Reid v. Stanley

124 P. 646, 62 Or. 151, 1912 Ore. LEXIS 124
CourtOregon Supreme Court
DecidedJune 4, 1912
StatusPublished
Cited by2 cases

This text of 124 P. 646 (Reid v. Stanley) is published on Counsel Stack Legal Research, covering Oregon Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Reid v. Stanley, 124 P. 646, 62 Or. 151, 1912 Ore. LEXIS 124 (Or. 1912).

Opinion

Mr. Justice Burnett

delivered the opinion of the court.

The findings of fact follow the allegations of the complaint without material variance. From them we learn, in substance, that prior to February 16, 1905, the defendants were owners of all the capital stock in two corporations, the Columbia Timber Company and the Goble, Nehalem & Pacific Bailway Company, and exercising the corporate powers of the companies, in the course of some logging operations, they had cut and removed from the land of one Davidson substantially all the timber and had converted it to their own use. At the date mentioned the plaintiff for a valuable consideration purchased from the defendants all the shares they held in the two corporations, and the stock was transferred, one share to each of two associates of plaintiff, and the remainder directly to himself. The conveyance was thus made so that there could be three stockholders for directors and to enable the plaintiff, as he did until March, 1907, to continue the business under the corporate names. The fourth finding of fact reads thus:

“That at the time plaintiff so purchased said capital stock of said corporations, the defendants, for the purpose of inducing plaintiff to make said purchase, and in order to proteet the plaintiff from the acts of the defendants in so cutting said timber upon the land above described, entered into a written agreement with the plaintiff whereby they agreed to hold the plaintiff harmless from any and all claims for damages by trespass growing out of the management of the said corporations or either of them while they were thus engaged in logging, and that thereby the defendants intended to include any claim that might thereafter be made by said E. L. Davidson for cutting his said timber.”

The findings further recount that in April, 1906, Davidson commenced an action against the Columbia Timber Company to recover, among other things, damages for cutting and removing the timber alleged to [154]*154have been done in 1905 while that company was managed by the defendants here. These defendants employed counsel, who conducted a defense of that action, which on November 3, 1906, resulted in a judgment against the company for $2,000. At the request of these defendants, the plaintiff appealed that cause to this court; but such proceedings were taken therein that the appeal was dismissed and the cause remanded to the circuit court, where a judgment on the mandate was rendered against the timber company November 1, 1907, for the full amount of the original award with interest and costs, amounting to $2,668. While the cause was pending on appeal, on March 19, 1907, the plaintiff sold all the stock of the two corporations to O. M. Clark and his associates, composing a partnership. While the negotiations for such sale were in progress, and as an inducement to the consummation thereof, the plaintiff, on February 23, 1907, entered into an agreement in writing with Clark to hold him and his associates harmless from any and all claims for trespass growing out of the management of the corporations or either of them since the plaintiff took charge of the same. In that agreement no special mention was made of the judgment pending on appeal. About December 16, 1907, Davidson caused execution to be issued out of the circuit court with instruction to collect the amount of the judgment from the Columbia Timber Company, whereupon the plaintiff called upon the defendants and demanded that they should hold him harmless from said judgment; but, the defendants refusing to do so, plaintiff paid the same in full. As a legal conclusion the circuit court held that the satisfaction of the judgment against the timber company by the plaintiff, as stated, was a mere voluntary payment, and that he was not entitled to any relief against the defendants in this action.

[155]*155From the abstract we learn that the plaintiff submitted findings of fact, substantially like those returned by the court, coupled with conclusions of law culminating in a judgment for the plaintiff; but the court refused to adopt them. The plaintiff assigns as error that the court was wrong in finding that the judgment obtained by Davidson against the Columbia Timber Company was not within the purview of the indemnity agreement entered into between plaintiff and Clark, and that plaintiff in paying said judgment acted voluntarily. A second assignment is, in substance, that the court erroneously refused to find in favor of the plaintiff as demanded by his motion.

1. There is no bill of exceptions presented in the record. Hence we must take the findings of the court as a verdict. Section 159, L. O. L.; Ferguson v. Reiger, 44 Or. 538 (76 Pac. 14) ; Flegel v. Koss, 47 Or. 366 (83 Pac. 847) ; Courtney v. Bridal Veil Box Factory, 55 Or. 210 (105 Pac. 896); Seffert v. N. P. R. Co., 49 Or. 95 (88 Pac. 962: 13 Ann. Cas. 883).

2, 3. In the absence of any showing of error in the admission or exclusion of testimony in the court below, which can only appear by bill of exceptions, the only question we can consider is whether or not the court was wrong in its conclusions of law deducéd from the facts found by it. Indeed, it was conceded at the argument that the only issue to be determined on the record as presented is whether or not the court reached the correct conclusion of law on the facts disclosed in the findings.

4. There was no privity of contract between the defendants and Clark. Their liability to the plaintiff was not affected by any engagement entered into by him with Clark. The subject-matter of one contract is different from that of the other. The agreement between the plaintiff and the defendants was one of indemnity for the purpose of holding the plaintiff harmless from damages resulting from the operations of the corporation [156]*156while the defendants were the managers thereof. On the other hand, the agreement between the plaintiff and Clark had to do with the operations of the corporation at an entirely different period, to wit: while the plaintiff had it in charge. For these reasons we must lay out of the case any consideration of the contract between the plaintiff and Clark. Liability of the defendants to the plaintiff must result, if at all, from their contract with him and for damages visited upon him as a consequence of something to which that contract was subsidiary. That liability is not to be measured or controlled in any degree by a writing to which defendants were strangers. The compulsion of his engagement with Clark upon a matter not within the scope of his agreement with the defendants will not operate against them in favor of the plaintiff.

5, 6. Looking again into the findings, we discover that the agreement was made by the defendants as individuals with the plaintiff as a natural person, whereby “they agreed to hold the plaintiff harmless from any and all claims for damages by trespass growing out of the management of said corporations or either of them while they (the defendants) were thus engaged in logging.” As to its scope and effect the contract must speak for itself and in its own terms. Staver v. Locke, 22 Or. 519 (30 Pac. 497: 17 L. R. A. 652: 29 Am. St. Rep. 621) ; Fenton v. Fidelity & Casualty Co., 36 Or. 283 (56 Pac. 1096: 48 L. R. A. 770).

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Bluebook (online)
124 P. 646, 62 Or. 151, 1912 Ore. LEXIS 124, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reid-v-stanley-or-1912.