109 P. 2 | Utah | 1910
This is an appeal from a judgment rendered in the district court of Tooele County, Utah, wherein the plaintiffs sought to have specifically enforced a written contract signed
Defendants admit tbe execution of tbe agreement in question, and admit tbe payments alleged in plaintiffs’ complaint, but they allege that tbe payments were made by Louis Le Vine on behalf of himself and Milando Pratt and not otherwise; that neither Louis Le Vine nor Milando Pratt bad power of attorney or other written, or any, legal authority from plaintiffs or either of them to execute or enter into tbe agreement mentioned on behalf of plaintiffs or either of them; that neither of tbe plaintiffs were bound, or in any manner obligated, thereby; and that no mutuality ex
Upon the issues thus tendered, a trial was had, and the court, after hearing the evidence, made and filed its findings of fact and conclusions of law, and entered its decree denying to plaintiffs the relief prayed for in the complaint and dismissing the action.
The court, so far as material here, found: (1) That neither Milando Pratt nor Louis Le Vine had any written authority from plaintiffs, or either of them, “for the execution of said written agreement, and neither of them had ever been constituted the attorney in fact for the said respective parties for whom they respectively undertook to execute said agreement.” (2) That at the time the agreement was entered into the stock of the Bingham West Dip Tunnel Company had no actual market value; but that neither J. W. nor Ettie Whitehouse knew of the worthlessness of the stock; that they relied upon and believed the statements of Milando Pratt and Louis Le Vine in relation to the value of the same. (3) That on the 29th day of January, 1906, the defendants J. W. and Ettie Whitehouse entered into an agreement with Theodore G-. Schulte (code-fendant), whereby they agreed to sell and Schulte agreed to purchase, the land in question, together with other lands, for the sum of $2750, $1200 of which was paid thereon by Schulte “without any knowledge that plaintiffs were claiming any rights in the property mentioned in plaintiffs’ complaint, but at the time of the payment of the balance ($1550) of said purchase price mentioned in the agreement of said Schulte with said Whitehouse and wife, on or, about the said 23d day of February, 1906, the said contract or agreement (between plaintiffs and J. W. and Ettie White-house) . . . had been placed with the county recorder of Tooele County, Utah, the same having been recorded
Appellants have asigned numerous errors, all of which in some way challenge the correctness of the findings of fact made and the judgment rendered by the court. The questions presented by the assignment of errors relate to and involve the affirmative propositions urged by respondents in support of the judgment, and may be classified as follows: (1) Want of mutuality in the contract. (2) That the contract was not signed by plaintiffs in person nor by any one having written authority from them to sign it. (3) That the respondents J. W. and Ettie Whitehouse were induced to enter into the contract through fraudulent representations of Milando Pratt and Louis Le Vine respecting the value of the 1400 shares of stock which wase accepted by the Whitehouses in lieu of $700 in cash, and that this alleged “inequitable conduct” on the part of plaintiffs’ agents rendered the contract “unfair, unjust, and wholly inequitable.” (4) Tht time Was of the essence of the contract and that plaintiffs, in failing to pay the taxes on the land covered by the contract, amounting to $4.40, which became delinquent November 15, 1905, forfeited their right to a specific performance of the contract. (5) That defendant Schulte was a bona fide purchaser of the land in question, and for that reason specific performance should not be de
We will consider and briefly discuss the questions involved in the order in which we have stated them.
The contract, among other things, provided that if the vendees, appellants, should fail to make any of the payments therein mentioned for a period of sixty days after the same became due, then the vendors, respondents, would be “released from all obligations to convey the property,” and appellants would “forfeit all right thereto
“Where a contract for the sale of lands is signed only by the defendant, it is clear that the plaintiff need nerer have performed his agreement. There was a clear lack of mutuality in, the terms. Yet it was clearly held that the contract could be enforced against the party who had signed. The cases all agree upon the point. The filing of the bill made the remedy mutual.”
The same author, in his work on Specific Performance (section 75), says:
“It may, perhaps, he sustained upon the following grounds: The statute of frauds does not reach the substance of contracts and render them invalid or valid; it simply furnishes a rule of evidence. Whenever, therefore, any agreement is enforced against a defendant who has signed it by a plaintiff who has not, it cannot be said that the agreement, so far as it purports to bind the plaintiff, is a nullity. In a Buit against him the statute does no more than require a certain kind of proof, in case he avails himself of it as a defense. The defense, however, is wholly a personal one; and, if he neglects to set it up, the agreement would be established against him notwithstanding the statute. For these reasons, it cannot be said that a memorandum signed by one party alone is so completely wanting in mutuality that no action upon it can be sustained.”
See also, 29 Am. and Eng. Ency. Law (2 Ed.), 858; 3 Parsons on Contracts, sec. 9.
In a note to tbe case of Ullsperger v. Meyer (217 Ill. 262, 75 N. E. 482, 2 L. R. A. [N. S.] 221), reported in 3 Am. and Eng. Ann. Cas., tbe compiler bas, beginning on page 1036, collected and reviewed cases from nearly all tbe states, as well as many English cases, and in tbe course of bis review" and discussion of tbe cases be says:
*270 “The memorandum prescribed by the statute of frauds is usually required by the statute to be signed by the ‘party to be charged’ or by ‘parties to be charged.’ In either case by the great weight of authority the quoted words are held to refer, not to the party or parties ‘charged’ with the contract, but to the party or parties ‘charged’ in the action; that is, the defendant or defendants. And the fact that the plaintiff has not signed the memorandum does not affect his right to maintain the action.”
And again, beginning near the bottom of page 1037, he says:
“By the great weight of authority a verbal acceptance of a written offer to sell or to buy property is sufficient to constitute a complete and obligatory agreement on which to charge the person by whom the offer is signed. In such case, if the memorandum is otherwise sufficient, when it is assented to by him to whom the proposal has been made, the contract is consummated by the meeting of the minds of the two parties, and the evidence necessary to render it valid and capable of enforcement is supplied by the signature of the party sought to be charged to the offer to sell or buy.”
A further discussion of this question will be found in a note to the ease of Bailey v. Leishman (32 Utah, 132, 89 Pac. 78), reported in 13 Am. and Eng. Ann. Cas. 1121. In 2 Page on Contracts, section 691, the author says;
“The statute does not require the contract, note, or memorandum to be signed by both parties, but only by the party to be charged therewith. . . . Accordingly, a contract, note, or memorandum is sufficient if signed by the party to be charged therewith, though not signed by the party seeking to enforce it. Thus a memorandum of a contract to convey land, signed by the vendor alone, . . . may be enforced by the promisee.”
The contract in this case, however, was signed hy the duly authorized agents of appellants. True, the authority of the agents was not in writing; but this does not invalidate the contract, there being no statute in this state, at the time the agreement was entered into, requiring an agent’s authority to purchase land to be in writing. In 29 A. and E. Ency. Law (2d Ed.) 861, it is said':
“The general rule is that parol authority is sufficient to enable an agent to make a contract for the sale of personal or real property.*271 But, as regards real property, the contrary doctrine is upheld by many decisions, based usually upon a statutory requirement to that effect.”
See also, 2 A. & E. Ency. L. & Pr. 809.
In Pomeroy on Specific Performance, section 79, the author says:
“Contracts, however, relating to real estate, as for sale, letting, and the like, need not he under seal, and the rule is settled that the authority of an agent to enter into such agreements may be given by parol, and may, therefore, be implied from acts and circumstances; unless, as is the case in certain states, the authority to make such contracts is required by statute to be in writing.”
As we have 'observed, at the time the agreement in question was entered into, there was no statute of this state requiring the agent’s authority to contract for the purchase' of real estate to be in writing, therefore this case does not fall within the exception to the general rule ■
The next question for consideration is the alleged misrep*-resentations of Mil ando Pratt and Louis Le Yine to the defendants J. W. and Ettie Whitehouse respecting the value of the 1400 shares of stock received by the Whitehouses in part payment of the land covered by the contract. Respondents contend that these alleged misrepresentations rendered the contract “unfair, unjust, and inequitable.” The record discloses that Le Yine, at the time he negotiated with White-house for the purchase of the land, represented the stock to be worth fifty cents per share, and stated that none had been sold for less than that sum. The record, however, also shows that Whitehouse must have known that the stock had only a speculative value; and, according to his own testimony, he discovered about a month after the agreement was entered into that the stock had no actual or market value, and that he thereafter, without protest, continued to accept payments (aggregating $600) on the contract until the 8th day of November, eleven months after he learned that the stock was practically without value. In fact, the first in
“The party defrauded will generally lose his right to rescind if he takes any benefit under the contract or does any other act which implies an intention to abide by it or an affirmance of it after he has become aware of the fraud.”
Many cases are cited in the footnote in support of this doctrine. Mr. Pomeroy, in his work on Specific Performance (Section 222) states the rule as follows:
*273 “In accordance with this principle, if the party to whom a misrepresentation has been made, after having ascertained the real facts of the case, and thus discovered the untruth of the statements, goes on acting in pursuance of the contract, treats the property acquired under it as his own, or otherwise conducts himself with respect to it as though it were a subsisting and binding engagement, he thereby waives the benefit of the misrepresentations, and cannot allege them7 as a ground either for rescinding or resisting enforcement of the agreement. In other words, the party who has been misled is required, as soon as he learns the truth and discovers the falsity of the statements on which he relied, with all reasonable diligence to disaffirm the contract, and give the other party an opportunity of rescinding it, and of restoring both of them to their original position. The party deceived is not allowed to go on deriving all possible benefit from the transaction, and then claim to be relieved from his own obligations by a rescission or a refusal to execute.”
Tested, by this principle, the acts and conduct of tbe defendants J. W. and Ettie Whitehouse after
Nor do we think the claim that appellants, because they failed to pay the taxes assessed against the land for the year 1905, breached the contract is tenable. The concluding part of the fourth paragraph of the contract, we think, clearly shows that the payment of the taxes for the year 1905 by plaintiffs was not a condition precedent to their right to demand performance of the contract. The part of the contract to which we refer is as follow's: “And the said parties of the first part, on receiving such payments as hereinbefore provided, agree to execute and deliver to said parties of the second part, or their assigns, a good and sufficient deed to said property herein described, the title thereto to be free from all incumbrances (except that the second parties shall pay the taxes for the year 1905.)” We think this clearly indicates that the parties, when the contract was drawn, had in mind that the taxes for 1905 might
In the latter part of November, or the 'first part of December, 1905, respondent J. W. "Whitehouse entered into negotiations with J. H. Hurd, attorney at law, Walter A. Cook, and J. B. Taylor for the sale of the land in question and 120 acres of additional land in Tooele county, and on January 29, 1906, entered into a written agreement with one Theodore G. Schulte, one of the respondents herein, by the terms of which Whitehouse, for and in consideration of $2750, agreed to sell and convey to Schulte, and Schulte agreed to purchase, the lands mentioned. At the time of the execution of the agreement, Schulte paid Whitehouse $1200 of the purchase price of the land. On February 7, 1906, J. W. and Ettie White-house executed deeds of conveyance of the lands covered by the agreement last mentioned to Schulte. The deeds were placed in escrow1 with the understanding that they should be delivered to Schulte on payment by him of the balance of the purchase price, $1250 of which was to be paid on or before August 1, 1906, and the remaining $300 on or before October 1, 1906. It is admitted that Schulte had no personal or pecuniary interest whatever in these transactions, and that he acted solely as the agent and trustee of Hurd, Cook & Taylor, who, as partners, manipulated the deal and furnished the money with which to. purchase the land. On February 23, 1906, Hurd, Cook & Taylor paid the balance of the purchase price of the land less a small discount, and the deeds thereto were delivered to Schulte, who, on February 26, 1906, had them duly recorded in the office of the county recorder of Tooele County.
As we have observed in the foregoing statement of the case, the trial court, in the seventh finding of fact, found that the agreement last mentioned was made by Schulte as trustee^ for Hurd, Cook & Taylor, “in entire good faith, and the sum of $1200* paid without any knowledge that said plaintiffs were claiming any right in the property mentioned in plaintiffs’ complaint.” Appellants contend that this finding was erroneous for the reason that Hurd, Cook & Taylor were in
Hurd testified, in part, as follows: “In one of these conferences tbe question came up in some way, and Wbite-bouse said that Le Vine bad a contract for some portion of this land, but was unable to tell us what portion. . . . I asked him if tbe contract was oral or in writing, and be said, ‘Oh, there isn’t any contract. It is all off. . . . Le Vine hasn’t got any interest in it at all.’ That be bad requested him to sell tbe property and give him bis money back, what money be bad paid. . . . My impression was, however, that it bad been a written contract. . . . He convinced me that it was nothing, and that it was perfectly agreeable to Le Vine to have tbe sale go on, and that Le Vine was anxious to get bis money back. We took bis word for it. I am tbe same J. H. Hurd who appears for tbe defendant Schulte in this case.”
Tbe original answer of defendant Schulte filed in tbe case which was prepared by Hurd and duly verified by' Schulte, was admitted in evidence. This answer, among other things,
We think the evidence of these three witnesses on this phase of the case, when considered in connection with the allegations of Schulte’s original answer hereinbefore referred to, clearly shows that Schulte ws not a bona fide purchaser without notice. According to their own version of the transactions in question, Cook and Hurd were in possession of sufficient facts to put an ordinarily prudent person upon inquiry. And it is apparent from the record that if they had, with ordinary diligence, followed the line of inquiry suggested by the information furnished them
“If, however, it appears that the party obtains knowledge or information of such facts, which are sufficient to put a prudent man upon inquiry, and which are of such a nature that the inquiry, if prosecuted with reasonable 'diUgence, would certainly lead to a discovery of the conflicting claim, then the inference that -he acquired the information constituting actual notice is necessary and absolute; for this is only another mode of stating that the party was put upon inquiry, that he made the inquiry and arrived at the truth. Finally, if it appears that the party has knowledge or information of such facts sufficient to put a prudent man upon inquiry, and that he wholly neglects to malee any inquiry, or having begun it fails to prosecute it in a reasonable manner, then also, the inference of actual notice is necessary and absolute.”
True, it is claimed that Hurd and Cook were assured by Whitehouse that Le Vine had abandoned the contract which he and Pratt had entered into on behalf of plaintiffs; but this did not relieve them of the duty of pursuing the inquiry, and especially so in view! of the fact that the record discloses that they had but little, if any, confidence in the integrity. of the man with whom they were negotiating for the purchase of the land. Cook, in the course of his testimony, says: “I think he (referring to Whitehouse) came to the office and arranged to meet Mr. Hurd because I would not talle to a man of that hind unless my attorney was present In 2 Pom. Eq. Jur. (3d Ed.) section 601, the author says:
“When, however, the grantor, vendor, or mortgagor admits that his title was defective or incumbered, or that there was some outstanding claim upon or equity in the property, or makes any other communication which, unexplained, would constitute an actual notice, but adds a further declaration to the effect that such defect has been cured, or*279 ineubrance removed, or claim of equity rescinded and destroyed, the purchaser, according to the weight of authority, is not warranted in accepting and relying upon this explanation or contradiction; the information obtained under such circumstances and from such a source is sufficient to put a prduent man upon an inquiry. The reason of this is plain. The informant is under a strong personal interest to misrepresent or conceal the real facts. While the former branch of his communication is made against his interest, and is therefore more likely to be true, the latter part is in conformity with his personal interest, and is essentially untrustworthy.”
See also, Price v. McDonald, 1 Md. 403, 54 Am. Dec., 657; 2 Jones on Real Prop. & Conv., see. 1521.
We are of the opinion that the finding of the court that Schulte was a bona fide purchaser without notice
The contention that appellants cannot prevail in this action because they have failed to pay into court the balance due the defendants J. W. and Ettie Whitehouse on the purchase price of the land is without merit. The evidence shows that appellants made a tender of the money when they demanded of the Whitehouss that they execute a deed to the land involved. And in their complaint appellants allege that they are ready and willing to perform their part of the contract. In cases of this hind, where there are reciprocal demands and obligations, and there is anything remaining to be done by the party who obtains a de-
The judgment is reversed, with directions to the trial court to set aside its findings of fact heretofore made and filed in the case, and the judgment rendered thereon, and to make findings and enter judgment in favor of plaintiffs for a specific performance of their contract according to the prayer of the complaint and in accordance with the views herein expressed. Costs of this appeal to be taxed against respondents.