Case ID: iowa_117/html/0173-01.html
Source: Caselaw Access Project
Author: {"author": "Sherwin, J. —", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Emma L. Bellinger, Appellant v. Fannie F. Collins, Appellee.
    Í 2 Construction Trusts: sale by agent: Combination to defraud vender. Plaintiff’s agent for the sale of her farm employed the real estate firm of 0. to assist in finding a purchaser. 0. offered the farm to S. to whom they represented themselves as acting for plaintiff, and obtained an offer of $2,000 cash and a town lot worth $2,000. The offer was communicated to the agent, who told plaintiff that he had made a sale to S. for $2,000 cash, but that S. wished the deed to show a consideraion of $4,000; and plaintiff executed her deed accordingly, receiving the proceeds of the cash payment, and knowing nothing of any further consideration, or of any other purchaser than S. After the terms of sale had been agreed upon, but before S. had paid anything, O. paid the agent on the purchase price $150, which he claimed to have obtained from Oh., and the balance of the cash payment was paid the agent by O. & Oh. after the deal with S. had.been finally closed. The town lot was conveyed to O. ’s wife, and thereafter the agent O. & Oh. claimed that the farm had been sold to Oh. for $2,000, who in turn had sold to S. for $2,000 and the lot, and that then Oh. had sold the lot to O. Held that there was no such bona fide sale of the farm to O. & Oh. or to either of them as would prevent the town lot from being impressed with a trust in favor of plaintiff.
    3 Ratification. The agent having told plaintiff the day before the deal With S. was closed that others were helping him to sell the farm, and having introduced to her 0. and Oh., who in her presence paid the balance of the cash payment to him, her failure to object to her agent’s acts in employing subagents was a ratification of the acts of O. & Oh., which made O. & Oh. her agents, and impressed the town lot with a trust for her benefit.
    
      4 Good faith buyer. Where ah agent for the sale of a farm sold it in exchange for a cash sum and a town lot, and then, representing to his principal that the cash sum was the full consideration, had the. lot conveyed to his wife, who paid nothing for it, the wife was not entitled to hold the property as against the trust impressed thereon in favor of her husband’s principal.
    
      
      Appeal from Pottawattamie District Oourt. — Hon. Walter I. Smith, Judge,
    Thursday, May 22, 1902.
    The plaintiff was the owner of a farm which she listed for sale with the firm of Daj^ & Hess, real estate agents of Council Bluffs. Oollins & Childs was another firm of real estate agents of the same city. Day told Oollins & Childs that his firm had the Bellinger land for sale, and I Oollins & Childs said they would try to find a- customer for it. Soon after this the latter firm, through Mr. Collins, who is the husband of the defendant herein, entered into negotiations with one Smith for the sale of the Bellinger land to him, which finally resulted in Smith’s agreeing to take it at $4,000, $2,000 of which was to be paid in cash, and the balance by the conveyance of real estate in Council Bluffs. It was agreed, however, that there should be deducted from the cash agreed to be paid a sum equaling six per cent, on $2,000 for one year, because possession of the farm could not then be given Smith. Day told Mrs. Bellinger that he had others assisting him in the sale of her land, and both Oollins and Childs told Smith and his wife that they were making the sale for Mrs. Bellinger. Smith did not deal with the firm of Day & Hess in this matter at all. After the terms of the sale had been agreed upon, and a written memorandum thereof had been signed by Smith, but before Smith had paid any money thereon, Oollins paid Day $150 on the purchase price of the land, which money he says he received from Ohilds. When the deal was finally close!, Mrs. Bellinger was paid $2,000 for her land, and was told by Day that he had sold it for that sum. She made a deed directly to Smith; the consideration named therein being $4,000, which she was told was at his request. The Smith property was deeded to the defendant Fannie F. Collins. It is claimed by Day and by Collins & Childs that Childs was in fact the purchaser of the Bellinger land for $2,000, and that he in turn sold it to Smith for $4,000, but that, as he did not want any more city property, he agreed with Collins to deed it to the defendant Fannie F. Collins in consideration of Collins paying to him the sum of $250 for his share of the profits in the deal. The land deeded by Smith to the defendant had two houses on it, and was worth from $1,500 to $2,000. Mrs. Bellinger knew nothing of any pretended sale of her land to Childs, or of the fact that Smith paid more than $2,000 for it, until some time after the transaction had been closed, and brought this action in equity, asking that she be decreed to be the owner of the property conveyed to the defendant, and that a conveyance thereof be made to her. Her petition was dismissed, and she appeals. —
    Reversed.
    
      Jacob Sims for appellant.
    
      Mayne c& Hazelton for appellee.
   Sherwin, J. —

3 4 If the relation of principal and agent did not exist between Mrs. Bellinger and the firm of Collins & Childs as to the sale of her land, they would have owed no duty to her which would have prevented either or both from buying the land for speculation; and, in the absence of a combination between them and Day & Hess to defraud the plaintiff in the sale and purchase thereof, the title acquired by this defendant would be good, and it could not be impressed with a trust in favor of the plaintiff. But we are convinced that there was no bona ñde sale of the land to Collins & Childs, or to either of them. Neither of them wanted the land; its value was uncertain, depending upon the vagaries of the Missouri river; while on the other hand, it is shown that Collins did want the Smith property, which was conveyed to his wife. That Mr. Day knew the infice that Smith was to pay for the laud before the claimed sale was made to Oollins & Ohilds, we do not donbt; and, if he did, it was his duty to put his principal in possession of all the facts, instead of closing a deal whereby she was despoiled of nearly $2, COO, It is practically admitted that Oollins & Ohilds undertook to find a purchaser for this land. True, this agreement was not made with Mrs. Bellinger, but with her agent, Bay. In pursuance of this undertaking, they found Smith, and represented to him and to his wife, when his signature to the Smith property was obtained, that they were acting for Mrs. Bellinger. Mrs. Bellinger was told by Bay, before the transaction was closed that others were helping him sell her land, and Oollins & Ohilds were introduced to her, and in her presence paid over to Bay the balance of the $2,000 in cash. She made no objection to the employment of subagents by Bay, and her acts at that time should be deemed a ratification of such employment; and, while Bay may have had no authority originally to employ subagents, neither he nor they can complain, if Mrs. Bellinger does not. The original employment of a subagent by express or implied authority of the principal would make the subagent the agent of the principal, and liable as such for his acts. Mechem, Agency, section 197. And the ratification of the acts of a subagent create the agency as surely as an original employment. We hold, therefore, that Collins & Ohilds were acting in conjunction with Bay in the sale of the plaintiff’s land, and that the land conveyed by Smith to Mrs. Oollins belonged to the plaintiff, as a part of the price of her farm. Mrs. Oollins paid nothing for the property deeded to her. Her husband caused the conveyance to be made to her, and the most that can be said in relation to the matter is that he was acting as her agent. In any view that may be taken of the matter, Mrs. Oollins was not a lona dde purchaser entitled to protection. The property belonged to Mrs. Bellinger, and equity will impress a trust thereon in her favor, just the same as if it had been deeded to Oollins, and there can be no question that Collins would be held a trustee for Mrs. Bellinger’s benefit.

The prayer of the petition is granted, and the judgment reversed.