Title: Alldrin v. Lucas
Citation: 490 P.2d 141
Docket Number: N/A
State: Oregon
Issuer: Oregon Supreme Court
Date: November 5, 1971

490 P.2d 141 (1971)
Caleb ALLDRIN, Respondent,
v.
Walter J. LUCAS and Alice J. Lucas, Husband and Wife, Appellants.

Supreme Court of Oregon.
Argued and Submitted September 14, 1971.
Decided November 5, 1971.
Claud A. Ingram, John Day, argued the cause and filed briefs for appellants.
Glenn D. Ramirez, Klamath Falls, argued the cause for respondent. With him on the brief were Ramirez &amp; Hoots, Klamath Falls.
Before O'CONNELL, C.J., and McALLISTER, HOLMAN, TONGUE, HOWELL and BRYSON, JJ.
BRYSON, Justice.
This is an action at law to recover a sum of money as a commission for securing a loan for defendants. Trial was commenced before a jury. During the trial, both parties stipulated that the jury be dismissed and the case tried to the court. The court made findings of facts and granted judgment in favor of plaintiff. The defendants appeal.
The evidence discloses the following sequence of facts. Plaintiff was a loan correspondent for a life insurance company and had known defendant Walter J. Lucas for twenty years. Mr. Lucas had an option to purchase the ranch on which he lived, near Mitchell, Oregon. He required a loan of $600,000, to be secured by a mortgage on the ranch property, to enable him to exercise his option to purchase. Mr. Lucas contacted the plaintiff for the purpose of securing such a loan. In return *142 for plaintiff's services, Mr. Lucas signed the following letter agreement:
Plaintiff investigated the ranch and Mr. Lucas's financial condition and submitted the necessary report to the John Hancock Mutual Life Insurance Company, hereafter referred to as the insurance company.
On May 22, 1968, based on plaintiff's recommendations, the insurance company issued their commitment for a loan to defendant Walter J. Lucas in the amount of $600,000, to be secured by a mortgage on the ranch property. The terms and conditions of this commitment by the insurance company were accepted in writing by Mr. Lucas. The commitment provided, inter alia,
Thereafter, the commitment set forth in detail a "SALE AGREEMENT FOR LOAN (To be on Interim Lender's Stationery)."
The option of Mr. Lucas to purchase the ranch expired in October 1968. On June 14, 1968, on the basis of the insurance company's commitment, the defendants secured a loan of $600,000 from the United States National Bank of Oregon. Both defendants executed the note and mortgage in favor of the bank. This is the first time that the signature of defendant Alice J. Lucas appears on any of the instruments. On November 13, 1968, the United States National Bank of Oregon, for valuable consideration received, assigned the defendants' note and mortgage to the insurance company.
Defendants assign as error the court's failure "to grant appellant's motion for an involuntary nonsuit on the grounds that the plaintiff had failed to prove performance on the plaintiff's part." Defendants argue, in support of this assignment of error, that "a party who pleads an agreement cannot vary the terms of the agreement pleaded on trial." The defendants argue further, in effect, that the plaintiff did not secure a loan for them from the life insurance company but, rather, defendants secured their own loan from the United States National Bank of Oregon.
The defendants, in support of this assignment of error, rely on Waterway Terminals v. P.S. Lord, 242 Or. 1, 44, 406 P.2d 556 (1964); Dicillo et al. v. Osborn et al., 204 Or. 171, 186, 282 P.2d 611 (1955); Borgert v. Spurling et al., 191 Or. 344, 352, 230 P.2d 183 (1951). These cases stand for the proposition that the pleadings in a cause are judicial admissions. Also, defendants cite Setser v. Commonwealth, 256 Or. 11, 470 P.2d 142 (1970), and Killam v. Tenney, 229 Or. 134, 149, 366 P.2d 739 (1961). These cases involve real estate brokers' employment contracts and hold, in effect, that a broker does not earn a fee until an enforceable contract has been entered into with a purchaser who is ready, willing, and able to buy on the terms fixed by the owner, and with a purchaser *143 who has the financial ability to perform. This case does not involve a question of judicial admissions nor is it a case where a broker is selling real estate and must find a buyer ready, willing, and able to purchase, and financially able to pay the agreed purchase price in order to recover his commission.
Defendant also relies on Northwestern Agencies v. Flynn, 138 Or. 101, 5 P.2d 530 (1931). This case can be distinguished, on the facts, from the case at bar. In Northwestern Agencies, after an exchange of letters defining the terms and conditions of the loan sought, the defendant rejected the proposal and withdrew the offer to borrow. There was no meeting of minds and the defendant did not receive the desired loan of money.
Defendants are correct in asserting that the plaintiff did plead "* * * that if Plaintiff would secure a loan for them in the sum of $600,000.00 to purchase certain real property located in Klamath County, Oregon, that they would pay Plaintiff the sum of one and one-half percent (1 1/2%) of the loan obtained to the Plaintiff for services therein" and that "Plaintiff secured a loan to the Defendants from the John Hancock Insurance Company * * *."
ORS 16.630 provides:
In Brooke et ux. v. Amuchastegui et ux., 226 Or. 335, 360 P.2d 275 (1961), defendant, as an assignment of error, contended that there was a material variance between the allegation in the pleading and the proof. At page 340, 360 P.2d at page 277 we held:
In LaBarge v. United Ins. Co., 209 Or. 282, 287, 303 P.2d 498, 500 (1956), this court again stated:
In Wehrung v. Portland Country Club, 61 Or. 48, 120 P. 747 (1912), the defendant, as here, claimed that the evidence introduced was at variance with the allegations of the complaint. The court considered the problem in light of Section 97, L.O.L., the predecessor to our present statute, ORS 16.630. At page 54, 120 P. at page 749 the court stated:
While the original complaint did not plead the original letter of agreement, it was received in evidence and stated, in part, "You will obtain this fee when you *144 have a firm written commitment from your company." It would be difficult for the defendants to contend that this is a material variance between the pleadings and the proof because we find that they were not misled to their prejudice. The written commitment for the loan was also received in evidence at the time of trial. This is the commitment that the defendant Walter J. Lucas affirmed and agreed to in writing. It specifically sets forth all the terms of the commitment and that a contemplated interim lender, such as the United States National Bank of Oregon, would make and close the original loan which was in turn to be purchased from the bank by the insurance company.
The trial court found "* * * any deviation from the express terms of the brokerage agreement has been waived by the defendants as they have accepted the loan and have received substantially exactly what they bargained for * * *." There is substantial evidence to support the trial court's findings as to defendant Walter J. Lucas, and we conclude that there was no error in this respect.
The defendants' other assignment of error is that the court erred in failing to grant defendant Alice Lucas's motion for an involuntary nonsuit for the reason there was no evidence that she was a party to the agreement to pay a commission. Defendants contend that a husband and wife relationship does not, of itself, make one the agent for the other, and the mere fact that Alice Lucas signed the mortgage does not justify the creation of agency by implication, relying on ORS 108.020; ORS 108.040; ORS 108.100.
The plaintiff contends that Alice J. Lucas, together with her husband, W.J. Lucas, accepted the benefits of the plaintiff's services and ratified and approved the acts of her husband when she executed the note and mortgage in favor of the United States National Bank of Oregon. The plaintiff, stating "* * * [a]lthough it is not strictly in point," relies upon Higgins v. Insurance Co. of N. America, 256 Or. 151, 469 P.2d 766 (1970). We agree that the case is not in point. In Higgins, an earnest money receipt was signed by Linn D. Higgins and Betty J. Higgins as purchasers, but only Mr. Higgins signed the agreement. The question before the court was whether or not Mrs. Higgins had an obligation to pay the purchase price and whether or not she had an insurable interest in the property.
We have closely examined the transcript and the exhibits. The record is devoid of any testimony establishing that defendant Alice J. Lucas had any knowledge of the original letter agreement on which the action is based or the subsequent acceptance in writing by Walter J. Lucas of the terms of the insurance company's commitment. Mrs. Lucas was not called as a witness nor did anyone testify as to her knowledge or presence at any time the transaction was discussed, with the one exception that she did sign with her husband the note and mortgage in favor of the United States National Bank of Oregon. The trial court held that Mrs. Lucas ratified the agreement between plaintiff and her husband by accepting the benefits of the loan, subsequently received.
To establish Mrs. Lucas's liability under the terms of the letter agreement signed by her husband, the court would have to find that the acts of the husband were impliedly authorized by the wife or, if unauthorized, that the acts were subject to ratification and subsequently ratified by Mrs. Lucas. As there is no evidence that the acts of Mr. Lucas were authorized by his wife, to hold Mrs. Lucas liable on the contract by ratification requires (1) the existence of a principal, Restatement (Second), Agency § 87; (2) an act done as agent, Restatement (Second), Agency § 85; (3) that there was knowledge of the material facts, Restatement (Second), Agency § 91; and (4) that there was an intent by Mrs. Lucas to ratify her husband's acts.
There is no evidence that Mr. Lucas, at the time of signing the contract, was acting as his wife's agent or with her express or implied authority, or any indication that she intended to ratify the contract. The only evidence that she participated in this transaction is her signature to the note and mortgage in favor of the bank. She might well have signed the note and mortgage without any knowledge of an agreement to pay the commission sued for in this action.
In Cranston v. West Coast Life Ins. Co., 72 Or. 116, 130, 142 P. 762, 766 (1914), this court held:
In Phillips v. Colfax Company, Inc., 195 Or. 285, 296, 243 P.2d 276 (1952), it was held:
There is no evidence that Mrs. Lucas had knowledge of the letter agreement to pay plaintiff a commission. On the evidence presented in this case, we cannot say that Mrs. Lucas authorized or ratified her husband's agreement to pay plaintiff a commission. The trial court erred in this respect.
Affirmed as to defendant Walter J. Lucas; reversed as to defendant Alice J. Lucas.