Court Opinion

ID: 7277846
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:02:20.411494+00
Date Added: 2024-06-11T16:18:56.701745
License: Public Domain

Mr. Chief Justice Shepard
delivered the opinion of the Court:
The ground upon which this case was made to turn was that the corporation of Stone & Fairfax was a necessary party to the suit.
The record shows no plea or suggestion on the part of either Stormont or Washington that the said corporation was a necessary party. When the court announced its opinion to that effect, before the entry of the decree, Lizzie Lee Willey prayed leave to amend her hill by making it a party. Leave was denied and the decree entered. Error has been assigned to the decree that Stone & Fairfax is an indispensable party, and to the denial of the leave to amend by making it a party. Before considering those questions, it is important to consider the nature of the case presented by the pleadings as well as the facts established by the evidence. The bill of Stormont is not for specific performance of the contract of sale of the premises 1403 Delafield place; it charges a sale completed by the execution and delivery of a deed, and seeks to vacate the deed made *408by George R. A. Willey to Lizzie Lee Willey, later in date, but earlier of record, as a cloud upon his title. The bill of Lizzie Lee Willey, alleging that the deed to Stormont and the deed to Washington were executed through fraud and mistake, and had not been delivered by the grantor, and that they had been recorded without authority, seeks to vacate the same and restore all parties to their original position. The answer of George R. A. Willey to the Stormont bill alleges the execution of the two deeds through fraud and mistake, and denies the completion of the transactions and the delivery of the deeds. The evidence establishes the following facts:
(1) George R. A. Willey was-the owner of 1403 Delafield place, and lived thereon with his sister, Lizzie Lee Willey.
(2) Lizzie Lee Willey advanced $504.75 towards the purchase of the said property, with the agreement and understanding that she should have an interest therein to that extent.
(3) The property cost $6,500, and at the time of the alleged conveyance to Stormont was worth, according to the allegation in the latter’s bill, $7,000, and according to the evidence about $6,750.
(4) Stone & Fairfax, Incorporated, was a real estate broker and agent. As such it had been rental agents for other property owned by the Willeys.
(5) Stone & Fairfax undertook to effect an exchange of property between Stormont and Willey, and acted as the agent of both parties, expecting a commission from each. Stormont paid the corporation for effecting a disposition of his property 308 R St. N. E., and knew that it was claiming to act as agent for Willey in the same transaction. It did not inform Willey of its agency for Stormont, and he had no knowlerge of the fact.
(6) R. L. Hall, an employee of Stone & Fairfax, conducted the negotiations with Willey, and in part with Stormont.
(7) At the time of signing the contract of sale with Stormont, neither Stone & Fairfax, nor Hall, had any written authority from Willey to enter into the same, though he had, in writing, constituted it his agents to sell.
*409(8) After informing Willey that the agreement with Stormont included the conveyance to him by Willey of 308 R St. N. E., Hall procured Willey’s signature to the approval of that sale, shown in the paper, dated September 15, 1910, set out in the answer of Willey.
(9) Prior to that time, Hall had made a memorandum for Willey, giving figures showing that he would realize from the sale of the equity in 308 R St. N. E., the sum of $2,350 net. The figures as shown on the memorandum produced are as follows:
$3,500.00
1,400.00 Trust.
$2,350.00 Equity in No. 308 R St. N. E.
When Willey signed said paper of September 15, 1910, he did it under the representation of Hall that he would not have to take the property, but that the equity in it would be sold for $2,500. He so understood the instrument. Hall testified as follows to what occurred: “I told Mr. Willey that Stone & Fairfax had to sell 308 R St. at $2,500 net to him in a period of thirty days; that he did not have to take the R St. house, if he did not want it. That is what I told Mr. Willey, and then he signed. He wanted the money out of the R St. house, instead of the house.”
(10) At the same time Willey executed the paper constituting Stone & Fairfax his exclusive agents for the sale of 1403 .Delafield place for $6,000, less a commission of 3 per cent.
(11) Willey’s evidence that he executed the deeds at Stone & Fairfax’s office without reading them is entitled to no weight; he had the opportunity to do so. But had he done so, he would have derived no knowledge that they were not in accord with his understanding. The deed to Washington was a special warranty,- — called a “code deed,” — and recited the nominal consideration of $10. It contained no recital informing him that it was not in execution of the paper of September 15, and the understanding then had of the price he was to receive. He was not shown the contract entered into with Washington, and no *410statement was made to him of the actual terms. The statement of the account actually made to him later showed that, instead of about $2,350, he was actually to receive about $640. The contract which should have been shown him recited a sale for $2,660, of which $1,400 was in the assumption by the purchaser of the mortgage on the property, and the $1,260 in cash. The excess of $160 was intended to be appropriated by Stone & Fairfax, under their understanding that they were authorized to sell the property for $2,500 net, and not the equity merely. Willey was never informed of this excess.
(12) Willey executed the deeds expecting the final settlement to be made in accordance with his agreement, and left them with Stone & Fairfax with that understanding. He did not deliver the deeds to Stormont or Washington; nor did he direct their delivery or recording by Stone & Fairfax. He was not informed that Stone & Fairfax were also agents for either Stormont or Washington, and the deeds were not delivered to it as such.
(13) The deed to Washington had been sent to the agents of Washington by Stone & Fairfax, and was returned to Stone & Fairfax on notice that another deed had been placed on record, and Stone & Fairfax did not know how it might affect this transaction.
(14) While the deeds were still in the possession of Stone & Fairfax, Willey retained an attorney who went to the office of Stone & Fairfax, and notified them not to deliver either deed, or to close the transaction. Stormont was present and heard what occurred. Stone & Fairfax proceeded to close the transactions, and sent the deeds for record. In the meantime Willey had, by the advice of his attorney, conveyed the Delafield place property to his sister.
(15) Willey was then, and he and his sister have remained, in possession of 1403 Delafield place. Stormont was then, and has remained, in possession of 308 R St. N. E., but is renting from Washington.
(16) The funds received in the transactions remained in the hands of Stone & Fairfax. This was subject to its claims for *411commissions. These seem to have been deducted from the gross ■amount before the delivery of the balance to the receivers.
Founded on the foregoing facts we are of the opinion that Stone & Fairfax exceeded its authority in entering into the contracts of sale with Stormont and Washington. The approval of the contract with Stormont was upon the condition that the equitable title conveyed by him should be sold within thirty days for $2,500. Whether Stormont had actual knowledge of this condition is immaterial. Stone & Fairfax was his agent to effect the transfer, and he is charged with the knowledge which it and its managing agents had in the course of the tran.action. Moreover, he had actual konwledge while the deed was still in the possession of Stone & Fairfax, undelivered. There was no legal delivery of the deeds to either Stormont or Washington, and they acquired no title by the record made through the action of Stone & Fairfax. Stormont is not entitled to relief under the allegations of his bill. No title having passed out of Willey by the conveyance to Stormont, Lizzie Lee Willey acquired the title under her conveyance from him, and is entitled to be quieted in her possession. Stormont is entitled to be quieted in his title and possession to 308 R St. N. E. Lizzie Lee Willey and her grantor, having received no part of the money paid by either Stormont or Wahington, have no return to make to them in order to obtain a decree restoring all parties to their former positions.
This brings us to the consideration whether Stone & Fair-fax is a necessary party to this proceeding in order that a -complete disposition of the rights of all of the parties can he made in the final decree.
If the necessity to make Stone & Fairfax a party depended upon any interest of it in the subject-matter of the suit, we would not hesitate to say that it would not, at least when not suggested at a reasonable stage of the proceedings. Passing without comment the question of its acting as agent of both buyer and seller, expecting to receive a commission from each for effecting a sale, it is sufficient to say that it did not become entitled thereto on a transaction not completed, under the *412contract therefor, whatever may be its right to recover for services actually performed, in an action against any of the-parties on such a demand. The question, however, does not depend upon these considerations alone. Both parties sought relief in equity, which they were entitled to do, as the remedy at law for the situation presented would not be adequate. In addition, they consented to an interlocutory decree appointing' receivers for the property, and empowering them to receive-from Stone & Fairfax all of the funds in their hands derived from the transaction. In addition, they were empowered to-receive rent of the property, and to renew mortgages. For this purpose and to pay taxes and for necessary repairs they were empowered to use the fund, holding the balance subject to the final decree. This order was proper enough for the protection of all concerned. But it does not appear that Stone &r Fairfax delivered any of the money claimed by them as commissions. It seems, though the record is not clear on the-point, that they only delivered the balance after deducting-their commissions and probably some other charges and expenses paid in arranging the transactions.
Under these circumstances the final decree ordering payment' of the funds to the parties entitled thereto could not dispose-of such of the fund as may have been retained by Stone & Fairfax. To do this it must be made a party. When so-made the final decree could be so molded as to settle every matter involved. In this view the court was right; but wears of the opinion that it should have suspended the hearing- and directed that it be made a party defendant. This would have entailed delay, especially if the new party should demand, as it would have the right to do, time to take testimony on the issues in which it is involved.
Ordinarily, the matter of amendment of pleadings in equity,, at the time of the hearing, is one of discretion, the exercise-of which will not be disturbed without very strong reasons-therefor. At the same time it is not unusual to permit an amendment after the cause shall have been taken to an appellate court. . Owing to the principle of equity that a cause shall *413not be finally disposed of without having all parties whose interests might be affected before the court, leave to amend by making new parties is more liberally granted, especially where the necessity therefor has not been suggested, and does not become manifest, before the hearing. We are of the opinion, therefor, that the leave to amend should have been granted in this case when applied for.
The decree will be reversed, and the cause remanded with direction to grant the leave to make Stone & Fairfax a party, and for further hearing and a final decree not inconsistent with this opinion, making a disposition of the fund in the possession of the receivers, as well as that which may have remained in the possession of Stone & Fairfax. The costs in this court will be taxed one half against George R. A. Willey and Lizzie Lee Willey on the one side, and George T. Stormont and Eichard Washington on the other. It is so ordered.

Reversed.