Court Opinion

ID: 4942110
Source: CourtListenerOpinion
Date Created: 2021-09-24 11:38:59.74254+00
Date Added: 2024-06-11T08:14:56.605449
License: Public Domain

CAYTON, Associate Judge
(dissenting).
On both substantive and procedural grounds I think the judgment should be reversed.
1. The Substantive Question
Unlike a gratuitous or accommodation surety, this corporate bonding company is not a “favorite of the law” and not entitled to the protection of the strictissimi juris doctrine.1 The United States Supreme Court, adopting the same rule of construction as applies to insurance contracts has held that such a bond, if it be reasonably susceptible of two differing constructions, should be construed in a light favorable to the obligee.2 But even if it is to be construed strictly in favor of the surety company it means only that the interpretation must be a reasonable one,3 “so as to impose upon the surety only such burdens as clearly respond to the terms thereof, and should not be extended by implication or presumption to cover other burdens not coming within its scope.”4
What was the status of this particular plaintiff in the court below? He alleged clearly enough that he had an interest in a series of commissions for sales he had made for the broker Zirkle, that Zirkle had recognized his claim and paid part thereof and had dishonestly withheld the remainder. This was a violation of Code Section 45 — 1408, because under subsection (g) thereof he had
“Failed, within a reasonable time, to account for or to remit any money, valuable documents, or other property coming into his possession which belong to others and had also under sub-section (j)
“Been guilty of any other conduct, whether of the same or a different character from that hereinbefore specified, which constitutes fraudulent or dishonest dealing;”
Appellee argues that appellant had no rights under the bond because he was a mere employee of Zirkle. And yet the bond, and the statute requiring it, both specifically provide that “any person aggrieved” by the failure of a broker to conduct himself and his business in accordance with the law may recover on the bond
“any damages sustained by reason of any act, representation, transaction, or conduct of the principal which may be prohibited by this chapter or enumerated as one of the causes for suspension or revocation of a license granted hereunder.”
It may be admitted at once that an ordinary employee of a broker could not sue on such a bond if his claim were merely upon a money debt owing by the broker. But we should take judicial notice that most real estate salesmen, even if they be called employees, are really operating upon common ventures with the brokers for whom they work and are for these purposes really colleagues or business associates of their brokers; that they usually receive no salary and are paid only out of commissions they earn. In other words that they are upon a different footing from other employees claiming for services rendered; and different also from general creditors of a broker. They have a direct interest in and claim upon commissions earned by the broker through their efforts. In this respect, a salesman’s status is but slightly different from that of an independent broker who becomes entitled to share in a commission. This being true, it seems clear that such a salesman is entitled to look to the surety when the broker unlawfully or dishonestly withholds portions of commissions due. Such, it seems to me, is the reasonable construction to give this type of bond, prescribed as it is by a statute hav*848ing a broad social purpose. A narrower interpretation may easily result in obstructing the public protection which Congress intended.
We need make no attempt to decide just what arrangement existed between these two parties or to decide any other ultimate questions in the case, such as plaintiff’s failure to press his claim sooner than he did. He may or may not have had a satisfactory reason for waiting. This, like other matters of proof, will depend upon what develops at the trial, either in support or refutation of plaintiff’s claim. Our decision should be confined to the pleadings upon which the judgment was entered.
I think the Sigler case, cited by the majority, is practically identical with this one. There the court held that the salesman was a “person” to whom the money “belonged” and as such was entitled to recover on the bond. The court said [71 Ohio App. 425, 50 N.E.2d 392]:
“A failure to remit to a salesman his part is a violation of the act the same as the failure to remit to a seller his part is a violation of the act, and the bond is specifically and in terms for the benefit of ‘Any person claiming to have been damaged * * * by reason of the violation of the terms’ of the act.” (Emphasis supplied)
I cannot agree that the only purpose of the legislature was the protection of members of the general public, if that term means only actual clients of brokers. If the law be given so limited an application I apprehend that there would be no protection to banks, title companies, fellow brokers, or others who may be fleeced by unscrupulous brokers. I feel that Congress intended no such limited protection. I agree with the Ohio court that
“It is apparent that the Legislature intended to require that such business should be conducted with honesty and integrity and in accordance with the provisions of the aforesaid section. To insure that such business should be so conducted, it required that brokers furnish a bond indemnifying ‘any person’ for damages suffered by the operation of such business in violation of said act; and we can think of no good reason for concluding that the Legislature intended therebjr that the seller or buyer of real estate through a real estate broker should be protected by the act, but that a salesman, operating in the business upon a commission basis, should not likewise be protected. The statute requires a bond to indemnify any person damaged by a violation of the act, and we know of no satisfactory reason for concluding that the Legislature did not mean what the plain words used by it do mean.”
2. The Procedural Question
The Municipal Court is now functioning under rules designed to make its practice conform to that in the Federal courts. And we need not search far to learn that there is a seeming unanimity of decision in those courts to the effect that a plaintiff’s complaint, when under attack on a motion for judgment, should be liberally construed in favor of the pleader and in a “light most favorable to the plaintiff, and with every intendment regarded in his favor."5 This rule of construction was very clearly applied by the Eighth Circuit, speaking through Justice Sanborn in Leimer v. State Mutual Life Assurance Co., 8 Cir., 108 F.2d 302, 306, in this language:
“ * * * There is no justification for dismissing a complaint for insufficiency of statement, except where it appears to a certainty that the plaintiff would be entitled to no relief under any state of facts which could be proved in support of the claim.”
The rule has also been restated in different language in a later case, Louisiana, etc., Union, Inc. v. Great Atlantic & Pacific Tea Co., 8 Cir., 131 F.2d 419, 423, where we are told that “no matter how improbable it may be that the plaintiff can establish the allegations of his complaint [he] is, nevertheless, entitled to the opportunity to make the attempt.”
Judging the pleadings,by these tests I think it cannot be said with any assurance that it was impossible for plaintiff to prove a case, or “that defeat must be his inevitable fate and that the coup de grace was therefore properly administered at the inception of the struggle.”6

 Illinois Surety Co. v. John Davis Co., 244 U.S. 376, 37 S.Ct. 614, 61 L.Ed. 1206; United States F. & G. Co. v. United States, 191 U.S. 416, 24 S.Ct. 142, 48 L. Ed. 242; United States, to Use of District of Columbia v. Bayly, 39 App.D.C. 105, 41 L.R.A.,N.S., 422; Hartford Accident & Indemnity Co. v. Federal Bond & M. Co., 8 Cir., 59 F.2d 950; Maryland Casualty Co. v. Fowler, 4 Cir., 31 F.2d 881, 63 A.L.R. 1375; City of Cheyenne v. Maryland Casualty Co., D.C.D. Wyo., 13 F.2d 401.

 Guarantee Co. of North America v. Mechanics’ Sav. Bank & T. Co., 183 U. S. 402, 22 S.Ct. 124, 46 L.Ed. 253; American Surety Co. v. Pauly, 170 U.S. 133, 18 S.Ct. 552, 42 L.Ed. 977.

 Ambrose v. Hayes, 36 App.D.C. 255.

 Commercial Nat. Bank of Washington v. London & Lancashire Indemnity Co. of America, 56 App.D.C. 76, 10 F.2d 641, 642.

 Tahir Erk v. Glenn L. Martin Co., 4 Cir., 116 F.2d 865, 869; Pliner v. Nesvig, D.C., 42 F.Supp. 297; Cohen v. United States, 8 Cir., 129 F.2d 733; Continental Collieries, Inc. v. Shober, 3 Cir., 130 F.2d 631; United States v. Thurston County, D.C., 54 F.Supp. 201; Publicity Building Realty Corp. v. Hannegan, 8 Cir., 139 F.2d 583; Tyler Fixture Corp. v. Dun & Bradstreet, Inc., U.S.D.C.W.D.Mich., 3 F.R.D. 258.

 Dissent in Johnson v. Uline, D.C.Mun.App., 40 A.2d 260, 264.