Mannix v. Hildreth

2 App. D.C. 259, 1894 U.S. App. LEXIS 3227

• Court: District of Columbia Court of Appeals
• Decided: February 5, 1894
• Docket: No. 67
• Status: Published

Opinion

Mr. Justice Shepard

delivered the opinion of the Court:

Pitney & Bradford were strangers to Mrs. Hildreth, and learned from some outside source — probably from the .advertisement of Hill & Johnston — that her property was for sale. Believing that it was cheap at $18,000 (as Baum-.grass testified), they, acting in the interest of their client, Mrs. McLinden, wrote this letter of July 17, 1890, making the offer of $17,000, part cash and part credit, with a deduction of 3 per cent, as a commission to themselves. From her reply it appears that Mrs. Hildreth was willing to take $17,000, all in cash, for the house and lot. She said: “I will accept” that sum; but did not in express terms constitute them her agents and empower .them as such to enter into a contract of sale binding upon her with any purchaser they might find. The words, “I will'accept,” as used in her letter, no more than the words, “ I will sell,” can be held as expressly saying, “ I authorize you to contract for sale with any purchaser you may find.” Stillman v. Fitzgerald, 37 Minn., 186; Bosseau v. O’Brien, 4 Biss., 395; Grant v. Ede, 85 Cal., 418; Kramer v. Blair, 88 Va., 456; Bissell v. Terry, 69 Ill., 184.

The letter of Pitney & Bradford clearly indicated that they represented a proposed purchaser,’ on whose behalf •they wrote; and she, declining the offer, indicated her willingness to accept a certain price if offered. If, on behalf of Mrs. McLinden, they had promptly replied to Mrs. Hildreth’s letter, accepting her terms, they might thus have made a binding contract between them. The point is in •fact made incidentally, that acting as agents for Stevens they accepted this offer for him, and we will refer to this later. The main contention is, that the effect of Mrs. .Hildreth’s •letter was to constitute Pitney & Bradford her agents, with full power to make a contract of sale at- her price, which •she can be compelled to perform. That Mrs. Hildreth (without regard to the legal effect of the correspondence) did not so intend as a matter of fact, we think, is apparent. She immediately wrote to her niece to ascertain who Pitney & Bradford were, and also to enquire who the proposed purchaser might be. As soon as she received the letter of the 26th, in which Pitney & Bradford informed her that the sale could be concluded in thirty or sixty days, she wrote them she would do nothing about selling until she should return in the fall. They did not tell her niece, nor write her, that they had entered into a written contract of sale, in her name, on the 24th, and received a deposit on account of the purchase money. The niece, in obedience to her aunt’s request, called to see them on the 24th, the very day that the contract bears date. Instead of telling her they had made a contract with Mrs. McLinden, and that nothing remained to be done but to execute it by deed and delivery of possession within thirty days as stipulated in said contract, it would seem that they misled her. We say, “it would seem,” because, in her letter to her aunt, written on the next day, she gives an account of her interview, and says: “ By this post you will probably receive a letter from him ( Pitney) saying that the applicant, a Mrs. McLinden, would take your house at $17,000 cash.” She then refers to the anxiety of the “applicant” to obtain almost immediate possession, and suggests that if “she can’t get possession at once, the sale may fall through;” she then adds: “If she has to wait until October for your return to get in the house, she will probably look elsewhere, so you had better come and settle it.” Mrs. Hildreth did not accept the suggestion, but wrote her niece that she would defer the matter of sale until her return in October, and asked her to so inform Pitney & Bradford. The information was given as requested. About the same time she wrote her short letter to them of the same effect. Notwithstanding all this, not one word was said to her of the existence of the contract with Mrs. McLinden, of of the second one made with Stevens.

Instead of being the agents, in the true sense of the word, of Mrs. Hildreth, Pitney & Bradford may well be considered the agents, first of Mrs. McLinden, and then of Stevens. Everything they did was in the interest of the proposed purchasers. They thought the property a good investment at $18,000, and yet, instead of trying to obtain that price (or more, as they should have done if really representing the interests of the owner), their sole effort was to obtain a reduction on behalf of the conflicting interest of the buyers. An agent’s duty is to. obtain the best price that he can for his principal, and scrupulously to avoid placing himself in a situation which may conflict with this duty. And any attempt to occupy the relation of agent to two persons whose interests conflict, whether with or without notice to them, is to be condemned as contrary to good morals and the principles of equity.

In the interest of Stevens, who had shown extreme anxiety to obtain the property at the price, they, without consulting Mrs. Hildreth, permitted Mrs. McLinden to withdraw, and substituted him in her stead. They antedated the contract with Stevens so as to malee it correspond with the date of the original notice to Mrs. Hildreth of sale, viz., July 24th; and had the cheque of Stevens for the deposit to correspond in date also. Again, some days afterwards, though the exact date could not be given by the parties who ought to have been able to do so, they procured the pretended assignment of her contract by Mrs. McLinden to Stevens. We say pretended assignment, because this contract had been set aside and Mrs. McLinden’s deposit cheque returned when the contract with Stevens was made. No attempt was made to purchase her option before its cancellation, and afterwards she had nothing left which she could assign. This assignment was plainly an afterthought, and a device by which it was sought to strengthen the claim of Stevens in an expected controversy with Mrs. Hildreth.

Anticipating that Pitney & Bradford might be regarded as the agents of Stevens instead of Mrs. Hildreth, the point has been made, as we have mentioned above, that the letter of Mrs. Hildreth contained a proposition to sell for $17,000, which they, as agents of Stevens, accepted, thereby making a contract which may be enforced, though relief be denied upon the main contention. The answer to this is plain. The only acceptance of the offer was on behalf of Mrs. McLinden, and Mrs. Hildreth was so informed through her niece on the same day. The proposition, as such, was never in fact accepted by Stevens. To make acceptance of an offer form a contract, the parties making the offer must have notice thereof in a proper manner before its withdrawal. No such notice was ever given. It is not necessary to inquire whether, had there been a formal acceptance, the proposition was sufficiently definite to be good under the Statute of Frauds.

But whether Pitney & Bradford are to be treated as the agents of Stevens or of Mrs. Hildreth, or of both, their conduct has been such, at least within the knowledge of Stevens, as would make it inequitable to enforce the specific performance of the alleged contract. In the exercise of a sound discretion, courts of equity will always decree specific performance in plain cases of contract, and have no. right to refuse it arbitrarily or capriciously; but they will never do so when, independent of the contract, circumstances are developed which would render it unjust, or tend in the slightest degree to encourage deception.

The decree passed below must be affirmed upon the other and chief ground upon which it has been assailed, viz., that the correspondence between Mrs. Hildreth and Pitney & Bradford did not confer upon them the power to enter into a contract of sale of her property, which, without ratification, would bind her.

That power to sell real estate does not include the power to make a contract therefor, has been expressly held, in two cases, by the Supreme Court of this District. Ryon v. McGee, 2 Mackey, 17, decided in 1882; and Hamilton v. Cutts, 6 Mackey, 208, decided in 1887. Both of these cases were cited with approval in the later case of Armes v. Cameron, 19 D. C., 435 (1890).

The want of care, if any, displayed by Mrs. Hildreth, in her original letters, as well as in subsequent correspondence, in not expressly excluding any such power, may well be explained by the circumstance that these decisions had made a rule of practice or construction, presumably well known to owners and buyers as well as to brokers and agents within the District of Columbia. The soundness of these decisions has been challenged in an argument which ably presents the other side, and is supported by high authority. The question has been the subject of much dispute and the conflict of authority is irreconcilable. As the decisions which have been assailed have necessarily had their effect upon the relation of owners of real estate and brokers in their dealings with each other in this jurisdiction, we would not feel justified in overruling them in case we doubted their soundness. But we are not satisfied to uphold them upon that ground alone. The doctrine which they enounce meets with our approval. It is not unsound in principle, accords with true public policy, and is supported by highly respectable authority. Duffy v. Hobson, 40 Cal., 244; Grant v. Ede, 85 Cal., 418; Carstens v. McReavy, 1 Wash. St., 359; Stewart v. Pickering, 73 Iowa, 652; Morris v. Ruddy, 20 N. J. Eq., 236; Milne v. Kleb, 44 Id., 378; Malone v. McCullough, 15 Col., 460; Fisher v. Bowser, 41 Tex., 222; White v. Templeton, 79 Id., 454; Simmons v. Kramer, 88 Va., 411; Kramer v. Blair, Id., 456; Bosseau v. O'Brien, 4 Biss., 395; Stillman v. Fitzgerald, 37 Minn., 186; Graves v. Horton, 35 N. W. Rep., 568; Hamer v. Sharp, L. R,, 19 Eq., 108. The reasoning of these cases is. to our minds, cogent, and leads to conclusions essentially just.

The agent thus constituted is under' no contract with his principal to sell, is charged with no duty in the premises, and liable for no negligence. He may throw up the business at any time without notice without being liable for neglect or omission of duty. He becomes entitled to his commission when he shall have procured a purchaser at the owner’s price and terms who is ready to close and able to perform the contract.

Real estate brokerage is an extensive business that within a few years has grown into colossal proportions. Real estate speculations throughout the whole country have brought into existence a host of brokers, who buy and sell for owners, resident and non-resident. We cannot ignore the universality of the business, the manner in which it is conducted, the customs prevailing in buying and selling, nor the evils of litigation which arise out of it. It is a well-known fact that persons who desire to sell lands or lots place them in the hands of two or a dozen brokers, with the understanding that the one who first finds a purchaser to the owner’s satisfaction shall receive the commission: It would be opening the door to frauds and perjuries and endless litigation to extend the power to sell into anything more than a commission to find a purchaser at the owner’s terms, with right to compensation for services' should he, without legal excuse, refuse to complete the sale.

The agency to sell, though created by writing duly signed, has never been deemed sufficient to authorize the agent to make a deed .or a title good at law; the authority to do so must be formal and express. Then why, upon such limited agency, permit him to enter into a contract which a court of equity, through its process, will ripen into a perfect title? Why should not the power of the agent to act cease in equity where it ceases at law?

“ He stops short somewhere, and when we are inquiring where the probable and proper place of his stoppage is, the evils that would attend the extension of his actual authority beyond the finding of a purchaser furnish ample reason for fixing his limit there.”

“ An agency of this kind may be created by the slightest form of words without any writing, leaving it to litigation to determine whether the substance of the authority is ‘to sell ’ or ‘ to find a purchaser,’ wherein the unscrupulous and dishonest agent would be at once arrayed, as the principal witness against his client, with every advantage from some note, ‘ made at the time,’ of what the instruction was. Perjury would go at a premium in such cases, and the confiding and unlettered would be the victims. Scarcely any man, when listing his property with a real estate agent, stops to give details, either as to the property itself or as to the arrangements he desires to make, yet no one would, sell upon equal terms to a first-class business man, and to an habitual drunkard, or well-known insolvent, and the ordinary man would not sell at all to a person whose very occupancy would tinge the neighborhood with a bad repute. These are good reasons, and are probably some of the reasons why custom and the law have made it not necessary 'that real estate agents should actually procure contracts in order to earn their compensation, and why, in this connection, the common understanding of the phrase ‘authority to sell’ means only authority to find a purchaser, whether the authority be given orally or by written request.” Stiles, J., in Carstens v. McReavy, supra.

The facts of this case, we think, forcibly illustrate the wisdom and justice of the rule of strict construction which requires that, whether verbal or written, “the words used for the purpose should be distinct and clear in their meaning and import, and should, with the requisite degree of certainty, manifest the intention of the principal to do' something more than merely to employ a broker.” Duffy v. Hobson, 40 Cal., 245.

It is not necessary to pass upon the application for leave to amend the bill in this court so as to include in the cause of action the claim under the assignment from Mrs. McLinden; for it must be apparent from what we have said with respect thereto, that had it been included in the allegations of the original bill, it would afford no ground for the relief prayed.

No error appearing in the proceedings below, the decree dismissing the bill must be affirmed with costs to the appellee ; and it is so ordered.