Case Name: Spengler v. Sonnenberg et al.
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1913-06-10
Citations: 88 Ohio St. 192
Docket Number: No. 13327
Parties: Spengler v. Sonnenberg et al.
Judges: Shauck, C. J., Donai-iue, Wanamaker, Newman and Wilkin, JJ., concur.
Reporter: Ohio State Reports, New Service
Volume: 88
Pages: 192–206

Head Matter:
Spengler v. Sonnenberg et al.
Proceedings to enforce specific performance—Written contract for sale of real estate—Signed by agent under express authority— Authority must conform to identical contract sued on—Parol authority of agent must be clearly proven—Law of agency.
1. In a proceeding to enforce specific performance of a written contract for the sale of real estate, signed by an agent under express authority, it must be shown that the authority was such as to permit the making of the identical contract sued on, and not one differing therefrom in a material respect.
2. If an agent, acting under express authority to enter into a written contract for the sale of land, makes a contract for his principal which includes terms not authorized, the agreement is void, and its performance will not be enforced.
3. Where the express authority of an agent to sign an agreement in writing for the sale of lands rests in parol, the proof must be clear and convincing not only of such parol authority, but also that the authority was such as to permit the inclusion of all of the material terms which are embodied in the instrument.
(No. 13327
Decided June 10, 1913.)
Error to the Circuit Court of Henry county.
This was a proceeding for the specific performance of a written contract for the sale of eighty acres of land in Henry county and certain personal property and rights.
The petition alleged that Spengler, the defendant below, was the owner of the land and that on the 26th day of February, 1910, he entered into an agreement in writing, signed by his duly authorized agents, Hanna & Konzen, whereby he agreed to and did sell the said premises for the sum of $10,800.00, payable $3,000.00 on or before March 20, 1910, $2,000.00 on or before June 1, 1910, deferred payment to be secured by three equal notes due in one, two and three years from date respectively, with six per cent, interest payable annualfy, with privilege of payment in sums of $100.00 or more on any interest day. Said notes to he secured by mortgage on said premises. The plaintiffs to have the tile, logs, lumber and wire .fencing then' on said premises for the improvement of the same; also to have the farm’s share, as given by the renter thereof, for the season 1910.
The petition further alleges that the plaintiffs tendered to the defendant the sums of money stated and the notes secured by the mortgage, in accordance with the agreement, but that the defendant refused and still refuses to receive said payments and notes and refuses to execute and deliver to plaintiffs a good and sufficient deed or any deed for said premises.
The answer of the defendant admits that he is the owner of the lands and in possession of the same and has been in possession for many years last passed and denies all the other allegations in the petition.
On the hearing in the common pleas, a finding and decree was entered in favor of the plaintiffs. The case was appealed to the circuit court where it was ordered and decreed that the plaintiffs, within five days, deposit with the clerk of the court the $5,000.00 in money and the three notes and the mortgage securing the payment of the same, and that defendant shall “within five days thereafter, execute and deliver to plaintiffs a warranty deed for the premises described in said1 petition, and that upon failure of defendant to execute and deliver to plaintiffs such a deed, this decree shall stand for and operate as such conveyance.”
It was further ordered that in the event plaintiff failed to deposit said money, notes and mortgage within the time specified, plaintiffs’ petition shall stand dismissed.
A finding of facts was made by the circuit court on which its judgment was entered. From this it appears that in May, 1909, William Spengler owned the lands described in the petition; that in said month he verbally authorized Hanna & Konzen, who were real estate brokers at Napoleon in said county, to sell said land at not less than $130.00 an acre, upon a fair contract, to a purchaser who was a responsible man, for a reasonable payment at the time of the consummation and execution of the deed, and the balance on any reasonable terms to suit the purchaser. Deferred payments were to bear six per cent, interest, payable annually, secured by mortgage. That the' defendant authorized Hanna & Konzen when and as soon as they found such purchaser, who would buy the lands on the terms stated, to enter into a written contract with such purchaser on behalf of the defendant.
The. finding further shows that at the time defendant authorized the real estate agents to sell the land, nothing was said between the defendant and the agents concerning the kind of deed to be made, that nothing was said relative to an abstract of title nor about the crops, the rents, the time when possession should be given, payment of taxes or about all, or any, of the items of personal property, mentioned in the contract thereafter made by the agents with the plaintiffs, or about any personal property whatsoever.
It is further shown that some nine months later, on the 26th of February, 1910, the agents entered into a written contract with the plaintiffs below, who' were responsible men, and signed the defendant Spengler’s name to the contract and delivered it to the plaintiffs. The written contract was included in the finding of facts and purports to be a sale by Spengler to plaintiffs of the land described for $10,800.00, payable in the manner stated in the petition, the owner to execute and deliver a warranty deed and abstract of title by June 1, 1910, and included the provision: “It is understood and agreed that second party is to have the tile that is on the farm at this time; also all logs, lumber and wire fencing, etc., that are on the farm to be used for the improvement of said farm. It is also understood and agreed that second party is to have the farm’s share of the rent as agreed by said first party with the renter on the farm for season 1910. Second party to have the right to enter on said farm to make improvements so long as they do not interfere with growing crops of the renter on said farm.”
The finding further shows that at the date of the contract there was on the farm, belonging to the defendant, fencing, drainage tile, farm lumber and logs, which had been procured by him but which had not been used on said farm; that at that time the farm had been rented by the defendant until March 1, 1911, to the tenant who was in possession.
The finding also shows that immediately after the execution of the contract the agents notified the defendant of what they had done, and asked him to be ready to carry out the contract, but that he refused to do so and that in a few days thereafter he notified the plaintiffs that he would not carry out the terms or provisions of the contract of February 26th, and that thereafter the plaintiffs tendered to the agents and to the defendant the money and notes provided for by the contract to be paid and delivered by them. The finding further shows that at the time of the trial in the common pleas and in the circuit courts, the plaintiffs tendered to the defendant $5,000 in cash and the notes and mortgage above referred to and demanded that defendant execute and deliver to them a deed' for said lands as provided in said contract and demanded full performance of said contract by him, but that said defendant refused to make said deed of performance of contract.
This proceeding is brought to reverse the judgment of the circuit court and for judgment.
Messrs. Harris & Shaw, for plaintiff in error.
The cases involving unauthorized sale by agents of fencing, lumber, logs, tile, abstract and warranty, .in addition to the sale of land, are not/numerous. There are, however, a number of cases wherein. analogous questions relating to commissions, taxes, interest, time in which to make sale, and the terms of payment for land bargained by agents have arisen when specific performance was sought. We believe that all such cases that have been reported, sustain the views we urge. Among them are: Dayton v. Buford, 18 Minn., 126; Siebold v. Davie, 67 Ia., 560, 25 N. W. Rep., 778; Monson v. Kill, 144 Ill., 248, 33 N. E. Rep., 43; Munson v. Jacques, 144 Ill., 651, 33 N. E. Rep., 757; Jackson v. Badger, 25 Minn., 52, 26 N. W. Rep., 908; Miller v. Sawbridge, 29 Minn., 442, 13 N. W. Rep., 671; Hamlin v. Wistar, 31 Minn., 418, 18 N. W. Rep., 145; Oliver v. Sattler, 233 Ill., 536, 84 N. E. Rep., 652; Hoyt v. Shipherd, 70 Ill., 309; Kinman v. Botts, 147 Ia., 474, 124 N. W. Rep., 773; Hartenbower v. Uden, 242 Ill., 434, 90 N. E. Rep., 298, 28 L. R. A., N. S., 738; Tripp v. Smith, 180 Mass., 122; DeSollar v. Hanscome, 158 U. S., 216; Brown v. Grady, 16 Wyo., 151, 92 Pac. Rep., 622; Downing Investment Co. v. Coolidge, 46 Colo., 345, 104 Pac. Rep., 392; Morris v. Ruddy, 20 N. J. Eq., 236; Speer v. Craig, 16 Colo., 478, 27 Pac. Rep., 891; Hampton v. Moorehead, 62 Ia., 91, 17 N. W. Rep., 202; Wilkin v. Voss, 120 Ia., 500, 94 N. W. Rep., 1123.
Messrs. Donovan '& Dittmer and Mr. W. W. Campbell, for defendants in error.
It is a general rule that when a power is conferred upon an agent, he has by implication such incidental authority as is necessary to carry his power into effect. Insurance Co. v. Williams, 39 Ohio St., 588; Pollock v. Cohen, 32 Ohio St., 514; 31 Cyc., 1335, 1364.
The proper authority includes all mediate powers which are necessary to carry it into effect, and this applies equally to general and to special agencies. 31 Cyc., 1344; Bell v. Moss, 5 Whart., 189; Peck v. Harriott, 6 Serg. & R., 146, 9 Am. Dec., 415.
The implied powers and authority of an agent employed for a particular service depend largely upon the circumstances in each case and upon what is necessary or reasonable to enable him to effect the purpose of his agency. N. Y., etc., Mining Co. v. Fraser, 130 U. S., 611; National Bank of Republic v. Old Town Bank, 112 Fed. Rep., 726, 50 C. C. A., 433; 31 Cyc., 1366; General Cartage & Storage Co. v. Cox, 74 Ohio St., 294.

Opinion:
Johnson, J.
From the finding of facts, it appears that the defendant in May, 1909, verbally authorized the real estate agents to sell the land referred to, for the price and on the conditions named, and also authorized them to enter into a written contract with the purchaser when found.
The' finding shows that, in the employment of the agents by the defendant, nothing was said as to the kind of deed to be made; nothing as to an abstract of title, nor as to the crops, rents, time when possession was to be given, payment of taxes, nor about any personal property whatever.
Notwithstanding this, all of these matters were covered by the contract which the agents made, and plaintiff in error contends that, as he did not authorize the making of such a contract, he was warranted in refusing to carry it out, and that the circuit court erred in finding that the plaintiffs below, were "entitled to have the agreement performed as to the real estate."
The contract which the defendant repudiated was the one embodied in the written instrument signed by the agents, the one on which suit was brought and the one which, as shown by the finding, plaintiffs demanded full performance of by the defendant, on the trial in both of the courts below.
. It is the settled law of this state that a real estate agent is without authority to execute a contract of sale which shall be binding on one who places real estate in his hands for sale, unless such authority is specially conferred. Weatherhead v. Ettinger, 78 Ohio St., 104.
The business of a real estate agent is to find prospective purchasers for property, whose owners desire to sell, and if employed he has earned his commission when he has found a person willing and able to pay the price stipulated, or has brought, parties together who afterwards agree. The fact that the owner of real estate employs an agent to find a purchaser for it, does not raise an implication that the agent is authorized to make a written contract with reference to it. And while the weight of authority seems to sustain the proposition that special authority to an agent to enter into a written contract may be verbally conferred, the proof must be clear and decisive, not only of such parol agreement, but that the agent had authority to make all of the terms for his principal which he includes in the written contract. If the agent assumes to make a contract in excess of this authority, the agreement is void and unenforceable. Where special power is conferred upon an agent, persons dealing with him are bound to ascertain the extent of his power. Pomeroy Spec. Perf., Sec. 77; Morris v. Ruddy, 20 N. J. Eq., 238; Merritt v. Wassenich, 49 Fed. Rep., 785; Campbell v. Hough, 73 N. J. Eq., 601; Payne v. Potter, 9 Iowa, 549; 31 Cyc., 1350; Ward v. Thrustin, 40 Ohio St., 347.
It would seem that the justice and salutary force of these rules would be obvious. The owner of land is not bound to perform any contract for its sale unless it is in writing. A prospective purchaser is presumed to know that such is the law. When he deals with the person who claims to have verbal authority to sign such a contract as the agent of the owner, he does so with the knowledge that the principal will not be bound unless he had specially authorized the agent to make the contract which he assumes to make. The statute of frauds itself is but the expression of a wholesome desire to avoid some results of the infirmities of human nature.
Our attention is called to some cases in which the rule is announced that when a power is conferred upon an agent he has by implication such incidental authority as is necessary to carry his power into effect and defendants in error contend that inasmuch as the only direction which Spengler gave to the agents in this case was that the price should not be less than $130.00 an acre, all other matters necessary to be determined in the making and execution of the contract were left open without any specific instructions or limitations.
There is no doubt as to the correctness of the rule stated, but the incidental authority which the agent has by implication is only such as is necessary to carry into effect the power actually con ferred on him. It cannot be said that where an agent was employed to sell a piece of land for $130.00 an acre, he had incidental authority to convey other valuable property and rights, in addition to the land, for the same price, and yet that is what the written contract made by the agents in this case provided for. The tile, the fencing material, the lumber and the logs, all were personal property belonging to Mr. Spengler, separate and apart from the realty. The contract also provided that the purchaser should have the landlord's share of the rents for the year 1910, and, at the same time, provided- that the making of the deed should be postponed till June 1, 1910, at which time the cash payments should be completed.
The contract was made February 26th, the taxes became a lien in April, the deed and complete cash payment were postponed until June. By the arrangement stated, the purchaser would secure the rent for the year 1910 and Spengler would be compelled to pay a j^ear's taxes which became a lien more than a month after the making of the contract. Moreover, under that provision of the contract, Spengler, in addition to giving up the rent and assuming taxes which became a lien after he made the contract, would lose the interest for the time between February 26th and June 1st on $7,800.00 of the purchase price.
None of these things was included in the authority given to the agents, and none of these things can, under any just rule, be held to be necessarily incidental to the power given by the verbal agreement. The effect of such provisions was to reduce the price to be paid for the land itself, below the sum for which the owner had authorized it to be sold.
The written contract made by the agents also provided that the vendor should furnish to the purchaser an abstract of title to the premises and should convey them by warranty deed.
• Authority to contract for an abstract of title would not be implied, because the vendor is under no obligation, in the absence of express provisions, to furnish the vendee with an abstract of title. Thomas v. Guaranty Title & Trust Co., 81 Ohio St., 432. The same remark may be made as to the provision for a warranty deed.
The learned circuit court seems to have been of the opinion that the written contract, in so far as it provided for the conveyance of the personal property and rights referred to, was not binding-on the defendant Spengler, but they found that "as to said real estate plaintiffs were entitled to have said agreement enforced."
The contract was entire. The price named was one entire sum for all of the property contracted for, not apportioned in any manner. The decree entered by the circuit court in effect subjected the vendor to the payment of the taxes referred to, as well as the loss of the interest on the sum above stated. All of this was as much unauthorized as the provisions for the conveyance of the personal property and the making of the abstract. The whole arrangement lacked the essential element of mutuality.
Courts will compel parties to perform contracts in accordance with their terms, but they have no power to and will not make contracts for persons and compel the execution of them. Where the contract is entire and the consideration indivisible, if any material part of it is unauthorized, none can be enforced. Specific performance of contracts is a matter resting in the sound discretion of the court, not arbitrary, but controlled by principles of' equity, on full consideration of the circumstances of each particular case.
In City of Wellston v. Morgan, 59 Ohio St., 147, the statute under which the contract was made provided that it could be made for any period not exceeding ten years. A contract was made by the city for ninety-nine years. Its validity being attacked, it was contended that it was good for the ten years authorized by law, but the court held that the contract was entire and unseverable. It was held that the court could not make a different contract for the parties than the one they had made, by enforcing it for part of the time.
Spear, C. J.,
in the opinion, declares: "We are dealing with the subject of contract. It implies parties and a meeting of the minds. The paper presented undertakes to stipulate for the furnish-ing of light and an agreed price therefor, for a period of ninety-nine years. The proposition is that we now treat it as a contract for ten years; that is, that the court shall make a new contract for the parties for ten years, and then enforce it.' How can we say that the company would have incurred the great expense and outlay of money and labor, which the petition declares was incurred, for the period of ten years only? And if the court were of the opinion that probably, the company would have been willing to so contract, where is there any authority in the court to now alter the terms that they did agree upon and then enforce them as changed? We are of the opinion that neither in law nor reason is there any ground for such a proposition."
In Morris v. Ruddy, 20 N. J. Eq., 236, it is held that a broker employed to sell lands has no implied authority to sign a contract of sale on behalf of his principal, but that, if he had authority and the contract varies from his instructions, the principal will not be bound by it.
It was contended that the contract made by the agent varied from his authority in that by the contract the owner who employed the broker was left to pay the commissions, while the authority was to sell for $3,000 net, free of charge for commissions. The owner testified that these were the instructions, and the broker, who was the only other witness, admitted -that he was so instructed by the defendant. The court says: "He says that the complainant, by a verbal agreement, was to pay the commission and the complainant offers to pay them. But the written bargain is for $3,000, not for that and commissions. If the defendant is bound by the bargain as written, he can no more claim commissions than he could claim $3,030 on a parol understanding. If authority should be given in writing to contract to sell -lands for $1,000, retaining the right to occupy for three months, a written contract to sell for $1,000 would not be valid, although there was a verbal understanding which the purchaser will comply with, permitting the occupation. The defendant is bound by this written contract to a different bargain from the one he authorized." The court refused to enter a decree.
In Campbell v. Hough, 73 N. J. Eq., 601, there was a sale made by an agent who claimed to have been verbally authorized to sign a written agreement for the owner. The court, in the opinion, points out that the agreement as claimed by the agent, did not give him authority to bind the owner to pay the taxes due after sale, and say: "The authority, however, must be such as to permit the making of the identical contract sued on and not a contract different from the one actually authorized."
The case we have in hand differs from those in which equity will enforce specific performance as to part of the property contracted for, when it appears that the vendor does not own all of the interests he has agreed to sell, and is, therefore, unable to convey them in full in accordance with his contract.
In such case, the vendor is estopped from asserting his inability to perform, and the purchaser is permitted to insist that the vendor shall perform pro tanto. Here the purchaser was bound to know the extent of the agent's authority. The contract made by the agent exceeded that authority, and the principal repudiated it as soon as he learned that it had been made. The case contains none of the elements which must be present before the application of the doctrine of estoppel can be insisted upon. There was no conduct or representation by the owner upon which the purchaser relied. Nothing whatever was done by the purchaser which was induced by the silence of the owner with knowledge of the facts. / On the contrary, the purchaser being charged with knowledge of the extent of the agent's authority is presumed to have known that many items which were included in the contract were not authorized, and that, therefore, the contract itself, in its entirety, was subject to the approval of the owner when brought to his knowledge and that he would not be bound by it unless and until he had approved it. There is a clear distinction between an entire indivisible contract, which was only authorized in part, and a contract made by an owner or by his duly authorized agent, which he is only able to perform in part. The vendee may waive performance of the part which the vendor is unable to perform and insist on the rest, but as to a contract which was unauthorized, a decree of specific performance, in whole or in part, would be to enforce a contract which the owner never made.
For these reasons, the judgment of the court below will be reversed and judgment entered for plaintiff in error.
Judgment reversed. .
Shauck, C. J., Donai-iue, Wanamaker, Newman and Wilkin, JJ., concur.