Kreate v. Miller

• Decision Date: 23 November 1928
• Citation: 11 S.W.2d 99,226 Ky. 444
• Parties: KREATE v. MILLER et al.
• Court: Kentucky Court of Appeals

11 S.W.2d 99

226 Ky. 444

KREATE v. MILLER et al.

Court of Appeals of Kentucky

November 23, 1928

Appeal from Circuit Court, Kenton County.

Action by A. E. Miller and others against E. T. Kreate. Judgment for plaintiffs, and defendant appeals. Reversed, with instructions.

Northcutt & Northcutt and Lula A. Northcutt, all of Covington, for appellant.

O. M Rogers, of Covington, for appellees.

DIETZMAN J.

In this action for deceit, the plaintiffs were successful, and the defendant appeals.

In December, 1924, E. A. Grant and his wife listed a farm they owned in Boone county with the appellant, a real estate agent, for sale. The appellant duly advertised it. The appellees who were looking for a farm saw this advertisement visited the farm, and, being satisfied with it, decided to buy it. Thereupon the appellee Criswell went to see the appellant about the place, and found that it was listed at $16,800. Appellant ascertained at this time that the appellees did not have in excess of $500 cash on hand, but that they owned realty and a small amount of personal property all approximating in value $7,000. After some negotiations, the appellees on January 31, 1925, signed a written proposition directed to the Grants, in which they offered to buy this farm for $14,000 cash. Just prior to the making of this written proposition, the appellant and the appellees had made arrangements with a nearby bank, whereby that bank had agreed to lend the appellees, in the event the deal for the Grant farm went through, the sum of $8,000, to be secured by a mortgage on the farm. The banker testifies that, at the time these arrangements were being made, it was stated to him, either by the appellees or by the appellant in their presence and hearing, that the purchase of the Grant farm was to be a cash transaction. It also appears that, before the appellees signed the offer of January 31st, they had listed the realty which they owned with appellant for sale. A careful search of the record discloses no claim on the part of the appellees that they were in any wise misled into signing the offer of January 31st, or that they did not thoroughly understand the offer to be one for cash.

This offer of January 31st was declined by the Grants, but at the same time they indicated that they would take $15,000 net for the farm, which, when appellant's commission was added to it, brought the price up to $15,750. The appellant communicated this fact to the appellees, and on February 2, 1925, they came to his office and there signed another proposition which the appellant had prepared, offering to buy this farm for $15,750. They testify, however, that, when they signed this proposition, the appellant represented to them that the terms of the purchase as set out in the proposition were "$8,000 cash and time for the rest." The appellees are silent, however, as to what the terms for the unpaid portion of the purchase price were to be. The proposition as actually prepared by the appellant and signed by the appellees provides for a cash purchase. This proposition has been brought to this court, and the word ""cash" is written in such fashion on the paper that a most cursory reading of the document would have brought home to the appellees the fact that it provided for a cash transaction.

Appellant denies that he made any such representation to them as they say he did. He testifies that it was thoroughly understood all along that the offer was to be for cash, and that he so told them on this occasion. He is supported in this by his stenographer, who was present when the appellees signed the paper dated February 2d. At the time the appellees signed it, there was a long counter or table of appreciable width between the appellant and appellees. They do not claim that the appellant misread the paper to them, but only that he misstated its purport. Indeed, only one of the appellees clearly so testifies. The testimony of the other is very confused, evasive, and had to be dragged out of him by questions flagrantly leading. The appellees do not claim that they were not afforded an opportunity to read the paper had they so desired, and they both admit that they could read and write. One of them says that he ""kinder" read the contract, and in so doing saw that the purchase price was to be $15,750. It is very difficult, on inspecting the original paper, to understand how, if he read this much, he did not see staring him in the face the word "cash" in bold letters immediately under the figures mentioned. At the same time when the appellees signed this proposition, they deposited with appellant the sum of $500 as earnest money. This proposition of February 2d was duly submitted to the Grants by the appellant, and was accepted by them.

When the time came to close the deal, the appellees, not yet having disposed of their real estate, were unable to comply with their proposition as written. A dispute arose between them and the Grants; the appellees claiming that the written proposition they made should have embraced the terms they say appellant represented were in it when they signed it, while Grant claimed that the appellees were bound by the offer as presented to him. At all events, without the knowledge or consent of the appellant, Grant and the appellees entered into a contract mutually releasing each other from the contract dated February 2d and assigning to the appellees any claim Grant had upon the appellant for the $500 deposited with him by the appellees. Thereupon this suit was brought, not upon the assignment which Grant had made to the appellees, but in deceit, the damages being laid at $500; the theory being that this $500 had been obtained from the appellees by the appellant by virtue of the false representations as to what the paper of February 2d contained, and so they were damaged to this extent.

In the original petition it was averred that, at the time the February 2d contract was prepared, it was represented to the appellees that, although the contract called for cash, yet as a matter of fact Grant would not insist on cash, but would give the appellees time to pay the purchase price. The other usual allegations necessary in an action of deceit were made. A demurrer was interposed to this petition, and, after some contradictory rulings, the court finally sustained it. An amended petition was thereupon filed, in which it was averred that the appellant at the time the appellees signed the paper of February 2d represented to them that it provided for terms instead of cash, and that they had signed the paper relying on such representations. This amended petition also embraced the other usual allegations necessary in an action of deceit. The appellant in his answer as amended traversed these claims of the appellees and cross-petitioned against the Grants for a real estate commission in the sum of $750, claimed to be due him for procuring the appellees as purchasers for this farm. The court allowed this cross-petition to be considered only to the extent that the appellant claimed a lien on the $500 in his possession to secure him in the payment of any commission which the Grants owed him in this matter. The Grants by their answer to the cross-petition of the appellant made common cause with the appellees. On the trial the court submitted to the jury only the controversy between appellant and appellees. The jury found for the appellees in the full amount they sued for, and judgment was entered on that verdict.

A good deal of seeming confusion in the briefs of counsel in this case will be cleared away if at the outset we fix our attention on the character of this suit. It was not one ex contractu. It was not based on the contract of February 2d, nor was it grounded on the assignment of Grant to the appellees of any claim he had on the $500 deposited with appellant. It was an action ex delicto-an action based on deceit.

From this flow at least two consequences: First, we need not inquire as to whether appellees were, under the doctrine of the United Talking Machine Co. v. Metcalf, 164 Ky 258, 175 S.W. 357, Same v. Metcalfe, 174 Ky. 132, 191 S.W. 881, White Sewing Machine Co. v. Smith, 188 Ky. 407, 222 S.W. 81, Brenard Mfg. Co. v. Jones, 207 Ky. 566, 269 S.W. 722, and cognate cases, bound to the Grants under the contract of February 2d or not, since it is entirely possible for them to be so bound, and yet have a cause of action sounding in deceit against a third party who by his actionable misrepresentations got them so bound. Secondly, the court did not err in refusing to submit or decide the question of appellant's claim for a commission against the Grants. A cross-petition is not allowed except upon a cause of action which affects or is affected by the...