O'Donnell v. Henley

• Decision Date: 07 December 1927
• Docket Number: No. 18186.,18186.
• Parties: O'DONNELL v. HENLEY.
• Court: Illinois Supreme Court

327 Ill. 406

158 N.E. 692

O'DONNELL

v.HENLEY.

No. 18186.

Supreme Court of Illinois.

Oct. 22, 1927.

Rehearing Denied Dec. 7, 1927.

Error to Superior Court, Cook County; Denis E. Sullivan, Judge.

Suit for specific performance by Patrick J. O'Donnell against Sarah A. Henley. To review a decree denying specific performance but directing the return of earnest money, plaintiff brings error, and defendant assigns cross-error.

Reversed and remanded, with directions to dismiss.

George J. Dreiske and West & Eckhart, all of Chicago (Wm. L. Bourland, of Chicago, of counsel), for plaintiff in error.

Kirkland, Patterson & Fleming, of Chicago (Robert N. Golding and George Townley, both of Chicago, of counsel), for defendant in error.

THOMPSON. J.

Plaintiff in error, Patrick J. O'Donnell, prosecutes this writ of error to review a decree of the superior court of Cook county denying specific performance of a contract entered into between him and defendant in error, Sarah A. Henley, by which the latter agreed to convey to the former, in consideration of $115,000 to be paid as provided in the contract, a certain apartment building in the city of Chicago. Defendant in error assigns a cross-error questioning that part of the decree directing her to return to plaintiff in error $5,000 earnest money, which was to be applied on the purchase price in the event the sale was consummated.

The contract provided that $30,000 was to be paid within five days after title was accepted and upon the delivered of a general warranty deed. Of the $30,000 defendant in error agreed ‘to accept as cash contract for $10,000 on 5714-16 Calumet avenue, also contract for $3,000 on 10226 Rhodes avenue, also contract for $7,000 on 7356-58 Yale avenue, and also first mortgage of $5,000 on 6114 Laflin street, all in Chicago, Ill., at face value and accrued interest. * * * Title to said contracts and first mortgage taken by seller as above subject to approval by seller's attorney.’ The first security to be accepted as a part of the cash payment was not a contract as that term was used by the parties, but was a second mortgage on the Calumet avenue property. Plaintiff in error asks that the contract be reformed so that the security will be properly described, and that as reformed the contract be specifically performed. He bases his contention on the fact that he submitted his securities to the real estate agent employed by defendant in error to find a purchaser for the property, and that the agent had these securities before him when he described the second mortgage as a contract. When the agent submitted the contract for his signature, the plaintiff in error called his attention to the use of the word ‘contract’ in describing the second mortgage on the Calumet avenue property, and the agent replied that the word used was immaterial, inasmuch as the amount and the description of the property were correctly stated. The agent in charge of her building, through whom she had employed the real estate agent, delivered the contract to defendant in error at her home in Rushville, Ind., and she signed it. Shortly thereafter she was advised that the security described as a $10,000 contract was in fact a second mortgage securing notes in that amount, and she directed her superintendent to notify plaintiff in error that she would not carry out the contract, and he was so notified. Plaintiff in error testified that prior thereto he was notified by the agents representing defendant in error that the securities were approved, but there is no evidence that defendant in error or any attorney representing her approved the securities.

[1] Whether defendant in error is bound by the acts and statements of her agents depends upon their authority. The superintendentof her building had authority to keep the building in repair, purchase fuel and other supplies, and execute leases, but he did not have authority to make a contract to sell her building nor to approve securities that were offered in exchange for it. Defendant in error authorized him to employ a real estate agent to procure a purchaser for the building but by that act she did not authorize her superintendent, nor the real estate agent employed by him, to agree upon the terms of the contract or to approve securities tendered in lieu of cash. That no one understood that they had authority to execute the contract is evidenced by the fact that it was submitted to her for execution. When she signed the contract, it stated that she agreed to accept, in lieu of cash, provided her attorney approved the title to it, a real estate installment contract of the face value of $10,000. She did not agree to accept a second mortgage, and there is no evidence to show that she had actual knowledge of the misdescription. Before the knowledge of her agent can be imputed to her the knowledge must be that which the agent acquires while acting as such agent within the scope of his authority, or that which he may previously have acquired and which he then had in mind, or which he had acquired so recently as to reasonably warrant the assumption that he still retained it. People v. Gullborg, 324 Ill. 538, 155 N. E. 324;Lowden v. Wilson, 233 Ill. 340, 84 N. E. 245; Mechem on Agency (2d Ed.) § 721.

[2][3][4] If it be conceded that defendant in error had given to her agents sufficient authority to bind her to a bargain to sell the property for $115,000, it is clear that such authority would not include the power to approve securities offered in lieu of cash. The sale of real estate involves the adjustment of many matters in addition to fixing the price...