Goody v. Maryland Casualty Co.

• Decision Date: 06 October 1933
• Docket Number: 5983
• Citation: 53 Idaho 523,25 P.2d 1045
• Parties: ALICE J. GOODY, by Order of Substitution for the Original Plaintiff, v. MARYLAND CASUALTY COMPANY, a Corporation, Appellant. FRANK H. GOODY, Respondent, MARYLAND CASUALTY COMPANY, a Corporation, Appellant, v. ALICE J. GOODY, by Order of Substitution for the Original Defendant, FRANK H. GOODY, ASA R. LLOYD and ESTHER B. ROWLES, CLARENCE B. CUTHBERT, and All Other Unknown Claimants Against the Plaintiff Under and by Virtue of a Certain Realtor's Bond, Made, Executed and Delivered by the Plaintiff to One E. LEE BROWNING, on the First Day of March, A. D. 1928, Pursuant to Chapter 184, 1921 Session Laws of the State of Idaho, as Amended, Respondents
• Court: Idaho Supreme Court

25 P.2d 1045

53 Idaho 523

ALICE J. GOODY, by Order of Substitution for the Original Plaintiff, FRANK H. GOODY, Respondent, v. MARYLAND CASUALTY COMPANY, a Corporation, Appellant.

MARYLAND CASUALTY COMPANY, a Corporation, Appellant, v. ALICE J. GOODY, by Order of Substitution for the Original Defendant, FRANK H. GOODY, ASA R. LLOYD and ESTHER B. ROWLES, CLARENCE B. CUTHBERT, and All Other Unknown Claimants Against the Plaintiff Under and by Virtue of a Certain Realtor's Bond, Made, Executed and Delivered by the Plaintiff to One E. LEE BROWNING, on the First Day of March, A. D. 1928, Pursuant to Chapter 184, 1921 Session Laws of the State of Idaho, as Amended, Respondents

No. 5983

Supreme Court of Idaho

October 6, 1933

APPEAL from the District Court of the Ninth Judicial District, for Jefferson County. Hon. C. J. Taylor, Judge.

Action on real estate broker's bond. Judgment for plaintiff. Affirmed.

Judgment affirmed; costs awarded to respondent.

Chas W. Sandles, for Appellant.

The purchaser Goody could, by ordinary care and prudence, have protected himself, but did not see fit to do so, and it is the contention of the appellant, therefore, that the following law applies:

"Where a party can protect himself by ordinary care and prudence, he must do so and if, with full means of knowledge being equally able to judge of a matter for himself, he relies upon the representations of another, then should he stand on equal footing without exercising the means of knowledge open to him, neither courts of law nor courts of equity will relieve him from the effects of such folly." (Story's Equity Jurisprudence, vol. 1, 3d ed., secs. 199, 200; Slaughter v. Gerson, 13 Wall. (U. S.) 379, 20 L.Ed. 628.)

Wm. P Hemminger, for Respondents.

A purchaser may have an action against a vendor who assumes to know concerning his title, and represents that it is free from incumbrance, when as a matter of fact it is not, even though the purchaser might have discovered the fraud by making a search of the records. (26 Corpus Juris, p. 1155 sec. 70, p. 1211, sec. 109; Sutherland's Code Pleading, Practice and Forms, 1917 Supplement, p. 901, sec. 6840; Gannon, Goulding & Thies v. Hausaman, 42 Okla. 41, 140 P. 407, 52 L. R. A., N. S., 519.)

Appellate courts are not organized to hear causes de novo, but to review the errors of the inferior courts, if a party would take advantage of the admission of improper testimony on appeal, it is necessary to make objection at the time it is offered. Mere general objection, without the statement of any specific ground of objection, will not be reviewed in the appellate court. (Jones on Evidence, Civil Cases, 3d ed., sec. 893, and cases cited under notes 59 and 64; Douville v. Pacific Coast Casualty Co., 25 Idaho 396, 138 P. 506, Ann. Cas. 1917A, 112.)

Surety on real estate broker's bond is liable for acts of principal in making false and fraudulent representations in transaction of business covered by bond. (McIntosh v. Clarke, 131 Ore. 376, 282 P. 554, 283 P. 16; Rinaldi v. Barasch, 209 Cal. 372, 287 P. 462; White v. Sarff et al. , 115 Cal.App. 317, 1 P.2d 519.)

GIVENS, J. Budge, C. J., and Morgan and Wernette, JJ., concur. Holden, J., disqualified.

OPINION

GIVENS, J.

January 12, 1928, one Frank H. Goody, deceased, now represented by his widow, administratrix of his estate, entered into a contract with E. L. Browning for the purchase of certain real estate for $ 1,700, paying $ 200 thereof in cash. After final payment was made, Goody learned that Browning had paid only $ 400 on a $ 1,000 mortgage against the place.

This suit was instituted by Goody, against appellant, surety on Browning's bond as a real estate broker, for $ 625, which Goody paid the mortgagee to prevent its foreclosure, basing such action on the fraud of Browning in claiming in July when final payment was made and the deed delivered, that the property was clear and free from any incumbrance when in truth and fact it was not, and Browning knew that it was not.

Appellant, Maryland Casualty Company, after the filing of the action by Goody, commenced an action in the nature of an interpleader, wherein Goody and others were named defendants. Goody appeared, but the others either defaulted or withdrew their appearance. The issues and subject matter in the two cases are identical, and were tried by the court together, resulting in judgment for respondent Goody.

Appellant resists liability on the ground, first, that Browning was not a broker, and if he was, the broker's bond not given until March 1, 1928, did not cover the contract of purchase made in January, 1928; that there was no fraud, and that Goody could have, and should have, ascertained the facts with regard to the mortgage.

Section 53-2204, I. C. A., defines a real estate broker as follows:

"A real estate broker within the meaning of this chapter is a person who, for a compensation or promise thereof, sells, or offers for sale, buys, or offers to buy, negotiates, or offers to negotiate, either directly or indirectly, whether as the employee of another or otherwise, the purchase, sale, exchange, lease or rental of real estate or any interest therein for others. The word 'person' as used in this chapter shall be construed to mean and include a corporation and a partnership. The provisions of this chapter shall not apply to any person who purchases property for his own use or account, nor to any person, who, being the owner of property, sells, exchanges, leases, rents or otherwise disposes of the same for his own account, nor to any person holding a duly executed power of attorney from the owner granting power to consummate the sale, exchange, or leasing of real estate, nor to a salaried employee of such owner acting for such owner in the buying, selling, exchanging or leasing of his property, nor to an attorney-at-law, in the performance of his duties as such attorney-at-law nor to any receiver, trustee in bankruptcy, guardian, administrator or executor, nor to any person acting under the order of any court, nor to any person selling under a deed of trust.

"One act, for a compensation or promise thereof, of buying, selling, exchanging, leasing or renting real estate of or for another person, or offering to buy, sell, exchange, lease or rent real estate of or for another shall constitute the person so acting a real estate broker within the meaning of this chapter."

January 12th, when the contract was made, Browning did not own the property, but on January 26th, offered to buy the property from a receiver, in whose hands it then was, for $ 279, and delinquent interest, water assessments and taxes. It is not definitely shown what these later amounted to, but the total paid was evidently in the neighborhood of $ 400. In other words, Browning was making by the transaction about $ 300.

This evidence was sufficient to justify the trial court in finding and concluding that Browning was acting as a real estate broker as defined by the statute. (Mapes v. Foster, 38 Wyo. 244, 266 P. 109; Firestone v. O'Brien, 97 Cal.App. 43, 274 P. 1006.)

While the contract of January 12th made reference to a present loan of $ 1,000: "It being agreed that he (Goody) may assume present loan of $ 1,000 if he so desires . . . . ," it is evident that Browning did not consider that Goody was to assume this mortgage, because Goody testified, and it was not denied, that about November 13, 1928, he saw Browning with regard to the matter, and wanted the transaction straightened up, at which time Browning asked for an extension of thirty, later receiving an additional sixty, days, admitted that he had not paid the mortgage, and later paid $ 400 on the mortgage.

The deed from Browning to Goody made no mention of the $ 1,000 mortgage, though in the deed Browning received from the receiver, it is recited that the conveyance was made subject to the existing...