Carman v. Harrah

• Decision Date: 05 October 1914
• Docket Number: No. 11211.,11211.
• Citation: 170 S.W. 388
• Parties: CARMAN v. HARRAH.
• Court: Missouri Court of Appeals

170 S.W. 388

CARMAN v. HARRAH.

No. 11211.

Kansas City Court of Appeals. Missouri.

October 5, 1914.

1. VENDOR AND PURCHASER (§ 341) — ACTION BY PURCHASER — RECOVERY OF PAYMENTS — DISCLOSURE OF PRINCIPAL — SUFFICIENCY OF EVIDENCE.

Evidence, in a purchaser's action to recover a payment made, held insufficient to show that plaintiff did not know that he was contracting, not with defendant, but with the corporation

of which defendant was secretary and treasurer, and for which defendant held title to the land in her own name.

2. VENDOR AND PURCHASER (§ 83) — EXECUTION OF MODIFIED CONTRACT — LETTERS.

Where, subsequent to the execution of a contract for the purchase of land on which a payment was made, the vendor proposed to sell to the purchaser certain other land in lieu of that covered by the contract, and marked the new land on a plat which he gave to the purchaser, and where thereafter the purchaser wrote that he had "decided to accept the proposition of the land * * * as marked on the inclosed plat, * * * the money * * * paid * * * to apply," to which the seller replied that he would "take the matter up at once and have a deed gotten ready for you, and I am very glad indeed this matter can be fixed up in this way," the two letters constituted a new contract, which took the place of the original one.

3. CONTRACTS (§ 246) — SUBSTITUTION OF NEW CONTRACT — EFFECT.

Where a new contract is substituted for a prior one, the remedy is on the new contract, regardless whether its stipulations have been performed; nonperformance of the new contract not operating to reinstate the old contract.

4. NOVATION (§ 3) — SUBSTITUTED CONTRACT — CONSIDERATION.

The substitution of a new contract for a prior one is a sufficient consideration for the new contract.

5. FRAUDS, STATUTE OF (§ 103) — MODIFICATION OF AGREEMENT AFFECTING LAND — WRITING.

Where the vendor proposed to the purchaser that he accept other land, as marked by him on a plat, in lieu of that described in the contract, and thereafter the purchaser wrote, accepting the proposal by reference to the marked plat, to which the seller replied by letter acknowledging the acceptance, this constituted a new contract, valid under the statute of frauds.

6. PRINCIPAL AND AGENT (§ 184) — ELECTION TO HOLD PRINCIPAL — RELEASE OF AGENT.

Where the purchaser of land bought from an agent of a corporation, having failed to receive title to the land, with full knowledge of the facts material to his rights, filed with the receiver of the corporation, which has become insolvent, his claim for purchase money paid, he thereby released his claim, if any existed, against the agent.

7. FRAUDS, STATUTE OF (§ 116) — CONTRACT BY AGENT — VALIDITY.

A land sale contract signed by the name of the vendor's agent, without the principal's name appearing, is not invalid, under the provision of the statute of frauds (Rev. St. 1909, § 2783), that such contract shall not be binding on the principal, unless the agent be authorized in writing to make same, where it has been subsequently recognized in writing by the principal.

Appeal from Circuit Court, Jackson County; Frank G. Johnson, Judge.

Action by W. H. Carman against M. Harrah. From judgment for plaintiff, defendant appeals. Reversed.

E. R. Morrison and L. Newton Wylder, both of Kansas City, for appellant. James G. Smith and Newton C. Gillham, both of Kansas City, for respondent.

TRIMBLE, J.

This is a suit brought November 7, 1912, to recover a cash payment of $1,556.20, made by plaintiff on a contract, dated June 8, 1907, for the purchase of certain land in Texas.

The contract was signed by plaintiff and defendant, but the land was in fact owned by the International Land Company, a corporation, of which the defendant, Miss Mary Harrah, was secretary and treasurer. The company had an office in Kansas City, Mo. The land was in defendant's name, because, under the laws of Texas, a foreign corporation could not own land in that state for speculative purposes. The theory to which plaintiff clings in his attempt to recover of this defendant the cash payment made on the contract is that defendant was in reality the owner, or that, at the time the contract was signed, he thought that defendant was the owner of the land, and that the International Land Company was acting merely as a selling agent. (An analysis of plaintiff's own evidence, hereinafter made, will disclose whether he thought this or not.)

The petition sets out the contract and the cash payment made thereon, and then charges that:

"Although he was at all times after said 8th day of June, 1907, ready and willing to comply with all the terms of said contract, but that defendant could not at said time and cannot now convey a good title to said premises."

The petition further alleged that defendant falsely and fraudulently represented to plaintiff that she was the owner of the land and was able to comply with the terms of the contract; that she did so for the purpose of inducing the plaintiff to part with the $1,556.20; that plaintiff believed said false and fraudulent representations and paid said money; that plaintiff "has at all times since said 8th day of June, 1907, been ready, able, and willing to carry out the terms of said contract on his part, has repeatedly offered so to do, and has repeatedly demanded of defendant that she carry out the terms of said contract on her part, or, failing so to do, to return him his money paid on said contract as aforesaid. Plaintiff says defendant has at all times refused to comply with the terms of said contract or return said money so paid, and has fraudulently converted to the use of defendant said $1,556.20."

It will be observed that the petition seeks to recover the cash payment upon the theory that defendant breached the contract whereby plaintiff was entitled to consider it at an end and demand his money back. The breach and right to recover are stated in two different ways, but possibly do not constitute two different grounds. The first is that, although plaintiff was, on the date of the contract, ready and willing to comply with its terms, yet "defendant could not at said time and cannot now convey a good title to said premises." The second is that plaintiff was fraudulently deceived as to defendant's ownership of the land, but has been ready and willing to carry it out on his part, and has repeatedly offered to do so, and has demanded that defendant keep her part thereof or return him his money.

The answer of defendant was, first, a general denial; also that plaintiff never paid half of the purchase price, according to the contract which required this to be done, before he could demand of defendant a warranty deed; also that defendant had no interest in the contract; that she received no money from plaintiff; that he paid her none, but paid it to the International Land Company, well knowing that the said company owned the land, and well knowing the capacity in which defendant acted; and that plaintiff elected to pursue his remedy against the land company by filing his claim for the money herein sued for with the receiver of the company after it failed in business, and plaintiff never made any claim that defendant owed him anything until the institution of this suit. The answer also pleaded the five-year statute of limitations.

Did plaintiff know that he was really contracting with the International Land Company, although the contract was signed by defendant? We think this question is important, because, if he did, then the large question in the case, regardless of alleged errors in the trial, is: Can plaintiff recover of this defendant? As stated, plaintiff's theory is that he did not know the company was the real party he was dealing with.

Plaintiff was a resident of Indiana. He was induced, either by agents or advertisements of the International Land Company, to come to Kansas City and go down to Texas with its president, John U. May, and look at the land there had for sale. While down there he executed the contract sued on. By the terms thereof he agreed to pay $4,676.10 for the land, of which amount, $1,556.20 was paid in cash, and the remainder, $3,119.90, was to be evidenced by notes of even date with the contract (which was dated June 8, 1907), whereby he was to pay $778.10 on or before June 1, 1909, a like amount on or before June 1, 1910, and the balance, $1,563.70, on or before June 1, 1911. When one-half of the purchase price had been paid, he was to receive a warranty deed, with abstract showing good title. This contract was signed by plaintiff and defendant. Before it was signed, however, plaintiff understood perfectly well with whom he was dealing. He was told that the company could not hold the land in its name, and that for this reason the title stood in the name of the defendant, and the contract was made in her name. Toward the end of the trial plaintiff claimed he thought when he signed the contract that the land company was agent for the defendant, and that she was in fact the owner of the land. But here is what he testified to at the outset:

"Q. When was the first time you heard of that company called the International Land Company? A. Probably about a week before I started from my home in Indiana."

He then testified he saw advertisements that said John U. May was president of the company, and that Miss Harrah was its secretary and treasurer. He then testified that the terms of the contract were talked over.

"Q. And that is the time that you found out the company owned the land? A. That is the time that I found out first — that I first knew who owned the land. Q. That the International Land Company owned the land? A. Yes, sir; that's the first I knew the International Land Company owned the land, and that Miss Harrah had to have the land in her name, for the company couldn't own the land in Texas."

Thereafter the contract was submitted to him for his signature. Other admissions contained in letters...