Sakris v. Eagle Indem. Co.

• Decision Date: 04 January 1934
• Docket Number: 24566.
• Court: Washington Supreme Court
• Parties: SAKRIS v. EAGLE INDEMNITY CO. et al.

28 P.2d 316

176 Wash. 73

SAKRIS v. EAGLE INDEMNITY CO. et al.

No. 24566.

Supreme Court of Washington

January 4, 1934

Department 2.

Appeal from Superior Court, Spokane County; William A. Huneke Judge.

Action by Christina Sakris against Eagle Indemnity Company and another. From a judgment for plaintiff, defendant named appeals.

Affirmed.

H. Earl Davis and Lawrence H. Brown, both of Spokane, for appellant.

Roy A Redfield, of Spokane, for respondent.

HOLCOMB, Justice.

According to the undisputed facts herein, for some time prior to March 13, 1931, respondent had been the owner of some residence property in Spokane, and Theodore Gentsch, a real estate broker of Spokane, had been her agent and broker for many years. The property being deteriorated, Gentsch persuaded respondent that he could rehabilitate it and rent it so that it would bring in an income. In order to finance the necessary, improvements, respondent, at Gentsch's suggestion, placed a mortgage on the property which netted after expenses had been deducted, $975, which, at the suggestion of respondent, was paid by the mortgagee to Gentsch, so that the latter might use it for the desired purposes. She left this money in the hands of Gentsch with instructions to proceed, at her expense, to remodel, find tenants, and collect the rents. When the proceeds of the mortgage were received by Gentsch, which was by check, on March 13, 1931, he did not immediately cash the check, but carried it on his person for four days, cashing it on March 17, 1931.

On that date, Gentsch, as principal and appellant, as surety, made and executed a statutory real estate broker's bond in the principal sum of $1,000, on which this action is based.

This statutory bond was thereafter delivered to the state of Washington, director of licenses, for a broker's license to be issued by the director of licenses to Gentsch. By its terms the bond was in effect from its date, March 17, 1931 to December 31, of that year and was conditioned as follows: 'Now, therefore, If the said Theodore Gentsch the above bounden principal, shall, if said license is or has been issued to him, render a faithful accounting of all funds intrusted to him as such real estate broker by any person as provided in said chapter 129, Extraordinary Session Laws of 1925, and pay to any party entitled thereto all damages arising by reason of the failure of said principal to render to any person a faithful accounting of all funds so intrusted to him as such real estate broker, either directly or indirectly, then this bond shall be void and of no effect; otherwise to remain in full force and virtue.'

During the period from March 17 to December 31, 1931, Gentsch improved the property, found tenants for the premises on a month to month basis without written leases, and from time to time collected from them rents amounting to $504.

Of the $975 mortgage money intrusted to him, Gentsch became entitled to sundry credits, amounting to $487, thus leaving the net sum of $992, the property of respondent, which he appropriated and converted to his own use.

The controlling statutory provisions are now codified as Rem. Rev. Stat. §§ 8340-4, 8340-10, and 8340-11. It is first to be noted that the $504 rental money converted by Gentsch was all received during the period in which the bond for that year was in force. The $975 mortgage money, although in his hands as a check prior to that date, had not been cashed or reduced to money until March 17.

The terms of this bond were very similar to the terms of that involved in Wenatchee Orchard Syndicate v. Fidelity & Deposit Co. of Maryland, 143 Wash. 632, 255 P. 943, which we held made it a purely prospective and not a retrospective bond. Hence this bond must be held to be prospective only.

As to the rental money, we held in Salisbury v. Alskog, 144 Wash. 88, 256 P. 1030, that the statute, being penal, was to be strictly construed; and, further, that, since a leasehold interest in real estate had, prior to the enactment of the statute, always been considered as personal property and transferable as such, it could not be considered an interest in real estate. It would be presumed therefore, that the Legislature in enacting the definition of a real estate broker, as provided in section 8340-4, supra, knew and understood that a leasehold...