Globe Realty Co. v. Hardy

• Decision Date: 19 November 1928
• Docket Number: 27338
• Citation: Globe Realty Co. v. Hardy, 119 So. 192, 155 Miss. 12 (Miss. 1928)
• Court: Mississippi Supreme Court
• Parties: GLOBE REALTY CO. v. HARDY

119 So. 192

155 Miss. 12

GLOBE REALTY CO. v. HARDY

No. 27338

Supreme Court of Mississippi

November 19, 1928

Division B

Suggestion of Error Overruled Dec. 22, 1928.

APPEAL from chancery court of Harrison county, HON V. A. GRIFFITH Chancellor.

Suit by the Globe Realty Company against Mrs. Lulu Daniel Hardy. From a decree for defendant, plaintiff appeals. Affirmed.

Affirmed.

J. F. Galloway, of Gulfport, for appellant.

In courts of law as well as in those of equity, the interest of a bona-fide assignee of a chose in action will be protected against any unauthorized act on the part of the assignor tending to interfere with the rights of the assignee.

Kitcart v. Kitcart, 145 Ia. 549, 124 N.W. 305, 30 L.R.A. (N.S.); Weakly v. Hall, 13 Ohio 167, 42 Am. Dec. 194; Gallagher v. Caldwell, 22 Pa. St. 300, 60 Am. Dec. 85, 2 R. C. L. 63; Heisen v. Smith, 138 Cal. 216, 71 P. 180, 94 A. S. R. 39, 4 Cyc. 84; Field v. New York, 6 N.Y. 179, 57 Am. Dec. 435; Ann. Cas. 1912A, 675; Georgia Railroad Co., Ann. Cas. 1912A, page 675.

As a general rule the interest under an ordinary option to purchase, that is, the right to elect to take a conveyance, is recognized as an assignable interest, and a fortiori this is true where the option runs to the person named "and his assigns."

Simons v. Zimmerman, 144 Cal. 256, 79 P. 451, 1 Ann. Cas. 850; Roper v. Milbourn, 93 Neb. 809, 142 N.W. 792, Ann. Cas. 1914B, 1225; Kerr v. Day, 14 Pa. St. 112, 53 Am. Dec. 526; 27 R. C. L. 345; Hutchinson v. Simon, 57 Miss. 628; Redwood & Co. v. Foote, 58 Miss. 12; Moody v. Kyle, 34 Miss. 506; Richardson v. Lightcap, 52 Miss. 508; Fitch v. Stamps, 6 How. (U.S.) 487; Christmas v. Russell, 14 Wall. (U.S.), 69, 20 L.Ed. 672; 2 Story Eq. Jur., par. 1044; R. C. L. 512; Horn v. Butler, 39 Minn. 515, 40 N.W. 833; Brown v. Widen (Iowa), 103 N.W. 158; Boas v. Farrington, 85 Cal. 535, 24 P. 787; Noyes v. Johnson, 139 Mass. 436, 31 N.E. 767; Zunker v. Keuhn, 113 Wis. 421, 88 N.W. 605; Heller v. Cohen, 154 N.Y. 299, 48 N.E. 527; Howe v. Hutchinson, 105 Ill. 501; Gwin v. Calegaris, 139 Cal. 834, 73 P. 851; Bruce v. Wolfe, 102 Mo.App. 384, 76 S.W. 723; Howe v. Coates, 107 N.W. 397 (Minn.), 4 L.R.A. 1171; Bowles v. Umberson, 101 S.W. 842; Danzer v. Moerschel, 214 S.W. 849 (Mo.), 7 A.L.R. 1162-1180.

Gardner, Brown & Morse and Ross, Backstrom & Bickerstaff, all of Gulfport, for appellee.

Where an agent contracts with a third person, without disclosing that he is acting for a principal, and the third person supposes that the agent is the real party in interest, and is not chargeable with notice of the existence of the principal, and such principal sues the third person on the contract, he must accept the contract as it was made by the agent and the third party, subject to all the burdens and conditions attached thereto.

21 R. C. L. 901; Eldridge v. Finninger, 25 Okla. 28, 105 P. 334, 28 L.R.A. (N.S.) 227, 277; 18 R. C. L. 901.

A third party who contracts in ignorance of the existence of a principal can set up against the principal, who sues on the contract, any defense and equities which he could have set up against the agent, had the latter been in reality the principal, suing on his own behalf.

2 R. C. L., page 624; Harvin v. Galluchat, 28 S.C. 211, 5 S.E. 359, 13 Am. St. Rep. 671; Merchants' & Mechanics Bank v. Hewitt, 3 Ia. 93, 66 Am. Dec. 49; 21 R. C. L. 900, sec. 74; Rosevelte v. Doherty, 129 Mass. 301, 37 Am. Rep. 356; Midwoods Sons Co. v. Alaska-Portland Packer's Ass'n., 28 R. I. 303, 67 A. 61, 13 Ann. Cas. 954.

OPINION

Anderson, J.

Appellant, as assignee of one Nat Owen of a one-third interest in an option contract between appellee and Owen, filed its bill in the chancery court of Harrison county against appellee and Owen, to recover the sum of one thousand dollars under the provisions of said option contract, which sum had been furnished by appellant to Owen, and, by the latter, paid to appellee in part payment for the option to purchase from appellee the Southwest quarter of the Northwest quarter of Section 32, Township 7, Range 10 west, less ten acres off the east side thereof, in Harrison county. There was a trial on original bill and amendments thereto, and answer of appellee to the bill as amended, and proofs, resulting in a decree in appellee's favor, but against the other defendant, Owen, for three hundred and thirty-three dollars, and thirty-three cents, from which he, Owen, prosecuted no appeal. From the decree in favor of appellee, appellant prosecutes this appeal.

On the 9th day of November, 1925, appellee executed and delivered to Nat Owen an option to purchase the land above described. The option provided that appellee was to deliver to Owen an abstract of title, showing an unincumbered fee-simple title to the land in her; and further provided that the contract was simply an option to purchase on the part of Owen, and that the latter should have a certain time, provided in the option, in which to examine the abstract of title to the land and satisfy himself that the title was good. This option, by its terms, expired on January 2, 1926. On the 29th day of December, 1925, the option, without further consideration, was extended to the 9th day of January, 1926. On demand, appellee furnished Owen an abstract of title to the land, which was turned over to Owen's attorney to pass upon. Owen's attorney urged certain objections to the title, which, however, were later cured by appellee obtaining a quitclaim deed from one Thomas Sully. On the 27th of February, 1926, in consideration of one thousand dollars paid by Owen to appellee, the option was extended to the 1st day of July, 1928. In this extension addition to the option contract, it was provided that, in the event the title to the land was not satisfactory to Owen, or his assigns, then the payments theretofore made for the option of two thousand dollars, should be returned to Owen upon his demand. On the 24th day of February, and prior to the time when this extension of the option was granted by appellee, Owen conveyed to one S. J. Reigh a one-third interest in and to the property rights and privileges vested in him on account of the option. On the 13th day of April 1926, and after the quitclaim deed had been made to appellee by Thos. Sully, Owen's attorney unconditionally approved the title to the property as being an unincumbered fee-simple title in appellee. Of the existence of the assignment by Owen of a one-third interest in the option to Reigh, the record shows that appellee knew nothing--that she had no notice thereof, either actual or constructive; that all the while, up to and including the date upon which Owen's attorney approved the title, appellee dealt alone with Owen, and knew neither Reigh nor appellant in the transaction. The record shows that neither appellant nor Reigh ever made any move before that time to give appellee notice that they held an interest in the option by assignment from Owen. The consideration paid by Reigh to Owen for the one-third interest in the option was six hundred and sixty-six dollars and sixty-six cents, but at the time Reigh advanced to Owen the further sum of three hundred and thirty-three dollars and thirty-three cents as a loan in order to enable him to pay appellee the sum of one thousand dollars for the extension of the option.

After the approval of the title to the land by Owen's attorney, neither Owen nor his attorney, at any time thereafter, raised any objection to the title. Appellee therefore concluded, and claims to have been justified in so doing, that Owen had decided to decline to accept a conveyance of the land, and to forfeit to her the option money of two thousand dollars, paid by him to her for the option.

On the 15th day of April, 1926, two days after Owen's attorney had approved the title to the land, Reigh secured the abstract of title which appellee had furnished Owen's attorney, and had it examined by his (Reigh's) attorney who rejected the title as being defective. Reigh really purchased his interest in the option for appellant, a realty corporation being formed at the time, and, later, assigned his interest to appellant. Appellee knew nothing of appellant's interest in the option until the bill in this case was filed. Appellant, claiming, on the advice of its attorney (who was also Reigh's attorney), that the title to the land was imperfect, declined to accept a conveyance of the land, and filed the bill in this case against appellee and Reigh, jointly, to recover the one thousand dollar option money which Reigh had furnished to Owen to enable...