Johnson v. Fecht

68 S.W. 615, 94 Mo. App. 605, 1902 Mo. App. LEXIS 607

• Court: Missouri Court of Appeals
• Decided: May 13, 1902
• Status: Published

Opinion

GOODE, J.

We found this case so perplexing that we set it down for a second argument; but notwithstanding an able presentation of both sides by the respective counsel, and our own protracted study of the point involved, we announce our conclusion with diffidence.

The effect of the rulings on the instructions was to require the jury’s verdict to turn exclusively on whether or not Eeger authorized Lee to write the letter relied on as a ratification of the written contract of sale-signed by Hopkins & Ricketts as Eeger’s agents; but the judgment is now sought to be •upheld on broader grounds; to-wit, by construing the entire correspondence in regard to the sale of the forty-acre tract as well as the deeds to Hill and Eecht.

The letter containing the direction to sell said tract had been lost, and oral evidence was admissible to prove its contents. As that letter is counted on as giving authority in writing to Hopkins & Ricketts to make the sale in question, it was for the jury to say whether Eeger wrote it or authorized the writing of it, if there was sufficient evidence on that issue to be submitted. There was, however, practically no evidence at all; nothing but the one circumstance that it came to Hopkins & Ricketts in the envelope containing the deed to Hill. That Eeger authorized it to be written or approved it after he knew its contents is, at most, a bare surmise; so we think that instead of conferring authority, as a matter of law, it was not even competent to prove authority.

The letter written by Lee for Eeger was treated by the circuit court as an absolute ratification of the contract Eeger’s agents had made with Johnson. Whether it was or not, depends upon the terms required to be in the written authorization which must be given by a landowner to an agent to enable the latter to bind him by an agreement for the sale of his land; for there was nothing done by Eeger to work an estoppel, and whatever documents are relied on to establish a ratification must be complete enough to have constituted authority to his agents to make the agreement if the documents had been written beforehand. Hawkins v. McGroarty, 110 Mo. 546.

. What interpretation shall be given to the amendment of the statute of frauds, requiring an agent’s authority to make an agreement for the sale of realty, which will bind his principal, to be in writing, as regards the contents of the instrument of authorization ? The clause in question reads:

“And no contract for the salé of land made by an agent shall be binding on the principal, unless said agent is authorized in writing to make said contract.” R. S. 1899, sec. 8418; Sess. Acts 1887, p. 195.

Does that enactment mean that an instrument, delegating power to an agent to contract for the sale of land, must as completely state the terms of the agreement it is contemplated he may make, as the memorandum of the agreement made pursuant to' the power, to bind the vendor; that is, contain a •description of the property, the consideration, the names of the parties and all'the essential terms of the sale? Boyd v. Paul, 125 Mo. 9; Rucker v. Harrington, 52 Mo. App. (K. C.) 481.

No ease to clear up this difficult question of interpretation has been found; perhaps because few States have a statute providing that a broker must be empowered in writing to make contracts for the sale of lands; and such foreign statutes ■of frauds as contain a clause on the subject differ materially in their language from ours, the usual form being that no action shall be brought to charge a person on a contract for the sale of lands unless there is a note or memorandum of the agreement signed by the party to be charged or some person thereto lawfully authorized in writing; thus conforming the provision to those clauses which relate to the execution of instruments creating or assigning leasehold estates.

Prior to the amendment of the statute, the law in this State was that a broker verbally empowered to sell realty might execute a written memorandum or contract of sale to any purchaser, and the landowner would be bound by it, on the principle that a delegation of power to an agent to do a specific act carries the right to use the necessary means to make the agency effective. Glass v. Rowe, 103 Mo. 513, and cases cited. While that doctrine was widely accepted, it was and is rejected in some jurisdictions where there has never been a statute on the subject and the rule enforced that an agent authorized to sell can not bind his principal by a memorandum unless he has authority also to sign the memorandum. Chapman v. Jewett, 24 S. E. (Va.) 261; Halsey v. Montview, Id. 258; Henderson v. Beard, 51 Ark. 483; Edwards v. Johnson, 3 Houst. (Del.) 435. And this conflict in the cases really arose out of a difference of opinion as to what sufficiently proved the agent’s authority to sign the memorandum; for in all instances it was held his authority must expressly or inferentially embrace the power to sign or the principal worild not be bound. Coleman v. Garrigues, 18 Barb. (N. Y.) 60; Rutenberg v. Main, 47 Cal. 213; Browne on Statute of Frauds (5 Ed.), sec. 370.

The purpose of this amendment should be considered in striving to interpret it. Was it the intention of the Legislature to simply provide that an agent’s authority to sell real estate must be in writing in order for him to bind his principal by a contract, or rather to provide that an agent must be authorized in writing to execute a particular contract in order for him to bind his principal thereby ? The act was entitled “An amendment to the Statute of Frauds,” and its object must have been to still further obviate the evil against which that statute was originally directed, namely; the untrustworthiness of oral evidence in relation to certain kinds of agreements, which it sought to remove by requiring written evidence of those agreements. A memorandum of a contract for the sale of lands has been exacted for centuries, the statute having been enacted largely on account of the perpetration of frauds in regard to such contracts by false testimony after the relaxation of the ceremony of livery of seizin, or investure in transferring real property, a public ceremony and therefore an effective protection against trumped-up claims. ■ The cognate mischief to be cured by the amendment in question was not so much the proof of authority to agents to sell lands by false swearing, as the uncertainty of the terms they were empowered to sell on, concerning which honest as well as dishonest disputes frequently arose that could only be prevented by providing that no contract made by an agent for the sale of realty should bind his principal unless the agent was authorized in writing to make it. The language of the act favors this view; for it does not say the agent must have written authority to sell, but- to malee said contract, namely; the very one he undertakes to make.

Such references as our Supreme Court has made to the statute as amended countenance that construction.

In Hawkins v. McGroarty, supra, the defendant had authorized his broker in writing to sell a piece of land for him at a certain price and the broker sold for one hundred dollars less than that price, giving plaintiff, who was the purchaser, a receipt in Maull’s name containing the terms of the sale. A bill for specific performance was filed which pleaded that receipt and acts claimed to be a ratification. The agent swore he notified Maull of the terms of sale and the latter made no objection. He did, however, sell to McGroarty the next day. After stating that a ratification must be made in the same mode as the law requires the previous authority to be, the opinion says, in a paragraph -which contains a passage significantly italicised:

“Under the statute as it now reads, requiring written authority for the contract which the agents mcJce, there can be no question, it would seem, that there was no such ratification here as could, by any process of reasoning, bind the defendant Maull to specifically perform the contract in question, which his agent Heimans had no written authority to make.”

The italicised words indicate that the Supreme Court took the view that an agent must have written authority for the contract which he executes and therefore to ratify it the principal must know its full terms; or at the very least, that it has been made, and Eeger did not know that much.

It has been ruled in States having statutes more or less like ours that the written authority to the agent must be strictly construed and scrupulously followed. Bissell v. Terry, 69 Ill. 184; Kozel v. Dearlove, 144 Ill. 23; O’Shea v. Rice, 49 Neb. 893; Meux v. Hogue, 91 Cal. 442.

Kozel v. Dearlove, supra, went far in construing the Illinois statute requiring the agent’s authority to be in writing, holding that a contract executed by an agent different from the one authorized, was non-enforcible although it secured terms more favorable to the principal than the latter demanded. We would be reluctant to follow that ruling. The opposite view was taken on sounder reasoning in Bassett v. Rogers, 165 Mo. 377.

The decision in O’Shea v. Rice, supra, seems to have involved the very point controverted in the present case, although the opinion is not explicit. Eice had written a letter to' a real estate agent by the name of McBride who resided in Madison county, Nebraska, where Eice had a tract of land, to procure him a purchaser of the land. McBride wrote him that he had an offer of six hundred dollars for the property, without stating the terms 'of sale or payments, to which Eice replied that he would take that price if the purchaser Avould pay McBride’s commission, but not otherwise. This letter Avas written on the tenth day of January, and on the thirteenth McBride sold the land to O’Shea for six hundred dollars, signing a Avritten receipt for the money in Avhich he described the land and the terms of sale and bound Eice to furnish an abstract of title. On the next day he wrote to Eice telling him of tire sale and inclosing a deed Avhich he directed Eice to execute and send to a bank in Madison with the abstract of title and that the balance of the money would be paid to the bank. Eice sent the deed to the bank, telling it to pay McBride four dollars out of six hundred dollars for the abstract. Certain defects of title were detected and it Avas thought necessary to get quitclaim deeds from other parties to cure them. Eice icfusod to do this, his deed was returned to him and O’Shea afterwards filed a bill to have the contract performed. It was contended that even if the correspondence did not authorize McBride to bind the defendant by the agreement to sell to O’Shea, Avhich he executed in the defendant’s name, a ratification of the agreement should be implied from the defendant’s partial execution of it. On this proposition, the Supreme Court of Nebraska said:

“It is'elementary law that’ knowledge by the principal of the material facts is an essential element of an effective ratification of the unauthorized acts of his agents. The first intimation conveyed to the defendant of the execution in his name of a written agreement for the conveyance of the property in controversy was by letter from' McBrid'e bearing date of February third — two days previous to his repudiation of the transaction by directing*a return of the deed. We agree with the district court that the agreement relied upon is void under the provisions of the statute of frauds and that the evidence fails to establish a ratification thereof by the defendant.”

The statute construed in that case is as folloAvs:

“Evexy instrument required by any of the provisions of this chapter to he subscribed by any party, may be subscribed by his agent thereunto authorized by writing.”

That law is similar to the one we are considering and the effect of the foregoing decision is that the agent’s authority to bind the principal must be an authority to execute the contract of sale, not merely authority to sell or find a purchaser.

The letter written by Hopkins & Ricketts on the fifth day of January, to which Eeger replied on the following day, neither contains a description of the land, the name of the vendee, Johnson, nor information about the contract that Hopkins & Ricketts had signed to sell the land to Johnson. Eeger’s answer did not describe the land, in our opinion, sufficiently for it to be identified by extrinsic proof. It was spoken of as the forty-acre tract, and the forty acres on the south side of the road, but the county was not named. An attempt was made to show it was all the land Eeger had in Audrain county, but the witnesses only swore if he had any other they did not know it. He may, however, have had land which would have answered to the designation in the letters, somewhere else. We have no doubt the description was insufficient to answer the requirements of the statute of frauds. Weil v. Willard, 55 Mo. App. (St. L.) 376; Fox v. Courtney, 111 Mo. 147.

If the written authority to the agent must be as full as the memorandum of sale, then the correspondence would have been insufficient to empower Hopkins & Ricketts to execute the contract with Johnson. Ringer v. Holtzclaw, 112 Mo. 519.

Nor is the plaintiff’s case helped by the deeds. The deed to Hill contains no description of the land in question, the deed to Johnson was never signed by Eeger and the deed to Eecht certainly had no connection with the Johnson transaction.

If there was no writing of Eeger’s adequate to empower Hopkins & Ricketts to execute the agreement with Johnson in his name in the first instance, then, as heretofore said, there was no ratification of said contract after it was executed. Ecger received none of the purchase money, never signed the deed to Johnson, nor broached the subject thereafter to his agents, but conveyed the land to Eecht.

O’Shea v. Rice, supra, is a clear authority against the theory of ratification, and based on circumstances more cogent in favor of that theory than we have here. In fact, there was no circumstance tending to show a ratification except the letter written the sixth day of January. At that date Eeger was ignorant of the party with whom his agents had contracted and was not apprised that they had signed a contract in his name. It is difficult to 'see how he can be held to have ratified an affair of which he had no knowledge. The essence of the ratification of an unauthorized act, performed by one party in another’s behalf, is that the latter approved the act after he knew all about it.

It is necessary to reverse the judgment in respondent’s favor on account of the lower court construing Eeger’s letter to be an absolute ratification of the contract made with Johnson by Hopkins & Ricketts; because he simply knew at that time his agents had found a purchaser at the price he asked, without knowing who the purchaser was or that an agreement had been made in writing, and as soon as the deed sent for him to execute apprised him of the full terms of the agreement, he repudiated it. The proposition that a party who approves a contract when ignorant of its terms becomes bound thereby, is not applicable to contracts affected by the statute of frauds, as to which the rule is that in the writings relied on as a ratification, though they may be separate documents, all the terms of the agreement must be found. Christensen v. Wooley, 53 Mo. App. (St. L.) 53.

On an attentive survey of the entire record, we find no evidence which we think takes the case out of the operation of said statute, and it is unnecessary to remand it for further proceedings. The judgment is, therefore, reversed. Barclay, J., concurs; Bland, P. J., dissents, and requests tbat- the case be certified to the Supreme Court because in conflict with Block v. Crowther, 74 Mo. App. 480. It is so ordered.