De L'Archerie v. Rutherford

Rudkin, C. J. The plaintiff in this action is a school teacher and the defendant a dealer in real estate. About the month of July, 1906, the plaintiff arrived in the city of Seattle, bearing a letter of introduction to the defendant from a mutual friend in Chicago. Between July and November, 1906, the plaintiff purchased several pieces of property in the city of Seattle from or through the defendant, one of which at least was resold by the defendant on commission. Considerable sums of money belonging to the plaintiff were carried by the defendant in his private account, and he re [135] ceived and disbursed money for her from time to time without rendering any account or being called upon to account until early in January, 1907. In the month of November, 1906, the plaintiff purchased from or through the defendant a tract of land on Capitol Hill in the city of Seattle for the consideration of $5,700, the purchase price of which was paid as follows: $2,500 by mortgage, $2,606.25 from money belonging to the plaintiff in the hands of the defendant, and the balance of $893.75 by a second mortgage on the property in favor of the defendant. The property in question.was conveyed by Iola J. Herron and husband to the defendant under date of November 30, 1906, and by the defendant to the plaintiff under date of January 14, 1907, but it is conceded that the preliminary negotiations for the conveyance from the Herrons to the defendant, and from the defendant to the plaintiff, antedated their respective deeds by some considerable time. The consideration paid the Herrons by the defendant was $5,000, while the consideration paid the defendant by the plaintiff was $5,700. The plaintiff had no knowledge of and did not discover this difference in consideration until after the execution and delivery of her note and mortgage to the defendant, and the present action was thereupon instituted to cancel the note and mortgage on the ground of fraud. From a judgment in favor of the defendant, the present appeal is prosecuted. It seems to be conceded that the relation of principal and agent subsisted between the respondent and the appellant at the time of the sales and conveyances in question. In any event, that relationship was clearly and unequivocally established by the testimony. The respondent purchased and sold property for the appellant, carried her money in bank in his own name, received and paid out money, signed contracts and receipts in her behalf, and represented her in various ways at various times. The respondent contends that he purchased the property [136] from the Herrons on his own account, or on the account of J. G. Leslie & Co., with whom he was associated in business, and that the property was thereafter resold to the appellant. The appellant, on the other hand, contends that the property was purchased from the Herrons on her account, through the respondent as her agent, and' that the taking of the title in the name of the respondent and the subsequent conveyance to her for $700 in excess of the original contract price paid the Herrons was a fraud upon her rights. The contention of the appellant must be sustained. Mrs. Herron from whom the property was originally purchased was the only witness at the trial who was wholly disinterested in the result. She testified by deposition, and as to her at least this court occupies as favorable a position to weigh her testimony correctly as did the court below. Her testimony was clear, full and circumstantial. She testified positively that the respondent stated at their first interview that he was purchasing the property for a French lady (referring to the appellant), and that when the deed was afterward executed, in answer to the inquiry “The deed is in your name I see,” the respondent replied, “Yes, I am having it made to myself, but I am buying it for another party.” This witness was fully corroborated by the appellant, and by other testimony at the trial. While the respondent denied that he purchased the property for the appellant, he did not claim or pretend that he informed her that he was selling her his own property or property in which he had an interest. This of itself was a constructive fraud by reason of the relationship existing between the parties, but such fraud would give rise to a different form of action to be followed by a different kind of relief. The respondent did not deny except inferentially that he had told the appellant at the time she purchased the property that she must act quickly or the old lady who owned the property would back out; and upon the entire record we are convinced that the contention of the appellant is sustained by a clear preponderance of the testi [137] mony. The rights, duties, and obligations growing out of the relationship of principal and agent have been so often considered by this court that it seems scarcely necessary to refer to our former decisions. Hindle v. Holcomb, 34 Wash. 336, 76 Pac. 873; Cantwell v. Nunn, 45 Wash. 536, 88 Pac. 1023; Merriman v. Thompson, 48 Wash. 500, 93 Pac. 1075; Jameson v. Kempton, 52 Wash. 106, 100 Pac. 186. The judgment is reversed with directions to cancel the note and mortgage described in the complaint, upon the payment into court by the appellant of the sum of $193-75, with interest from date of the mortgage. If the mortgage cannot be surrendered or cancelled by reason of its negotiation to innocent parties, the court will give judgment against the respondent for the sum of $700, with interest from the date of the mortgage, and for costs of suit. Fullerton, Chadwick, and Gose, JJ., concur. Morris, J., took no part.