Love v. Harris

156 N.C. 88

Opinion

"Walker, J.

This action was brought to recover damages of tbe defendant for failure to comply with a bid made by tbe plaintiff at a sale, under a power contained in a mortgage to bim. On 9 January, 1905, Richard Harris and wife executed to tbe defendant, Caleb Harris, a mortgage on land, to secure tbe payment of a certain indebtedness, with power of sale in case of default by tbe said Richard Harris in tbe payment of the debt. On 21 December, 1909, tbe mortgagor having failed to pay tbe debt, tbe defendant advertised tbe land for sale, under and by virtue of tbe power vested in bim by tbe deed of mortgage, and on 22 {January, 1910, be sold tbe same tbrougb an auctioneer, <J. C. Spence, at public outcry, and one Cader Jennings, wbo was and is solvent, bid tbe sum of $1,500 for tbe land and it 'was struck off to bim at tbe said price. The auctioneer immediately made, on the back of tbe notice of sale, tbe following entry: “Sold to Cader Jennings for $1,500, 22 January, 1910.” After tbe sale bad been completed and after tbe bidders bad dispersed, tbe said Jennings refused to comply with bis bid, and stated to tbe auctioneer, in tbe presence of the defendant, that be was bidding for Elijah Harrell; that be did not want tbe land himself, and that be would have to sell it again. Under tbe advice of a friend, tbe auctioneer sold tbe land again on tbe same day, after tbe bidders bad dispersed, tbe defendant being present at tbe sale, and also tbe said Cader Jennings, and tbe plaintiff became tbe purchaser at tbe price of $1,175, there being only a few persons at tbe sale and no new advertisement of tbe sale having been made. Tbe defendant refused to make title to tbe plaintiff, and executed a deed for tbe land to Cader Jennings, wbo, in tbe meantime, bad agreed to abide by bis purchase. Out of tbe money paid by Jennings, tbe defendant retained a sufficient amount to pay bis debt and expenses of sale, and paid tbe balance over to tbe mortgagor, whose consent was never given to tbe second sale. The plaintiff now sues to recover tbe difference between tbe real value of tbe land, that is, $1,500, tbe amount bid by Jennings, and tbe amount bid by himself at tbe second sale. When tbe plaintiff bought at tbe second sale tbe auctioneer made tbe same bind of entry on tbe notice as be bad done when Jennings bid, that is, an entry to tbe effect that be bad sold tbe land to tbe plaintiff on tbe said day for tbe sum of $1,175.

At tbe close of tbe evidence for tbe plaintiff, tbe defendant demurred thereto and moved to- dismiss, or for judgment as of nonsuit, under tbe statute. Tbe motion was allowed. Judgment was entered for tbe defendant and tbe plaintiff appealed.

We are of tbe opinion that tbe judge correctly decided tbe case. When a sale is made at auction, tbe auctioneer, is tbe agent both, of the vendor and the vendee. It has been said that, until the fall of the hammer, he is the agent of the vendor, but when the property is struck off to the purchaser by the auctioneer he then becomes the agent of the vendee. The vendor employs the auctioneer to make the memorandum of sale, and the buyer, by bidding, sanctions the authority of the officer to do so. He, therefore, has the power to sign the memorandum, so as to bind the vendee to the terms of the sale. 1 Eeed Statute of Frauds, secs. 315 and 316, and cases cited in the notes. The principle is recognized in the case of Mayer v. Adrian, 77 N. C., 83, where it was assumed that the auctioneer has the right to sign the memorandum for the vendee, though in that case it was held that the memorandum was not sufficient, as it was not physically attached to the written notice or offer of sale, nor did it in any way refer to that paper, so as to constitute, with it, a complete memorandum, showing the names of the parties and the terms of the contract of sale. See, also, the case of Gwathney v. Cason, 74 N. C., 5, where it is said that an auctioneer is authorized by the bidder to sign his name to the memorandum or contract of sale. It is not necessary that„the vendee’s name should be subscribed to the memorandum, but it is sufficient if it appears in the body of the instrument and the intention is manifested thereby to bind the vendee by the instrument. Mr. Smith, in his work on Contracts (7 Ed.), at marg. p. 93, states the law very clearly in regard to this matter when he says: “There is a third point common to all the five contracts mentioned in the 4th section; it is with regard to the signature. The words are, you will recollect, 'signed by the party to be charged therewith, or some other person thereunto by him lawfully 'authorized.’ The signature, it is obvious, is most regularly and properly placed at the foot or end of the instrument signed; but it is decided in many cases that although the signature be in the middle or beginning of the instrument, it is as binding as if at the foot; although, if not signed regularly at the foot, there is. always a question whether the party meant to be bound by it as it stood, or whether it was left so unsigned because he refused to complete it. But when it is ascertained that he meant to be bound by it as a complete contract, the statute is satisfied, there being a note in writing showing the terms of the contract, and signed by him. Therefore, where in the case of the sale of a quantity of cotton yarn a bill of parcels was sent by the seller to the purchaser, headed: ‘London, 24 October, 1812. Messrs. John Schneider & Oo., bought of Thomas Norris & Oo., agents, cotton yarn and piece goods. No. 3, Freeman’s Court, Cornhill.’ Following this was a list of the articles sold, the particulars, quantities, and prices. It was held, in an action for not delivering the yarn, to contain a sufficient memorandum to satisfy the requirement of the statute as to the signature of the party to be charged. In this case the whole of the heading of the bill of parcels was printed, except the words, ‘Messrs. John Schneider & Oo.’ But as it was then given out to the other contracting party by the party to be charged, recognizing the printed name as much as if he had subscribed his mark to it, he had recognized and avowed it as his signature.” The auctioneer’s memorandum in this case was made at the very time of the sale and was written on the notice, and this was sufficient to make a complete contract of sale, the memorandum being physically attached to the notice, or so connected with it as to constitute a sufficient reference to it and so that they may be read together as parts of one and the same paper, the latter being an offer to sell the property (describing it), and the memorandum on the notice being an acceptance of the offer upon the terms contained therein.

In Proctor v. Finley, 119 N. C., 536, this Court held that advertising a sale of land at auction is an offer to sell at the highest bid, and the person who makes the last and highest bid thereby accepts the offer and the sale is complete, the auctioneer being the agent of the vendor to sell the land, and of the bidder to complete the sale by making and signing a proper memorandum thereof, and that the statute of frauds, as adopted in this State, does not require that the name or signature of the bidder should be subscribed1 to the memorandum, but the latter may be in any form which indicates that he has accepted the offer and agrees to be bound by the contract of sale. The name of the bidder and the price, in that case, were written on the side of the notice, and this was held to be a good memorandum, citing Gwathney v. Cason, 74 N. C., 5, and Mayer v. Adrian, 77 N. C., 83; Brown on tbe Statute of Frauds, sec. 369; 3 Am. and Eng. Enc., 848 and 849. Tbe rule is thus stated in 29 Am. and Eng. Enc. of Law, p. 856: “When tbe statute requires tbe memorandum to be ‘signed,’ it is immaterial in what part of tbe instrument tbe name of tbe party appears, whether at tbe top, in tbe middle, or at tbe bottom thereof, if applicable to tbe whole substance of tbe agreement, and written by tbe party, or by bis authority, with tbe intention of thereby executing tbe same as a binding obligation. A printed name upon a paper which is delivered under circumstances showing an intention to regard tbe printed name as tbe person’s own, will suffice, as will an entry in a book containing tbe ower’s name at tbe top of tbe page. When tbe statute requires that tbe memorandum be ‘subscribed,’ tbe signing must be a literal one at tbe end of the instrument. It is not necessary that the signature should be a part of tbe agreement itself. It is sufficient if it be indorsed upon it as a notification of tbe assent of tbe party, or if it be written in a letter or memorandum which refers to tbe agreement. Tbe statute does not require that both parties shall sign one paper containing the contract. .The subscription may be upon separate papers, as where counterpart memoranda are made and signed by the respective parties, or where an offer in writing is followed by a written acceptance of tbe same.”

The case of Dickerson v. Simmons, 141 N. C., 325 (opinion by Justice Brown), is distinguishable. There no sufficient memorandum referring to tbe written notice or offer of sale was made, but tbe principle herein stated was fully recognized. In our case tbe entry on the notice was equivalent to an acceptance of tbe offer of sale at tbe price, and as much so as if tbe acceptance bad been expressed in explicit terms and signed by tbe auctioneer as agent for tbe vendee. It is just as indicative of bis purpose to buy upon tbe terms of tbe offer and at tbe amount of tbe bid as was tbe entry in tbe Proctor case, if not more so. But if tbe first memorandum bad not been sufficient, tbe plaintiff cannot profit by the defect, as bis memorandum is identical with, it, and be therefore acquired no right, under the statute, by his bid and the entry of the auctioneer upon the notice of sale, to call for a deed.

As both parties signed the memorandum in this case, the mortgagee having signed the notice which was witnessed by the auctioneer and the defendant having, within the meaning of the statute, signed the memorandum by his agent duly authorized, it is unnecessary to decide another question in regard to what is a sufficient signing of the memorandum. The statute says it must be “signed by the party to be charged therewith, or by some other person by him thereto lawfully authorized.” Commenting on this part of the statute, Mr. Smith, at marg. p. 96 of his work on Contracts, says: “The signature is to be that of the party to be charged; and, therefore, though, as I have pointed out to you, both sides of the agreement must appear in the writing, it is not necessary that it should be signed by both the parties; it is sufficient if the party suing on it is able to produce a writing signed by the party whom he is seeking to charge. And such a writing signed is sufficient to satisfy the 4th section, though it be only a proposal accepted by parol by the party to whom it is made. The person, however, who seeks to enforce the agreement has not the other altogether at his mercy, but must either do, or be ready to do, his own part of the agreement, before he can seek performance on the part of the person who has signed.” Davis v. Martin, 146 N. C., 281; Love v. Atkinson, 131 N. C., 544.

But while the memorandum was sufficient within the statute of frauds, the sale to the plaintiff by the defendant and the auctioneer was invalid. If the purchaser at an auction sale is unable or refuses to comply with his bid before the bidders disperse, the property may be sold without a fresh advertisement, or the property may be afterwards sold if it has been newly advertised.

Discussing this subject, it is said in 27 Oyc., at p. 1486, that the bidder is liable for the amount of his bid, which may be recovered in a proper suit against him, or, if he is unable to comply with his bid, the property may be put up for sale a second.time. This may be done immediately, if the purchaser’s refusal or inability is clearly manifested, and the necessity of advertising a second time or giving new notices may be avoided if the resale is made on the spot and before the bidders disperse, although otherwise there must be a new publication and evidence of the trustee’s or mortgagee’s continuing authority to make the sale. It is no valid objection to such a resale that the property did not bring as much as at the first sale.

In Barnhardt v. Duncan, 38 Mo., 170, the very question we have here was presented. The bidder had refused, after the sale, to accept the deed because it did not contain covenants of warranty; and with reference to this, the Court said:' “Upon the refusal to accept it, the trustee proceeded at once to put up the property for sale again, at the same place, on the same day, without readvertising or any new notice, and, few persons being present, the property was resold for $25. This proceeding-can neither be justified nor sustained. It was, in practical effect, a sale without notice. The sale, as advertised, had taken place several hours before, and all bidders had departed. Though yet within the hours mentioned in the advertisement, it cannot be considered a fair and valid sale pursuant to notice. There should have been a new publication of notice for another day.” It was so held in the case of Dover v. Kennerly, 38 Mo., 469, the following being the headnote, which fairly states the substance of the opinion: “Where property offered for sale at auction by a trustee in a deed of trust is knocked down to the highest bidder, the sale may be enforced in equity in a suit for a specific performance, or the bidder may be held liable at law for the damages sustained. When the purchaser to whom the property is struck off at a trustee’s sale at auction fails to complete his purchase, the property must be readvertised for sale.” McClung v. Trust Co., 137 Mo., 106.

In this ease it appears that the second sale was made after the bidders had dispersed and without any new advertisement. The trustee and auctioneer had no power or authority from the mortgagor to release the first bidder and sell to the second bidder for a less price. The mortgagor was vitally interested in this transaction, as if we should hold that the second sale was valid, be would lose $325. Jennings was bound by bis bid, and as we'bave seen, it could bave been enforced against bim by a suit in equity, now a civil action.

We bold tbe second sale, wbicb was made to tbe plaintiff, to be invalid, for tbe reasons stated, and as tbe mortgagee bas made a deed to Jennings in accordance witb bis bid, for tbe full amount of $1,500, and as tbe mortgagor bas assented to tbe execution of tbis deed by receiving tbe balance of tbe purchase money, after paying tbe debts, costs, and expenses, we tbink Jennings must be declared to be tbe owner of tbe land, and tbe plaintiff is not entitled to recover against tbe mortgagor, wbo is tbe defendant in tbis action, tbe difference between bis bid and tbe real value of tbe land, according to bis contention. It can make no difference, so far as be is concerned, whether Jennings acquired title to tbe land under bis bid and tbe subsequent deed from tbe mortgagee, for it is sufficient to decide that tbe plaintiff acquired no right or title by virtue of bis bid at tbe second sale, as tbe mortgagee bad no power or authority to sell to bim.

Tbe plaintiff cannot recover upon tbe ground that tbe mortgagee assumed to exercise a power to sell wbicb be did not bave and that be was thereby misled or deceived to bis injury, for tbe simple reason that be bought witb full knowledge of all tbe facts, and as be is presumed to know tbe law, he was fixed witb notice of tbe fact .that tbe mortgagee did not bave tbe power to sell under tbe circumstances, and, therefore, be was in no sense defrauded.

In Leroy v. Jacobosky, 136 N. C., 443, Justice Connor, quoting from Reinhardt on Agency, sec. 308, and other authorities, says: “ ‘If tbe party witb whom tbe agent bas contracted knew that tbe agent bad no authority, or was cognizant of all tbe facts upon wbicb tbe assumption of authority was based— as, for example, when both parties labored under a mistake of law witb reference to tbe liability of the principal — tbe agent is not liable either in tort or upon tbe contract.’ Newport v. Smith, 61 Minn., 277; Baltzen v. McClay, 53 N. Y., 467. In Michael v. Jones, 84 Mo., 578, tbe Justice writing for tbe Court says: ‘But I am satisfied that under tbe best considered modem decisions tbe principle invoked by tbe plaintiff cannot be carried to such an extent. Tbe true rule, I tbink, is tbat as to tbe liability of tbe principal, tbe fact tbat tbe principal cannot be beld is no ground for charging tbe agent witb liability.’ Ruffin, J., in Fowle v. Kerchner, says: 'Tbe general rule is tbat whenever a party assumes to act as agent for another, if be has no authority, or if be exceeds bis authority, be will be beld to be personally liable to tbe party witb whom be deals, for tbe reason tbat by bolding himself out as having authority, be misleads tbe other party into making tbe agreement. But tbe rule is founded upon tbe supposition . . .

tbat tbe want of authority is unknown to tbe other party, or, if known, tbat tbe agent undertakes to guarantee a ratification of tbe act, and when this want of authority is known, and it is clear tbat tbe agent did not undertake to guarantee a ratification, it results tbat tbe agent is not personally bound.’ ”

In this case, as we have indicated, tbe plaintiff bad full notice of tbe situation, and will be beld, therefore, to have known all tbe facts, and it is clear tbat tbe mortgagee did not undertake to guarantee a ratification by tbe mortgagor, so tbat tbe essential elements of a warranty as to tbe authority of tbe defendant to sell to him is lacking, and be cannot justly claim to have been deceived or defrauded.

There is, therefore, no error in tbe case.

No error.