Court Opinion

ID: 6821342
Source: CourtListenerOpinion
Date Created: 2022-07-23 19:07:31.49365+00
Date Added: 2024-06-11T16:04:08.489696
License: Public Domain

Holt, J.,
dissenting.
It is not contended that Kaplan, merely by virtue of his office, had authority to execute to any one a valid deed to this property or to give to one a binding option. As I see it, the circumstances plainly indicate that he and Banks had authority, acting jointly, to do either of these things.
Goldman, the third associate, lived in North Carolina. He appears to have taken no active interest in the corporation or its management but to have turned over complete control of it to his Norfolk associates. He was vice president but did not know it. Kaplan, however, did tell Herman that he had seen Goldman in New York and that Goldman was unwilling to sell. Later he said that he did not see Goldman there' and was not bn speaking terms with him.
Kaplan, in the beginning, sent Herman to Banks and told him that Banks would give him all the necessary information. Herman then promptly went to see Banks, who furnished him with the information which appears in the following memoranda:
In a memorandum book in which is listed properties for sale this appears on one page and on the back of the sheet that which follows appears:
“Ex. A
Business Property For Sale
Date 10/4/40
Purchase Price............................$ 52,500.00
Location—S. E. Corner Colonial Avenue and 13th Street.
Nos. 1210-1212-1214-1216 & Visulite Theatre Colonial Avenue.
Assessment—Bldgs: $21,000.00—Land: $11,700.00 Construction—Brick with gravel roof. Property (3 l/i years old.)
*796Lot Nos. 8-9-10-11 & 12. Block 15 Plat of Fairmount Land and Building Corporation.
Size of site 168.6 on Colonial X 115 on 13 th St.
Present Income.
Visulite Theatre $200.00 (25)*
1216—Drug Store 100.00 (25)*
1214—Barber Shop 50.00
1212—Beauty Shop 35.00 (44)*
1210—Flower Shop 75.00 (85)*
Monthly .....$460.00 Annual $5,520.00
Expenses.
Taxes ..................$692.28 (817.50)*
Agents ................. 276.00
Insurance ............... 201.4.2
Incidentals .............. 100.00 $1269.70 (1394.92)*
Annual Net Income...........°......$4250.30 (4125.08)*
Insurance—
Fire and Liability on Theatre—3 years. . . .$308.87
Stores—Fire & Plate Glass—3 years $295.37
Total premiums for three years $604.24
Owner—Mosell Realty Corporation. (Sol Kaplan)
■ See Leon Banks, 306 E. Plume St. ’Phone 21841
Bal. on loans: (Approx. $24,500)
Loan—$28,500.00 at 4/2 % interest, curtail $1500.00 annually, payable quarterly.
Held by the National Bank of Commerce.
*797Apr. 6/43—Bal. on loan $24,000.00—Curtail $1500.00 4/6/44-4/6/45-4/6/46 and balance of $19,500.00 due 4/6/47
Building has just'been painted and in perfect condition.
Theatre is Air Conditioned and this equipment will remain as part of the premises.
Theatre has a fifteen year lease, which has run 31/2 years, and the. rent increases every 5 years. Likewise the Flower Shop and Drug Store rent increases. On January xst, 1942, the monthly rentals will be $520.-00, which will then show a Net Income of $4970.30.
Theatre rent Mar. 1937 to Mar. 1942 $200.00 mo.
Mar. 1942 to Mar. 1947 $225.00 ”
Mar. 1947 to Mar. 1952 $250.00 ”
Flower Shop—Oct. 1, 1941 85.00 ”iyr.
Drug Store—Expires Oct. 1, 1942 $125.00 ”
New Rents:
Flower Shop. 5 yr. lease from Sept. 1942—$85.00 1st year; $90.00 2nd year, $95.00 3rd yr. & last 2 yrs. at $100.00. Beauty Shop—3 yrs. at $40.00 mo. starting latter part this year.”
This memorandum on its face tells us that it was intended for a prospective or a possible purchaser. It is an inducement held out to them.
It is all that might have been expected of an owner. The theatre was under a fifteen year lease; it might as well have been under a twenty-five year lease.
It is said that the property in litigation is all of the real estate owned by this corporation. Its name is “Mosell Realty Corporation.” Its charter is a public record, recorded in Norfolk, and to it every Norfolk citizen had convenient access. Among powers conferred is the power to buy and sell real estate. The extent of its holdings were not known *798to Herman or to any of the would-be purchasers. These would-be purchasers were interested in the particular bit of land. There was no occasion for them to inquire as to the other properties which might have been owned by it and in which they were not interested.
Plaintiff during the trial called for minutes of directors’ meetings. The defendants promised to furnish them but never did. There were three of these directors’ meetings between 1940 and June, 1943, and if Goldman was not on speaking terms with Kaplan, Banks was. One would not readily believe that Banks, who at least was on speaking terms with Goldman, would have failed at one of these meetings to tell him of the outstanding $50,000 option, or that some note of it did not appear in one of the minutes of directors’ meetings called for but not produced. The truth is that Goldman left with his Norfolk associates entire control and management of this Norfolk property and nobody objected to the $50,000 option given in 1940, when it appeared to be above current market, value, and not until 1943, when there had been a marked increase in values in Norfolk city, was.there any objection made by anybody. It Is then that the gentleman in the woodpile spoke.
Of course if a jury had seen fit to accept Goldman’s statement—the substance of which is he knew nothing about what his Norfolk associates were doing; that their authority was limited, and that they had no authority to sell, express or implied—they had a right to do so. But the trouble is that they did not. They had at least as much authority to draw inferences from circumstances as we have. They were simple men, not learned in the law. The presiding judge agreed with them.
Authority of these Norfolk associates to sell may be proven by direct evidence; it may be proven by direct evidence and by circumstances, and it may be proven by circumstances alone, as authorities hereafter noted abundantly show.
Guileless faith may carry us far. It took Daniel out of the *799lion’s den, but skepticism has crept into the Twentieth Century and, in current argot, some of us are from Missouri.
A distinguished member of this court, commenting upon testimony which did not accord with the common experience of mankind, once said that “Those who will may believe.”
These authorities show that circumstances alone may suffice:
The law on this subject is thus stated in 1 Mechem on Agency (2d ed.), section 299-, quoted by us with approval in Lysle Milling Co. v. Holt & Co., 122 Va. 565, 95 S. E. 4141:
“It is impossible to lay down any inflexible rule by which it can be determined what evidence shall be sufficient to establish agency in any given case. That is a question which must be determined in view of the facts in each particular case. Whatever form of proof is relied upon, however, must have a tendency to prove agency, and must be sufficient in probative force to establish it by a preponderance of the evidence. It may be said in general terms, however,. that whatever evidence has a tendency to prove the agency is admissible, even though it be not full and satisfactory, as it is the province of the jury to pass upon it. So if evidence has first been introduced tending to prove the agency, or to make out a prima facie case thereof, the admissions and declarations of the alleged agent, if otherwise competent, may then be shown, and the whole case be passed upon by the jury.”
In 13 Am. Jur. p. 870, it is said:
“It is a fundamental and well-settled rule that when, in the usual course of the business of a corporation, an officer or other agent is held out by the corporation or has been permitted to act for it or manage its affairs in such a way as to justify third persons who deal with him in inferring or assuming that he is doing an act or making a contract within the scope of his authority, the corporation is bound thereby, even though such officer or agent has not the *800actual authority from the corporation to do such an act or make such a contract. This authority is known as apparent or ostensible authority. This apparent authority is materially the same and is based upon the same principles as authority by estoppel. Stating the rule ini terms of estoppel, a corporation which, by its voluntary act, places an officer or agent in such a position or situation that persons of ordinary prudence, conversant 'with business usages and the nature of the particular business, are justified in assuming that he has authority to perform the act in question and deal with him upon that assumption is estopped as against such persons from denying the officer’s or agent’s authority.”
More than half a page of authorities are cited, among which is Martin v. Webb, 100 U. S. 7, 3 S. Ct. 428, 28 L. Ed. 49. In that case it appears that a bank cashier cancelled certain notes due to his bank and released the liens of trust deeds given to secure them. Mr. Justice Harlan said:
“Strictly speaking, he may not, in the absence of authority conferred by the directors, cancel its deeds of trust given as security for money loaned—certainly not, unless the debt secured is paid. As the executive officer of the bank, he transacts its business under the orders and supervision of the board of directors. He is their arm in the management of its financial operations. While these propositions are recognized in the adjudged cases as sound, it is clear that a banking corporation may be represented by its cashier—at least where its charter does not otherwise provide—in transactions outside of his ordinary duties, without his authority to do so being in writing, or appearing upon the record of the proceedings of the directors. His authority may be by. parol and collected -from circumstances.” (Italics supplied.)
We may approach this subject from other angles:
We have seen that no question of authority of the Norfolk resident owners to sell arose until values rose. There were three intervening annual meetings of directors. These meetings were under the complete control of these Norfolk directors. They could, without trouble, have voted to *801ratify the options which they themselves had given, if they thought it was necessary, or they might have called a special directors’ meeting for that purpose. Again, since these Norfolk men controlled the board of directors and owned two-thirds of the stock, they might, under Code, section 3820a, by following the procedure there marked out, have proceeded to sell this real estate and to wind up their corporation’s affairs. Neither of these courses was adopted, and for this reason: They were not deemed necessary; they knew that its entire control had been left with them. They entertained no doubt about their authority to sell and never had any doubt until a purchaser was found in 1943 who was willing to pay $52,500, which would have still left them with but $50,000 while the agent would have gotten $2500. The ostensible reason then advanced was that Goldman, their associate, would not go with them—an associate who had so little to do with this Norfolk holding that the fact that he was vice-president was news to him.
With these matters before them, how can it be said that neither evidence nor circumstances supported the jury’s verdict?

These figures in parenthesis appeared on the original memorandum in pencil.