Insurance Co. v. Carson. and that it would make a warranty deed; and it was McKnight who accepted the first payment for the land together with the notes for the remainder which were made payable to the plaintiff and secured by a deed of trust, all of which were delivered by McKnight to the plaintiff. Plaintiff afterwards wrote from its home office in Connectitcut demanding payment of the notes and interest as it became due. And finally, after defendant had advised plaintiff of the representations made by McKnight, plaintiff foreclosed under the deed of trust which it accepted from McKnight, bought in the property, and then brought suit for damages against the defendant. Enough was shown to evidence the relation of principal and agent. In any event, the plaintiff did accept the benefits of the bargain made by McKnight, sought to enforce the contract, and to this day, so far as the record shows, in no way repudiated the transaction which was put through by McKnight. The law is well settled that where the owner of land pays a real estate agent or broker a commission to sell it and in doing so the agent makes false representations concerning the land which induce a customer to buy, such owner although unaware of the fraud, when he accepts the benefits of the transaction is also ladened with the burdens thereof, and in such case the fraud of the agent or broker is chargeable to the owner. cases go to the extent of holding an owner for the representations of an unauthorized agent if the owner adopts the trade made and accepts the benefits that flow from the bargain; the representations complained of, however, must be such as would naturally fall within the apparent scope of the agent's employment. In our case, the false representations were made as to the character and formation of the land, its nearness to a railroad agency, that it did not overflow, and that it had natural drainage. These things might naturally be expected to induce a sale of the property. We find in the case of Millard v. Smith, 119 Mo. App. 1. c. 711, The Insurance Co. v. Carson. 95 S. W. 940, the following quotation which the court in that case said is unquestionably the law: "There is no doubt of the general proposition that, if an agent is employed to effect the sale of lands for his principal, and he does so by means of false representations in respect to the land conveyed, even without authority or knowledge of his principal, the latter is chargeable with such fraud in the same manner as if he had known or authorized the same.' In Williamson v. Tyson (Ala.), 17 So. 336, 338, this language appears: “The general rule of law that one who deals with an agent is bound to know the extent of his authority is fully recognized, and one absolutely necessary to the protection of a principal in all actions brought against him founded upon contracts made by an agent. The doctrine is equally as well established, and rests upon sound principles, that a principal who seeks to avail himself of a contract made by another for him, whether by an appointed or a self-constituted agent, is bound by the representations made and methods employed by the agent to effect the contract." [See, also: Judd v. Walker, 215 Mo. 1. c. 334, 114 S. W. 979; Griswold v. Gebbie, 126 Pa. St. 353, 12 Am. St. Rep. 878; Haskell v. Starbird (Mass.), 25 N. E. 14; Busch v. Wilcox (Mich.), 47 N. W. 328; Green v. Waddington (N. Y.), 103 N. E. 964; Wilson v. McCarthy (Ore.), 134 Pac. 1189; Clough v. Dawson (Ore.), 138 Pac. 233; Porter v. O'Donovan (Ore.), 130 Pac. 393; Grover v. Hawthorne (Ore.), 121 Pac. 808; J. I. Case Threshing Mach. Co. v. Lyons & Co. (Okla.), 138 Pac. 167; Porter v. Woods, 138 Mo. 1. c. 552, 39 S. W. 794; Gelatt v. Ridge, 117 Mo. 1. c. 561, 23 S. W. 882; and The Clydesdale Horse Co. v. Bennett & Son, 52 Mo. App. 1. c. 337.] There can be no reasonable distinction drawn between a tort brought on through fraud and one brought on through negligence. The principal or master is held where the transaction was concerning his business and from the doing of which he derives benefit. Insurance Co. v. Carson. This rule works no hardship on a landowner because, in the first place, he can select who is to sell his property, and again, before accepting the negotiations of the agent he can inquire of the purchaser as to what representations if any the agent made. The reason for such rule is that where one of two innocent persons must suffer, it is nothing but right that the burden be saddled on the one who put it in the power of the wrongdoer to perpetrate the wrong. This entire question is thoroughly discussed in 2 Mechem on Agency (2 Ed.), sections 1984 to 1996 inclusive, preceded by the title, "Liability for Fraudulent Acts and Representations" (of an agent), where, in the footnotes many cases from the different States and England are cited as upholding the rule announced here. We therefore hold that the plaintiff is chargeable with the fraud worked on defendant by W. Ross McKnight. Appellant contends that in this action of ejectment brought by it, where only title and possession of land is in issue, the defendant will not be permitted to answer by an equitable counterclaim basing his claim on the fraud alleged in the purchase of the land and seeking a cancelation of the unpaid notes for the balance and the deed of trust and the further affirmative relief by way of damages sustained on account of the fraud. Defendant's counterclaim set up the entire transaction and prayed for a cancelation. The land had already gone back to the plaintiff and the defendant made no claim to it either as to the title or the possession. The offer to return, therefore, that which he received was of necessity done away with, and he was acquiescing in plaintiff taking it back which it had done. Therefore, in order to get rescission, a cancellation and a return of the purchase money and the twelve dollars and twenty-eight cents paid as taxes while defendant owned the land, it was only necessary for him to show that a material misrepresentation which induced him to purchase had been made. For this remedy he was Insurance Co. v. Carson. not required to go further and prove the actual fraudulent intent which is essential in an action for fraud and deceit. The counterclaim did contain many items for which he claimed damages that would require proof of scienter. It is unnecessary to discuss this because on an examination of the record it can be seen that the court only allowed a judgment for an amount that covered the damages recoverable in a suit to rescind; that is, a return of the purchase money paid plus the twelve dollars and twenty-eight cents (the tax item), together with interest on the whole. There can be no doubt that the court treated defendant's counterclaim as an equitable action seeking a rescission of the contract of purchase. When sued in ejectment, defendant may answer setting up an equitable defense. This proposition requires no citation of authority. If that equitable defense strikes at and would bar plaintiff's right of recovery it is very proper that defendant should be permitted to make such defense. A defendant, however, in ejectment may interpose an equitable counterclaim under our law in certain cases where the same would not defeat a recovery by the plaintiff. In other cases we find the ruling that the only way for a defendant in ejectment to obtain the value of his improvements and purchase money, for instance, is to proceed under the occupying claimant's statute. The distinction is made in the case of Henderson v. Langley, 76 Mo. 1. c. 228, where this language appears: "It has been repeatedly held by this court that when it appears in an action of ejectment, that the defendant has purchased land from the plaintiff, or in administration proceedings, or at sales under mortgages, and has paid the purchase money, entered into possession and made improvements in good faith, but failed to obtain the legal title intended to be sold, and could not have specific performance the owner of such legal title, or his grantee having notice of such facts, will not be permitted to eject such purchaser without ac Insurance Co. v. Carson. counting for the purchase money and paying for the improvements made. [Shroyer v. Nickell, 55 Mo. 262; Evans v. Snyder, 64 Mo. 516; Sims v. Gray, 66 Mo. 614; Mobley v. Nave, 67 Mo. 546.] But where, as in the case at bar, the defendant enters into possession under a stranger to the title of plaintiff, in order to obtain the value of any improvements made by him, he must proceed as provided by sections 2259, 2260 and 2261 of the Revised Statutes. The claim for improvements made under the sections cited cannot be presented or heard in the action of ejectment. It is intended to be an independent proceeding, and can only be instituted after final judgment of dispossession shall have been rendered against the defendant in the suit of ejectment." The distinction is clearly shown to be that where it is sought to eject a defendant who went into possession under the title of the plaintiff and for some reason should be ejected, he may, if he had an equitable counterclaim against such plaintiff, interpose and try it in the ejectment suit; but, on the other hand, where he went into possession or is claiming title or possession through a stranger to the plaintiff, then he must recover the value of improvements made which in equity he should have by an independent action as provided by the statutes. With this distinction in mind, the cases cited by appellant, to-wit, Williams v. Sands, 251 Mo. 147, 158 S. W. 47; Fairchild v. Creswell, 109 Mo. 1. c. 39, 18 S. W. 1073; Jasper County v. Wadlow, 82 Mo. 1. c. 179; McClannahan v. Smith, 76 Mo. 428, and Henderson v. Langley, 76 Mo. 226, are clearly inapplicable to the facts here, where the plaintiff went on the land through and under plaintiff's title. A number of cases in this State uphold the right of the defendant in our case to maintain his equitable counterclaim. [See, The Hannibal & St. Joseph R. Co. v. Shortridge, 86 Mo. 662; Foote v. Clark, 102 Mo. 1. c. 408, 14 S. W. 981; Hutchinson v. Patterson, 226 Mo. 1. c. 182, 126 S. W. 403; Patillo v. Martin, 107 Mo. App. 1. c. |