138 Va. 448 | Va. | 1924
delivered the opinion of the court.
On February 2, 1920, C. F. McKay, John H. Vail and Alvah H. Martin, Jr., conveyed certain real estate on Bank street in the city of Norfolk to J. Sidney Smith, trustee, to secure the payment of $48,000.00, as evidenced by sixteen notes for $3,000.00 each, signed by the grantors; payable $15,000.00 in two years, $15,-000.00 in three years, and $18,000.00 in five yearsi.
On February 26, 1920, McKay, Vail and Martin sold this property to George Betz, John Kelbaugh and C. G. Harris. C. G. Harris not being known in the transaction at the time, the conveyance was made to Kelbaugh, Betz and Vernon B., Harris, who was acting as agent for his brother, C. G. Harris. A part of the consideration was paid in cash, and the grantees agreed to assume and pay the notes of the defendants, secured by the deed of trust, as a part of the consideration for the conveyance, and executed a second deed of trust to secure the payment of the balance of the purchase money.
The deed of February 26, 1920, was signed and sealed by the grantors and also by John Kelbaugh, George Betz and Vernon B. Harris, the grantees, as evidence of the agreement to assume and pay off the notes secured by the deed of trust to Smith, trustee.
Upon the failure of the purchasers to pay the first two notes at maturity and the interest on the indebted
There was evidence to warrant the jury in finding the foregoing facts.
A verdict was returned in favor of the defendants in error, plaintiffs below, against George Betz, John Kelbaugh and C. G. Harris for the sum of $7,425.00, with interest, as claimed in the notice. Judgment was entered thereon, to which this writ of error was awarded as to C. G. Harris.
The plaintiff in error relies on seven assignments of error.
The first assignment is to the action of the court in refusing to set aside the verdict as to C. G. Harris, as contrary to the law and the evidence and without evidence to support it.
The plaintiff in error contends:
*452 (a) It was contrary to law to hold that C. G. Harris assumed and promised to pay off the $48,000.00 deed of trust by a covenant in a deed inter partes, signed and sealed by Vernon B. Harris and others, in which C. G. Harris was nowhere mentioned.
It is true,, according to the-general rule, as contended by plaintiff in error, that an undisclosed principal cannot be held liable upon a contract under seal executed by an agent in his own name, upon the doctrine that action cannot be brought upon a sealed contract against those whose names do not appear therein. But this rule has no application where an agent is authorized to execute a contract which requires no seal and he unnecessarily attaches a seal to the instrument executed by him. In such cases the seal may be regarded as surplusage and the principal will be held as upon a simple contract.
In 2 C. J. 458-459, the law is stated thus: “In most jurisdictions it is held that where an agent, authorized to execute a simple contract only, unnecessarily attaches a seal to the instrument executed by him, and which would be good as a simple contract, the seal may be treated as surplusage, and the validity of the contract be in no way affected by it, although his authority was not under seal, but was conferred merely by parol; but the principal will not be bound by such an instrument as a sealed instrument.”
In 2 C. J., at paragraph 524, it is further stated: “According to some authorities, a qualification of this rule exists where the seal affixed to the contract by the agent was not necessary to the validity of the instrument at common law, it being held in such cases that the seal may be disregarded as surplusage, and the principal be held liable as upon a simple contract.”
In Big Vein Pocahontas Co. v. Browning, 137 Va. 34,
In the case of Waddill v. Sebree, 88 Va. 1012, 14 S. E. 849, 29 Am. St. Rep. 766, Terrell, without disclosing the name of his principal, entered into a contract under seal, with Waddill, by which he agreed to buy certain real estate. Later Terrell disclosed Sebree as bis principal and showed that every step taken by him had been expressly directed by Sebree in person. Waddill sued Terrell and Sebree for specific performance of the contract. Sebree made the defense that he was not named in the contract and therefore was not bound by it. It appearing that he directed Terrell when and how to proceed and approved and ratified his actions in the premises, Sebree was held liable under the contract and required to specifically perform the same. In the opinion the court said: “There is no dispute about the facts stated above. The defense is made that Sebree is not named in the contract and hence not bound by it. The facts being established that Sebree, the principal, authorized Terrell to do for him the acts that he did do, that he directed each and every act in detail as "transacted, that he approved and ratified each and every act as done, and after its completion makes these acts his own * * he is bound by Terrel’s acts directed by him for his own benefit.”
The tendency of the courts is to ignore in large measure the technical distinctions between sealed and unsealed instruments which were so jealously guarded by the common law. While it may be well to retain' the seal to dispense with proof of consideration or lengthen the period of limitation, we know of no sufficient reason why they should not, in other respects, be dealt with as simple contracts.
In Whitaker v. Lane, 128 Va. 317, 104 S. E. 252, 11 A. L. R. 1157, this court held that a deed might be delivered to the grantee in escrow. In the course of the opinion, Judge Burks, speaking for the court, said: “The reasoning upon which parol evidence will not be
With equal accuracy it may be said that the reason for the rule that an undisclosed principal cannot be held liable upon a contract under seal, executed by his agent in his own name, no longer exists; and we know of no sufficient reason why the protection of the rights of litigants requires that doctrine to be longer maintained.
The instant case is a proceeding by way of notice of motion, similar to an action of assumpsit. It is based upon the promise to assume and pay the notes secured by the deed of trust, and the deed of February 26, 1920, from McKay and others to Vernon B. Harris and others, is used as evidence of this promise to pay. The action is not in covenant upon the deed, as an instrument under seal, but upon the independent promise to pay, which would be valid though not under seal.
The authorities from other jurisdictions sustain the contention that a seal unnecessarily attached to a writing which would be valid without a seal should be disregarded as surplusage and the instrument treated as a simple contract.
In Horner v. Beasley, 105 Md. 193, 65 Atl. 820, an agent was authorized verbally to find a purchaser, for certain real estate, and made an inter partes contract of sale under seal and signed it in her own name. Upon
Nichols v. Haines, 98 Fed. 692, 39 C. C. A. 235, involved a contract for the "purchase of oranges, in the form of an inter partes deed which was signed and sealed by the parties. The contract was-breached and in an action of' assumpsit on the contract the defendant was held liable. In the course of the- opinion the court said: “The next contention is that the execution of the contract by ■ the plaintiffs in error was not proved. Their copartnership name was signed to the agreement by an agent whose authority, otherwise amply proven, was not shown- by an instrument under seal. The contract is one to which a seal is not necessary. The action is in assumpsit,' not covenant, and the seals attached may be regarded as surplusage.”
To the same effect is Kirschborn v. Bonzel, 67 Wis. 178, 29 N. W. 907; Tapley v. Butterfield, 1 Metc. (Mass.) 515, 35 Am. Dec. 374; Sargent v. Webster, 13 Metc. (Mass.) 497, 46 Am. Dec. 743; Allen v. Montgomery, 25 Ga. App. 817, 105 S. E. 33.
In the Thacker-Hubard Case, the deed conveying the property to Thacker contained an assumption by Thacker of the payment of the deed of trust notes given by Portlock. Thacker did not sign the deed of bargain and sale containing the agreement to assume, but accepted it. Thacker was sued by the mortgagee for a balance due on the notes after foreclosure proceedings had been had. The court held that it had no jurisdiction to entertain the action of the creditor-mortgagee against Thacker who assumed the mortgage by simple contract, because there was no privity of contract between them, the contract having been made between the mortgagor and the purchaser-defendant.
That case is not controlling here, since in the instant case the persons with whom the promise to assume and pay was made are sbing the assumers and alleging that one of the assumers acted through a duly authorized agent. Where, as here, the agent’s authority is proved, no question of privity can arise. The doctrine of principal and agent — whether disclosed or undisclosed— recognizes that privity of contract exists. The act of the agent is the act of the principal.
Tuthill v. Wilson is likewise not in point. This case decided that where an election is made to hold the agent, the undisclosed* principal cannot also be held liable.
In Huntington v. Knox, 7 Cush. (Mass.) 374, the contract was in writing but not under seal. Hence anything said about undisclosed principal as applied to sealed instruments is mere obiter dictum.
The citations from Minor’s' Institutes, 236, and Burks’ Pleading and Practice, relied on by the plaintiff in error, simply, state the general rule that an undisclosed principal cannot be held liable upon a contract under seal, executed by an agent in his own name, omitting any reference to the qualification to the rule, where the seal affixed to the contract by the agent was not necessary to the validity of the instrument at common law; and the fact that in such cases the seal may be regarded as surplusage and action brought against the principal as upon a simple contract. 31 Cyc. 1576.
Leterman v. Charlottesville Lumber Co., supra, holds that both agent and undisclosed principal may not be held liable to a third party contracting with the agent. There is no attempt in the instant case to hold Vernon B. Harris.
(b). The doctrine of undisclosed principal does not apply to the case at bar because that doctrine does not apply in cases where negotiable instruments are involved.
The action here is not upon the negotiable notes but upon the promise of the agent to assume and pay the notes. No effort is being made to hold the agent, Vernon B. Harris, on the notes, and having made the election to hold his principal they cannot also hold the agent.
(c). To hold a person as undisclosed principal, there
The holders of the notes have made an election to hold the undisclosed principal and thereby waive their right to sue the agent. Kelbaugh and Betz were joint contractors with O. G. Harris, and the doctrine of election does not require an additional election from joint contractors of an agent and undisclosed principal, before those claiming a right under the contract may enforce the same.
(d). There .is no evidence showing C. G. Harris was undisclosed principal, unknown to McKay, Vail and Martin.
It sufficiently appears from the uncontradicted testimony of Martin that he conducted all the negotiations as a representative of himself and McKay and Vail and he did not know C. G. Harris was interested in the transaction until nearly two years after it had taken place. Besides C. G. Harris testified in his own behalf and does not claim that he had any dealings with Martin, McKay or Vail. The contention that Gurkin was the agent of the defendants in error and that they were therefore charged with knowledge that O. G.. Harris was interested in the deed is not sustained by the record.
(e). There is not sufficient evidence showing C. G. Harris authorized the assumption of and promised to pay the deed of trust!
Vernon B. Harris, in pursuance of verbal authority from C. G. Harris, signed and sealed the deed which evidenced the agreement to assume and pay the deed of trust debt. It is in evidence that C. G. Harris told Vernon B. Harris “if Mr. Kelbaugh signs the deed, you sign it.”
The first assignment is without merit.
The second assignment of error is the action of the court in overruling the demurrer of C. G. Harris to the notice of motion. The third, fourth and fifth assignments of error involve the admission of any evidence showing that C. G. Harris is liable as undisclosed principal.
Our views of the law governing the liability of the undisclosed principal are fully set out in our discussion of the first assignment of error, supra, and need not be repeated.
Each of these assignments is likewise without merit.
The sixth assignment of error is to the action of the court in granting instructions Nos. 1, 2 and 3, while the seventh assignment alleges that the court erred in refusing to give instruction “A” asked for by the plaintiff in error.
A careful and painstaking consideration of all the instructions granted and refused convinces us that the jury was fairly and fully instructed on the law in the case.
We find no reversible error in either of these assignments.
There was evidence to support the verdict of the jury, and the judgment will be affirmed.
Affirmed.