Colvin v. Blanchard ( 1908 )

The Honorable Court of Civil Appeals made a meagre statement of this case and we are under the necessity of looking to the undisputed facts, from which we made the following statement. For a number of years Blanchard had owned the property in controversy and for at least one year prior to the transaction in question Gilliland Harwood had been authorized by Blanchard to sell the lots. It seems, from the evidence, that the property had been advanced in price from time to time but no sale was made, and, on the 7th day of July, 1905, Gilliland Harwood wrote a letter to Blanchard, which, however, was not in evidence, nor was its contents proved on the trial. On the 10th day of July, 1905, Blanchard replied as follows: "Milwaukee, July 10, 1905. Gilliland Harwood, Fort Worth, Texas. Gents: Replying to yours of 7th inst., I beg to say that I will rent the building now occupied by L.G. Gilbert for $160.00 per month. I will sell the lots for $19,000 and pay you 5 percent com. plus $50, or $1,000 com. in all, for making the sale. In other words, I want $18,000 net for my lots. Terms $3,000 cash, bal. long time. I hope you will find a renter for the building. Let me hear from you. Yours truly, J.T. Blanchard."

After receiving the above letter, Gilliland Harwood sold the lots to the plaintiffs in error for $23,500.00; $4,500.00 of which was to be paid to other parties for the house, which did not belong to Blanchard, and $19,000.00 was to be the price of the lots, $3,000.00 being paid in cash and the remainder secured by five notes payable in 1, 2, 3, 4 and 5 years. The first four notes being for the sum of $3,000 each and the fifth note for the sum of $4,000. Each note was payable "on or before" the date stated therein. On the 17th day of July, 1905, Gilliland Harwood reported by letter the sale made to the plaintiffs in error, but no answer was received, and Gilliland Harwood were informed by Blanchard's wife that he was absent from home. The deed for his signature was sent by express to Blanchard at his home, also a copy of the contract was sent by mail, but no answer was received by Gilliland Harwood to their communication at any time. On October 24, 1905, Blanchard wrote this letter:

"Milwaukee, Wis., Oct. 24, 1905. Mr. G.H. Colvin, Fort Worth, Texas. Dear Sir: I have before me a letter from Gilliland Harwood of your city, in which they say they sold my Main street lots to you for $19,000; $3,000 cash, the balance, $16,000, to be evidenced by five notes in the sums of $3,000 the first year, $3,000 in two years, $3,000 in three years, $3,000 in four years and $4,000 in five years; notes bearing five per cent. interest payable annually, and notes to state `on or before.' Please inform me if this is correct, and oblige, Yours very truly, J.T. Blanchard."

G.H. Colvin replied October 27, 1905, as follows: "Fort Worth, Texas, Oct. 27, 1905. Mr. J.T. Blanchard, Milwaukee, Wis. Dear Sir: Your letter of the 24th at hand and noted. It is a fact that I purchased your two Main street lots from your agents, Gilliland Harwood, for $19,000 in accordance with the contract, a copy of which was forwarded you by them per express. Said contract was duly filed for record here in the County Clerk's office. Yours truly, G.H. Colvin."

Nothing more was heard from Blanchard about the matter until about January, 1906, when, being in the city of Fort Worth, Gilliland met him and took him to Colvin's office to talk over the matter of the contract for sale. Colvin asked Blanchard what objection he had to the contract, but he testified that Blanchard only said the interest is a little low, or something to that effect. Colvin offered to pay 6% on the notes, according to the terms of the contract, and give his notes at that rate, and he offered to pay the money in cash, but Blanchard ignored the contract and made no answer.

Suit was brought by G.H. O.V. Colvin in the District Court of Tarrant County for a specific performance of the contract, or in the alternative, for damages for breach thereof.

The Honorable Court of Civil Appeals erred in holding that Gilliland Harwood had no authority under the letter of Blanchard to make sale of the lots to Colvin. The letter from Blanchard to Gilliland Harwood, dated July 10, 1905, used this language: "I will sell the lots for $19,000 and pay you 5% com. plus $50; or $1,000 com. in all for making the sale." In connection with this, the fact, that Gilliland Harwood had previously been authorized to sell the same property, necessarily gives the meaning to this language that the said Gilliland Harwood were authorized to make sale of the land, otherwise how could Blanchard pay them a commission, "for making the sale." The Honorable Court of Civil Appeals refers to Watkins Land Mortgage Co. v. Campbell,100 Tex. 542, 101 S.W. Rep., 1078, as authority for the construction that court placed upon the language of Blanchard's letter. But an examination of the facts of that case, as stated in the opinion, will show that this court rested its decision upon the proposition, which was manifest by the correspondence, that the land agents in that case were making a proposition to the Land Mortgage Company on behalf of another party whom they represented as "our purchaser" and that the Land Mortgage Company so regarded it is evident from this reply: "We have yours of the 14th submitting an offer of $1,800.00; $300.00 cash and the balance on time, etc. If you could get the amount of yourcash payment increased to $600.00 we would be willing to accept the offer, etc." This clearly shows the proposition coming from Wilson Lightfoot was not made as agents of the Watkins Land Mortgage Company and that the reply did not authorize them to accept the proposition, but states distinctly, "We would be willing to accept the offer." Subsequent correspondence supported the construction by this court. This case is clearly distinguishable from the case of Watkins Land Mortgage Company v. Campbell.

However, we must affirm the judgment of the court below in this case, because the agents, in making the sale, did not observe the limitation of their authority expressly stated in the letter which conferred that power. Mr. Pomeroy expresses the rule applicable to this case as follows: "Where the delegation of authority is express and special, and the other party dealing with the agent can not fall back on any larger implied powers, the limitations may relate to the manner and form of executing the contract, as well as the substantial terms which it shall contain; and in such a case the agent must keep within the restricted authority conferred upon him and strictly pursue the method prescribed by his instructions." (Pomeroy, Specific Performance, 114, sec. 77; Thomas v. Joslin, 30 Minn. 388; Holbrook v. McCarthy, 61 Cal. 216.) In the letter of authority in this case Blanchard prescribed the terms on which the sale should be made, that is, $3,000 in cash and the remainder on long time notes. Possibly the notes running from one to five years might be considered long time notes, but the words "on or before" placed in each of the said notes gave the maker the privilege of paying them at any time he might choose and they did not comply with the terms of the authority because they were not long time notes, so far as Blanchard was concerned. The maker could make them long time or short time at his option, but the payee of the notes had no option but to accept the money on any day that it might be tendered to him; or, at the option of the maker, the payee must wait until the last day named. The purpose which prompted Blanchard to make "long time notes" one of the terms of sale would be unimportant in this case except that it serves to explain what was intended by him in the use of the phrase, "long time notes." It was consistent with good business policy for Blanchard to desire that the property which he was converting into negotiable paper should bring him an income secured by the lien for a term of years rather than to have it paid in cash with the uncertainty of reinvestment. For purposes of use as commercial paper such notes would be less desirable than those he specified. Whatever may have been his purpose, the terms of the authority are plain and unmistakable and the failure to comply with them is equally plain.

There are no acts on the park of Blanchard which could be construed into a ratification. As he had a right to do and as was prudent for him under the circumstances, he refrained from expressing himself with regard to the matter; he was not called upon to take any action in the premises. He simply ignored the transaction after he received the information which he sought from Colvin. Under the circumstances of this case his silence could not be construed into a ratification of the contract and it was not so understood by the parties as is shown by the testimony of Colvin himself, who stated that, when Blanchard was in Fort Worth in January following, he had a conversation with him in which Blanchard declined in every way to discuss the matter or to express any opinion of preference one way or the other. Because Gilliland Harwood failed to pursue the authority given them no valid sale was made, and the plaintiffs in error showed no right to the relief sought. The judgments of the District Court and Court of Civil Appeals are affirmed.

Affirmed.