47 App. D.C. 389 | D.C. Cir. | 1918
Lead Opinion
delivered the opinion of the Court:
The one question presented is whether the court erred in refusing to give the peremptory instruction. It did not unless the evidence, construed most favorably to the plaintiff, had no tendency to disclose a cause of action in his favor. In determining this we must give him the advantage of every inference fairly deduciblo from all the testimony, but if, when this is done, there is not .enough to sustain the verdict, the casi; must be reversed, but not otherwise. McDermott v. Severe, 202 U. S. 601, 50 L. ed. 1162, 26 Sup. Ct. Rep. 709; Shinn v. Evans, 37 App. D. C. 304; Glaria, v. Washington Southern R. Co. 30 App. D. C. 559; District of Columbia v. Moulton, 182 U. S. 576-582, 45 L. ed. 1237-1241, 21 Sup. Ct. Rep. 840; Randall v. Baltimore & O. R. Co. 109 U. S. 478, 27 L. ed. 1003, 3 Sup. Ct. Rep. 322; Baltimore & O. R. Co. v. Miller, 37 App. D. C. 218; Metropolitan R. Co. v. Moore, 121 U. S. 558, 30 L. ed. 1022, 7 Sup. Ct. Rep. 1334; Delaware, L. & W. R. Co. v. Converse, 139 U. S. 469, 35 L. ed. 213, 11 Sup. Ct. Rep. 569; Elliott v. Chicago, M. & St. P. R. Co. 150 U. S. 245, 37 L. ed. 1068, 14 Sup. Ct. Rep. 85; Union P. R. Co. v. McDonald, 152 U. S. 262, 38 L. ed. 434, 14 Sup. Ct. Rep. 619; McGuire v. Blount, 199 U. S. 142, 50 L. ed. 125, 26 Sup. Ct. Rep. 1; North Pennsylvania R. Co. v. Commercial Nat. Bank, 123
Studying the record in the light of this doctrine, did the plaintiff produce any evidence tending to show that he had performed his contract? To answer this we must first ascertain what the contract was. He testified that Riley, representing 1h(' defendants, and his agent Rankin, in February, 1913, submitted to him a “paper” outlining what the defendants wauled; that they desired a loan of $030,000, some of it to be used to erect a mill which would cut 130,000 feet of lumber a day; that he explained to Riley “why that was not feasible and that it would be useless for witness to undertake the proposition unless left free to handle features of the financing, as the bonding house would not lend enough of money to erect a mill- of that capacity, inasmuch as Riley also undertook to erect planing mills, etc., because $(>30,000 would not do those things and provide a working capital; that Riley and Rankin then agreed that witness “should be free to discuss that with the .bonding house, and that they would consent to any figure
“The court then asked the following question:
“ ‘Q. Do you claim that at the time you wore having conferences in Washington, he [Riley] agreed if you could not get more than $500,000 that would be satisfactory as to the amount of the loan?
“ ‘A. Yes, and the letter will show, which seems to settle that point.
“ ‘Q. The Court: Let Mr. Mcliarg point to the letter to which he refers and in which he says Mr. Riley said he would be satisfied with the $500,000 as the amount of the loan.’
“Whereupon the witness referred to letters of March 31th and 15th, from Rankin to him.” There were two letters on the first date; one is known as the “shorter letter” and that is the one, the record discloses, to which Mcliarg referred. In these letters, then, according to Mcliarg, is whore we are to find the contract.
The shorter letter written to Mcliarg by Rankin, who conducted all the correspondence in behalf of the defendants, says: “In order that you may be definitely and fully informed as to Mr. Riley’s attitude in this matter, 1 beg to report that he authorizes me to say that he will accept a loan of $500,000 (if it is impossible for you to do any better), provided the lenders will agree to have the bonds secured by the timber and plant only, and not by the land. This is on the basis of 200,000,000 feet of timber 10 inches and better at the cutting point, and his further condition is that if the new cruise shows more than 200,000,000 feet then the lenders must let him have an
McLIarg endeavored to obtain a loan in New York, and failing there, went to Chicago. Considerable correspondence between him and Rankin was held besides what we have set out; but for the present we put it out of sight as immaterial so far as the contract is concerned. Soon it developed that Riley did not have title to the land or the timber and was unable to procure it. This, of course, ended Mcllarg’s endeavors to get the
The only other testimony on this question is that given by Frederick R. Hill, who said that he.was located in Chicago and engaged in the business of placing bonds and mortgages, especially bonds secured by timber in the southern states; that McIIarg had “presented to him the outlines of a timber bond issue” and made certain representations with respect to the lands owned by Riley; that they discussed the matter in detail; told McITarg he would negotiate the bond issue if the representations made by Riley were true, namely, if tlie defendants had good title to 30,000 acres more or less of virgin timber which contained, as disclosed by reliable cruises, “more or loss, 220,000,000 feet of merchantable timber,” and if defendants “would enter into a proper binding agreement to devote the said proceeds of said timber bonds for the purpose of constructing and equipping a * * * sawmill, planing mill, and dry kilns * * * to adequately cut, manufacture, and market said timber.” He further said that he told McIIarg that at that time “he was prepared, ready, and able, to negotiate, said $500,000 issue of bonds on the above conditions, and requested McIIarg to have the questions answered.” The questions referred to were forty-one in number and were accompanied by a letter from Hill to McIIarg, which said.: “T am inclosing herewith a list of questions in regard to the proposed
"LT. State how many miles of logging railroad will have1 to be built to reach the timber, and how many miles of road tvill be built into the timber from the proceeds of this issue, and how many years’ cut the amount of road built will take, care or. Will the logging railroad be a separate corporation from the lumber company V’
"18. Send us statement showing what the. lumber tvill cost í. o. b. at the mill. * *
“22. AVill the borrowers guarantee the bonds ?”
“2-‘>. State the financial condition of the borrowers who will give guaranty, giving their-names and addresses.”
“2(5. * * * On this point we would like to get a frank statement of how much they [the ’liilevs] think they can take care of on the first maturity and the maturities that follow.
“40. Will the logging road have any permanent value after this timber is cut? * 'x' *”
“41. * * * Give a general summary of the value of the security behind the bonds, somewhat as follows: * * *”
-Many of these 41 questions were outside of any representation made by Riley. Riley, in his representations, made no reference to the building of a logging railroad; expressly stated, in the paper banded to Alcllarg detailing what he wanted and was willing to do to secure it, that there were to be “no personal guarantors on the loan ;” said nothing about taking care of the maturities, except the interest coming due for the first three interest periods (six, twelve, and eighteen months), or about the cost of lumber f. o. b. at the mill. None of (lie questions was answered before negotiations were broken oil. They dealt with important matters, dearly they were asked for the purpose of enabling Mr. Hill and his clients to determine whether or not they would make the loan. Rntil they were answered satisfactorily, it could not he said that Mcliarg had found persons ready and willing to take the bonds and advance the money. And this being so, be had not then performed his contract.
Mr. Hill, as we have seen, said that he was able and willing to negotiate a bond issue for $500,000 upon condition: (a) That Eiley owned in fee 30,000 acres of timber land more or less; (b)'that he could secure leases of several thousand acres more; (c) that a cruise made in 1912 showed 220,000,000 feet more or less of merchantable timber standing on the land; and (d) that Eiley would bind himself to devote the proceeds of the loan for certain purposes.
It will bo noticed that he did not say specifically that the land was to be a part of the necessary security, but neither did he specify that the timber or any of the other property was to be; yet it is clear that both were to be. About this reasonable minds could not differ. Now bearing these conditions in mind, let us compare them with the terms upon which McHarg was authorized to act for Eiley, as those terms appear in the letters of the 11th and 15th of March, which, according to McTTarg, are to be taken as conclusive evidence of the contract he had with Eiley. In the letter of the 11th he was authorized to “accept a loan of $500,000 if it is impossible for you [him] to do any better, providing the lenders will agree to have the bonds secured by the timber and the plant only, and not by the land.” But Hill was not willing to negotiate the loan except upon the theory that the security would cover not only the timber and plant, but also the land. The letter of the 11th further provided that, “if the new cruise shows more1 than 200,000,000 feet, then the lenders must let him | Eiley] have an amount above $500,000 as would be represented by the excess of 200 million feet at $2 per thousand.” Hill’s proposition required “more or less 220,000,000 feet” for the loan of $500,000. The letter concludes thus: ‘“The final condition beiug that the bonds are to be secured bv the standing timben-,' the plant, and the land, if the new cruise shows enough timber
At the bar and in the briefs, a great deal of importance ■was given by both sides to a letter written to Rankin by Mcllarg from Chicago on the 13th of March, and a telegram received from the former by the latter in response thereto. The letter, it is said, contained an offer from Mcllarg to secure the loan upon certain conditions therein named, and the telegram an accept anee of the offer. We cannot assent to this. The letter gives an account of interviews which Mcllarg had “with people here who handle timber lands,” says they “would like to have a guaranty outside of the security” furnished by the property, that the loan would be paid; it enumerates several other pieces of information desired, and follows with this statement: “I feel encouraged to say to you that if these things can be worked down in a business form along the lines indicated, the people with whom I have been talking will take a bond issue not to exceed from $500,000 to $525,000 on this property.” And then concludes with the assertion that if Riley could not “see his way clear to let us work the matter out on substantially the lines above set out, it- will be necessary for me to drop out of the transaction.” In tlie telegram Rankin said: “Riley accepts proposition yonr letter 13th with one or two immaterial modifications. Writing yon fully New York.” McHarg had made no offer. He related interviews and asked for information. And said that if the latter was furnished he would “feel encouraged.” Rut this was not such an offer as, if accepted, would constitute a contract. Rankin v. Collins, 40 App. D. C. 211. The word “accept” in the telegram was inapt. Obviously one cannot accept unless something is offered. And Mcllarg had offered nothing except some intelligence and an expression of hope. The telegram, interpreted in view of the letter, as it
Even if the letter should be construed as an offer, the acceptance was not sufficient to constitute a contract. Such an acceptance must be absolute, not conditional. Eliason v. Henshaw, 4 Wheat. 225, 4 L. ed. 556; First Nat. Bank v. Hall, 101 U. S. 43, 25 L. ed. 822; Minneapolis & St. L. R. Co. v. Columbus Rolling Mill, 119 U. S. 149, 30 L. ed. 376, 7 Sup. Ct. Rep. 168; Martin v. Northwestern Fuel Co. 22 Fed. 596; Clark v. Burr, 85 Wis. 649, 55 N. W. 401. In the Minneapolis £ Sf. L. B. Co. Case, it was said: “A proposal to accept, or an acceptance, upon terms varying from those offered, is a rejection of the offer, and puts a.n end to the negotiation, unless the party who made the original offer renews it, or assents to the modification suggested.”
■ In addition to this, it must be remembered that McTIarg was Riley’s agent, and therefore bound to the exercise of the strictest fidelity towards him in performing ■ his contract of brokerage. Mannix v. Hildreth, 2 App. D. C. 259; Rawlings v. Collins, 36 App. D. C. 72; Forrest v. Wardman, 40 App. D. C. 520; 4 R. C. L. 270; and 9 C. J. 536. In this view, was he not bound to await the letter referred to in the telegram ?' In fact this is what he did, as wTe show later.
Appellee, in his brief, says that it w'as agreed at the first conference between himself and Riley that, if lie could not get more than $500,000, that would be satisfactory as to the amount of the loan, and he refers for proof of this to his statement-in answer to the questions of the court referred to above, but in those answers he said that the letters of March 11th and 15th would show what the agreement was; that they would “settle that point.” The letters then supply the test because he -made them such, and they show conclusively, as we have disclosed, that if the loan was to be no greater than $500,000 the security should not include the land. The statement in the brief, just quoted, omits this very necessary element, namely, the extent of the security, and, hence, is not correct. The testimony of Riley is referred to by appellee, but we are not concerned at all about it, since it has no tendency to aid the
It is further asserted in appellee’s brief that, after receiving flic telegram of March 15, to which we have referred, Mcllarg went to the Chicago bankers, “closed the deal, and returned to New York.” lie did not say so in his testimony. What ho did say ivas this, that lie told the bankers that the proposition which liiley had authorized him to make “liad be'en accepted, and showed them his telegram.” This is not equivalent to saying that “be closed the deal” with them. Nor does his subsequent conduct indicate that he thought he had. When he reached New York he found awaiting him the letters referred to in the telegram. Answering these, March 20, he wrote: “I also note what you say about the bonds being secured by the
Having firmly in mind that this court will not set aside the finding of a jury on a question of fact except where it is clearly our duty to do so, we have searched the record with care for sufficient evidence to sustain- the verdict in the present action, but have failed to find it. Mr. McHarg may be entitled to recover any damages he has suffered by reason of Mr. Riley’s misrepresentations, but he has failed utterly to establish a performance of his contract.
For this reason the case is reversed, with costs, and a new trial ordered in accordance with this opinion. Reversed.
Dissenting Opinion
dissenting:
I find no fault with the abstract legal principles as stated in the majority opinion, but rather with their application - to the facts of this case, which has resulted in placing duplicity at a premium and good faith at a discount. While such a result always may not be avoided, even in a court of justice, I think it is easily avoidable here. That such was the view of the experienced trial judge and the twelve disinterested jurors who passed upon the evidence adds cogency to my position. The case is unique in that not an exception was reserved' to the introduction of evidence, and not a word of fault found with the charge of the court.
That Mr. McHarg was employed -to negotiate a bond issue
“The people here take the same view of the matter that 1 have expressed to you from the beginning, namely, that the property would not carry a $050,000 bond issue. * * *
“'My conclusion upon the whole matter was that they would handle the transaction if the bond issue did not exceed $500,000. In this connection, however, they will expect that your client in lien of the separate guaranty for the full amount Of the bond issue will give his personal guaranty on the issue. I understood you to say that lie was worth outside of this property from $100,000 to $150,000. It will be necessary in addition to furnish information in detail upon the following points.”
In substance tlio points were as follows: First, a statement as to the titles; second, the experience of Riley in timber and lumber business; third, details of two cruises represented to have been made; fourth, the cost of a spur railroad to the proposed mill site; fifth, the cost of the necessary logging road; sixth, Riley's experience in marketing lumber; seventh, information as to acreage and location of lands upon which Riley hud represented he held options. In short, these points merely covered statements Riley already had made. The letter concluded :
“I expect now to he in New York by the first of next week. I am planning to get there by Monday morning.
Evidently Ranldn was expecting a letter from Mcllarg, for on the next day, or March 14th, he wired Mcllarg at Chicago: “Letter not received. Will wire answer same address soon as received unless otherwise instructed.” On the next, day Rankin, having received Mcllarg’s letter of the 13th and submitted it to his client Riley, telegraphed Mcllarg at Chicago as follows: “Riley accepts proposition your letter 13th with one or two immaterial modifications writing you fully New York.”
Upon receipt of this telegram Mr. McTTarg went to the, bonding house with which he had been negotiating, “and told them the proposal they had authorized him to make had been accepted, and showed them this telegram.” A representative of this banking house testified that Mcllarg came to him and presented the outlines of a timber bond issue, and stated the representations made by Riley, and that he informed Mcllarg he would negotiate a bond issue totaling half a million dollars “if it could be shown that the representations made by Riley were true * * * that be told Ormsby Mcllarg that at that time he was prepared, ready, and able to negotiate said $500,000 issue of bonds on the above conditions, and requested Mcllarg' to have the questions answered, and'gave him a form of contract to be signed by Thomas R. Riley and the Thomas R. Riley Lumber Company; that he never received any answer to these questions; that he held himself in readiness to negotiate said bond issue until be received a letter April 12, 1913, from Mcllarg, stating that the people who had employed him (MeLIarg) to negotiate this bond issue were not the owners of the land and timber in question, although written representations had been made to him that the titles were in fee simple and perfect.”
When Mr. McTIarg reached New York he received three
Mr. Mellarg, responding to these letters, acknowledged receipt of the answers to the questions previously submitted, and then said: “I also note what you have to say about the bonds being secured by the timber plant oidy, and not by the land. This cannot be done. * * * 1 consider your letter of the 11th instant has so materially modified your first representations to me, that I must hear from you in response to this letter before I can submit any of your data to the Chicago brokers.” Rankin, on the day after the receipt of this letter, wrote Mc-Uarg that lie had submitted it to Riley; that he “hoped to have the matter in much better shape within a few days.” On March 17th Mellarg received from the Chicago brokers a form of contract and a supplemental list of questions, both of
Of course Mcllarg had a right to rely upon the representations which had been made to him hy Riley and his agent Rankin. lie went to Chicago, and made known those representations to the bonding house, and was told that if they could be substantiated a bond issue of $500,000 would be negotiated. Thereupon Mcllarg submitted the proposition in detail to his client, and received in reply a telegram accepting it “with .one or two immaterial modifications.” Surely Mcllarg had a right to take his client at his word, and to assume that the “immaterial” modifications related to matters of detail only, and not to substance. lie went back to the bonding house with the telegram, and a representative of that bonding house under oath says that he was “prepared, ready, and able to negotiate said $500,000 issue of bonds” on the conditions mentioned in Mcllarg's letter to his client. Had this telegram read, “Riley accepts proposition your letter 13th writing you fully New York,” could it be doubted for a moment that Mcllarg would have been entitled to his commission when the bonding house received notice of it? Questions had been submitted
I dissent from the opinion and judgment of the court.
A motion for rehearing was denied March 30, 1918.
Mr. Justice Siudons, of the Supreme Court of the District of Columbia, sat with the Court in the hearing and determination of this appeal, in, the place of Mr. Justice Van Oiisdet..