Court Opinion

ID: 9546266
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:26:41.768601+00
Date Added: 2024-06-11T15:16:12.836628
License: Public Domain

SHEPARD, Justice
dissenting.
I view the facts of this case in a different light than does the majority. Simply stated, they are these. The Empeys desired to sell their property and employed an agent Wolford to do so. The Empeys agreed to pay a commission of six per cent of the purchase price to Wolford and presumably have paid that amount in full. As the agent of the Empeys, Wolford contacted the Tankersleys, who offered to pay $2,500, together with their interest in a sales contract on land located in Oregon. The agreement was reduced to writing, wherein the Tankersleys agreed to purchase the Empey property for $2,500 plus the Tankersleys’ interest in the land sale contract. Wolford had an attorney prepare an assignment of the land sale contract, which stated that the Tankersleys’ interest in the contract was subject to a lien. The Tankersleys executed that assignment of their contract interest to the Empeys.
Although at some point in the proceedings Wolford was charged with the knowledge that the Tankersleys’ land sale con*1068tract had a lien against it, he added a term to the purchase money agreement, which agreement had already been executed by the Tankersleys. The added term indicated that the total purchase price of the Empey property was $17,500. There is no indication in the record whether such action by Wolford was inadvertent or a deliberate method of enhancing his real estate commission. Likewise, there is absolutely nothing in the record to indicate, nor is it contended, that Wolford’s action was authorized by the Tankersleys or that the Tankersleys had knowledge of Wolford’s change in the contract.
At that point in time, Wolford was clearly the agent of the Empeys, and there is no contention otherwise. In my opinion, Wolford owed a fiduciary duty to the Empeys, and the Empeys were responsible for and chargeable with the knowledge and actions of Wolford. If, as is uncontroverted, Wolford misrepresented to his principals Empeys what was essentially an offer by the Tankersleys to purchase the Empey property, that matter is between the agent Wolford and the principals Empeys; and if the Empeys sustained damage therefrom, a cause of action might well lie against Wolford.
It was not until some four years later, after the transaction was consummated and the Tankersleys had in turn sold the Empey property to a third party, that the Empeys discovered the effects of Wolford’s misrepresentation. Following negotiations between Wolford and Empey, a written agreement was executed between them, wherein it is recited:
“Whereas the real estate sale was closed by J.T. Wolford with the sellers receiving only an assignment of contract in the net amount of $7,638.79 ...
“Whereas J.T. Wolford acknowledges the error in the closing transaction and wishes to make payment to the Empeys for the amount not received plus seven and one-half per cent interest to date.”
It was thereafter agreed “that J.T. Wolford accepted responsibility for the error and agreed to pay Mr. and Mrs. Empey the amount for the loss occasioned by his error.” Thereafter, Wolford executed a promissory note, in favor of the Empeys, in the amount of $9,431.55, with interest thereon at seven and one-half per cent per annum.
Over the years between the execution of the contract and the initiation of this lawsuit, the Empeys each and every month received a statement from the escrow company holding and handling the land sale contract which the Tankersleys had assigned to the Empeys. Those monthly statements reflect that the purchasers under that contract remitted each month the amount due to the escrow company; that the escrow company each month deducted $138.50, which was then paid against the lien held by Pioneer Savings; and that the balance of the money was then remitted to the Empeys. Therefore, I deem the evidence to be overwhelming and conclusive that, above and beyond the knowledge of Wolford, the Empeys knew, from the assignment itself and from the escrow statements, that there existed a lien in favor of Pioneer Savings against the land sale contract assigned by the Tankersleys to the Empeys. No action was taken by Wolford or the Tankersleys for approximately four years, when Wolford persuaded the Empeys to join him in the instant action, alleging fraud and misrepresentation on the part of the Tankersleys and demanding $2,000 in damages to Wolford, approximately $7,500 in damages to the Empeys, punitive damages in the amount of approximately $9,500, together with costs and attorney’s fees.
In my mind, the following legal conclusions flow inexorably from the above-recited facts. Wolford was the agent of the Empeys. He acted within the scope of his agent’s authority when he negotiated a sale of the Empey property with the Tankersleys. Arguably, and according to Wolford’s deposition, Wolford checked with the lienholder to determine the amount of the *1069lien against the Tankersleys’ contract sale. Beyond question, the assignment of that contract from the Tankersleys to the Empeys indicated the existence of and the amount of that lien. That information for the assignment was given to the attorney by Wolford.
The case law is replete with holdings to the effect that a principal is charged with the knowledge acquired by an agent acting within the scope of his authority on behalf of the principal. This basic postulate of agency law has been long accepted in Idaho. In Branom v. Smith Frozen Foods of Idaho, Inc., 83 Idaho 502, 511, 365 P.2d 958, 963 (1961), the Court stated the rule as follows:
“It is a general principle of the law of agency, that the principals are bound by the acts of their agents which fall within the apparent scope of the authority of the agents and that the principals will not be permitted to deny the authority of their agents against innocent third parties, who have dealt with those agents in good faith. White v. Doney, 82 Idaho 217, 351 P.2d 380 [1960] ...
******
“In Stout v. McNary, 75 Idaho 99,. 267 P.2d 625, 627 [1954], the rule is stated as follows:
‘The principal cannot claim that an agent with apparent authority to act had no such authority when he claims benefits of such agent’s acts. He cannot approve the part that is beneficial to him and reject the part that creates a burden.’ ”
And in John Snowcroft & Sons Co. v. Roselle, 77 Idaho 142, 145-146, 289 P.2d 621, 623 (1955), we held the evidence sufficient to show an agent’s apparent authority to act on the principal’s behalf, and we explained:
“The purchase and receipt of merchandise by the Summitt Supply Company from respondent over a long period of time and admitted payments thereon by appellant was sufficient evidence from which a jury could find that appellant had clothed his agent or representative ... with actual or apparent authority to order and receive the merchandise in question.
“In 2 AmJur., Agency, page 86, sec. 104, it is said:
‘ * * * where a principal has, by his voluntary act, placed an agent in such a situation that a person of ordinary prudence conversant with business usages and the nature of the particular business is justified in assuming that such agent has authority to perform a particular act and deals with the agent upon that assumption, the principal is estopped as against such third person from denying the agent’s authority,
“See Hunsaker v. Rhodehouse, 77 Idaho 119, 289 P.2d 319 [1955]. A principal is bound by the acts of his agent within the scope of his apparent authority. Bevercombe v. Denney & Co., 40 Idaho 34, 231 P. 427 [1924]; Arens v. Scheele, 63 Idaho 189, 119 P.2d 261 [1941]; Clark v. Tarr, 75 Idaho 251, 270 P.2d 1016 [1954].”
Thus, it is clear that an agent’s acts are, by definition, those of his principal. The Empeys, having clothed Wolford with power to bind them by his, Wolford’s, acts, were estopped to deny the validity of the representations made by Wolford to the Tankersleys. See, e.g., Fowler v. Uezzell, 94 Idaho 951, 500 P.2d 852 (1972); Clements v. Jungert, 90 Idaho 143, 408 P.2d 810 (1965); Commercial Ins. Co. v. Hartwell Excavating Co., 89 Idaho 531, 407 P.2d 312 (1965); White v. Doney, 82 Idaho 217, 351 P.2d 380 (1960); Arens v. Scheele, 63 Idaho 189, 119 P.2d 261 (1941). See generally, Seavey, Law of Agency § 75 (West 1964); Reuschlein and Gregory, Agency and Partnership, Chapter 9 (West 1979).
Restatement (Second) of Agency § 161A (1957), states the rule as to causes of action against a principal, based on the agent’s acts, in contract:
*1070“§ 161 A. Unauthorized Acts of Special Agents
A special agent for a disclosed or partly disclosed principal has no power to bind his principal by contracts or conveyances which he is not authorized or apparently authorized to make, unless the principal is estopped,, or unless:
(a) the agent’s only departure from his authority or apparent authority is
i. in naming or disclosing the principal, or
ii. in having an improper motive, or
iii. in being negligent in determining the facts upon which his authority is based, or
iv. in making misrepresentations; or
(b) the agent is given possession of goods or commercial documents with authority to deal with them.” (Emphasis added.)
Restatement (Second) of Agency § 257 (1957) states the rule in tort law:
“§ 257. Misrepresentations; in General A principal is subject to liability for loss caused to another by the other’s reliance upon a tortious representation of a servant or other agent, if the representation is:
(a) authorized;
(b) apparently authorized; or
(c) within the power of the agent to make for the principal.” (Emphasis added.)
Hence, the Empeys are charged with knowledge of the lien existing against the land sale contract held by Pioneer Savings, and with the knowledge that, when the Tankersleys executed the purchase and sale agreement, it did not contain a sale price of $17,500, but rather stated the Tankersleys’ offer of $2,500 in cash and their interest in the land sale contract as payment for the Empey property. If mistake there was, there is no showing that it was on the part of the Tankersleys. If mistake there was, it was unilateral on the part of the Empeys and resulted only from the actions of their agent Wolford.
The contract, as executed by the Tankersleys, clearly indicates their intent to pay $2,500 in cash and assign their interest in the land sale contract in return for the Empey property. While the Empeys may have intended to get $17,500 for their property, they are chargeable with the knowledge of Wolford, who knew they would only receive the amount offered by the Tankersleys. This is not an action for rescission of a contract or for reformation on the grounds of mutual mistake brought within a reasonable period of time. Rather, it is an action brought after the contract has been fully executed, under the guise of unjust enrichment, asking the court to penalize the Tankersleys for the action, either inadvertent or deliberate, by Wolford, the agent of the Empeys. Since the action is equitable in nature, the court, in my judgment, should have allowed the executed contract to stand. ' The Tankersleys obtained the property for the amount of their offer. While the Empeys did not receive what they now contend they anticipated (ignoring their knowledge of the lien furnished by the assignment and the monthly statements), they have been made whole by Wolford. The loss, if any there was, has appropriately fallen on the shoulders of Wolford, who precipitated the problem.
Finally, I have reviewed the record and find a total lack of evidence, clear and convincing, or otherwise, of any fraud, misrepresentation, or overreaching on the part of the Tankersleys.
Therefore, I dissent.
BISTLINE, J., concurs.