Shatz Realty Company v. King

• Decision Date: 23 October 1928
• Citation: 225 Ky. 846
• Parties: Shatz Realty Company v. King.
• Court: United States State Supreme Court — District of Kentucky

225 Ky. 846

Shatz Realty Company v. King.

Court of Appeals of Kentucky. Common Pleas Branch.

Decided October 23, 1928.

1. Brokers. — Generally, a real estate agent must act in compliance with instructions of his principal and in accordance with customs prevailing in community where he carries on his business.

2. Brokers. — Real estate agent is bound to exercise reasonable skill and diligence in transaction of business which is intrusted to him, and on his failure to exercise ordinary care in obtaining tenant and to make reasonable investigation as to character of person desiring to become tenant, and as result tenant enters property who was not fit person and damage results by reason of acts of tenant, agent will be responsible to owner for such damage.

3. Appeal and Error. — In action by owner against real estate agent for damages to house by tenant to whom house was rented by agent, conflicting evidence as to whether owner agreed to accept tenant without investigation on part of agent, and whether owner made contract with agent to rent property, held to make jury's finding against agent conclusive.

4. Appeal and Error. — In action by owner against real estate agent for damages to house caused by unfit tenant, to whom house was alleged to have been rented by agent without reasonable investigation of tenant's fitness, admission of evidence as to condition of property some months after tenant had left held not prejudicial error, in view of evidence that property was in good condition when tenant took possession and absence of proof that vandals or thieves damaged property after tenant vacated it.

5. Brokers. — In action by owner against real estate agent for damages to house by undesirable tenant, to whom agent was alleged to have rented house without reasonable investigation, where contract in regard to rental of property was alleged to have been oral, written contract between parties authorizing agent to sell property held properly excluded.

6. Trial. — In action by owner of house against real estate agent for damages caused by undesirable tenant, to whom agent was alleged to have rented house without reasonable investigation, instruction as to damages caused by vandals or thieves, or by some person other than tenant, held properly refused, where there was no evidence justifying such instruction.

Appeal from Jefferson Circuit Court

HAGAN & MAX for appellant.

MORTON K. YONTS for appellee.

OPINION OF THE COURT BY JUDGE LOGAN.

Affirming.

The appellant, Louis Shatz, is engaged in the real estate business in the city of Louisville under the trade-name Shatz Realty Company. The appellee, Delia King, in 1926 was the owner of a certain house and lot located at No. 117 West Kentucky street in that city. In December of that year, she went to the appellant and listed her house with him for sale, and at the time she signed the usual contract required by real estate agencies when property is placed with them for sale. At the same time according to her contention, she made an oral contract with appellant whereby he undertook to procure for her a suitable and proper tenant for her house and premises. He was to collect the rents and otherwise act as agent of appellee in leasing and renting the property. Soon after the making of this contract, she moved away from Kentucky to another state, where she and her husband resided for several months. When she returned to Louisville, she discovered that her property had been seriously damaged by the acts of a tenant that she claims was procured for her by the appellant while acting as her agent.

She instituted suit against appellant, in which she set out the foregoing facts, and, in addition, she alleged that appellant rented her property to a woman by the name of Frey, and that in so doing he rented the property and premises to an undesirable, unsuitable, and unfit tenant without making any investigation as to the character, standing, or reliability of such tenant, and that he was grossly negligent in making the rental contract with the Frey woman without making any investigation as to whether she was a fit and proper person as a tenant. Appellee alleges in her petition, that the Frey woman was an undesirable, unsuitable, unfit and improper tenant of the house and premises, and that when she entered into the possession of the house and premises she used the property in a reckless, careless, wanton, and destructive manner, and in such way as to inflict upon the property and premises damages which are specifically enumerated in the petition. The damages consisted of broken lights, holes bored in the doors, window panes broken, sections of pipe removed, window cords cut, escutcheon removed from front door, carpets damaged and removed from floors, basement locked up so that egress and ingress were prevented, liquor stains on floors, doorbells and wiring torn out, lead pipe removed, heater injured and destroyed, protection strips torn from stairways, Brussels carpet gone, plumbing attachments and equipment broken and destroyed, and divers other injuries of a similar kind and nature. She alleges, in her petition, that the injury and damages to her property was caused by the negligent failure of the appellant to exercise reasonable care and diligence in the selection of a suitable, proper, and fit person to use and occupy the premises, and that her damage amounted to $2,000.

The first paragraph of the answer of appellant is a traverse. In the second paragraph it is alleged that, before the person referred to in the petition was allowed to become a tenant of the property, appellant notified appellee that the tenant could not give any satisfactory references as to her reliability as a suitable or proper tenant, and that she was further notified by appellant that he knew nothing as to the character, reliability, or responsibility of the Frey woman; but notwithstanding this information conveyed to the appellee, she instructed appellant to accept the person as a tenant of the premises, and that she therefore became the tenant of appellee entirely and solely under the orders and instructions of the appellee. He further alleged that he did not secure said tenant, or assume any responsibility for her, and that she was placed in the possession of the property through the direct instructions of appellee. The affirmative matter in the answer was controverted by a reply.

There was a trial before a jury, which resulted in a verdict in favor of appellee for $1,000. A motion for a new trial was overruled, and the case is before us for review.

Counsel for appellant do not seriously deny that he is responsible to appellee in damages if she employed him as her agent to rent the property and he negligently procured a tenant that caused the damages alleged in the petition. A motion was made for an instruction directing the jury to return a verdict for appellant, and complaint is made that the court failed to sustain the motion. It is the general rule that a real estate agent must act in compliance with the instructions of his principal, and in accordance with customs prevailing in the community where he carries on his business. He is bound to exercise reasonable skill...