Ex&rs v. Alleghany Coal & Iron Co

• Decision Date: 07 February 1887
• Citation: 1 S.E. 325,82 Va. 913
• Court: Virginia Supreme Court
• Parties: Bocock's Ex'rs, etc., and others v. Alleghany Coal & Iron Co. and others.

1 S.E. 325

(82 Va. 913)

Bocock's Ex'rs, etc., and others

v.Alleghany Coal & Iron Co. and others.

Supreme Court of Appeals of Virginia.

February 7, 1887

Corporations—Agent—Authority—Duty op Third Party.

Where several persons entered into a contract for the sale of land to a coal and iron company having a constitution and by-laws, through one whom they supposed to be its duly-authorized agent, they are bound to ascertain whether or not the agent had authority, under its constitution and by-laws, to bind the company; and, if not having done so, they dealt with the agent at their own peril, and cannot be heard afterwards to complain of the refusal of the company to assume the responsibility of such agent's unauthorized contract.

Bill in chancery for the specific performance of a contract for the sale of land. The facts are stated in the opinion.

R. T. Hubard and Geo. J. Hundley, for appellants.

Johnston, Williams & Boulivare, for appellees.

Richardson, J. This is an appeal from a decree of the chancery court of the city of Richmond rendered July 9, 1883, in the suit therein pending, wherein Thomas S. Bocock, executor of N. E. Bocock, deceased, 0. R. Bocock, and Peter A. Forbes, who sue for the benefit of D. A. Parrock, were complainants, and the Alleghany Coal & Iron Company, H. C. Parsons, G. McNeill, Murillo Spaulding, and F. B. Deane were defendants. The object of the suit was to compel the specific performance on the part of the defendant the Alleghany Coal & Iron Company of a contract alleged to have been entered into by said defendant with the complainants for the purchase of a tract of land known as the "Pratt Farm, " situated in Buckingham county, Virginia, containing 774 acres, and on which it was supposed there were valuable deposits of iron ores. The active parties to the transaction were Thomas S. Bocock, executor of N. F. Bocock, deceased, and O. R. Bocock, widow of N. F. Bocock, and Peter A. Forbes, the vendors, and F. B. Deane the vendee. The contract was entered into on the fourteenth of June, 1881, and by it said tract of land was sold at the price of $2,500. In evidence of the sale a contract in writing of that date was signed by said vendors, and by "P. B. Deane, for himself and his associates." By this contract "Deane and his associates" reserved the right of 60 days within which to consult and determine whether or not they would consummate the purchase.

N. F. Bocock, deceased, had by his will prescribed different terms of sale for his real estate from the terms whereon this sale was made. A decree was obtained, at a special term of the circuit court of Buckingham county, in a suit pending in said circuit court for the settlement of said N. F. Bocock's estate, ratifying this sale, and directing a conveyance of the land to Murillo Spaulding, whom the purchasers designated as the grantee; and the vendors, having been informed that the purchasers had determined to take the land, executed a good and sufficient deed conveying the land to Spaulding, and delivered the same to J. D. Horsley, Esq., who was acting in this transaction as the attorney of the purchasers. During the entire negotiations, not only the complainants, but also Deane and Horsley, seem to have understood that the real purchaser of the land was the Alleghany Coal & Iron Company, or, if the company was not, then H. C. Parsons, the then president, and G. McNeill, an agent of the company, were individually the real purchasers; and in this supposition the complainants were sustained by the evidence of both Deane and Horsley. So, of course, they all looked to the company, or to Parsons and McNeill, for the payment of the purchase money, and were greatly surprised, as they say, when Deane and Horsley informed them, by letter in October, 1881, that H. C. Parsons and G. McNeill, of the Alleghany Coal & Iron Company, had refused to ratify Deane's action as their agent in the purchase of the Pratt farm. After various ineffectual efforts, in which the complainants were earnestly backed by Deane, the agent, and by Horsley, the attorney, to induce the company, or Parsons and McNeill, to recognize the purchase, and pay the purchase money, the complainants, on third of April, 1882, instituted this suit for specific performance.

In their bill they set forth the foregoing facts, and aver that the company was the real purchaser. Deane was its duly-authorizedagent, and that he was so recognized by Parsons, the president, and by McNeill, the agent, of the company; and that Horsley was its duly-authorized attorney, and as such had advised its agents at every step of the transaction; and that Parsons was its president, and McNeill was its factotum, and that through those two the company transacted all or nearly all its business, and that they had held out to the public both Deane and Horsley as the representatives of the company which thereby became responsible for their action in making this purchase; and the complainants prayed for specific performance thereof by the company. But, denying all dealings with or knowledge of Spaulding in the transaction, the complainants added that if, in the progress of the suit it should turn out that Parsons and McNeill, or either of them, were the real purchasers of the land, they then should be granted the same relief against them, or either of them.

To this bill the company filed its demurrer and answer. In its answer the company positively denied that it had purchased this land, and that either Deane, Parsons, or McNeill was authorized in any way to purchase land for it; that Parsons, as its president, had, under the charter, constitution, or by-laws of the company, any authority whatever to buy land, or to bind the company by any contract so to do; and filed with its answer a copy of its constitution and by-laws. It also denied that it knew of the purchase until long after the contract was made, when a claim was made against it for the purchase money, and denied that Horsley was authorized in any way to represent the company in the transaction.

The defendant Parsons also answered. He denied all knowledge of either this land, or of the contract, until the latter was filed with the bill. He likewise denied that he was a partner with Deane either in this or in any other transaction, and that he ever knew of the transfer of the contract to Spaulding, or of the delivery of the deed to Horsley, or that he ever wrote to the latter about this matter; and he denied, too, that either Deane or McNeill was an agent of the company during the time that he was its president, and that he, as such president or individually, ever directed, authorized, or approved said purchase. He (Parsons) also denied that the company had ever given him any authority to buy land for it, and that it was within the scope of his official authority as...