Seergy v. Morris Realty Corp. , 138 Va. 572 ( 1924 )

Sims, P.,

after making the foregoing statement, delivered the following opinion of the court:

There are a number of assignments of error, but it . will be necessary to consider only a single question presented thereby, as the determination of that question is decisive of the case. That question is as follows:

1. Did the letter of Harry Morris, the president of the appellee owner of the property involved in this suit, to the agent, Burruss, authorize the latter to execute and bind the said owner by the contract of sale to the appellant, consisting of the memorandum in writing signed by said agent, which is set forth above?

The question must be answered in the negative, on two grounds.

First: The aforesaid agent was a special, not a general agent. (Chapman v. Jewett, 2 Va. Dec. 336, 24 S. E. 261; Halsey v. Monteiro, 92 Va. 581, 24 S. E. 258; Crews v. Sullivan, 133 Va. 478, 113 S. E. 865.) In such ease the established rule is that the authority of the agent “must be strictly pursued, and if it is not, the principal will not be bound” (1 Mechem on Agency, 2d ed., sec. 742; See also to same effect the cases just above cited); and “any one dealing with such an agent must inquire and look to his * * * authority. If the agent has exceeded his authority, he who dealt with him has done so at his peril.” Chapman v. Jewett, supra; and Halsey v. Monteiro, supra.

The contract of sale signed by the agent, involved in the instant ease, did not strictly pursue the authority of the agent contained in the letter in question, but departed therefrom, certainly in two material particulars. The letter stipulated that the terms of sale should be $16,000.00 to be paid all cash; and that the sale should be made at that price subject to all loans and leases. By the contract of sale, with the exception of the payment of $250.00, the appellant purchaser was given thirty days time within which to pay the purchase money; and there was no provision in the contract of sale that the sale was made subject to all loans and leases. Hence, the sale not having been made by the special agent strictly in accordance with his authority, we must hold, under the established rule above mentioned, that the owner was not bound by the contract of sale. Therefore, on this ground, the decree under review was plainly right.

There is nothing in the cases of Yerby v. Grigsby, 9 Leigh (36 Va.) 390; Smith v. Tate, 82 Va. 657; Ford v. Street, 129 Va. 437, 106 S. E. 379, or Crotty v. Effler, 60 W. Va. 258, 54 S. E. 346, 9 Ann. Cas. 770, relied on for appellant, in conflict with the conclusion just stated.

In Yerby v. Grigsby, the court held, at pages 388-9 of the aforesaid report of the case, that “the evidence established that John Green” (the agent) “was authorized by Charles” (the owner) “to make such a contract as was made” (by the agent) “with the complainant” (the purchaser). (Italics-supplied.) So that the agent in that case made the sale strictly in accordance with his authority.

In Smith v. Tate, the evidence showed and the court held that the sale by the agent was made strictly in accordance with his authority.

The cases of Ford v. Street and Crotty v. Effler do not involve any variance between the terms of the authority of and the contract made by the agent; and, hence, neither of these cases is in point.

Secondly: A special agent’s authority is “deemed to be limited to that which is expressly given or necessarily implied. 1 Mechem on Agency, sec. 799. As said in Halsey v. Monteiro, supra, at pages 583-4, (24 S. E. 259): A real estate broker or agent is defined to be one who negotiates the sale of real property. His business generally is only to find a purchaser who is willing to buy the land upon the terms fixed by the owner. He has no authority to bind his principal by signing a contract of sale. A sale of real estate involves the adjustment of many matters besides fixing the price. The delivery of possession has to be settled, the title examined, and the conveyance with its covenants to be agreed upon and executed by the owner — all of which require conference and time for their completion. They are for the determination of the owner and do not pertain to the duties and are not within the authority of a real estate agent. For obvious reasons, therefore, the law wisely withholds from him any implied authority to sign a contract of sale in behalf of his principal.” Citing numerous authorities. (Italics supplied.)

This, of course, does not mean that a real estate agent, like any other special agent, may not be authorized by his principal to sign a contract of sale of real estate which will bind the principal, provided the terms of the authority are such that they, expressly or by necessary implication, definitely determine all the matters involved in the performance of the particular contract. of sale in question, so that no detail which is essential to the performance of the contract is left by the authority unsettled, to be adjusted by subsequent agreement of the owner with the purchaser.

Accordingly, in Halsey v. Monteiro, supra, where merely the description of the real estate, the price and terms at which the agents were authorized “to list” and “place the farm,” i. e., to sell the property, and the agreement to pay the agent a “liberal commission” if he made the sale, were embraced in the terms of the letter relied on as authorizing the agent to execute the contract of sale — it was held that “a simple inspection” of the letter “showed that” it only empowered (the agents) to find a purchaser for the land. That “no power whatever (was) conferred upon them to sign a contract of sale”.

We think that it is equally plain, from an inspection of the letter relied on in the instant case as authorizing the agent to execute the contract of sale, that it only empowered the agent to find a purchaser for the property. The terms of the letter clearly indicate that the writer of it was to “close the deal” and that the agent’s authority was confined to obtaining and reporting an “offer” of purchase in accordance with the terms of the letter. The agent is expressly directed not to “come back with any other offer.” And the letter is silent as to many of the details essentially involved in the performance of the contract at the time of its completion, such as the adjustment of the outstanding encumbrances upon and of existing leases of the property, of the time of the delivery of the deed and possession, etc. These matters were left unsettled by the letter, to be adjusted by subsequent agreement of the owner with the purchaser. It is true that in the contract of salé signed by the agent he attempted to settle some of those matters, such as the time of the delivery of the deed, and, by inference, the time for the delivery of possession. But he was not authorized by the letter to' do this. Those matters, therefore, notwithstanding such action of the agent, remained unsettled to be adjusted by subsequent agreement as aforesaid. And the adjustment of the outstanding ¡encumberances and leases aforesaid was not even attempted by the agent — they were not mentioned in the contract which the agent signed, nor to.the purchaser outside of the contract, nor were the particulars as to how the loans and leases were to be adjusted ever considered or agreed upon by the agent and the purchaser; nor does it appear,' so far as shown by the evidence, when the loans were due and payable, or that they were only of such a total that they could have been discharged by the purchase money or that the leases terminated at such a time that the possession of the property could have been delivered even at the expiration of the thirty days, the time fixed in the contract signed by the agent (without authority as aforesaid) for the completion of the contract.

As may be stated in another way, to say the least on the subject, the evidence fails to show that the minds of the owner and the purchaser ever met upon all of the essential particulars of the contract of sale sought to be enforced in the instant case. In such ease it is settled that the owner is not bound by contract of sale sought to be enforced.

As said in Clinchfield Coal Co. v. Powers, 107 Va. 398-9, 59 S. E. 370, 372: “Where the court is unable, from all the circumstances of the case, to say whether the minds of the parties met upon all the essential particulars * * specific performance will be refused.”

The decree, under review will be affirmed.

Affirmed.