MERRITT V. WASSENICR.
78Q
ated to transfer the tiUe to Harmon, in whose name the lands should have been to his title. It follows from what I have said that the biU'must dialnissed.
MERRITT
et ale v. WASSENICR.
(CircttU CWn, D. Colorado. February 27, 1899.)
1.
SPlIQJ;1PIO PBRII'OjUIANOB-DISORBTION 011' COURT.
B.
Speclfl.c performance of a contract rests in the discretion the court, whioh will not i'tecreeit wheu; ill view of all the circumstances, the ends of justice will not be 'IIubservedthereby.
or
8.
A real-estate agent, in order to induce his non-resident princll?al to make a sale, wrote that the property might be sold for $27,000, and that this was from $2,000 to . $3,000 more than jt was worth. A few days later it was sold for 185,000.. Held, that tha statemaut must be considered a representation of fact, and not of opinion merely. : &ME.· .
RBADlESTATII BROKERS-FALSE REPRBSENTATIONS.
The fact that the owner's son was in the city about a month before, and had written her the property was worth $35,000, was not sufficient to show that she did not reiy upon the agent's representation. .One who purchases real estate from a non-resident owner, through a real-estate is bound to ascertain, not only the terms of his authority, but also the corresponQ.ence by which such authority was obtained. . TlIIRD PERSONS.
4. BAME:""AUTltORITY-DuTY· 011'
In Equity. Suit by Elmer D. Merritt and Philo D. Grommon,c<>partners: against Theresa Wassenich, for specific performance of a sale of real estate. Bill dismissed. Benedict Phelps and J. P. Heisler, for plaintiffs. Charles J. Hughe8, Jr., for defendant.
«
RtNER,District Judge. This is a suit in equity for the specifio pel'. formance of a contract for the sale of certain real property situated vU Fifteenth street, in the city of Denver, which property is described in the bill of complaint as follows: "Part of lots fifteen and sixteen in block one hundred seven." The facts, briefly stated, are as follows: January 16, 1888, L. Anfinger &00., real-estate men at Denver,addressed to the defendant, at Cincinnati, Ohio, the following letter: "DEAR MADAM: We have some eastern parties here, who are buying Den. ver real and have bt>en trying to get them to buy your property; but. not knowing what you would sell for, we were unable to give them a prict> knowing tb8.t the property now pays about six per cent. on a little over $30" 000, with all the risk of a large depreciation in the next few years, for Fifteenth street has seeu its best days. In fact, the property was worth more two years ago than it is to.day, and is falling in value every day. Tbe electric road bas,proved a failure, and the company has stopped running, and all of their operations that have been going on for the past year, trying to make it successful. and have shut down. The tenants of the stores are all kicking. and want a reduction in rent; and we earnestly advise you to sell at the present time, if possible. The people whom we now have on the string will pay V.49F.no.l0-50
FEDERAL REPORTER, vol.
49.
·.which,is from $2,OOO,td$5,OOO,moretban' the wortb. and J[lIcl!lUore than you can get any one to pay. They say they will only pay can induce them to pay something more. You know Mr. Tesch, tenant of the saloon, claims that the property is worth more to him than to anyone else; still he only offers 825,OQO·.W.oagain advise you that if you can get these people to buy, you ought to let it go. We can loan the money out at 8 and 9 per cent. per annum, secured by first-class Denver real estate, which will give yOIl an incom,eof clear, the trouble, worry, or risk. As it is now, you no not get as much as that, and with the chances of the property·depreciaUnginvalue.. It will never.. increasf', and, as time goes by, it is sure to fall in value. Fifteenth street has had its best days is one·. The 17th, the main streets, especially l111.1apd Hlth...If you decide to sell, wire us your very lowest price, (we will/Zet as much more as possible,) enough for you to inform liS by for the party will not remain in Denver we could get more out of them if they are here when your reply correspondence. . L·. AN'-.INGER &00." ;",'fYours.weryLruly, To this letter the defendant replied by telegram on the 20th of Januin the followinglangunge: ,."" ' 20th. "To L. Anftnger & 00., 1541 Ohampa Street: 'fhirty-two thousand is my ' MRS. T. WASSENIOH." , .: (l, __ " , I:, ' ' Following this telegram, the defendant wrote to L, Anfinger & Co., her patedoll .the 20th of January, as follows: "DEAi . Your letter of the 16th received. and, hardly know what to db; Ydll and 'Albert and differ so wielely in estimate of the property. Albert thinks it worth $35,000, and is positive it will increASe inv:alue. As I have the utmost confidence in both, I don't know whose advice to take. so compromised. sun I should not like to miss this hope you will bring about a settlement. Some years ago was offered $34,000, before even the They were also eastern people. Should you effect this make everything solid for us, so they 9l'nnot hold us for taxes or atlytllrng else. You will remembllr, perhaps, I made Mr. Tesch a promise throulfll you to let him havethe refusal of it. and he might consider himself uojUBtlY' treated should we sell without considering that; It might also benefit us to play them against each other, and no d,oubt he wm apprecieeeing some one eille desires it. leave all that ate 'to your better j.u4gwent. You might let \De know wha,tper cent. you charge, also what 'otlierexpenses will arise, 80 that I know exacpy' What to flgllrtl on. "MRs. T. WASSENIOH. " L· .Anfinger & entered into negotiations nussell, a resident of Denver a,nd"a real-estate, broker, for the sale of,tbls property, giving him a certaintiDll,l witbin which to close the tranSltction., He sold it to the complainants herein· for tbe sum of $35,000, ;'llndWBS to receive for his services the 'SURl of $2,000, and onthe 28tl1;;bf}anuary, L: Anfinger'. & Co. wrote to'the defendant, at that the property {oJ," $32,000,le8s comof 1887, stating in their they had U!'led every effOlUoget the parties up to, missed, .and stated the term$lo1':. 'to be $500 cash, to bind the bargain, 89,500 in 30
ary,
,MERRITT ,; WABSENICH.
787
days, and $22,000 6n or before three years, with interest at 8 per cent., secured by trust-deed on the property; stating, also, to her in that letter that their commissioD would amount to 8715. On the same day they telegraphed her that they had sold the property for $32,000, less commission and taxes. To this last letter and telegram the defendant did not reply, and the only communicatione from her in relation to this transactioDwere the letter and telegram of January 20th. On the 28th of January, the date of the last communiCation to Mrs. Wassenich, L. Aufinger & Co. signed a.receipt, as follows: "DENVER, CoLO., Jan. 28, 1888. "Received from Merritt & Grommon, 8S part paymf'nt for the following described real estate, [here follows description.' the entire price to be paid for said real estate $32.000, and is to bt> paid as folfows: $1,000 ad above recited; $9,000 on or before thirty days from date: and four notes, of $5,500 each, aggregating $22,000, secured by trust-deed on said property. The four notes payable on .or before thrt>e yeurs from said date, with interest at t'lght per cent. per annum, interest payable quarterly. The title to be perfect, a and sufficient warranty det'd, and to be executed and delivered loy said Theresa Wasst'llicb to Merritt & GromOlon, their heirs or assigns. on or ht'fore the 28th of ,February, 1888, together with an abstract shOWing clear title: pro· vided, however, that tht> payment of $31,000 is tendered or paid at said dale. If the said payment of $31,000 in cash and notes is not pad or tt>ndered on or beforeth,e said 28th of Februar.v, H!88, then this contract to be void and of no effeet,anu both parties released from their obligations herein: and in that event tbt> sait! one thousalld t!ollars paid on this date is to be held by Theresa Wasst>nich lind L. Antinger & Co. anl.1 P. B. Russell, bl"Okers, onehalf as liqUidated damages. "THERESA W ASSENICH. "il, L · .ANFUiGJJ:R & Co·· her Agents.
"I'. B. RUSSELL. "W. B. WWTE." Subsequently, and on the 8th of February, L. Anfinger & Co. gave to the complainlU!ts herein the following receipt: . . "DENVER, COLO., Feb. 8, 1888. "R",ceivedof Merritt & Grommon the slim of five hundreu dollars, as part payment of Jots filteen and sixteen, in bloC'k one hundl'ed seVt'II, in East Denver, AI';ipahoe county, Colorado. dl'scrihed as fullows, [here follows description,] wh1ch I have this tlay aflsigne.l to said Ml'rritt &. Grommon at the full price of $32.000, the balance of $,1,500 to be paid UpOIl examination of titll:' Ilnd attbe tiwe or times, and in the Inanner, alJ I /Day then sell tit to reo qqest. lIMRS. THERESA WASSENICU, [Signed] "By L. ANFINGElt &. CoMPANY, her Agl'nts." -Th}$ last receipt or contl'l;lct being the one set out in the bill of complaint, anq which the court is asked to specifically. enforce. The above constitutes substantially all of the correRpon(lence in the between these parties and Mrs. Wassenich in relation to the
sale·
. It, is containe4
by the complainant that if any misstatements were the communication oft. & Co. of January 16th
7.88
FEDERAL REPORTER, '\T01.
w.hich led up to the alleged sale by them; as the agents of MTS. Wassenich, of this ,property ,they related 'merely to matters of opinion" and were:notmisstatetnents or misrepresentations of fact,andthat:the plaintiffs are only charged with knowledge of this correspondence so far as it relates to the questi()1!l. of authority. lit 'is contended, ale 0 , that she had other means ofinfo11llation, and that she knew the'situation when she sent the telegram and letter of J anuary20th.Therelief here asked is not it matter of absolute right to either party. It is a matter resting in the discretionofthe, court, to be exercised upon a consideration of all of the circumstances of the particulaJ;case. The discretion which may be exercised iUlOt an arbitrary or capricious one, but is controlled by. the established doctrines and settled principles of equity. In general, relief will be granted when it is the cii''cumstances of the ends of jusapparent from a view of tice W;UI be.: subserved, and it will be withheld when from a like view it appears that ,it -will produce and injustice to either of the parties. It is not sufficient to show thatthe legal obligation under the contract to do the specific thing desired may be perfect; but itinust also appear that the specific enforcement will work no hardsbiporinjustice. That L. Anfinger & Co.'sletter of January 16th contain:\'ld misstatements, of fact, and not of mere opinion, is and Wlls not, in my judgment, a statement of They were real-estate men, and assumed to state the facts:.· .Their statement to the defendant was that the property could probably be sold for $27,000, which was $2,000 or $3,000 more than it was worth. That this statement was not the fact, and that it must, or at least should, have been known td them to be unwarranted, is I think fully established by the fact that within a very few days the property found :rlJady saJe at Neither dQ I think that there is anything in the that she had other sources of information; that her son had .been there, and that for that reasqn she ,did not rely upon the statement of L. Anfinger & Co. The shows that her son had left Denver, and gpne to Caliit appare)lt on fornia, a tpbnth or twd before this transaction. I tQe face of thia record that .the letter of January was written. to induce her to close the transaction at wh,at is clearly shown to be an inadequate price. Taking the entire corresponden:oe,and the oircumstanceS surrotniding the transaction, into consideration, I think it entirely clear that the effect was to commit a fraud upon her, and induce her to part with her property for less tban. it was worth ;Rnd I do not think it can be said, in view of the fact that L. Anfinger & Co. were in the 'and had opportu'nity to know the values ot property, that their statement contained in the 'communication which was the basis 'ofthis transaction was a mere expression of opinion. But, conceding: this to be the fact,stiIl I say they Were bound to know_ So far as the transaction affects the rights of the defendant in this case, the misrepresentations were misrepresentations of fact,'upon which she relied, and which induced herreplies which are now 'relied Oil as the
·'MERRITT V ·. W;ASSENICH.'·
"
789
basis of recovery here. Whether Merritt & Grommon knew the contents of the letter of L. Anfinger & CO. of January 20th is perhaps not clearly shown by the record; but, if they did not take steps to inform themselveEl as to that matter, .they cannot take advantage of it here, for they were bound to know, not only the authority from her to L. Anfinger & Co., but the correspondence which induced that authority to be given. But, even taking the most favorable view for the complainant in the case, and admitting, Jor the sake of argument, that the misstatement in the letter of the 20th was only an expression of opinion as to values, and that Merritt & GromnlOn were not required to examine into the transaction further than to see the authority, still this contract is one which I think, within all the cases, cannot be specifically enforced. Construing the authority in the most favorable light, and giving to it the broadest construction contended for by complainant, its terms were not complied with. The.authoritywas, if authority at all, to Bell the property for $32,000; the purchaser to be responsible for the taxes. The,sale as made was for 632,OOO,-five hundred dollars cash, 89,500 in 30 days, and 822,-,. 000 in three years; the defendant to pay the taxes on the ;property and a commiSsion of 8715. This was the statement of sale contajned in the letter of L.Anfinger & Co. of January 28th; also the statement of the sale contained in the receipt given by them on that date. That authority to make the sale upon such terms was not authorized, the parties themselves, it seems became aware; for on the .8th .of February another and different receipt, stating different terms of sale as to payment, was given by L. Anfinger & Co. to the complainants. That this last transaction was unauthorized, and cannot affect tbe rights of this defendant, ,1 think entirely clear. The terms of sale as originally made she declined to accept, and they could not after that date; without new authority, proceed to make other and different terms of sale. In addition to all that I have Buggested.above, my own view isthat the authority on which L. Anfinger & Co. assumed to act was not an authority to sell the property for $32,000. The very language of the letter shows clearly upon its face that it was not intended as an authority io dispose of the property at that price, absolutely and unconditionally, but that it contemplated further correspondenCe and negotiations. The closing words of her letter are: "You· might let me know what per cent. you charge,also what other expenses will arise, so I will know exactly what to figure on." This statement meant, if it meant anything, that the matter must be again submitted to her before any definite action was taken. Under all of the circumstances of this case, to grant -the relief asked by the complainants would undoubtedly work a great hardship and injustice upon this defendantj it would be to say to her that she must take forher.property several thousand dollars less than it was worth at the time of the transaction; and this upon a letter and telegram which she was induced to write by a statement of 'values, which. so far as sbe is .concerned, under the circumstances of this case, amounted to a fraud. The complainants' bill will be dismissed, at their cost.
790 .' CITY ".-'J " I
I'EDERAL m:PORTER,
vol. 49. Receiver.:
,
H
OF SOMERVILLE i/. BEAL,
D. MaB8achusettB, March 14, 1899.) CQLLllOTION-INSOLVENOT.,· .
L
Wbetber·tbe title to a cbeck depoBlted witb a bank passes to the bank before col· lectioD. ,so lUI todmmediately create the relation of debtor and Qreditor between it and tb, dllpoBltor, is '" question of fact, depending upon tbe, ciroumstances and course of delLling in eacb particular case. . . Certain marked" For deposit .. were deposited in.a bank at a, quarter to 8 oli Saturday, and credit was immediately given for the amount thereof on the pasabook. Tbe bank closed at 8, and tbe next day was declared insolvent with the ,checks still in its hands. It was the bank's custom, at the close of each day's business, to balance its books, creditiIlg depositors with tbe amount of tbeir checks, aIi'd, if aoheck Was subsequently returned unpaid from the clearing-house, it was chllorged oir to the depositors, The depositor in this instance did not know of this custom. He had made deposits with the bank for severallears without any spaci,1i1 arrangement, and hlld never drawn against U,ncollecte cberl[s, exoept by partioular understanding.lrleld that, on these facts, title had pass8ll to the bank so as \0 create the relation of debtor and oreditor·
,l1fD
.. SUI_RIGHTS' 0" DEPOSITOR.
But wbere tbe foregoing faots were alleged in the bUl, and conneoted with the .fur\ber Ii1legationstbat, at the time the ohecks were received. the bank was, "irre· . : trievably insolvent, and made so by tbe operations of the president and two others ,of the directors," and tbat the depositQr then believed it to be 1I0lvent, and had no means of knowing of its insolvency, this was sufficient to show fraud, and to render the bank liable to return the cbecks or their proceeds, " fUlda..was not necessary for the lim to specifically allege that the officers of tbe bank It had knOWledge of its insolvency, since sucb knOWledge would be .Implied from the .allegation \hat the insolvenoy was caused by the president and two directors.
.. B.urs-I'LEADING-FRAUD.
In;Equity. Suit.by the city of Somerville against Thomas P. Beal, receiver of the Maverick Nntional Bank, to .recover the proceeds of certainchecks; Heard on demurrer to the bill. Overruled. Selwyn Z. Bowman,Jor complainant. Hul.china and .l'l·ank D. Allen, U. S. Atty., for defendant. Cot,T, Circuit Judge. This is a bill in equity brought by the city of Somerville against Thomas P. Beal, receiver of the Maverick National Bank, claiming title to certain checks (or their proceedll) deposited in said bank on the afternoon of October 31, 1891, the day the bank closed its doors for business. The case was heard upon demurrer to the bill, the receiver ,contending that the title in the checks passed to the bank, and that the/city of Somerville must come in with' the general creditors. The mam allegations of the bill are, in substance, as follows: On Saturday. October 31, 1891, at about a quarter bei'ore 3 o'clock in the afternoon, tne treasurer of the city of Somerville deposited in the Maverick National Bank checks 011 difierent banks, amounting to $21.171.40, and $8,450 in cash. The bank closed its doors at3 o'clock on that day. The trell.sUrer, handed :the checks (with the other deposit) to the receiving teller,with ,a deposit: ticket, and at the same time his pass-book, and the teller at once credited the total amount of the (Ieposit therein. The treasurer stamped the following indorsement on the buck of each check: "For deposit. JOHN Jj'. COLE, Treas. & CoIl. City of Somerville." After