Loma Vista Development Co. v. Johnson

• Decision Date: 17 May 1944
• Docket Number: No. A-81.,A-81.
• Citation: 180 S.W.2d 922
• Parties: LOMA VISTA DEVELOPMENT CO. v. JOHNSON et ux.
• Court: Texas Supreme Court

180 S.W.2d 922

LOMA VISTA DEVELOPMENT CO. v. JOHNSON et ux.

No. A-81.

Supreme Court of Texas.

May 17, 1944.

Rehearing Denied June 21, 1944.

Error to Court of Civil Appeals of Fourth Supreme Judicial District.

Action by Thomas W. Johnson and wife against Loma Vista Development Company for damages for fraud in the sale of a dwelling house. A judgment for plaintiffs

was reversed by the Court of Civil Appeals, 177 S.W.2d 225, which remanded the cause and both plaintiffs and defendant brings error.

Judgment of both courts reversed and judgment rendered for defendant.

Johnson & Rogers and Nat L. Hardy, all of San Antonio, for petitioner.

Elmer Ware Stahl and A. R. Sohn, both of San Antonio, for respondents.

BREWSTER, Commissioner.

Thomas W. Johnson and his wife sued Loma Vista Development Company for damages for fraud in the sale of a dwelling house to them by the company. The trial court rendered judgment for the Johnsons on a jury verdict favorable to them. The Court of Civil Appeals at San Antonio reversed that judgment and remanded the cause on the ground that "there was no evidence establishing a legal measure of damages." Associate Justice Murray dissented, contending that the judgment should be rendered for the company. 177 S.W.2d 225, 228. Both sides sought a writ of error. The company's application was granted on its first point of error, hereinafter stated, and the Johnsons' application was then granted as a matter of course. Since our decision renders it unnecessary to discuss the latter application, we shall refer to the company as "petitioner" and to the Johnsons as "respondents."

Petitioner was engaged in the construction and sale of dwelling houses in the Loma Vista Addition to the City of San Antonio. When the house in question was about finished, petitioner listed it with Wm. P. McNeley Company, real estate brokers, for sale. Roy Jones was a salesman for these brokers. On January 28, 1940, respondents were in the Loma Vista area looking for a house to rent, when they noticed an "Open for Inspection" sign in front of the property in question. They decided to look at the house, and when they went in Jones introduced himself as the salesman in charge. Then it was, they allege, that Jones made false representations as to the manner of construction of the house and the materials used in it, upon which they claim they relied and which induced them to buy it. At the request of Jones, petitioner then gave the McNeley Company an exclusive listing of the property for a few days to give him full opportunity to negotiate with respondents, whom he regarded as likely prospects. Jones continued his efforts by going the next evening to the home of respondents, where, they say, he repeated the representations made to them the previous afternoon. On February 1 respondents signed an "earnest money agreement" to purchase the property, which showed the McNeley Company as agent and Jones as salesman. It was presented to petitioner, which signed and accepted it. The deed to respondents was delivered on March 19, and they moved in the next day.

Both Jones and one Saur, secretary of petitioner, testified that petitioner did not authorize Jones to make any representations concerning the house, and Saur swore that he gave no such authorization to the McNeley Company. He also testified that he knew nothing about the alleged representations until after this suit was filed. Respondents in no manner controverted this testimony.

It is unnecessary to state all of Jones' alleged misrepresentations, as the Court of Civil Appeals held that only one was actionable, namely, that the foundation of the house "would give them (the Johnsons) no trouble and would stand up and that it was the best foundation for that particular type of house."

During the trial and while Johnson was testifying in his own behalf, he declined petitioner's offer to rescind the conveyance.

Petitioner's first point of error complains at the holding of the Court of Civil Appeals that Jones' unauthorized representation concerning the foundation of the house was within the scope of his agency for Loma Vista Development Company.

At the outset we are confronted by respondents' contention that Jones was established as a general agent by the jury finding that he was an agent, under the trial court's definition of an agent as "one who undertakes to transact some business or to manage some affair for another, by the authority and on account of the latter, and to render an account of it." We see nothing in that definition inconsistent with special agency, therefore we fail to see how the jury finding can enlarge Jones' powers as they existed under the undisputed facts. It is a question of law, under what the facts show respecting the scope of the authority conferred upon him by petitioner, as to whether his agency was general or special. See Continental Oil Co. v. Baxter, Tex.Civ.App. 59 S.W.2d 463, cited in 2 C.J.S., Agency, § 101, p. 1238, note 29. It is clear to us that he was a special agent whose authority was limited to showing the property and finding a purchaser, and that he had no authority to consummate the sale. See Donigan v. Policek, Tex.Civ.App., 34 S.W. 2d 375, error dismissed. That he claimed no power to bind petitioner, even by the earnest money contract, is shown by the fact that, after that instrument was executed by respondents, it was presented to, and accepted by, the petitioner. That a real estate broker ordinarily is only a special agent is the reason for the uniform decisions of this court that, in the absence of special agreement, he is entitled to his commission when he finds one who is ready, able and willing to buy on his principal's terms because he has done all that his employment requires or authorizes him to do.

In finding one who is so ready, able and willing to buy, does the agent have implied authority to make representations as to the quality of the real estate? In discussing this proposition, one authority has said: "The question as to the authority of a broker to bind the owner of land as to representations which affect the value of the land, where it is sought to hold the innocent owner for damages on the ground of imputed fraud, is involved in much difficulty. The result of sustaining the authority often is to impose upon the owner a burden clearly beyond that which the agent had...