Harvey v. Sparks Bros.

Mount, J. The appellant is a corporation engaged in the real estate business in Spolcane. On March 16, 1904, the appellant as agent for one R. R. Grow, sold a house and lot in Spokane to respondent for an agreed price of $2,400, $500 of which was paid in cash and the balance was to be paid at the rate of $25 per month until the purchase price was fully paid. The contract of sale provided that time was of the essence of the contract, and that, if the respondent failed to make any payment when the same became due, the said Grow might terminate the contract and retain all payments theretofore made. As an inducement for respondent to enter into this contract, the appellant, through its manager O. M. Sparks, represented to respondent that the property would readily rent for $25 or $30 a month, and that appellant could sell the property for the respondent in a short time so that she could clear a couple of hundred dollars on her investment, and that if she would purchase the property the appellant would act as her agent, rent the property for her, and apply the proceeds of the rent on the purchase price as the installments became due to Mr. Grow. Under this arrangement respondent entered into the contract with Mr. Grow and made the first payment. Within a few days thereafter the property was leased at a monthly rental of $25. Appellant collected the rent for three days in March and for the months of April and May, amounting to $52.50, and out of this money made the payment due in Api’il on the contract between respondent and Mr. Grow. Appellant, however, without informing respondent, neglected to make the payment due on the 16th day of May. Immediately thereafter Mr. Grow declared the contract of purchase forfeited and retook the property. Respondent did not know of this transaction until after Mr. Grow had taken possession of the property. Shortly thereafter she brought an action against Mr. Grow and O. M. Sparks, alleging fraud and deceit in making and enforcing the contract of purchase, and asking for a rescission of the con [580] tract and for damages. Issues were joined and the trial rer suited in a finding that the contract was entered into in good faith by Mr. Grow, and that Sparks was not guilty of fraud in inducing the parties to make the said contract of purchase, and a judgment was thereupon entered in favor of defendants in that action. Thereafter this action was begun against O. M. Sparks and the corporation to recover damages for neglect of duty as agents of respondent. The complaint was afterwards amended by omitting Mr. Sparks as a defendant. Issues were joined and the cause tried to the court and a jury, which trial resulted in a verdict and judgment in favor of respondent for $629.OS, being the amount of money she paid on the contract with Grow, together with interest to the time of the judgment. The defendant prosecutes this appeal from that judgment, and contends that the court erred, first, in submitting the case to the jury, in refusing to direct a verdict for defendants, and in denying the motion for a new trial. These questions have necessitated an examination of all the evidence. We are convinced after reading the evidence that the court made no error in any of these respects. The only substantial dispute in the evidence is whether appellant was authorized to use the money collected for rent for any other purposes than to pay the monthly installments on the contract of purchase. Respondent testified that appellant had no such authority, but expressly agreed to apply the rent to the payment of installments on her contract with Mr. Grow, and that within a few days before the May payment became due, Mr. O. M. Sparks told her that he would make the payment when it became due, and that he had money for that purpose. Mr. Sparks on the other hand testified that there were some bills for insurance and repairs which he paid and notified respondent thereof, and that he did not have on hand sufficient funds to meet the monthly installments due in May. The question whether appellant was supplied with funds was therefore a question for the jury, and we think [581] the jury resolved the fact in accord with the weight of the evidence. It is also contended by appellant that the evidence shows that respondent is a married woman and her husband is not a party to this action, and that, therefore, the court should have dismissed the action upon appellant’s motion. But the evidence also clearly shows that she was dealing with her separate property. She could therefore maintain the action in her own name. Appellant also contends that the court erred in rejecting the record in the case of Harvey v. Grow and Sparks, wherein the plaintiff sought to rescind her contract with Mr. Grow and recover the money paid thereon, upon the ground of fraud and deceit practiced upon her. It is claimed that the judgment in that case in favor of the defendants is res adjudicata of this case. This case is essentially different from that case. Here the gist of the action is the negligence of the agent, or his failure to perform a duty he owed his client, after the contract was entered into. There the gist of the action was the validity of the contract of sale. The parties are entirely different in the two actions. Here the defendant is the corporation which was the agent of the plaintiff. There the defendants were R. R. Grow and O. M. Sparks. It is true, Mr. Sparks is a stockholder and the managing agent for the defendant in this case, but he was sued in his individual capacity in the former suit. It is plain, therefore, that the judgment in the former case is not an adjudication, of tins in any particular. Appellant claims that O. M. Sparks was not authorized to bind the appellant in this transaction. There is no merit in this contention, for the evidence clearly shows, that the corporation held Mr. Sparks out as managing agent, that he entered into the agreement, and carried on the business in the name of the corporation which received the benefits. The business was certainly within the scope of a real estate [582] business. The corporation, therefore, cannot now be heard to say that O. M. Sparks was not authorized. We find no error in the record. The judgment is accordingly affirmed. Hadley, C. J., Dunbar, Root, Rudkin, Fullerton, and Crow, JJ., concur.