Case Name: William P. Fleming, Appellant, v. P. H. Burke
Court: Iowa Supreme Court
Jurisdiction: Iowa
Decision Date: 1904-01-27
Citations: 122 Iowa 433
Docket Number: 
Parties: William P. Fleming, Appellant, v. P. H. Burke.
Judges: 
Reporter: Iowa Reports
Volume: 122
Pages: 433–437

Head Matter:
William P. Fleming, Appellant, v. P. H. Burke.
Contract to Sell Real Estate: pkixcipal and agent; ratification : evidence In an action for breach of contract to sell and convey real estate, made by the agent of the vendor on terms different from those stated by the owner, the purchaser cannot recover, and the fact that the purchaser makes a partial payment to the agent on the unauthorized contract, which is repaid by an order of'court, does not amount to a ratification of the contract. Evidence considered and held to show that the agent and purchaser knew the terms upon which the owner proposed to sell but made an unauthorized contract.
Appeal from Linn District Court. — Hon. H. M. Remxey, Judge.
Wednesday, January 27, 1904.
Suit at law to recover damages for a breach of contract There was a directed verdict for the defendant. The plaintiff appeals.
Affirmed.
Heim ■& Heins for appellant.
Jamison & Smylh for áppellee.

Opinion:
Sherwin, J.
The defendant was the owner of a farm which he listed for sale with H. M. Troy, a land agent of Cedar Rapids. The terms of sale, other than the price, were not fixed at the time it was thus listed. About a month thereafter Troy wrote to the defendant that he had a prospective purchaser for the farm, and submitted' to the defendant a proposition of purchase from the party referred to. It was an offer to pay $40 per acre for the land, $100 to be paid as soon as contract of sale was executed, $1,000 when deed and possession were delivered'to him, and it was stated "that he will secure the balance by first mortgage back on the land at six per cent, interest, payable semi-annually, the principal being payable in multiples of one hundred dollars, at any interest-paying date." This proposition was sent to the defendant in a letter bearing date August 21, 1900. In answer to this letter the defendant, on the 23d of the same month, wrote to Troy that he must have $40 per acre net, and that he understood from his letter that his man would pay six per cent, interest, payable semi-annually, and $100 at each interest-paying date, and said, "If that is the way it reads, it will be all right for me." A few days after this the plaintiff and Troy entered into a written agreement for the transfer of the land to the former, Troy sign- • ing as tbe agent of Burke. It stipulated for tbe payment of $100 at tbe time, wbicb was paid to Troy, and for tbe payment of tbe balance of tbe purchase price as follows: $1,000 on tbe 1st of IVlarcb, 1901, and $100, or any multiple thereof, afterwards at any interest-paying date, "with interest at six per cent, per annum, payable semi-annually, the whole amount so remaining being payable six years after March first, 1901, tbe portion unpaid after March first, 1901, to be secured by first mortgage back on said premises, payable on above terms." This contract and tbe money paid thereon by tbe plaintiff were sent to tbe defendant by mail on the 31st day of August, 1900. On tbe next day tbe defendant returned tbe money to Troy, and- wrote him that as he understood tbe contract tbe remainder of tbe purchase price would draw interest only after March 1, 1901, and that tbe plaintiff could not have tbe land on those terms. He further stated . that it-could not all be paid in- six years because of a mortgage on tbe land, but be said that if tbe plaintiff would take tbe land subject to tbe mortgage, and pay interest "from now," "be can have possession of tbe farm at once, except about twenty acres pasture and about twenty acres in corn." He also stated that tbe bouse was vacant, and that the plain.tiff could have possession of that at once. This letter was duly received by Troy and shown to tbe plaintiff, and thereafter they made a new contract in writing whereby tbe plaintiff agreed to assume tbe payment of tbe mortgage and apply tbe same "as such proportionate amount of tbe purchase price, tbe balance over to be paid as follows." Tbe contract then provided for tbe payment of tbe balance precisely as did tbe former contract. Tbe defendant would not accept this contract.
It will be noticed that tbe first proposition Submitted to tbe defendant by Troy did not contemplate any delay in the execution of the deed or in giving tbe purchaser possession of tbe farm, but on tbe contrary, it was an offer to pay $1,100 whenever a deed was furnished and tbe possession given, and to then secure tbe balance, with interest, and this offer, as well as tbe subsequent correspondence between Troy and the defendant, must be considered in determining whether Troy ever had any authority .to make either of the contracts before us, and in construing the contract in fact made by Troy. It is clear from the first proposition that the plaintiff offered to pay interest only from the date of the execution of the mortgage back to the defendant, for such is in effect its terms, and such seems to have been the defendant's understanding of it. So much of the offer was satisfactory to the defendant, but, whether he understood the offer as to future payments in multiples of $100 or not, he did not agree thereto, as his letter of the 23d of August clearly shows. Troy, then, had no authority to make a contract which would postpone interest on the unpaid purchase price or provide for payments other than $100 at a time, and the contract of August 30th was clearly not authorized by the defendant, on the latter ground, at least. This objection was probably avoidéd, however, in the second contract, because of the plaintiff's agreement to assume the mortgage then on the land. So that we have really but one question to determine, and that is whether the contracts postponed the interest on the balance of the purchase price until March 1,1901. We believe such to have been the intent and understanding of the plaintiff, and it is unquestioned that such was the defendant's understanding. The plaintiff was advised that he could have a deed and the possession of practically the whole one hundred sixty acres at once. Notwithstanding this, the contracts provide for the deed and possession on the 1st of March following. If he understood that he was hound by them to pay interest on the unpaid purchase money from the date of the contract, there was no sense in delaying the deed and possession. Furthermore, the defendant advised the plaintiff of his construction of the contract of August 30th, and objected thereto, but no attention was paid to the objection, and the same terms were carried into the later one. In view of these facts, it is hardly profitable to discuss section 3038 of the Code, or to review the eases cited by the appellant in support of his 'contention that a present debt will bear interest from its date, in the absence of express stipulation. Here the contract provided for interest, but is uncertain as to when the interest shall cómmei ce. Construed in the light of the entire transaction, and as the parties themselves understood it, and as we think the plaintiff intended it, interest could only-have been received from March 1, 1901, whereas the defendant insisted that it must begin on the date of the contract. Again, the defendant was not bound to sell or convey under an ambiguous or uncertain contract, which might be the subject of future litigation. He clearly stated his terms, and, with full knowledge of what they were, it would have been an easy matter for the plaintiff and Troy to make a contract that complied with them without quibble or question. They chose to take their chances on another course, and must suffer the consequences.
The contention that the contract was ratified by the judgment requiring the defendant to repay the $100 paid to Troy by the plaintiff can hardly be sustained. Its acceptance by Troy was unauthorized. It was returned to him for that reason, and he kept it, probably with the consent of the plaintiff, certainly without the sanction of the defendant. The judgment was not the act of the defendant, but of the court, and, if held to be a ratification by the defendant, would establish the doctrine of a ratification by force.
The judgment is aeeibmed.