose that the pleading contains sufficient statements of fact to render it invulnerable to attack by demurrer. It will be observed that it is averred that the money advanced by Shute was to be repaid out of the profits to be derived from the sale of the lands; that the lands have been sold, the proceeds received and disposed of by defendant, who has refused to account for the same; that plaintiff does not know what the profits are and cannot know what amount, if anything, is still due to defendant upon his advances in the purchase of the land. These allegations clearly distinguish the situation from a mere pleading of counterclaim and discloses matters material to plaintiff’s defense in the law action.

2. Defendant also urges that the complaint is defective because there is no allegation of a demand for an accounting. This point is not well taken since the complaint alleges that the defendant “has at all times refused and neglected to render to this plaintiff a full, true and correct statement of the account between plaintiff and defendant herein.” In the case of Brossard v. Williams, 114 Wis. 89 (89 N. W. 832), the court says:

‘ ‘ The defendant insists that the complaint is insufficient because it fails to allege a demand upon the defendant before the commencement of the suit. It is alleged that the defendant refuses and has ever refused to account or pay over the indebtedness sued for. Defendant’s contention is completely answered by the case of Divan v. Loomis, 68 Wis. 150 (31 N. W. 760), in which it is said: ‘An allegation of refusal implies a previous demand and is equivalent to an allegation of demand and a refusal.’ ”

The same conclusion is reached in the following cases: Ferguson v. Hull, 136 Ind. 339 (36 N. E. 254); Worth v. Wharton, 122 N. C. 376 (29 S. E. 370), and Mason v. Carter, 8 S. C. 103.

We conclude that it was error to sustain the demurrer. The decree is therefore reversed and the cause remanded with directions to overrule the demurrer. Reversed With Directions.

Rehearing Denied.

Mr. Chief Justice McBride, Mr. Justice Burnett and Mr. Justice Harris concur.