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(220 P.)

mony of the witness adduced in court, and the great weight of authority holds that the declarations of a party in his own favor are deemed self-serving and are not admissible in his behalf. With certain exceptions, selfserving declarations whether written or oral, not parts of the res gestae, are not competent. State v. Anderson, 10 Or. 448; State v. Smith, 43 Or. 109, 110, 71 Pac. 973; Wirth v. Richter, 63 Or. 114, 116, 126 Pac. 987; Service Lbr. Co. v. Sumpter Val. Ry. Co., 67 Or. 63, 80, 135, Pac. 539; Hillsboro Nat. Bank v. Garbarino, 82 Or: 405, 410, 161 Pac. 703; Stanfield. v. Arnwine, 102 Or. 289, 202 Pac. 559; 4 Chamberlayne, The Modern Law of Evidence, § 2734.

“It is a well-established general rule that a statement of a party, whether oral or written, which is of a self-serving nature, is not admissible in evidence in his favor. * * * * 22 C. J., § 193, p. 220, and numerous cases cited.

[21,22] Under the exception to the general rule, the testimony sought to be introduced was not competent.

"Where, however, a witness has been assailed on the ground that his story is a recent fabrication, or that he has some motive for testifying falsely, proof that he gave a similar account of the transaction when the motive did not exist, before the effect of such account could be foreseen, or when motives of interest would have induced a different statement, is admissible; but, in order to bring a case within this rule, it must appear that the conversation occurred soon after the transaction, is consistent with the statements made on oath, and contains such fact or facts pertinent to the issues involved as reasonably furnish to the jury some test of the witness' integrity and accuracy of recollection.” 40 Cyc. 2789.

To similar effect see 1 Thompson on Trials, $574–577.

The exclusion of the testimony was not error. However, the record does show, from the testimony of W. W. Lucius, that Zanello Bros. reported, in a letter, that the price of reinforcing steel included in their bid was raised in the sum of $400, and Exhibit D, being the revised figures on the Labor Temple building, was based upon the report made by the letter. This statement was received into the record over the objections of plaintiff. [23] Defendants aver error because of the court's overruling their objection to certain testimony given by C. J. Montag relating to oustom. Under the pleadings and the condition of the record, the question was not technically proper. Simms v. Sullivan, 100 Or. 487, 198 Pac. 240, 15 A. L. R. 678. “Custom" is thus defined:

- “In its more technical legal sense, a custom As a usage which has obtained the force of law. In other words, it is a law established by long "sage. * * * The word ‘custom' is also employed by the courts in its more popular sense

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& For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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6. Landlord and tenant 6-76(1)—Restrictions against assignments must be clearly established and strictly construed. Restrictions against assignments, being restraints' against alienation, are not favored by the courts, which should not insert such a clause in 'a lease without clear and convincing evidence of a previous definite agreement on the particular point, and will construe it, when found therein, with the utmost strictness.

7. Reformation of instruments 3-1 |-Statements of reasons for desiring lease held insufficient to authorize insertion of provision against assignment or subletting. A statement by lessees’ representative in negotiations for a lease that lessees desired the building for their own business, and expected to improve it by large expenditures, held insufficient to authorize insertion of a provision against assignment or subletting without lessor's written consent, not being part of the consideration for, but merely a statement made as an inducement to lessor to execute, the lease.

8. Fraud 8-12—Mere nonperformance of promise not actionable.

Mere nonperformance of a promise made, or failure to carry out an intention expressed, in the course of negotiations, is not a fraud or evidence of fraud, unless the representations were falsely and fraudulently made with intent to deceive; a representation as to a past fact or present condition being necessary to constitute actionable fraud.

9. Reformation of instruments 3-21–Lessee held not guilty of fraud in accepting lease without pointing out omission of provision agreed On. A lessee and its representative, neither of whom was represented by an attorney in negotiations for the lease, which was drawn by lessor's attorney, held not guilty of fraud in accepting and signing it without pointing out omission of a provision which lessor claimed was agreed on.

10. Reformation of instruments 3-21—Subletting cannot be made basis of reformation of lease on ground of fraud. The subletting of premises by lessee cannot be made the basis for reformation of the lease on the ground of fraud, by inserting a provision against subletting, especially where it occurred more than two years after the lease was made.

| 1. Reformation of instruments &=45(1) — Testimony as to mutual mistake must be clear, and show precisely what was intended to be inserted. To obtain reformation by insertion of omitted provisions, testimony as to mutual mistake must be clear, definite, cogent, and unequivocal, and must show precisely what was intended to be inserted.

|2. Reformation of instruments 3-520-Instrument not conforming to contract because of mutual mistake or mistake of one and fraud of other party reformed. Where a written memorandum fails to conform to the contract because of mutual mis

take, or mistake of one party and fraud of the other, a court of equity will generally reform the instrument to make it conform to their actual stipulation.

13. Evidence 6-70–Reformation of instruments &45(1)—Every presumption in favor of correctness of writing; clear and convincing proof of facts alleged in complaint necessary. Every presumption must be invoked in favor of the correctness of a written instrument. which will not be reformed except on clear and convincing proof of the facts alleged in the complaint.

14. Reformation of instruments 3-2–Court should consider equitable or inequitable features of clause sought to be inserted. A suit for reformation is an appeal to an extraordinary power of a court of equity, which should scrutinize a clause sought to be inserted in the writing and consider its equitable or inequitable features.

15. Reformation of instruments 6-2–Nonassignment clause in long term lease without restriction on lessor's power to withhold consent does not appeal to court's conscience. A nonassignment clause sought to be inserted in a long term lease with no restriction on lessor's power to withhold consent to a subletting does not appeal to the conscience of a court of equity, especially where subtenant is a responsible concern satisfactory to lessor, who only desires to obtain an increased rental.

| 16. Reformation of instruments 6-1 I-Lessor not suggesting omitted provisions when contract was made cannot do so in suit to reform lease. Lessor not suggesting or insisting on provisions against assignment and subletting without her written consent when the contract was made cannot do so in a suit to reform the lease; lessee's assent to such provisions being necessary to make them part of the contract.

Department 2. Appeal from Circuit Court, Multnomah County; T. E. J. Duffy, Judge.

Suit by Eliza C. Dolph against Lennon's, Incorporated, and others. From the decree rendered, the named defendant and others appeal. Reversed, and suit dismissed.

The plaintiff, Mrs. Eliza C. Dolph, instituted this suit against the appellants, Lennon's, Incorporated, A. J. Lennon, Chas. F. Berg, and the Sweet Sixteen Company, a corporation, to obtain the reformation of a lease of certain premises situated on Broadway street, in the city of Portland, Or. In this lease, which was dated March 10, 1919, the plaintiff, Mrs. Dolph, was lessor, and the appellants, Lennon's, Incorporated, was lessee. Lennon's, Incorporated, subsequently assigned the lease to A. J. Lennon and Chas. F. . | Berg, its principal stockholders, and Februlary 11, 1921, Lennon and Berg sublet the

C-2 For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

(220 P.) premises to the Sweet Sixteen Company at a to carry on and conduct therein the business considerable rental advance. that it was then carrying on in its said store

At the time the lease was executed the on Morrison street, it would expend between property was yielding a rental of $900 per $35,000 and $40,000 in remodeling said building month. The lease called for a monthly ren- ;...” to make it convenient for its own use.

o - That, in negotiating for said lease from the tal of $1,500 per month, and covered a period plaintiff to said defendant, and in the final con

of 10 years but was not to go into effect, in summation thereof, and to induce plaintiff to so far as possession was concerned, until two execute said lease to said defendant, Lennon's years after it was executed. The plaintiff Incorporated, said defendant, amongst other sought by her complaint to reform the lease things, promised and agreed that said premises so as to insert (1) a provision limiting the should be used exclusively during the term use of the premises to Lennon's, Incorporat. thereof, by said defendant, Lennon's, Incorpoed, and (2) a provision explicitly denying to rated, for the purpose of conducting its own

- - - business only, therein, and that said premises the lessee the right to assign or sublet with- would not be sublet under the said lease, and

out the written consent of the plaintiff. The that said lease should not be assigned, without trial court rendered a decree refusing to in- the written consent of the plaintiff first had and sert the first provision mentioned, in effect, obtained, and it was thereupon so agreed by denying relief in so far as the insertion of and between the plaintiff and said defendant.” the clause requiring Lennon's to conduct its own business on the premises was concerned, The lease was drawn by Mrs. Dolph's atand reforming the lease so as to prevent an torney, and as drafted did not contain either assignment thereof, to the effect that the of the clauses claimed to have been agreed premises should not be sublet or assigned upon at the meeting to which the verbal unwithout the written consent of the plaintiff derstanding had been reached. There were first had and obtained. After decreeing that present at the meeting in question Mrs. the lease should be so reformed the trial court Dolph, Mr. Joseph Simon, Mr. Chas. F. Berg, adjudged that the lease as reformed was of Lennon's, and one M. A. Newell, a real esvalid; that the sublease to the Sweet Sixteen tate agent. Company was valid; and then adjudged that It was not contended that in the court of the Sweet Sixteen Company should pay the verbal negotiations there was any reference rental of $2,500 per month fixed by the sub- whatever to a restriction on assignment for lease directly to the original lessor, Mrs. subletting, but it was claimed that such a Dolph. Lennon's, Incorporated, A. J. Len- restriction was inferable from Berg's statenon, and Chas. F. Berg appealed from the de- ment that Lennon's intended to conduct on cree. The Sweet Sixteen Company was sat- the premises the business which it was then isfied with the decree. Mrs. Dolph was also conducting on Morrison street, in Portland. satisfied, and neither appealed. Mr. Simon stated that he dictated certain The allegations of the complaint which ex- special clauses to his stenographer, and plain the issues, and the gist of which are then left to her the incorporation of what he denied by the answer, are as follows: termed “boiler plate” provisions, one of

o ---- - - which was a restriction against an assignloi..'... . ...'... ..o.o. ment and subletting without consent; that he porated, through the above-named defendant, failed to notice that this restriction had been Charles F. Berg, its then vice president, ap- omitted as he went over it hastily. He then plied to the plaintiff herein for a lease of the gave the lease to Mr. Newell, who subsequento hereinabove described. and at said ly returned it signed by Lennon's. Mr. Si..". "...o.o.o.o. "..." |mon further testified that it was his purpose

premises to the defendant, Lennon's, Incorpo- rated, promised and agreed with plaintiff that to have included in the lease the usual re

said defendant would use the said premises strictions covering the nonassignment and under said proposed lease for its own purposes subletting without the written consent of the *clusively, and promised and agreed to conduct lessor. On cross-examination Mr. Simon tes. in said premises under said proposed lease, stified as follows:

*nd under its name, ‘Lennon's, Incorporated,’ the business then carried on by said defendant “Q. Was there any discussion at any time orporation, in its then place of business on during the conference or was there any menthe north side of Morrison street, between tion of assignment or subletting at the time of Fifth street and Sixth street, in the said city the conference between Newell, Berg and yourof Portland, but upon a larger and more im- self; was there any reference to assignments portant scale and the said Charles F. Berg, and subleases in that conference? A. Not in representing and acting for and on behalf of express language; but the understanding was said defendant corporation as aforesaid, then that the lease should be formulated and based and there represented that the principal busi- upon the agreement that was entered into. * * * ness of said defendant corporation in case of “Q. You never at any time intended to insert, *ecuring said proposed lease, as applied for, and omitted by negligence of you or any stenogwas thereafter, and with the commencement of rapher, any clause affirmatively obligating them the term of said lease, to be carried on oy it to conduct exclusively a certain business on in said hereinbefore described premises, owned certain premises for a certain period of time, by plaintiff as aforesaid, and that, to enable it regardless of conditions? You never intended

to dictate that, did you, Senator? A. No; I did not. “Q. Another matter which I wish to ask you, with regard to the dictation of the lease outside of what you call the “boiler plate' portion: Did you intend to dictate in that lease as part of the agreement of the parties that Lennon's should improve that building—spend the sum of approximately $35,000 in making it into the store of the character or type of Magnons? A. No; I don't think there is any such provislon. “Q. I agree with you, there was not any such provision. Was it your intention to obligate the tenant to do that? A. No; that was one of the inducements Lennon's offered to Mrs. Dolph, to make the lease, but that didn't go in the lease. “Q. It was a statement of their intention, was it not, Senator? A. Yes. * * * “Q. You didn't require them to make any improvement? A. Mrs. Dolph consented certain improvements be made. “Q. But you did not require them? A. Not in the writing. “Q. That was in conformity with the verbal agreement? A. Well, the verbal agreement was they were to make improvements. They said they would make improvements to the extent of $35,000 or $40,000. “Q. I mean, no mistake, the failure to require them to make any improvement? A. No; no mistake about that, because I didn't intend to put that in the lease.”

Mrs. Elizabeth C. Dolph testified in part as to what took place at the meeting in Mr. Simon's office: That Mr. Berg, of Lennon's, desired to obtain the lease. He said that he wanted to greatly enlarge their business and establish a business as nearly as possible like Magnon's, of San Francisco; that they wanted the building for their own use. That Mr. Berg said, “Mrs. Dolph, if you will lease your building to us, to Lennon's, we will carry on a high-class business there that you will be proud of.” She was to pay taxes, insurance, and street improvements, and they asked her to let them have it for 10 years. That at first she demurred to letting the building for 10 years, but afterward consented. That Mr. Berg assured her that he could not possibly take the building for less than 10 years, because he was going to expend something like $35,000 or more in the improvement of the building, making it suitable for their use. That this induced her to give the lease. She testified that nothing Was said regarding the rights of Lennon's, Incorporated, to sublet or assign the lease, and that she would not have leased the premises if any such right had to be granted; that she did not know how it happened that the provisions by which Lennon's were to occupy the premises exclusively for their own business were left out, and the prohibition against assigning and subletting was omitted, and she did not know when she signed the lease that those restrictions were


The understanding of Mr. Newell, the real estate agent, in regard to the transaction, is indicated by his cross-examination, which is in part as follows:

“Q. I took down your statement. I want to know if that is correct or not. Mrs. Dolph asked Mr. Berg: “What do you intend to do with the building?' A. Yes. “Q. Mr. Berg told her it was their intention § occupy it for Lennon's, Incorporated? A. es. “Q. Is that the statement on which you base your conclusion that was her understanding? A. Yes, sir. “Q. That is as far as you remember, was the language used? A. Yes, sir. “Q. Was there any discussion about assigning, or anything of that sort? A. About what? “Q. About assignment of the lease? A. No, sir. “Q. No discussion of that kind? A. No, sir. “Q. Who drew that lease, do you know? A. Senator Simon, I think. “Q. Whom did Senator Simon represent? A. Sir? “Q. Whom did he represent? A. Mrs. Dolph.”

Roscoe C. Nelson and Martin L. Pipes, both of Portland (Dey, Hampson & Nelson and George A. Pipes, all of Portland, on the brief), for appellants.

Chester W. Dolph and H. J. Bigger, both of Portland, for respondent.

BEAN, J. (after stating the facts as above). In regard to the clause which it was claimed in the complaint was omitted from the lease to the effect that Lennon's, Incorporated, should occupy the premises during the term of the lease exclusively for the conduct of its own business, we should first notice that the trial court found from the testimony, that such clause should not be incorporated in the lease, and the plaintiff, being apparently satisfied with the decree did not appeal; therefore that phase of the matter is out of the CaSe.

[1] A party who has failed to take an appeal cannot, on appeal by the adverse party, insist on a decree more favorable to him than that given in the court below, even though the case is triable de novo in the Supreme Court; Flinn v. Vaughn, 55 Or. 372, 106 Pac. 642; McCoy v. Crossfield, 54 Or. 591, 104 Pac. 423; Goldsmith v. Elwert, 31 Or. 539, 50 Pac. 867, and other cases referred to in these.

[2] The decree appealed from ordered that the lease “be, and the same is hereby, reformed and corrected to conform to the real agreement of the parties thereto"; then provided for inserting in the lease the following:

“It is further covenanted and agreed by and between the parties hereto that said party of the second part will not assign this lease, nor sublet said premises, nor any part thereof; without the consent in writing of the party of the first part had and obtained permitting the same."


(220 P.)

The instrument as reformed by the decree of the trial court contains no covenant either that the premises should be used exclusively by Lennon's, Incorporated, for the purpose of conducting its own business only, or for the conducting of the business formerly conducted at Morrison street. The decree is a judicial determination against the plaintiff that no such terms were a part of the original Contract. [3] The only question that remains is Whether or not the testimony warrarits the finding that the contracting parties to the lease agreed that the premises should not be sublet or the lease assigned without the written consent of the plaintiff first had and obtained. It goes without saying that a written instrument can only be reformed so as to Conform to the agreement made by the parties. The function of the written instrument is to record the agreement which the parties executing the same have made. If it was an oversight in not making any agreement as to subletting the premises or assigning the lease, then there could have been no mistake or oversight in omitting the insertion of such a clause in the written lease. The scrivener who drew the lease would not be expected to insert therein a stipulation that in fact had not been made by the parties. Neither is the court authorized to reform the instrument and insert therein any stipulation or agreement that was not in the minds of the parties at the time they made the contract. [4] We fail to find in the record any testimony to support the finding or decree of the trial court that the monassignment clause and clause restricting the subletting of the Premises was a part of the real agreement of the parties to the lease. There were four Persons present at the negotiations when the Verbal contract was consummated and the terms thereof fixed, Mrs. Dolph, Mr. Simon, Mr. Newell, and Mr. Berg. All of these witnesses agree that the subject of assign"ent and subletting was not even mentioned *t that time by either of the parties or any One else. Thereason for the opinion of the trial court *ens to have been that the agreement al*sed, to the effect that the premises were to be used by Lennon's, Incorporated, for its *iness only, and to conduct such a busi*ss as was conducted at Morrison street, is equivalent to an agreement not to assign or oublet the premises without the written con*nt of the plaintiff. If the defendant Len"on's, Incorporated, did not agree as a part "f the contract to occupy its premises for its business only or to conduct its business therein as conducted at Morrison street, it "annot be said that they agreed to something *imed to be equivalent, namely, not to as*n or sublet the premises. We should not translate words used in the negotiations which were not a term of the contract into

other words constituting a contract. If we change the phraseology it must mean the same thing as the original language. The new language inserted in the written instrument by the decree is radically different from the original. It is not susceptible of the same meaning as the original language used by the parties in the negotiations and was not so understood by both of them. Therefore there is no basis for the decree, because there is no evidence supporting the finding that an agreement was made that the lease should not be assigned and the premises should not be sublet without the written conSent of the lessor. According to the facts in the case as delineated by the testimony, if the clause relating to the nonassignment of the lease and the restriction as to the subletting of the premises had been inserted in the lease by the draftsman, then it would have amounted to no more than a proposal on the part of the lessor, and would have required the acceptance of the lessee to consummate the agreement. This, of course, would have been accomplished by the execution of the lease with Such an insertion. Whether the lessor and the lessee could have come to an agreement as to a restriction in regard to subletting if they had endeavored to do so, is in doubt. Mrs. Dolph testified that she would not have signed the lease if she had understood that there were no restrictions in regard to a sublease. On the other hand, Mr. Berg, the vice president and representative of Lennon's, the lessee, testified that he would not have signed the lease containing the covenant that the lease should not be assigned nor the premises Sublet without the written consent of the lessor unless there had been a further provision that such consent should not be arbitrarily withheld. So that it appears that the oversight was a failure of the parties to come to an agreement or understanding in regard to the covenant inserted by the decree, rather than in a mistake in making the written memorandum show what the parties had agreed to. [5] As a general rule, the power of assignment is incident to the estate of a lessee, unless it is restrained by the terms of the lease. Though a lease is necessarily a contract, yet it is a contract which creates an estate, and by the common law an estate is assignable, and the power to assign exists without the word “assigns” in the lease. It has been held that under an agreement for a lease the lessor is not, without an express stipulation, entitled to a covenant restraining alienation without the lessor's consent as a proper and usual covenant. 16 R. C. L. 828, § 323; Church v. Brown, 15 Wes. Jr. 258, 10 Rev. Rep. 74, 15 Eng. Rul. Cas. 688; Hampshire v. Wickens, 7 Ch. Div. 555, 47 L. J. Ch. 243, 38 L. T. N. S. 408, 26 W. R. 491, 15 Eng. Rul. Cas, 699. [6] Restrictions against assignments being

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