Paddock v. Bray , 40 Tex. Civ. App. 226 ( 1905 )

This suit was brought in the court below by appellee against appellant to cancel two deeds executed by him to appellant, upon the ground that they were executed without consideration. Appellee in his petition alleged, in substance, that appellant proposed to him that they jointly buy a certain piece of property in Paris, Texas, known as the Richards Hotel, stating that he had a talk with Richards, the owner, and that he would sell for $5,000, but that he would not take less, and that there would be a profit in the property at that price, and proposing that he would pay $1,500 of the purchase price and appellee the balance, they to own the property in those proportions, the deed to be taken in appellee's name. That appellee accepted said proposition, and it was agreed that he should buy the lot from Richards at $5,000, provided it could not be bought cheaper; that on November 6, 1903, appellee bought said lot for $5,000, $1,500 of which had been furnished by appellant, and took the deed in his name, the consideration being $1,500 cash, and vendor's lien notes for $3,500; that, at the time of the agreement between them to jointly purchase said property, appellant, unknown to appellee, had a contract with Richards by which he was to sell the property for him, and receive as a commission all he should sell for over $3,500, which was concealed from appellee, and that Richards had promised appellant that he would not sell for less than $5,000 to any person appellant should send to him to buy; that after the purchase of the Richards property appellee, still not knowing of the relations and contracts between appellant and Richards, and relying on appellant's statements, made a settlement with him, by which he paid appellant $2,000 for his supposed interest in said Richards property, giving appellant his note for $600, and making him a deed to the first lot in controversy at a valuation of $1,400; that after the consummation of the trade with Richards, appellant was paid by Richards $1,500 of the money paid Richards by appellee; that afterwards, on the _____ day of November, 1903, appellant told appellee that they could buy a lot from Collins Dulaney, situated just across the street from the Richards property, for $2,000, and proposed that they buy the lot jointly, appellant to pay $500 of the purchase price and appellee the balance, the price to be $2,000, to which appellee agreed; that appellant stated that he had sent a messenger to Collins Dulaney, and $2,000 was the least they would sell for. It was agreed that appellee should buy the lot and take the deed in his own name, or the name of some other person; that at the time of this agreement appellant had a contract with Collins Dulaney by which he was to sell said lot for them and receive as commission all he should get over $1,500, and that Collins Dulaney had agreed with him that they would not sell for less than $2,000 to any person appellant should send to them. That, in pursuance of said agreement, appellee bought said lot from Collins Dulaney, and had the deed made to one Charles N. Priddy, paying therefor $1,000 in cash and Priddy's note, secured by vendor's lien, for $1,000, which said note was endorsed by appellee; that said Collins Dulaney paid over to appellant $500 of the amount paid to them by appellee for said lot; that on November 28, 1903, appellee still not knowing that appellant was Collins Dulaney's agent, and of the aforesaid agreements between him and them, had a settlement with appellant, by which he deeded him the second lot in controversy in consideration of appellant's profit in the Collins Dulaney lot, which was agreed to be $400, the surrender of the aforesaid note for $600 and $300 in cash paid by appellant.

Appellant answered by general demurrer, special exceptions and general denial. Appellant's demurrers and exceptions were overruled.

The case was tried before a jury, and the court instructed the jury peremptorily to find for plaintiff, and judgment was rendered as prayed for upon the verdict so found by the jury.

Appellant's first and fifth assignments of error, which are submitted together, complain of the action of the court below in overruling his general demurrer to appellee's first amended original petition, and his fourth special exception to said petition, which sets up that the same is insufficient in law, in that the prayer of said petition for cancellation of the deeds and rescission of contracts alleged in said petition does not entitle appellee to such relief, because he does not tender back the money shown to have been paid him by appellant. The relation of joint purchasers of property is fiduciary, in the same general sense as is that of an agent dealing with his principal, and one will not be permitted to acquire a secret advantage in the purchase over his associates. (1 Bigelow on Frauds, sec. 315.) If it is true, as alleged by appellee, that he agreed with appellant to purchase jointly with him the Richards and Collins Dulaney property, relying upon the representations of appellant that the former could not be purchased for less than $5,000, and the latter for less than $2,000, and that at the time appellant had, unknown to appellee, a secret agreement and understanding with the respective owners of such property, whereby he was authorized to sell the Richards property at $3,500 and the Collins Dulaney property at $1,500, and to retain for himself all over such amounts, and the joint purchases of the two tracts were made at the respective prices represented by appellant, and appellant, unknown to appellee, received from the respective vendors the excess over the prices at which he was authorized to sell said property; and appellee, in consideration of the supposed interest of appellant in the property jointly purchased, based upon the supposed payment by appellant of the amount agreed to be paid by him in the joint purchase of said property, conveyed to him the property the deeds to which are sought to be canceled by this suit, appellant having paid nothing for such property, appellee would be entitled to a cancellation of said deeds. Appellant's fiduciary relation to appellee would not permit him to acquire an interest in the property by virtue of the payment by appellee of the entire amount for which he, appellant, was authorized to sell the property. As to appellant, there was no consideration upon which to base an acquisition of any interest in the property. (King v. Wise, 43 Cal. 629; Barry v. Bennett, 45 Cal. 80; Willink v. Vanderveer, 1 Barber, 599; Yoeman v. Lasley, 40 Ohio St. 190; Hodge v. Twitchell, 33 Minn. 389.)

Appellee alleged that Collins Dulaney paid to appellant $500 of the $2,000 paid them by appellee, and that appellant had paid to appellee only $300, in part payment of the consideration of one of the tracts of land, the deed to which is sought to be canceled in this suit. This, in connection with other allegations of appellee's petition, shows that appellant, after returning to appellee the property involved in this suit, will have a profit of $200 out of the transaction. Hence it is clear that it was not necessary for appellee to tender back any money to appellant. We are of the opinion that appellee's petition states a good cause of action, and is not subject to the general demurrer or fourth special exception addressed thereto by appellant.

Appellant's second, third and fourth assignments of error are overruled. The allegations in appellee's petition that appellant represented that Richards would not take less than $5,000 for his property, and that Collins Dulaney would not take less than $2,000 for their property, are allegations of representations of present existing facts at the time the representations were made, and such facts were material to the matter of the joint purchase being then proposed by appellant, and appellee was justified in relying upon such representations being true. In view of the fiduciary relation between appellant and appellee, as joint purchasers of the property, the fact that appellant had an agreement with the owners of the property that he should have the amount for which the property sold over the price at which he was authorized to sell same, was a material fact, and its concealment was the concealment of a material fact.

Appellant's eighth assignment of error complains of the action of the court below in instructing the jury peremptorily to find for the plaintiff, because the evidence is conflicting as to whether plaintiff bought the Richards lot and the Collins Dulaney lot for himself and defendant, or for himself alone. When the evidence is sufficient to raise an issue, it must be submitted to the jury, the trial being before a jury. If appellee bought the Richards and Collins Dulaney property, or either parcel, for himself alone, and not for himself and appellant jointly, in pursuance of the alleged agreement, then there was no fiduciary relation existing between him and appellant in the purchase of said property or such parcel thereof, upon which he could hold appellant bound by or responsible for the alleged representations and concealments. Without intimating any opinion as to the weight to be given to the testimony, raising the question as to whether appellee bought said property, or either parcel thereof, for himself alone, or for himself and appellant jointly, we are of the opinion that there is testimony in the record raising that issue, and that same should have been submitted to the jury.

The appellant, after testifying that Richards held his property at $3,500, and that he had an understanding with him that he could have all over $3,500 that he could sell the property for, and that Richards would not quote the property to a buyer sent to him by appellant at less than $5,000, testified as follows: "Shortly after that I saw Mr. Bray, and asked him if he was still thinking of buying the Richards property, and proposed that we go in together and buy it; that I would pay $1,500, if he would pay the balance, and we could own it in the proportions paid by each. He agreed to this, and it was agreed that he should do the buying, and buy it at the best price he could. I told him if he bought it to take the deed in the name of Bray and Paddock, which he agreed to do. The agreement was that it was to be a cash transaction, each party to pay his part. Bray did not say anything to me about making a note for his part of the purchase money and encumbering the whole property with a vendor's lien. I gave Bray a check for $1,500 and he went and made the trade. Before he closed it, however, he came back and said Richards wanted $6,000, and afterwards told me that he had to pay $5,500 for it. I found out from Richards that Bray had bought it for $5,000, and taken the deed in his own name, and left me out, and that he had encumbered the whole property for $3,500. I went to Bray and told him I wanted some showing for my money, that he had used my money and taken the deed in his own name — had not paid anything himself, but had encumbered the whole property with a lien for $3,500, which was not in accordance with our agreement. He said he took the deed in his own name because he thought he could handle it to better advantage, as I was agent for the railroad company. He then offered to give me something on the outside. I asked him what he had, and he mentioned this property on North Main Street. I asked him what he would take for the house and lot, and he said $1,400. I went and looked, and told him I thought $1,000 would be a big price for it. We then agreed on that price and made a settlement. We figured that I was entitled to a profit of $100 on my $1,500, which would make him due me $1,600. In settlement of this he made me a deed to the North Main Street property, and gave me his note for $600 due in six months."

Appellant, after testifying that Collins Dulaney held their property at $1,500, and had given him an option on same at that amount, and agreed not to quote the price to a buyer sent them by him at less than $2,000, testified as follows:

"I then saw Bray, and told him about the Collins Dulaney lot, and proposed that we buy it together — that I would put in $500 if he would put in the balance, and we would own it in the proportions paid by each. He agreed to this. We agreed that Bray should go to them and do the buying, and buy at the lowest figure he could. This was to be a cash transaction, and each was to pay the money for his part. Nothing was said about buying it partly on time and encumbering the property with a vendor's lien for $1,000. I saw Bray two or three times after this and asked him about the trade for the Collins Dulaney lot, and he said he could not buy it — that they wanted $2,500 for the lot. In the meantime I saw Mr. Collins and he first told me that they had agreed on a trade, and that Bray had put up $100 to bind it pending an investigation by him of the title. Afterwards Bray, having again told me that he had not bought the property, and could not buy it, I went to Mr. Collins and asked him about it, and he said the trade was closed; that Bray paid them $1,000 cash, had the deed made to one Priddy, and Priddy made a note for $1,000, which Bray had also signed, and that Mr. E. S. Connor had taken up the note; they paid me $500, as per our contract. I don't know Priddy, had never heard of him, and certainly was not willing to have my property in his name. I went to Bray and asked him why he had left me out on this deal, and he said that he had to pay $2,500 for the property, and he did not think I wanted in at that figure. As he had encumbered the property for $1,000, and had not bought it according to our agreement, I did not insist on claiming an interest in the Collins Dulaney lot. I had tried to sell Bray's note for $600 that I had, and had failed to do so. In order to get this note paid I proposed to Bray to buy another lot he owned on North Main Street, adjoining the first one that I had already bought from him. I asked him what he would take for it, and he first asked me $1,000. I offered him $900, to be paid by surrendering his note for $600 and paying him $300 in cash, and we traded on that basis. I gave him his note and paid him $300, and he made the deed to me."

We are of the opinion that the testimony of appellant quoted raised the issue above mentioned, and thereby created a conflict in the testimony as to the right of appellee to recover; and that, therefore, the case should have been submitted to the jury under appropriate instructions upon the issues raised by the pleadings and the evidence of both parties. (Wallace v. Southern Cotton Oil Co., 91 Tex. 18; Lee v. International G. N. Ry. Co., 89 Tex. 588; Johnston v. Drought, 22 S.W. Rep., 290; Royall v. Gulf, C. S. F. Ry. Co., 32 S.W. Rep., 186.)

For the error pointed out, the judgment of the court below is reversed and the cause remanded.

Reversed and remanded.