Cassimus v. Vaughn Realty Co.

• Decision Date: 24 May 1928
• Docket Number: 6 Div. 99
• Citation: 117 So. 180,217 Ala. 561
• Parties: CASSIMUS v. VAUGHN REALTY CO. et al.
• Court: Alabama Supreme Court

117 So. 180

217 Ala. 561

CASSIMUS v. VAUGHN REALTY CO. et al.

6 Div. 99

Supreme Court of Alabama

May 24, 1928

Appeal from Circuit Court, Jefferson County; Richard V. Evans Judge.

Action in assumpsit by George Cassimus against the Vaughn Realty Company, James H. Vaughn, and Thomas H. Vaughn. Judgment for defendants, and plaintiff appeals. Transferred from Court of Appeals, under Code 1923, § 7326. Reversed and remanded.

Erle Pettus, of Birmingham, for appellant.

Mullins & Jenkins, of Birmingham, for appellees.

SAYRE J.

Plaintiff Cassimus, entering into a written contract with defendants Vaughn Realty Company for the purchase of two lots in Smithfield, November 13, 1924, paid to defendants the sum of $100 as earnest money. On the part of defendants, the contract was executed by "Vaughn Realty Co. Agts.," and it was stipulated that "the seller," who, according to plaintiff's testimony was not otherwise named, designated, or known, should furnish an abstract showing a good and merchantable title and furnish a warranty deed, the "deal to be closed within 30 days from date *** unless otherwise agreed," in default whereof the earnest money was to be returned to the purchaser. The evidence leaves no room for doubt that the contract of sale failed of completion because "the seller" was unable to comply with its requirements as to title. December 20, 1924, plaintiff wrote to defendant company demanding, in effect, the return of his earnest money. The demand being refused, plaintiff brought this suit.

The trial court, on the request of defendants, instructed the jury that plaintiff could not recover, being, we may assume, influenced thereto by the then recent decision in Ingram Land Co. v. Moore, 213 Ala. 19, 104 So. 134, the theory of which is that where a party discloses his principal and is known to be acting as an agent, enters as such into a contract, he is not liable thereon in the absence of his express agreement to be thereby bound. Whitney v. Wyman, 101 U.S. 392, 25 L.Ed. 1050. Gulf City Construction Co. v. L. & N., 121 Ala. 621, 25 So. 579, was cited as an Alabama authority for the decision. The cases cited in the last-mentioned case do no more than assert the principle that, quoting the headnote in Comer v. Bankhead, 70 Ala. 493:

"It is generally true, that where a party plainly appears, upon the face of an agreement, to be acting as the agent of another, the contract is binding solely on the principal, unless the agent superadds his own responsibility by special stipulation."

But in a suit to recover earnest money from the agent of the seller, the contract of purchase having failed, there is reason for the application of a different rule. 2 C.J. 821, § 495, where cases from the Supreme Court of the United States, the courts of England, and many of the state courts of this country, including Upchurch v. Norsworthy, 15 Ala. 705, are cited, and the rule, peculiarly apt in the circumstances of this case, is stated in the footnote as follows:

"So long as the money has not been paid over by the agent to his principal; nor his situation altered, relatively to his principal, as touching that fund, it may be recovered from him [the agent]. Neither he nor his principal, is, in conscience, entitled to retain it; but, ex aequo et bono, it belongs to the payer; and an action lies to recover it. It is not the property of the agent; and therefore he cannot retain it. And it is not the property of the principal; and therefore he [the agent] does not hold it for the use of the principal. He holds it for the use of him who illegally, or by mistake, has paid it. The agent is not liable to the principal for it.

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