Maixner v. Travelers Ins. Co.
| Decision Date | 26 November 1937 |
| Docket Number | 30120. |
| Parties | MAIXNER ET AL. v. TRAVELERS INS. CO. ET AL. |
| Court | Nebraska Supreme Court |
Syllabus by the Court.
1. One professing to contract as agent is personally liable if unknown to the other party, his purported principal is fictitious, for the agent impliedly represents that his principal has existence, and if no principal is bound, then he himself will be liable.
2. One seeking to recover from a principal, for an unauthorized act of an agent, must establish that the principal obtained knowledge of such act before it had changed its position.
3. If a principal received that to which it was entitled, regardless of an unauthorized act, and if it cannot make restitution without loss of that which it is entitled to keep, then ratification of such unauthorized act does not result from a failure to return the benefits received.
Appeal from District Court, Lancaster County; Frost, Judge.
Action by Anton F. Maixner and another against the Travelers Insurance Company and others. From an adverse judgment plaintiffs appeal.
Affirmed.
Littrell & Patz, of Lincoln, for appellants.
Hall, Cline & Williams and Walker & McArthur, all of Lincoln, for appellees.
Heard before GOSS, C. J., DAY, PAINE, CARTER, and MESSMORE, JJ., and TEWELL, District Judge.
This is an action for fraud and deceit, and for the return of $500 to plaintiffs, who have elected to rescind a contract for the purchase of real estate, upon which $500 was paid down. The plaintiffs, having lost in the lower court, appeal to this court.
The evidence discloses that the plaintiffs have resided at Brainard, Nebraska, for over five years, moving there from Loveland, Colorado, but had lived in Nebraska for many years prior to moving to Colorado; that the plaintiffs are husband and wife, and are farmers, and each of them speaks the Bohemian language much more fluently than they do English. That the defendant E. A. Marshall had resided at Stanton, Nebraska, since 1912, and was connected in this deal with W. H. Hyland, a real estate agent, also residing at Stanton since 1906.
The plaintiffs owned land in Colorado which they had advertised for sale in an Omaha paper, and Marshall and Hyland, seeing the advertisement, got in touch with them to trade them something for their land in Colorado. They first tried to trade them a piece of land belonging to a man named Wagner, but were unable to get the title to this land. Later they found that a half-section of land in Antelope county, which had been foreclosed by the Travelers Insurance Company, could be purchased for $4,000, at least W. F. Powers, who was in charge of over 100 of the insurance company's farms in the vicinity of Plainview, said that he would recommend to the Travelers Insurance Company that they should accept an offer of that amount.
Marshall took the plaintiffs to see this land, and on December 12, 1934, the plaintiffs signed a contract to buy the half-section in Antelope county for a consideration of $10,500, of which amount they paid $500 in cash and agreed to pay $1,500 March 1, 1935, and were to pay the balance by deeding their 80 acres of land in Larimer county, Colorado, together with two lots in Loveland, Colorado, and, in addition, to give back a mortgage of $2,500 on the half-section they were buying. This contract, being Exhibit No. 16, left the name of the owner of the Antelope county half-section in blank. E. A. Marshall represented to the plaintiffs that the Antelope county half-section was first-class land and very productive, and well worth $12,000, but he could let them have it for $10,500. Plaintiffs testify that he told them they did not need to spade the soil because it was dark and productive, and they could take his word for it. On the day they visited the land in Marshall's car, the snow was deep, but they waded out through the snow for a ways although they were not at the farm more than 15 or 20 minutes. Marshall said if they would buy the farm he could resell it for them in about six months for around $12,000. Marshall took them to the office of Hyland in Stanton, at which place the contract was dictated by Marshall and typed by Hyland, and signed by plaintiffs alone. It was falsely stated to the plaintiffs that the land was owned by a " Mr. Johnson," residing in Sioux City, and Marshall said he would leave immediately and go to Sioux City and deliver the money to him. That instead of going to Sioux City he at once drove to Plainview, Nebraska, arriving at the office of W. F. Powers at about 7:30 in the evening, and represented to Mr. Powers that he had secured a buyer for the half-section, and after some conversation a contract was drawn, dated December 12, 1934, between W. F. Powers, agent of the Travelers Insurance Company, and W. H. Hyland, for the half-section of Antelope county land for $4,000, upon which contract Marshall paid Powers $500 in currency that night, and the contract agreed that $1,500 would be paid March 1, 1935, and a $2,000 mortgage to be taken back on the land for five years at 5 per cent., and this contract was sent to Omaha to be forwarded to the Travelers Insurance Company at Hartford for approval. Marshall was to receive 2 1/2 per cent. commission on this sale.
It developed in the evidence that " Mr. Johnson," the purported owner of the land, was an entirely fictitious person, and that Marshall, at the time he made the contract with the plaintiffs in Hyland's office, had no authority whatever to contract to sell the half-section of land in Antelope county belonging to the Travelers Insurance Company. Plaintiffs had no idea at the time they signed the contract that the land did not belong to " Mr. Johnson" of Sioux City. The plaintiffs lived at Brainard, which was around 200 miles away from the land in Antelope county. They placed entire confidence in the representations made to them by Marshall and Hyland, and were deceived thereby. The land was not as represented, and W. F. Powers testified that it was a sandy top soil, and that it was not a first-class farm, and that $4,000 was its value under normal conditions. The plaintiffs upon their return home began to investigate the land they had contracted to buy, got a soil map from the university at Lincoln, and learned that it was sandy land instead of black dirt, and then employed attorneys to rescind the contract and secure the return of their $500.
The petition was filed in the municipal court in the city of Lincoln, and summons was served upon the Travelers Insurance Company by delivering the same to M. A. Fairchild, chief clerk of the insurance department of the state of Nebraska, being their statutory agent for the service of process, and summons was also delivered to the sheriff of Stanton county for service upon W. H. Hyland and E. A. Marshall.
At the trial in the municipal court the motion of the Travelers Insurance Company to dismiss the action, for the reason that there was insufficient evidence to sustain a judgment against said company, was sustained. Marshall and Hyland then moved for a dismissal on the ground that they were nonresidents and,...
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