236 P. 956 | Cal. Ct. App. | 1925
Action by the plaintiff to recover the sum of $18,070.98, with interest, against the defendant Thomas Coulter and Howard D. Kerr, as undisclosed principal and agent, respectively, as the balance due after the sale of certain lands included within a certain trust deed executed in favor of the plaintiff to secure the repayment of the sum of $40,000 and such other liens, encumbrances, taxes, etc., as might be incurred in protecting the title to the premises covered by the trust deed. Judgment was entered in favor of the plaintiff against the defendant, Thomas Coulter, as principal, and dismissed as to Kerr, as agent of the defendant Coulter. From this judgment the defendant Coulter appeals.
It appears from the record that on or about the eighteenth day of September, 1919, the appellant entered into a written contract with one Hoffman, by which he agreed to exchange certain land in Sacramento County, and to pay Hoffman $41,300 in cash, in return for a conveyance of about 730 acres of land situate in Colusa County.
A few days after the execution of this agreement the appellant entered into a written contract with the defendant *80 Kerr wherein it is recited that whereas said Coulter had authorized the said Kerr to negotiate the agreement for the exchange of properties herein referred to, the said Coulter agreed, upon said exchange being perfected and the agreement being performed by Hoffman and his wife, there would be due to the said Kerr the sum of $500, for and on account of his services in negotiating said exchange, which sum Coulter agreed to pay Kerr.
The appellant transferred his lands mentioned in the agreement to Hoffman, but the deed by the Hoffmans conveying their Colusa County land was executed in favor of Kerr, Kerr taking the title in place of Coulter. The deed from Hoffman to Kerr was placed in escrow with the San Francisco Title Company, pending negotiations to secure a loan for the sum of $40,000. These negotiations undertaken by Kerr resulted in the plaintiff in this case loaning the sum of $40,000 and taking as security a deed of trust upon the Colusa County lands transferred by Hoffman to Kerr, as aforesaid. This deed of trust was executed and delivered on or about the seventeenth day of November, 1919. On the following day the appellant paid to Kerr the sum of $500 on account of commissions earned, as per the agreement for payment of services hereinbefore mentioned and at the time of taking conveyance by Kerr of the Hoffman lands and premises Kerr executed a deed covering the same lands in favor of Blanche Brown, a daughter of the appellant Coulter. This deed was delivered to Coulter, held by him, never recorded, but was apparently a method taken to secure Coulter.
On the eighteenth day of December, 1919, the record shows that the appellant entered into a written contract with Kerr, by the terms whereof the appellant agreed to sell to Kerr and Kerr agreed to purchase from the appellant, all and singular the Colusa County lands included within the terms of the deed executed by the Hoffmans to Kerr, and then standing upon the records in the name of Kerr. This agreement, among other things, sets forth that the land was subject to the $40,000 indebtedness to the plaintiff in this case, which indebtedness Kerr agreed to assume and pay. The sale to Kerr was effected early in the month of January following, the record title to the Hoffman lands being finally conveyed by Kerr to one Stormer. Upon the trial of the action both oral and written testimony was offered in evidence. *81 The oral testimony was to the effect that Kerr was acting as the agent of Coulter in the transfer of the lands, and securing the loan of $40,000 with which to carry out the agreement between Coulter and Hoffman, and that the title was taken in the name of Kerr, to facilitate the transaction and that the ownership of the land was, at all times, vested in Coulter. Upon this testimony and the written instruments, to which we shall hereafter refer, the court found and entered its judgment that Kerr was the agent of Coulter, and was acting for him in that capacity at the time of the execution of the trust deed and the securing of the loan from the plaintiff in this action; that Coulter was, in truth and in fact, the principal in the transaction undisclosed to the plaintiff at the time the negotiations were being had; that the indebtedness was in fact Coulter's indebtedness; that the transaction was managed, as heretofore set forth, in order to consummate the deal between Coulter and Hoffman; that the record shows the agency and, also, a ratification of the execution of the trust deed, and that such facts sufficiently appear by written evidence. It is admitted by the appellant in this case that there is sufficient oral testimony to support the findings of the trial court, but that oral testimony is incompetent to establish the agency or trust relation existing between Coulter and Kerr and that the written evidence introduced is insufficient to comply with the statute of frauds. To support the contentions of the appellant, four propositions are set forth:
(1) The contract sued upon was a negotiable instrument and an undisclosed principal cannot be held liable upon it.
(2) The contract sued upon was one required by law to be in writing, and hence an agency to execute it could neither be created nor proved except by a written instrument.
(3) The contract sued upon being one which could only be authorized by a written instrument creating the agency, its execution could only be ratified with like formality.
(4) A contract made by a person intending to contract on behalf of a third party but without authority cannot be ratified by the third party so as to render him liable to be sued thereon where the person who made the contract did not profess to be acting on behalf of a principal and contracted in his own name.
The note given by the defendant Kerr evidencing the terms to represent the $40,000 obtained by loan from the *82 plaintiff was dated the seventeenth day of November, 1919, is in the usual form of a promissory note, but concludes with this statement: "This note is secured by a deed of trust dated the 17th day of November, A.D. 1919." The deed of trust executed by the defendant Kerr to secure the said loan of $40,000 from the plaintiff is dated November 19, 1919, refers to the $40,000 obtained by the defendant Kerr from the plaintiff in this action, and then proceeds to convey the Hoffman lands as security for the repayment of the said sum of $40,000, with interest, setting forth the usual and ordinary covenants contained in trust deeds.
The note and deed of trust being executed, as just indicated, the appellant proceeds to argue that the note in question is a negotiable instrument, and, hence, is one upon which an undisclosed principal cannot be charged. A number of cases are cited in the briefs submitted by counsel, decided in states other than California, directly and emphatically holding that a note in the form as appears in this case, though secured by a trust deed, is a negotiable instrument. Two very strong cases supporting this view of the law are cited, to wit: Blumenthal v. Jassoy,
[1] It would serve no useful purpose to review the authorities cited by counsel in support of the rule followed in other states, by reason of the fact that the Civil Code of the state of California and the many decisions of both the supreme and appellate courts establish a contrary doctrine. Section
Beginning with the case of Meyer v. Weber,
Admitting that such was the law of California prior to the adoption of the Uniform Negotiable Instruments Act, it is further contended that such is no longer the law of this state. It is also contended that section
"(a). It provides for the payment of further advances and all sums now or hereafter owing by the makers.
"(b). It provides for the payment of `all taxes and assessments.'
"(c). Of all other charges and encumbrances now or hereafter appearing as a lien upon the property.
"(d). Of all expenses and attorney's fees expended by the creditor in any action affecting the property or the title thereto.
"(e). Of all sums expended by the creditor in settling or compromising of any adverse claim; or,
"(f). Of all sums expended by the creditor on account of taxes, assessments, etc.
"The deed of trust provides that the entire sum secured by the deed of trust may be declared due, `if default be made . . . in the payment of any of the other moneys herein agreed to be paid,' or `if breach be made in the performance of any obligation for which this Deed of Trust is a security.' This means that the entire sum secured becomes due, not alone in one year, nor upon the happening of an event `which is certain to happen,' but —
"(a). If the maker fails to pay any taxes; or,
"(b). If he fails to pay any assessments; or,
"(c). If he fails to pay any charge or encumbrance; or,
"(d). If he fails to repay any expenses or attorney's fee expended by the creditor in any action involving the property or the title; or, *85
"(e). If he fails to repay any sum paid in settlement or compromise of any adverse claim; or
"(f). If he fails to repay any sum expended by the creditor on account of taxes or assessments."
We conclude that the note under consideration is a non-negotiable instrument and that the appellant's objection to testimony based upon the alleged negotiability of the note in question is not well founded.
[3] It is next insisted that there is no writing showing agency on the part of Kerr, and that his agency terminated on the twenty-second day of September, 1919. This contention is based upon the fact that the agreement on the part of Coulter to pay Kerr $500, by reason of his services, is dated as of that day. There seems to us no real merit in this contention. The instrument to which we are referring reads, exclusive of the date and the address:
"Whereas, on this day of September, 1919, you were authorized to negotiate an agreement of exchange between ourselves and W.H. Hoffman and Evelyn Hoffman (his wife) of the following described property: (Here follows a description of the lands then belonging to the appellant situated in the County of Sacramento.) Evidence of said exchange being agreement made on the 18th day of September, 1919, between ourselves and W.N. Hoffman and Evelyn Hoffman (his wife).
"We now hereby agree that upon said exchange being perfected and said agreement performed by said Hoffman and his wife there will be due you for your services for negotiating said exchange the sum of Five Hundred ($500) Dollars, and we now hereby agree to pay you the said sum of $500 when said exchange has been finally consummated." (Signed by the appellant.)
Following the execution and delivery of this instrument, all the proceedings to which we have heretofore referred in relation to the carrying out of that agreement, the part performed by Kerr, Hoffman, and Coulter, respectively, were taken and had and the agreement referred to in this instrument finally consummated on the said seventeenth day of November, 1919, on which date the deed of trust given by Kerr to the plaintiff was executed, and on the following day the appellant paid to Kerr the sum of $500 agreed to be paid, as we have just stated. We think this writing sufficiently evidences the existence of the agency and trust relation existing *86 between the appellant and Kerr during the entire time covered by the negotiations.
As we have seen, the trust deed in favor of the plaintiff was executed by Kerr during the time the record title stood in the name of said Kerr, and it is insisted by appellant that there is no admissible testimony in the case showing any authority for the execution of such deed or ratification of the act of Kerr. In making this contention, we think the appellant overlooks or minimizes the written agreement dated the nineteenth day of December, 1919, entered into between Coulter and Kerr. This transaction took place shortly after the consummation of the negotiation to which we have been referring. This agreement sets forth the following:
"Received from Howard D. Kerr Five thousand Dollars ($5000) on the purchase of that certain piece of realty situate in the County of Colusa, State of California, to-wit: (Here follows a description of the property covered by the trust deed and at that time standing in the name of Kerr.) at the price of seventy thousand three hundred (70,300) Dollars, balance of the purchase money of fifteen thousand Dollars, to be paid in gold coin, within twenty days, or as soon thereafter as the papers can be arranged for transferring said property. It is hereby understood that there is a $40,000 loan now on the said property held by the Central Savings Bank of Oakland which the purchaser assumes and agrees to pay. . . .
"Upon the payment of the balance of the purchase money I hereby agree to give and grant deed to the above property, with a good title, . . ." Dated the nineteenth day of December, 1919, signed by Thomas Coulter and Rowena Belle Coulter, and at the bottom of said agreement appears the following: "I hereby accept the terms of this contract, and agree to purchase the said property and pay therefor the amount as set forth." (Signed, Howard D. Kerr.)
This is a plain, unequivocal statement or acknowledgment by both Coulter and Kerr that the ownership of the property in question was vested in Coulter. If the contention made herein that Kerr was the owner of the property and not the agent of Coulter, and acting for him in the negotiation of the loan, the question necessarily occurs, why he (Coulter) should be agreeing to sell the land to Kerr, and Kerr agreeing to buy from Coulter lands actually vested in Kerr? We think there is but one answer to this question. The agency *87 is clearly shown and the ratification of the act of the agent established by the writing.
Appellant relies upon the case of Keighley Maxsted Co. v.Durant, 1 B.R.C. 351, to the effect that an undisclosed principal cannot be held liable upon any obligation by reason of ratification. Whatever may be the law in other jurisdictions, such is not the law here. Section
We think the written testimony in this case sufficient to comply with the statute of frauds and that the testimony supports the findings of the trial court.
THE COURT.
All transactions referred to herein having been had and the note and deed of trust involved in this action having been executed and delivered prior to the amendment of section
The judgment is affirmed.
Hart, J., and Finch, P.J., concurred.
Appellant's petition to have the cause heard in the supreme court, after judgment in the district court of appeal, was denied by the supreme court on May 28, 1925.
All the Justices concurred.
