Canfield v. With.

• Decision Date: 28 April 1931
• Docket Number: No. 3561.,3561.
• Citation: 35 N.M. 420,299 P. 351
• Parties: CANFIELDv.WITH.
• Court: New Mexico Supreme Court

35 N.M. 420

299 P. 351

CANFIELD

v.WITH.

No. 3561.

Supreme Court of New Mexico.

April 28, 1931.Rehearing Denied June 3, 1931.

Syllabus by the Court.

Broker occupies fiduciary relation to owner in selling realty; on broker's faithfulness depends right to commission.

A real estate broker occupies a fiduciary relation to the owner he represents in the sale of property, owes fidelity in the service he undertakes, and upon his faithfulness depends his right to commission.

Broker's false representation realty involved in exchange had certain market value held representation of fact, and, if relied on, could be basis of charge of fraud.

A false representation by a real estate broker negotiating an exchange of property that certain property was of the market value of a given price is a representation of fact, and, if relied on, may be made the basis of a charge of fraud.

In broker's action for commissions, excluding evidence respecting value of property to sustain defense of false representations as to market value, held error.

On trial of an action for broker's commissions on exchange of property, in which a defense was that defendant had been induced to enter into a contract by plaintiff's false representation as to the market value of certain property, defendant attempted to prove the value of such property, but the evidence was excluded. Held that the exclusion of the evidence of the value of the property was error.

Appeal from District Court, Bernalillo County; Helmick, Judge.

Action by Fred P. Canfield against A. With. Judgment for plaintiff, and defendant appeals.

Reversed and remanded for new trial.

On trial of an action for broker's commissions on exchange of property, in which a defense was that defendant had been induced to enter into a contract by plaintiff's false representation as to the market value of certain property, defendant attempted to prove the value of such property, but the evidence was excluded. Held that the exclusion of the evidence of the value of the property was error.

Merritt W. Oldaker, of Albuquerque, for appellant.

Downer & Keleher and John Venable, all of Albuquerque, for appellee.

BICKLEY, C. J.

Appellee, a real estate agent, brought suit to recover commissions for negotiating a sale of Albuquerque real estate for appellant. From a judgment for appellee, appeal was taken.

We shall hereafter refer to the appellee as the agent and the appellant as the owner.

The agent, having the property of the owner listed, interested the Coopers in the property upon the basis of exchange of some real estate and other property belonging to the Coopers. Negotiations were had which resulted in a written sales agreement between the owner and the Coopers, whereby the owner agreed to sell his property for $23,000, and receive in payment therefor certain property, including a house and premises belonging to the Coopers, at a price of $10,500.

The owner denies liability upon the ground, among others, that his agent, in order to induce him to enter into the contract with the Coopers, falsely and fraudulently represented to him that the house and premises of the Coopers priced in the sales agreement was of a market value of $10,000; that such representations were known by the agent to be false and fraudulent; that he made the same for the purpose of defrauding the owner; that, in truth and in fact, the market value of the said property did not exceed $6,000, and that the defendant (owner) relied upon such false and fraudulent representations, believing them to be true, and was induced to enter into the sales agreement by such false representations.

The uncontradicted testimony of the owner is that he was unfamiliar with the value of residence property in Albuquerque, and that he relied upon the statement of the agent that the Cooper residence was of the value of $10,000 or more, and believed the statement of the plaintiff in that regard to be true. The owner went with the agent to inspect the Cooper property. The trial judge refused to hear testimony offered by the owner (defendant) as to the actual or market value of the Cooper residence. The evidence offered on the question of value was of two responsible real estate agents residing in Albuquerque, and it was stated in the offer that they would testify that the value of the property did not exceed $6,500 or $7,000. The court refused the offer of the testimony of the two real estate men as to value of the property, saying: “That offer will be refused because the court considers it immaterial what the opinion of experts may be on the value of this property, the defendant having agreed to pay that sum for it, there being no false representations about it, it being a matter on which he could inform himself, and did inform himself, and has expressed himself being willing to pay $10,000 for. As I see this defense, you are trying merely to prove that you made a bad bargain and therefore you ought to be let out of it. ***” Elsewhere the court expressed his view as follows: “No, you have got a contract here and you signed it and you can't crawl out of it. *** The court does not care to hear any more evidence in the cause, because it is assumed that it certainly will not contradict that of the defendant and any further evidence to the same effect the court would consider incompetent, irrelevant and immaterial and will not make out a defense. *** False representation, in law, is a very definite thing, as everyone knows, and all the elements of the thing must be established by strict and convincing proof before a solemn written contract will be overthrown.”

[1][2] We think the trial judge took the wrong view of the matter. The agent dealing fairly could recover compensation from the owner if he found for him a buyer able, ready, and willing to purchase, whether the buyer and owner had reduced the terms of the agreement to writing or not. The agent was suing on an oral contract between himself and the owner. The written sales agreement between the owner and the Coopers was a part of the evidence to make the agent's case probable, but the liability of the owner to the agent did not depend upon it. It would seem that the trial judge thought, as there were no false representations as to the physical conditions surrounding the Cooper property and no concealed defects therein, there were no false representations which were material. It may be that in a controversy between the owner of real estate engaging in writing to exchange the same, at stipulated prices, the expression of opinion as to value of the respective properties would not be considered as a statement of a fact, and, if the parties are on an equal footing and have equal opportunities and facilities for obtaining information as to value, expressions of value would be considered as...