Middlefork Cattle Co. v. Todd

MR. JUSTICE HOLLOWAY delivered the opinion of the court. On August 30, 1911, the Middlefork Cattle Company commenced an aetion in the district court of Cascade county against Ira E. Todd. Personal service of the summons was made on September 15, and on October 9 the default of defendant for want of an appearance was entered, and on October 13 a judgment was rendered in favor of the plaintiff agreeably to the prayer of the complaint. Defendant immediately made a motion to set aside the judgment, open the default, and permit an answer to be filed. The motion was supported by affidavits, and a proposed answer was tendered. A counter-affidavit was presented by counsel for plaintiff, and on February 20, 1912, the district court entered its order as follows: “It appears to the court that defendant has not shown that judgment was entered against him through his mistake, inadvertence, surprise or excusable neglect; but it further appears to the court that the complaint does not state facts sufficient to constitute a cause of aetion against the defendant, and does not support the judgment. It is therefore ordered that said motion be, and the same [261] is hereby, sustained, and that said default be, and the same is hereby, set aside, and that judgment entered in said action be, and the same is hereby, vacated.” From that order, plaintiff appealed. Counsel for respondent invoke the rule that, if the decision of the court was correct for any reason, it will be sustained, even though the particular reason assigned in the order is [1] erroneous. The disputed questions of fact presented by the affidavits are of such character that we are not in the same advantageous position in considering them as was the trial court, and, for this reason, the finding is conclusive against the defendant upon this appeal. Aside from the disputed questions of fact, counsel for defendant in their affidavits do not present any legal excuse for the default. They merely disclose that they prepared a demurrer in time, but neglected to file it. It is unfortunate that the learned trial judge did not indicate [2] the particulars in which he deemed the complaint insufficient. We have given it careful consideration, and are unable to discover any fatal defect. Stripped of its legal phraseology and repetition, and reduced to plain, terse English, the complaint charges (a) that plaintiff employed defendant, a real estate agent, to sell certain lands for it for $8,000, upon a commission of five per cent of the selling price; (b) that defendant thereafter represented to plaintiff that he could secure for the land only an amount sufficient to net plaintiff $6,650, which would be upon the basis of a total selling price of $7,000; (c) that this representation was false and fraudulent, but was believed by the plaintiff to be true, and, relying upon it, plaintiff agreed to the sale and executed a deed reciting a consideration of $7,000 as the purchase price, and accepted the sum of $6,650 as its share; (d) that in truth and in fact, at the time the representation was made, defendant had already negotiated a sale of the property for $8,000, and thereafter consummated such sale and received the extra $1,000 for his own use and benefit, or to the use and benefit of some other person, and thereby defrauded the plaintiff out of that sum; (e) a demand upon defendant to pay over this $1,000, and his refusal. If [262] these facts do not state a cause of action, they ought to. It does not require any knowledge of the law to convince one that plaintiff should prevail if these facts are true, and, for the purposes of the motion, they are deemed to be true. Common honesty denies to an agent the right to profit at the expense of his principal by chicane and misrepresentation. If there are any instances wherein the law and justice are out of harmony, this is not one of them, for the courts are of one opinion in declaring that the unfaithful agent under such circumstances shall be made to disgorge the amount of profit so wrongfully realized. (Hewitt v. Young, 82 Iowa, 224, 47 N. W. 1084; McNutt v. Dix, 83 Mich. 328, 10 L. R. A. 660, 47 N. W. 212; Bain v. Brown, 56 N. Y. 285; Blanchard v. Jones, 101 Ind. 542; Kerfoot v. Hyman, 52 Ill. 512; Cutter v. Demmon, 111 Mass. 474; Denson v. Stewart, 15 La. Ann. 456; Mulvane v. O’Brien, 58 Kan. 463, 49 Pac. 607; 31 Cyc. 1435, 1436.) This rule is embodied in our Code, in substance, if not in form. Section 5437, Revised Codes, provides: “An authority expressed in general terms however broad, does not authorize an agent: * * * 3. To do any act which a trustee is forbidden to do by Article II, Chapter I of the last title.” Section 5375, which deals with the relation of trustee and beneficiary, declares: “A trustee may not use or deal with the'trust property for his own benefit, or for any other purpose unconnected with the trust, in any manner.” And section 5380 provides: “Every violation of the provisions of the preceding sections of this Article is a fraud against the beneficiary of the trust.” A state of facts very similar to that presented by this complaint was disclosed in Schoelkopf v. Leonard, 8 Colo. 159, 6 Pac. 209, and the Colorado court held the complaint sufficient. It is not of any consequence that plaintiff unnecessarily avers that the money was paid over by the purchaser through the Great Falls National Bank. So long as it is made to appear that the relationship of principal and agent existed between plaintiff and defendant, good faith required the agent to account to the plaintiff for the entire selling price, less the agreed [263] commission. The defendant was entitled to $400, and- the amount of the judgment should be computed accordingly. The order of the district court is reversed. Reversed. Me. Chief Justice Beantly and Me. Justice Sannee concur.