Court Opinion

ID: 6617230
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:24:36.488944+00
Date Added: 2024-06-11T15:58:34.713351
License: Public Domain

Biggs, J.
(dissenting). — The majority of the court are of the opinion that the plaintiffs were entitled to recover for the loss of their bargain, and that the circuit court was justified in so instructing the jury. To this I cannot agree. The action is one for the. breach of an implied warranty of authority by the defendants as agents of Taylor to make the contract set forth in the petition. If the defendants assumed to act' for Taylor without having authority to do so, they would be answerable in this action for whatever amount had been paid on account of the pretended contract. But whether they must also answer to plaintiffs for the damage sustained by reason of the loss of a bargain, must depend upon the sufficiency of the memorandum to bind Taylor but for want of such authority. All the authorities hold this. In the case of Dung v. Parker, 52 N. Y. 494, the defendant falsely represented that he had authority to act as agent for another, and made a parol contract for the leasing of a store to plaintiff for two years, in consequence of which the plaintiff incurred expense in procuring fixtures, etc. The owner of the storeroom refused to execute the lease, and the plaintiff instituted the action for damages. The court of appeals, in its opinion, said: “In this case it is to be assumed, from the finding of the jury, that the defendant made a contract to lease the premises without authority. But the contract was by parol; and, if the defendant had possessed authority to make it, it would have conferred no right upon the plaintiff. The plaintiff has. not been injured by the misrepresentation, and has lost nothing, for he *152would have gained nothing if the representation had been true. He cannot say that he was defrauded, and make that the substantive ground of his recovery, because he had no right to rely upon a contract which, when made, the law declared to be void. If he incurred expenses on the faith of the promise, or relying upon the express assurance of the defendant that the corporation would sanction the contract, it is his misfortune, but it furnishes no ground of action.”
. The same principle is clearly enunciated in a decision by the same court in a subsequent case (Baltzen v. Nicolay, 53 N. Y. 467), where it was said: “When an agent makes a contract beyond his authority, by which the principal is not bound, by reason of the fact that it was unauthorized, the agent is liable in damages to the person dealing with him upon the. faith that he possessed the authority which he assumed. ' The ground and form of his liability in such a case has been the subject of discussion, and there are conflicting decisions upon the point; but the later and better considered opinion seems to be that his liability, when the contract is made in the name of his principal, rests upon an implied warranty of his authority to make it, and the remedy is by an action for its breach. Collins v. Wright, 8 E. & B. 647; White v. Madison, 26 N. Y. 117; Dung v. Parker, 52 N. Y. 494. The reason why the agent is liable in damages to the person with whom he contracts, when he exceeds his authority, is that the party dealing with him is deprived of any remedy upon the contract against the principal. The contract, though in form the contract of the principal, is not his in fact, and it is but just that the loss occasioned by there being no valid contract with him should be borne by the agent who contracted for him without authority. In order to make the agent liable in such a case, however, the unauthorized contract must be *153one which the law would enforce against the principal if it had been authorized by him (Dung v. Parker, supra), otherwise the anomaly would exist of giving a right of action against the assumed agent for an unauthorized representation of his power to make a contract, when the breach of the contract itself, if he had been authorized to make it, would have furnished no ground of action. That the agent who makes a contract for an undisclosed principal is personally bound by it, although the party dealing with him may know the general fact that he is acting as agent, is well-settled ; nor does the fact that the -agent is an auctioneer, and that the contract arises upon a sale by him as .such, withdraw it from the operation of the rule. * * * The plaintiffs, upon the case made, must recover, if at .all, upon the basis of the existence of a contract, valid in form, for the purchase of stock. If they rely on the false warranty of authority by the defendant, then, if the contract was invalid within the statute of frauds, they can recover nothing, for, in a legal sense they have sustained no injury. If they say that the coniract was the personal contract of the defendant, he has a right to interpose the statute as his defense.”
So in this state the supreme court in the case of Lydick v. Holland, 83 Mo. 703, decided that, when a contract could not be specifically enforced because of the statute of frauds, damages could not be allowed for its breach.
Now it is quite clear that the memorandum read in evidence by the plaintiffs is of itself insufficient as a contract for the sale of the lots, because, under all the authorities, the vendor must be named or described in the writing. Hartzell v. Crumb, 90 Mo. 629; Kelly v. Thuey, 102 Mo. 522; Einstein v. Holt, 52 Mo. 340; Boeckeler v. McGowan, 12 Mo. App. 507; Fenly v. *154Stewart, 5 Sandf. (N. Y.) 101; Schenck v. Spring Lake Co., 47 N. J. Eq. 44; Clason v. Bailey, 14 John. 484; The First Baptist Church v. Bigelow, 16 Wend. 28; Calkins v. Faulk, 39 Barb. 620; Wright v. Weeks, 25 N. Y. 159; Drake v. Seaman, 97 N. Y. 230; Grafton v. Cummings, 99 U. S. 100; Martin v. Flowers, 8 Leigh, 158; Townsend v. Hubbard, 4 Hill, 351; Squier v. Norris, 1 Lans. (N. Y.) 282; Stackpole v. Arnold, 11 Mass. 27; Clampet v. Bells, 39 Minn. 272; Champion v. Plummer, 4 B. & P. 253; Williams v. Lake, 29 L. J. Q. B. 1; Mayer v. Adrian, 77 N. C. 83; Nichols v. Johnson, 10 Conn. 198; O'Sullivan v. Overton, 56 Conn. 102; Mentz v. Newwitter, 122 N. Y. 491.
It will be observed that the instrument which we have here not only fails to name Taylor, but it does not in the remotest way name or refer to anyone as the vendor. It is clear that the paper, as written, obligated no one to convey, and the question which arises on this record is, whether it was competent to help out the instrument in this respect by oral evidence to the effect that Taylor was the real vendor. The majority opinion holds that, under the decisions in this state, which follow the dictum of the English court of exchequer in the case of Higgins v. Senior, 8 M. & W. 833, such evidence was admissible. In that case the defendant Senior, who had entered into a written contract in his own name for the sale of goods, undertook to discharge himself by showing that in making the contract he acted for a principal known to the plaintiff though not named in the contract, and that he, therefore, incurred no personal liability. The court held, and correctly so, that such evidence was incompetent for the reason that it contradicted the written instrument. But Park, J., who delivered the opinion, said arguendo: “There is. no doubt that, where such an agreement is made, it is competent to show that one or *155both of the contracting parties were agents for other persons, and acted as such agents in making the contract, so as to give the benefit of the contract on the one hand to, and charge with liability on the other, the unnamed principals; and this, whether the agreement be or be not required to be in writing by the statute of frauds; and this evidence in no way contradicts the written agreement. It does not deny that it is binding on those whom, on the face of it, it purports to bind; but shows that it also binds another, by reason that the act of the agent in signing the agreement, in pursuance of his authority, is in law the act of the principal.” Some of the American courts have given the English rule a qualified recognition by confining its application to simple contracts, other than negotiable instruments. Nash v. Towne, 72 U. S. 689; Bank v. Hooper, 5 Gray, 567; Salmon Fall Mfg. Co. v. Goddard, 14 How. 454. But the greater number of the cases repudiate the rule altogether, holding that the admission of oral evidence in such cases is incompetent, as tending to vary the writing. Schenck v. Spring Lake Co., supra; Stackpole v. Arnold, supra; Clampet v. Bells, supra; Mentz v. Newwitter, supra; Clason v. Bailey, supra; Grafton v. Cummings, supra; Fenly v. Stewart, supra; Pentz v. Stanton, 10 Wend. 271.
The supreme court of this state, however, seems to have adopted the English rule, which, stated in the broadest terms, is to the effect that, if A contracts to sell land, it is competent to show by oral ¡evidence that his individual undertaking was in law the undertaking of B, for whom he acted as an authorized agent. It is thought that such evidence in no way adds to or varies the writing, but only tends to show that some one else, other than the parties to the contract, is bound by it. This reasoning was never satisfactory to me. But how the rule can be extended to a case like we have here, where *156no vendor is named, and there is nothing in the writing itself obligating anyone to make a conveyance, passes my comprehension. All the books say that it is essential in such a contract to name or describe the vendor •and vendee; to describe the land so that it may be identified, and also to state the terms of the sale. These are the requisites. Now if it be competent to piece out such ■a contract by showing orally who the vendor is, where none is named, then in like manner the name of the vendee may be supplied, also the terms of the sale, and the description of the land, thus entirely uprooting the statute requiring such contracts to be in wilting.
But it is argued by my associates that the sufficiency of the contract is assailed for the first time in this court. I take a different view. The sufficiency or insufficiency of the contract only became material in ■determining the measure of damages. If the memorandum was sufficient to bind Taylor, and the defendants were not authorized to bind him in such a contract, •then the defendants were bound to answer in damages for the difference, if any, between, the market value of the property at the time of the sale and the • agreed price. But, on the other hand, if the contract was insufficient for the purpose stated, then the amount of the recovery ought to have been confined to the amount cf money paid on account of the contract, whether the ■defendants had authority to make the sale or not. The defendants asked the court to declare as a matter ■of law that the plaintiffs’ recovery could not under the evidence exceed the sum of $50, which was the amount paid by the plaintiffs on account of the alleged purchase, which instruction the court refused, and the ■defendants excepted. In this way the sufficiency of the contract was challenged, and, in my judgment, it was the only proper way to raise the question.
*157Neither do I think, as has been stated in the-majority opinion, that the course pursued by the defendants at the trial is inconsistent with the theory that the contract was insufficient. The defendants-attempted to show on the trial that they had written authority from Taylor to make the sale, and their counsel argue in this court that the letters from Taylor to-them and the old power of attorney to one of the defendants constituted such authority. By this evidence, and by the instruction asked, the defendants-attempted to avoid liability for the loss of bargain on two grounds: First. That the defendants had authority from Taylor to make the sale. Second. If the court found that they possessed no such authority, then such special damages could not be recovered, because the paper executed by the defendants and accepted by the plaintiffs was not a vs,lid contract for the sale of the lots. I can see no inconsistency in this.
Eor the foregoing reasons I have been unable to-agree with my associates as to the proper disposition of this case. I think that the plaintiffs are entitled to-a judgment for $50 and interest, and no more.