Lapke v. Hunt

Citation443 P.2d 493,151 Mont. 450
Decision Date12 June 1968
Docket NumberNo. 11420,11420
PartiesHoward LAPKE and Melvin H. Magnuson, Plaintiffs and Respondents, v. Dave HUNT and United States Fidelity and Guaranty Company, a corporation, Defendants and Appellants.
CourtUnited States State Supreme Court of Montana

Smith & Emmons, Robert J. Emmons (argued), Great Falls, for appellants.

Vance & Leaphart, Helena, Cure & Borer, Edward Borer (argued), Great Falls, for respondents.

PER CURIAM.

This is an appeal from a judgment entered in the District Court of Cascade County, the Honorable Paul G. Hatifield, presiding without a jury, in an action for the return of earnest money paid on a contract for the sale of land and interest on that money; for treble damages and attorney's fees, as provided for in the Real Estate License Act of 1963, §§ 66-1924 to 66-1946, R.C.M.1947, and for exemplary damages.

The suit in the district court was one by Harold Lapke, and Melvin M. Magnuson, hereinafter referred to as the respondents, against Dave Hunt and United States Fidelity & Guaranty Company. United States Fidelity & Guaranty Company, hereinafter referred to as appellant, was the surety on the bond required by the above mentioned Real Estate License Act for Hunt to do business as a licensed realtor in the State of Montana.

The district court, based on its order finding facts and conclusions of law, entered a judgment against both defendants. Only United States Fidelity & Guaranty Company has appealed the judgment rendered against it.

The facts concerning the dealings between the respondents and Hunt, which resulted in the action against Hunt and the appellant in the district court, are as follows:

In the year 1964, Mr. Hunt was a licensed real estate broker. The surety on his bond was the appellant.

In September 1964, Mr. Hunt obtained an exclusive listing from Mr. and Mrs. J. H. Todd, of Lincoln, Montana, to sell their ranch. This ranch was commonly known as the Seven-Up Ranch.

On December 29, 1964, the respondents signed a 'Receipt and Agreement to Sell and Purchase' the Todd's Ranch. Mr. Lapke gave Mr. Hunt his check for $2,500.00 as earnest money for the purchase on the same day. This offer was to expire five days after the date of signing. It was not accepted by the Todds within that period.

On January 4, 1965, respondents executed a new 'Receipt and Agreement to Sell and Purchase' for the same property. This offer was to remain open for thirty days. This offer called for the payment of $5,000.00 as earnest money. Accordingly Mr. Lapke issued a second check for $2,500.00, which, along with the first check, was to constitute the required earnest money. This second agreement was also not accepted by the Todds.

The record indicates that Hunt made other attempts to effectuate a deal between the respondents and the Todds. All of these attempts were unsuccessful. The record also indicates Hunt made assurances to the respondents that all they would have to do was remain patient, and something could be arranged.

On January 4, 1965, Hunt had Mr. Lapke's check of December 29, 1964, for $2,500.00 in his possession at Poplar, Montana. Hunt endorsed this check and obtained a bank draft on the Great Falls National Bank, issued by the Tader's State Bank of Poplar, for $2,500.00, made payable to Mr. Hunt. This cashier's check was paid on January 29, 1965, to Mr. Hunt.

On January 7, 1965, Mr. Lapke's check of January 4, 1965, was endorsed by Mr. Hunt and deposited to the account of his wife, Lillian Hunt, at the Montana Bank, Great Falls, Montana.

Respondents became impatient with the dealings for the Seven-Up Ranch. On April 10, 1965, they met Mr. Hunt at his home in Great Falls, and demanded the return of the earnest money and a mortgage given by Magnuson's mother, which mortgage was to constitue part of the down payment on the ranch. The mortgage was returned, but Hunt stated that he did not have the $5,000.00 to return as he had already spent it. The earnest money was never returned and as a result action against Hunt and the appellant was begun for its return.

The facts of the dealings between Mr. Hunt and the appellant, which resulted in the appeal to this Court from the judgment of the district court, are as follows:

Mr. Hunt was first issued a bond by the appellant in the year 1963, which bond was continued for the year 1964.

However, the 1963 Session of the Montana Legislature passed the Real Estate License Act of 1963. That Act made it a misdemeanor to act as a realtor in the State of Montana without a license. It further provided: That all licenses for realtors would be issued from January 1 of each year to December 31 of the same year; that all license applications must be accompanied by a bond in the amount of ten thousand dollars; and that all applications for licenses must be received before January 1, of the year for which they were to be issued.

On November 2, 1964, appellant sent a letter to its local agent in Great Falls, McNair and Roberts, giving notice that real estate licenses and bonds would have to be renewed by January 1st of the next year. Enclosed with the letter was the bond which was to be countersigned by the applicant and transmitted, along with the license application and license fee and premium on the bond, to appellant's office in Helena. Appellant would then transmit it to the Real Estate Commission. The letter listed Mr. Hunt as one of those whose license and bond would have to be renewed.

On December 20, 1964, Mr. Hunt went to McNair and Roberts' office, signed his application for a real estate license, countersigned the bond, and paid the license application fee plus the premium on the bond.

Solely because of the error of the local agents of the appellant, the requisite papers were not sent to the appellant's office until after the January 1st, deadline. Appellant did, however, countersign the bond and transmit the requisite papers to the Real Estate Commission on January 7, 1965. On January 8, 1965, because of the lateness of the receipt of the application and the bond, Mr. Hunt was denied his real estate license for the year 1965.

Appellant and McNair and Roberts made several attempts to get the commission to recosnider its decision, all of which attempts failed. It appears that Mr. Hunt was tentatively advised of the situation as early as January 15, 1965, but was not finally advised of the denial of his application until February 15, 1965. Not until March 16, 1965B did the appellant return the premium paid on the bond, and then it only returned it to its local agent. It took no steps to formally revoke the bond as provided in the agreement itself.

The court below found in favor of the plaintiffs as against the defendant Hunt, for the sum of $5,000.00, the earnest money down payment which Mr. Hunt converted, trebled as provided by section 66-1940, R.C.M.1947, together with interest at the rate of six (6) percent per annum from April 10, 1965, the date of demand of the earnest money, and $2,000.00 attorney's fees. Judgment was entered against Dave Hunt for the total sum of $17,677.09, together with interest from the date of judgment and costs. Judgment was entered against United States Fidelity & Guaranty Company for $10,000.00, the limit of the bond, together with interest at the rate of 6 percent per annum from October 6, 1965, the date of filing of the complaint, plus costs.

No appeal has been taken by Dave Hunt from the judgment rendered against him, and United States Fidelity & Guaranty Company in its brief has conceded that Mr. Hunt had no right to retain the $5,000.00 earnest money and that he misappropriated that sum, an act which constituted a violation of section 66-1937(5), R.C.M.1947.

Appellant has, however, raised several other objections to the findings of fact and conclusions of law of the trial court. We will not discuss each of these issues individually, in that many of them relate to the same subject and can be discussed together.

The issues presented by the appellant in his Statement of Issues I, II, III, IV, V, VI, and VII, all relate to the subject of whether the appellant was liable as surety for any bond issued on Mr. Hunt by the appellant.

We agree with the appellant's contention that there is no liability on its part under the bond issued for the period of January 1, 1964 to December 31, 1964, for the simple reason that no violation of the Real Estate License Act of 1963 took place during that year. The misappropriation which did occur took place during the year of 1965, and under ordinary contract law appellant's liability on the 1964 bond cannot be extended past the time specified for its expiration in the instrument itself.

We also agree with the appellant's contention that as between it and Mr. Hunt, there was no bond for the year 1965. A condition precedent to that bond going into effect, the issuance to Mr. Hunt of a license to act as a real estate broker, had not been met. Again, under the rules of contract law, the failure to meet this condition precedent meant that the contract never did go into effect.

We conclude, however, that as between it and innocent third parties who did not know about the dealings between Hunt and United States Fidelity & Guaranty Company, the appellant in this case is estopped from asserting that defense and is liable on the 1965 bond. We base this conclusion upon several grounds.

One of these grounds is contained in section 49-109, R.C.M.1947, which states: 'No one can take advantage of his own wrong.'

The whole record here indicates the only reason the license was denied was that the appellant, because of the fault of its local agent, was tardy in transmitting the papers before the deadline. There was no fault upon the part of Hunt in his failure to receive a license.

Hunt had advised the respondents in 1964 that he was a licensed realtor. There was no reason for them to believe that this same situation did not...

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4 cases
  • Warrington v. Great Falls Clinic, LLP
    • United States
    • United States State Supreme Court of Montana
    • July 7, 2020
    ...Bank of Mont. , 164 Mont. 479, 481-82, 525 P.2d 19, 20-21 (1974) (date of trigger of statutory duty to pay); Lapke v. Hunt , 151 Mont. 450, 460, 443 P.2d 493, 498 (1968) (date of filing of complaint); Silver Bow Cty Sch. Dist. No. 1 v. Globe & Republic Ins. Co. of Am. , 146 Mont. 208, 216, ......
  • Estate of Taylor, Matter of, 83-262
    • United States
    • United States State Supreme Court of Montana
    • January 5, 1984
    ...v. Cantrell (1977), 174 Mont. 130, 568 P.2d 1225; Howeth v. D.A. Davidson Co. (1973), 163 Mont. 355, 517 P.2d 722; Lapke v. Hunt (1968), 151 Mont. 450, 443 P.2d 493; Higby v. Hooper (1950), 124 Mont. 331, 221 P.2d 1043; Lindblom v. Employers' Assurance Corporation (1930), 88 Mont. 488, 295 ......
  • Mader v. James
    • United States
    • United States State Supreme Court of Wyoming
    • February 12, 1976
    ...v. Morgan, 1964, 64 Wash.2d 851, 394 P.2d 898; Perino v. Jarvis, 1957, 135 Colo. 393, 312 P.2d 108. As said in Lapke v. Hunt, 1968, 151 Mont. 450, 443 P.2d 493, 498, the barebones rule, without reference to contract terms and exceptions, 'It is a well established rule relating to the law on......
  • Twite v. Western Sur. Co., 13873
    • United States
    • United States State Supreme Court of Montana
    • May 5, 1978
    ...whether to one or more persons, shall in no event exceed the total sum of TEN THOUSAND DOLLARS ($10,000.00)." In Lapke v. Hunt (1968), 151 Mont. 450, 460, 443 P.2d 493, appellant in a real estate transaction urged that interest could not be collected if it exceeded the face value of liabili......

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