Merritt v. Adams County Land & Investment Co.

151 N.W. 11 | N.D. | 1915

Lead Opinion

Bkuce, J.'

(after stating the facts as above). Although the trial before the jury was held some time after the hearing before the court, and the proceedings were treated in many respects as two independent actions, there can be no question that the hearing before the jury was held under the order of the court in the preliminary equity case, and that the verdict of the jury was nothing more or less than an advisory verdict of a jury which is rendered in a suit in equity.

The first point raised by appellant is that the contract of sale which is the foundation of the cause of action does not conform to the requirements of the statute of frauds, being § 5407, Pev. Codes 1905, § 5963, Compiled Laws of 1913, in that it is signed, as far as the plaintiff is concerned: “C. E. Merritt, by Chas. Bigham, his agent,” and that there is no proof of any authority in writing to the said Big-ham, and that such is required by § 5407, Pev. Codes 1905, § 5963, Compiled Laws of 1913, which provides that "no agreement for the sale of redi property, or of an interest therein, is valid, unless the same, or some note or memorandum thereof, is in writing and subscribed by the party to be charged, or his agent thereunto authorized in writing; but this does not abridge the power of any court to compel the specific performance of any agreement for tbe sale of real property in case of part performance thereof.”

It is to be noticed that the statute merely speaks of an agreement to sell, and the agreement to sell which is sought to be enforced in this case was all that seems to have been required by the statute to have been authorized in writing. It is well settled, indeed, that not only is a contract sufficient and enforceable if executed by the party sought to he charged (see Morin v. Martz, 13 Minn. 191-193, Gil. 180, 182), but it has also been held that a contract of sale, if accepted by the buyer, is not wanting in mutuality because it is signed only by the seller. Ward v. Spelts, 39 Neb. 809, 58 N. W. 426; Justice v. Lang, 42 N. Y. 493, 1 Am. Rep. 576, reversing 2 Robt. 333, 30 How. Pr. 425; Tilt v. La Salle Silk Mfg. Co. 5 Daly, 19; 9 Cyc. 300.

The only question to be determined, then, is whether the contract was signed hy the company itself, or was partly performed so as to be taken out of the statute of frauds and to render an action for damages or for specific performance maintainable. On' this point there is no question that the plaintiff’s agent gave to the vice president of the company a check for $500 at the time of the making of the contract; that that check was made payable to the Adams County Land & Investment Company, and that later it was indorsed “Adams County Land & Investment Company, by A. A. Jackson, V. P. and Gen. Mngr.” and that, though the defendant company claims that it never received the proceeds thereof, it was paid to its representative and vice president. There is no claim that the money has ever been returned or offered to be returned, the extent of the offer being that the company would get A. A. Jackson to return the money. It, on the other hand, seems to be clear that A. A. Jackson was given no specific authority, either by the charter or by-laws, to sell land, and that the usual practice seems to have been (which practice, however, does not seem to have been generally known in North Dakota nor by the plaintiff) for land to be sold on a resolution of the board of directors.

The only question, therefore, to be determined, is whether A. A. Jackson had such ostensible authority that the plaintiff was justified in dealing with him and in purchasing land from him and making the 'payment to him in question. It really resolves itself around the question as to whether he had the ostensible authority to receive the money,

even tbongb not to execute any specific contract of sale, as no effort seems to bave been made to return the money. The case at bar seems in many respects to be analogous witb tbat of Grant County State Bank v. Northwestern Land Co. 28 N. D. 479, 150 N. W. 736, and we are quite satisfied, both under the holding in that case and of the authorities generally, that the plaintiff should be allowed to recover in the casé at bar. Section 5770, Bev. Codes 1905, § 6324, Compiled Laws of 1913, defines ostensible authority to be “such as the principal, intentionally or by want of ordinary care, causes or allows a third person to believe the agent to possess.” There is no question that if the by-laws or charter had so provided, the witness A. A. Jackson would have been the proper party to have made the contract, and to have received the money. Whether general manager or not, according to the understanding of the directors of the defendant corporation, he styled himself as general manager in North Dakota, and was known by the bank with which he dealt and with which the company dealt, as general manager. He was the only officer or agent of the company in North Dakota, and he was certainly vice president of the company. There is much conflict in the authorities, it is true, as to the duties of a vice president. Generally speaking, such an officer acts in the absence of the president. The president, in the general acceptation, is the general executive officer. It is no abuse of power or of a sound public policy to hold that when a corporation chooses to incorporate under the laws of North Dakota in order that it may deal in lands in North Dakota, and obtain the protection of the courts and of the laws of the state, both as to its contracts and to its property, and where the laws of North Dakota, loose and liberal though they may be, require 'that the principal place of business of the corporation shall be located in the state, that a third party has the right to believe that the vice president of the company when acting in the town, if not in the building, of the principal office, and in the office of the attorney of the company, and in relation to a sale of the land of the company, for the purpose of buying and selling which the company alone was. incorporated, is authorized by the bylaws to make such contract of sale, and that when such officer tells such third party upon express inquiry that he has such authority, and the third party relies upon such statement and not only pays $500, but obligates himself on a contract with still another party on the reliance therewith, and of which fact he informs the vice president, such purchaser has the right to believe in the statement of the vice president, and to pay the money on the strength of such belief, and, when the vice president receives the money he receives it for and on behalf of the company he represents. Nor do we think that this ostensible authority is weakened by the fact that the attorney who drew the papers suggested to the plaintiff’s agent that it would be well to send them to Indianapolis for approval, it being shown by the evidence that on and after such statement, Jackson, the vice president, positively assured the plaintiff of his authority and of the validity of the agreement. Grant County State Bank v. Northwestern Land Co. supra.

It is unnecessary for us to examine the numerous objections to the admission of testimony in this case, including the testimony as to the subagreement by the plaintiff to sell the land in question to Gottlob Hoffman, and the loss of profits which he suffered on account of the failure of the defendant to convey the land to him and thus to make a reconveyance by him possible. A nice question of law is presented by these objections, both as to whether the damages provided for by § 6568, Bev. Codes 1905, § 7151, Compiled Laws of 1913, are ex' elusive of all others or whether the damages provided for the breach of a contract in § 6563, Bev. Codes 1905, § 7146, Compiled Laws of 1913, may in special instances and in the case of special damages which have or should have been foreseen at the time of the making of the contract of sale, also be relied upon (see Needham v. Halverson, 22 N. D. 594, 135 N. W. 203); also whether, such being the case, the rule of damages which is announced in the leading ease of Hadley v. Baxendale, 9 Exch. 341, 2 C. L. R. 517, 23 L. J. Exch. N. S. 179, 18 Jur. 358, 2 Week. Rep. 302, 5 Eng. Rul. Cas. 502; which has been generally followed by the American courts, and which is emphasized in North Dakota by § 6563, Rev. Codes 1905, § 7146, Compiled Laws of 1913 (see Needham v. Halverson, supra), would apply in a case such as that before us (see Guetzkow Bros. Co. v. A. H. Andrews & Co. 92 Wis. 214, 53 Am. St. Rep. 909, 66 N. W. 119, 52 L.R.A. 209, and valuable note thereto in 52 L.R.A.

The question is not briefed or discussed with any thoroughness, and we believe it would be unwise to pass upon it in its entirety here. It is sufficient, however, to say that in the case at bar this measure of damages can have no footing, and the later part of § 6563, Rev. Codes 1905, § 7146, Compiled Laws of 1913, is conclusive. This paragraph provides that “no damages can be recovered for a breach of contract which are not clearly ascertainable in both their nature and origin.” It merely restates the common law. It must be taken and construed in connection with the general rule that the law abhors uncertainty and speculation, and that where there are two methods of proving damages, one of which is certain and the other of which is uncertain, the former will be adopted. In the case at bar it is shown that, though a contract for resale had been made by the plaintiff Merritt with one Gottlob Hoffman before the making of the agreement with the Adams County Land & Investment Company, and that the making of this agreement was known to the vice president of the Adams County, Land & Investment Company at the time of the making of the later contract, and that said vice president knew that the land was sought to be purchased for the purpose of meeting the terms of this agreement, that this sub-agreement embodied a trade of lands, and that the real value of those' lands is neither clearly proved in the case at bar, nor was their value known to the said vice president. The proof, in short, of the damages which were occasioned by the loss of the subsequent sale are not merely indefinite, but it also can hardly be said that the vice president in question had or should be presumed to have had sufficient knowledge of the attempted transaction, that is to say, of the trade of the lands as opposed to a mere sale for cash, as would, under the construction of § 6563, Rev. Codes 1905, § 7146 Compiled Laws, of 1913, and of the case'of Hadley v. Baxendale, supra, make it fair to presume that he anticipated or could have anticipated the value thereof.

The rule of damages, therefore, in the case at bar, must in any event be that which is laid down by § 6568, Rev. Codes 1905, § 7151, Compiled Laws of 1913, and which is: “The difference between the price agreed to be paid and the value of the estate agreed to be conveyed at the time of the breach, and the expenses properly incurred in examining the title, with interest thereon, and in preparing to enter upon the land, and the amount paid on the purchase price, if any, with interest thereon from the time of the breach.” This conclusion, however, does- not necessitate a new trial or a reversal of the judgment, even though we concede that some of the evidence that was introduced was inadmissible. Tbe action before ns is a suit in equity and comes before us for a trial de novo. Tbe verdict of tbe jury was merely advisory, and tbe errors in tbe admission of evidence, if any, do not necessarily interfere witb us bere, and we are quite sure that they did not interfere either witb tbe correct judgment of tbe jury or of tbe trial court. Tbe learned trial judge positively and correctly instructed tbe jury that tbeir estimate of damages should be solely based upon tbe difference between tbe market value of tbe land contracted for by tbe plaintiff, and tbe price which be bad agreed to pay therefor, added to which must be, if they found for tbe plaintiff, tbe original $500 payment, for which no consideration was received. Tbe judgment of tbe trial court, and tbe verdict of tbe jury on which it was based, were for tbe sum of $1,850, and this allowed, after deducting tbe $500 and interest thereon, some $1,300 for tbe difference between such contract and market price. Tbe price which was agreed to be paid for tbe land was about $16.25 per acre. Tbe testimony as to tbe actual value of tbe land runs all tbe way from $14 to $25 per acre. Tbe verdict of tbe jury allows a value of about $18.35 per acre. This is satisfactory to us, and we see no reason for overruling tbe judgment of either tbe trial court or tbe trial jury in relation to tbe matter. Even though tbe allegation and proof of special damages may have been improper and insufficient, proof of tbe general damages allowed by § 7151, Compiled Laws of 1913, was permissible under tbe general allegation of damages which is to be found in tbe complaint, and not only was the jury instructed on this basis, but tbe trial was largely bad upon this theory. See 19 Enc. Pl. & Pr. 80; Partridge v. Blanchard, 23 Minn. 69.

We may close by adding that it is idle to say that the company did not know of tbe payment of tbe $500. Tbe knowledge of a vice president of a North Dakota corporation, who is tbe only officer in the state, and who is transacting tbe business of such company; which is tbe buying' and selling of land, and which is acquired in such a transaction, is tbe knowledge of tbe company itself. Grant County State Bank v. Northwestern Land Co. 28 N. D. 479, 150 N. W. 736.

Tbe judgment of tbe District Court is affirmed.

CimsTiANSON, J., did not participate in tbe foregoing opinion.

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Rehearing

On Petition for Rehearing.

Bbuce, J.

A petition for rebearing bas been filed, wbicb, among ■other matters, calls attention to tbe fact that tbe writer of tbe opinion erred in saying that “tbe case before tbis court is a suit in equity on a trial de novo under § 7846, Compiled Laws of 1913,” and in assuming therefrom that tbe errors in tbe admission of evidence before tbe jury, if any, were immaterial.

Counsel is correct in bis criticism that tbe writer of tbe opinion did err. He, in fact, overlooked tbe prior opinion of tbis court in Peckbam v. Van Bergen, 8 N. D. 595, 80 N. W. 759, in wbicb we held that “in an equity case where tbe district court calls in a jury for advisory purposes, the trial is not governed by tbe provisions of § 5630, Rev. Codes 1895, as amended by chapter 5 of tbe Laws of 1897 (being § 7846 of tbe Compiled Laws of 1913) ; nor does tbis court try such cases anew. That statute applies only to such cases as are tried in the district court without a jury.” We have therefore stricken tbe clause from tbe original opinion so that one reading that opinion and failing to read tbe words just written will not be confused thereby. Tbe fact, however, in no way changes tbe opinion or conclusion of this court in tbe case at bar. Tbe court in Peckham v. Van Bergen, supra, expressly stated that, though in such cases tbe verdict of tbe jury is entitled to receive grave consideration at tbe bands of tbe trial courts, and such juries are not called as a mere formality, their verdicts can be set aside if clearly wrong. It would follow that, if their verdicts are clearly right, and, even though incompetent evidence may have been admitted, it is quite clear that tbe jury was not misled thereby, or at any rate that their advisory verdict is in accordance with tbe law, tbe mere fact of tbe introduction of such incompetent evidence will not justify tbe ordering of a new trial. Such, we believe, is tbe case in tbe action before us.

Counsel also criticizes tbe statement of facts made by tbis court, and in wbicb it said that tbe vice president told tbe plaintiff “upon express inquiry that be bad tbe authority to make tbe contract,” and calls our attention to tbe fact that at tbe moment tbe contract was executed all that tbe vice president did was, “with a waive of tbe band, to say that it was all right as it was.” He, however, ignores tbe fact that tbe plaintiff positively testified that “at tbe time tbe contract was drawn I walked out with Mr. Jackson and bad a conversation with him; I told him then after you (tbe attorney, Mr. Norton) spoke to me about there was some question in your mind as to this authority, you intimated something along that line. I talked with Mr. Jackson and I told him that we had drawn a contract for the sale of this land with a party, and we made a provision allowing ten days in case we couldn’t deliver the land; that it was not binding upon us, and I told him at that time that I wanted to be sure and certain about his getting this land to us by the 1st of March. There was some encumbrance on the land, and I asked if he would see to having that paid up and having his abstract of title brought down to date, so that the deal could be closed on the date payment became due, and he assured me that everything would be all right; that he was vice president and general manager, and had authority to accept money and to make out contracts, and he had previously stated those things to me, and the fact that he had charge of the outfit out there, — I had been out to call on him a couple of times before the contract was made.”

The petition for a rehearing is denied.