Practice, Civil, Amendment. Deceit. Fraud. Contract, Validity. Agency. Broker. Evidence, Relevant to show fraud, Admissions by conduct. Witness, Impeachment.
In the trial of an action for the alleged breach of an agreement in writing to convey certain real estate to the assignor of the plaintiffs free from incumbrances, where the answer consists of a general denial and does not allege fraud on the part of the plaintiffs, but early in the trial and thereafter the defense is relied on that the defendant's agreement to sell the property was obtained by fraud on the part of the plaintiffs, and the jury return a verdict for the defendant, it is within the discretion of the presiding judge to allow the defendant to amend his answer after the verdict by alleging the fraud relied upon in defense and shown by the evidence, and such amendment may be allowed as of a date before the trial, so as to make the evidence introduced upon that issue at the trial material and admissible.
False representations, fraudulently made to induce an owner of real estate to sign a contract to sell it, to the effect that the person named in the contract as such is the actual purchaser, relying on which the owner executes the contract, constitute a defense to an action on the contract against the owner for failing to convey the real estate free from incumbrances, brought by an assignee to whom the contract was assigned in pursuance of the fraudulent plan to deceive the defendant as to the identity of the purchaser.
No commission for procuring a sale of land can be earned by procuring a contract to sell it which the owner was induced to sign by fraud in which the person claiming the commission participated.
An agreement between the brokers representing the two sides of a transaction to share commissions can be made lawful only by the knowledge and assent of their respective principals.
In an action for a commission for effecting a sale of real estate of the defendant, where the defense relied upon was that the defendant was induced to sign the contract to sell the real estate by fraud in which the plaintiff participated, the fraud consisting in false and fraudulent representations that one L. named in the contract as the purchaser was to be the actual purchaser whereas it fraudulently was intended that K. should become such purchaser by an assignment from L., the plaintiff testified that it was his understanding that L. and not K. had bought the property. On cross-examination the plaintiff made the admission that the defendant said to him, "If I had known that K. was buying the property or claiming a commission I never would have sold." The plaintiff did not testify to making any reply to this remark of the defendant. Held, that, not only was this testimony of the plaintiff on his cross-examination relevant to show that the signing of the contract was induced by fraud, but also the conduct of the plaintiff, in making no reply to the remark of the defendant and in expressing no surprise or dissent, was inconsistent with his previous testimony and tended to contradict him as a witness.
BRALEY, J.
If the original pleadings did not raise the issue, early in the trial the defense relied on was, that the contract whereby the defendant agreed to sell the property had been fraudulently obtained. But, with the understanding that amended answers should be filed, the trial proceeded, and the allowance of the amendments after verdict as of an earlier date was within the discretionary power of the court. Cronan v. Woburn, 185 Mass. 91.
In the first action, the plaintiff was an assignee within the purview of R.L.c. 173, § 4, and, a sale having been effected to Levy, until the defense of fraud had been pleaded, there was no evidence on which the defendant could impeach the contract, and the proof of her signature not having been required by the answers, the plaintiffs in both actions on proving performance on their part and a failure to perform by her would have been entitled to prevail. If, however, the defendant's evidence was accepted, she believed and understood that throughout the entire transaction she was dealing with Levy alone, to whom, acting by her daughter as agent, the written contract for a sale of the real estate at first had been executed and delivered. The jury further could find, that, from the beginning of the negotiations, the acts and conduct of all the plaintiffs in procuring the first paper, which named Levy alone as the purchaser, the immediate assignment by him to Abraham Kurinsky, followed by the procurement from the defendant of a ratification in writing, with the important modification giving to Levy's appointee or assignee the right to a conveyance, the payment by Kurinsky of Levy's check received in part payment of the purchase price, were circumstances which tended to support her contention, that Levy never intended to buy and that the contract in its final form had been procured through the misrepresentations of all of them acting in concert. Freedley v. French, 154 Mass. 339. Bliss v. New York Central Hudson River Railroad, 160 Mass. 447. Gurney v. Tenney, 197 Mass. 457. It is true that a few weeks later, upon ascertaining that the title was not clear, the defendant returned the money to Kurinsky which up to that time she had retained. But how far this delay, or her reading of the whole or a part of the paper before signing, tended, if at all, to show that the defense of fraud was an afterthought to avoid the payment of damages or brokerage, was also for the jury to determine under instructions to which no exceptions were taken. By their verdict for the defendant, they must have reached the conclusion that the defense had been established.
While there were two issues, one of which was whether the sale to Kurinsky was induced by fraud, yet the other, whether the plaintiffs in the second action were entitled to commissions, depended upon the first, for, if the contract was avoided by reason of the fraud in which they participated, there was no sale, and, if there was no sale, a commission had not been earned. Trambly v. Ricard, 130 Mass. 259, 261. O'Donnell v. Clinton, 145 Mass. 461, 462. McNamara v. Boston Elevated Railway, 197 Mass. 383.
The third, fourth and fifth requests, as the counsel for the plaintiffs suggest, accordingly are no longer material. The eighth request and the ninth, except as to the burden of proof which was given, were refused properly, and the instructions upon the questions raised correctly stated the law. In refusing the third no error was committed, as the request omitted the important qualification that to be lawful an agreement between brokers to share commissions must be with the knowledge and assent of their respective principals. Quinn v. Burton, 195 Mass. 277. The testimony in cross-examination of the plaintiff Blue, which was finally admitted, that the defendant said to her, "if I had known Mrs. Kurinsky was buying the property or claiming a commission I never would have sold" was relevant after the defense of fraud had been pleaded. If the defendant had been deceived as she testified, this plaintiff had participated in the fraud. In her direct testimony she had said substantially that it was her understanding that Levy and not Kurinsky had bought the property. The conversation took place on the night of the sale, and when, after talking about the parties in terms which the jury might find were intended to mislead, the fact, that after the defendant had made the statement previously quoted the plaintiff made no reply and expressed no surprise or dissent, was conduct inconsistent with her other testimony and which tended to contradict her. Reeve v. Dennett, 137 Mass. 315.
Exceptions overruled.