Ga. State Sav. Ass'n of Savannah v. Elias
| Decision Date | 16 February 1943 |
| Docket Number | Case Number: 29675 |
| Citation | 135 P.2d 36,1943 OK 47,192 Okla. 227 |
| Parties | GEORGIA STATE SAVINGS ASSOCIATION OF SAVANNAH, GA. v. ELIAS |
| Court | Oklahoma Supreme Court |
¶0 1. CONTRACTS--Contract for loan of money--Specification of particular type of property as security.
A contract to loan money with a particular type of property as security does not obligate the lender to consummate the loan on a different type of property as security.
2. PRINCIPAL AND AGENT--Extent of agent's authority known to be limited may not be established by mere declarations or acts of agent.
The declarations or acts of an agent as purported agent made out of court are of insufficient probative force to establish an agency or prove the extent of an agent's authority where the same is known to be limited.
3. SAME--One dealing with agent bound by known limitations on authority.
One who deals with an agent, knowing that he is clothed with a circumscribed authority and that his act transcends his Powers, cannot hold his principal on the theory of apparent authority.
Appeal from District Court, Creek County; Arthur Cochran, Judge.
Action for damages for breach of contract by Emil K. Elias against the Georgia State Savings Association of Savannah, Ga. Judgment for plaintiff, and defendant appeals. Reversed and remanded.
Charles L. Yancey, of Tulsa, H. L. Douglass, and Wm. Roy Kirby, both of Oklahoma City, and Cheatham & Smith, of Bristow, for plaintiff in error.
T. Austin Gavin, of Tulsa, for defendant in error.
¶1 This is an action for damages for the alleged unjustifiable breach of a contract to make a loan of money on real estate. It was instituted in the district court of Creek county on the 5th day of June, 1937, by Emil K. Elias, as plaintiff, against the Georgia State Savings Association of Savannah, Ga.
¶2 Issues were joined and the cause was tried to a jury in May of 1939, resulting in a verdict and judgment for the plaintiff in the sum of $2,500. Timely motion for a new trial was thereafter filed and overruled, and the defendant has appealed, appearing herein as plaintiff in error. Our continued reference to the parties will be by their trial court designation.
¶3 The substance of the defendant's position is that under the proof it was entitled to prevail as a matter of law, and in the alternative it asserts that if the evidence was sufficient the instructions to the jury were improper, vague, and indefinite. It is undisputed that the defendant company entered into a contract whereby it agreed to loan to the plaintiff the sum of $4,500 for the purpose of financing the construction of a building to be erected on real estate in the city of Bristow, the loan to be secured by a mortgage on real estate as improved by the building. However, the defendant company takes the position that its contract obligated it to make the loan only in the event a business building suitable for ordinary business should be erected upon the premises and then only when and if plans and specifications for the building had been submitted to and approved by the company.
¶4 It is undisputed that a building such as would be used for general business purpose was not erected, but, on the contrary, a building was constructed for the purpose of being used for a motion picture business which required a special type of construction. It was also established that plans and specifications were not submitted to the company. It was, however, proven that an agent of the company knew of the type of building which was being constructed upon the premises and may have encouraged its erection. There can be no doubt that the loan company in dealing with its own money could exercise its own judgment with respect to the security which it would require to insure the payment thereof. However, the parties are agreed that it may and in this case did, prior to the actual making of a loan, enter into a contract with the borrower by which it obligated itself to subsequently and under stipulated conditions make a loan.
¶5 Did the company in this case by its conduct obligate itself in such a way as to be liable for damages for its subsequent refusal to consummate a loan on the real estate when a building specially adapted for use as a motion picture show was erected? In answering this question we must review the evidence in a light most favorable to the plaintiff.
¶6 First let us examine the contract, which was in writing (except insofar as it may have been altered through the acts or knowledge of the company's agent, a contention which will be subsequently discussed). The interpretation of a written contract is primarily a problem for the court as distinguished from the jury. McCarty v. Lumry, 170 Okla. 156, 38 P. 2d 937; Smith v. First National Bank of Chandler, 114 Okla. 293, 245 P. 653; Brown v. Coppadge, 54 Okla. 88, 153 P. 817.
¶7 According to plaintiff's petition and the exhibits thereto attached, plaintiff executed a written application in question and answer form for the loan in question on August 3, 1936. The application, which is attached to plaintiff's petition as a portion thereof, is rather long and need not be copied in this opinion. However, certain features which constitute the basis of dispute between the parties are sufficiently vital to require specific mention.
¶8 Plaintiff's request was for a $4,500 loan. The purpose as recited in the application was "rebuilding an old building into a new brick 25 x 80." The estimated cost was $5,250, which included the cost of a basement estimated at $750. The application stated that the building was to be used "as grocery store by tenant." A rough sketch of the proposed building was attached to the application. In addition to the foregoing information the application contained voluminous specific detailed information respecting the location of the property, its status with reference to delinquent taxes and other details which might be useful to the lending corporation in exercising its judgment as to whether the loan should be made. It also contained the following provision:
¶9 The application was transmitted to the defendant, Georgia State Savings Association, at its office in Savannah, Ga., by Mr. McDonald, who received it from Mr. West.
¶10 In connection with the application it is appropriate to observe at this point that the copy of same was not attached to plaintiff's petition at the commencement of this action, its absence being excused by the allegation that the same was not in the possession of the plaintiff. Later, on motion of the defendant, the plaintiff procured the same and attached the copy as a part of his pleading without alleging any existing inaccuracy therein.
¶11 In connection with the type of building to be constructed on the property as depicted by the application a peculiar condition of the proof is reflected by the record.
¶12 The application, as we have noted, contained a statement that the proposed building was to be used as a "grocery store by tenant," a character of use which in itself depicts a type of building suitable for various business uses and negatives the idea of a building adaptable to use for a picture show.
¶13 The plaintiff, however, after attaching a copy of the application to his petition, without asking a reformation or questioning its accuracy in his pleading, offered to prove that the answer last above noted was not in the application when he signed it. The trial court first excluded the testimony, but later it was admitted.
¶14 If the questioned answer were the only part of the application which depicted the type of building to be created, a disputed question of fact on the point might be said to exist.
¶15 However, the record reflects and the plaintiff admits in his testimony that, when the application was prepared, he submitted to Mr. West a rough sketch (which had been prepared for him by one Mr. Cundy) of the building, which was attached to the application and transmitted to the company. The sketch, consisting of two sheets of paper, was produced in evidence. While it does not indicate the building was to be used as a grocery store, it does clearly indicate a building suitable for that or any other common business use by reason of its type and wholly unsuitable for use as a theatre.
¶16 Thus, regardless of any dispute as to the presence of the question in the application, it is unquestionable that plaintiff by the written application agreed to supply a certain type of building as security.
¶17 For reasons which will be more fully discussed hereafter, we have concluded that the type of building to be erected as contemplated by the application constitutes a very important factor in the case.
¶18 In response to the application the defendant company replied by letter from which we quote the following pertinent excerpts:
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