Lucey v. Hero Intern. Corp.
| Decision Date | 10 April 1972 |
| Citation | 361 Mass. 569,281 N.E.2d 266 |
| Parties | John P. LUCEY v. HERO INTERNATIONAL CORPORATION. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Gerald Gillerman, Boston, for defendant.
Thomas A. Buckley, Springfield, for plaintiff, submitted a brief.
Before TAURO, C.J., and CUTTER, QUIRICO and HENNESSEY, JJ.
This case involves a bill for specific performance of an option to purchase land. The defendant appeals from an interlocutory decree confirming the master's report and from a final decree ordering it to convey certain land to the plaintiff. The evidence is not reported.
We summarize the facts as found by the master. The defendant was the owner of a large tract of land in Richmond. On February 15, 1969, a clergyman, Father John P. Lucey (the plaintiff), offered to purchase five acres of the defendant's land and the buildings thereon for $65,000, and paid a broker $1,000 as a deposit. The broker told the plaintiff that his firm represented one Henry Rose, the defendant's president. At that time no mention was made of the corporation. The broker also prepared a real estate agreement describing the parcel and stating that 'This agreement subject to an option to purchase additional land north of the house and along road at rate of.$1000.00 per acre.' This agreement, however, was not executed.
On March 5, 1969, the defendant's board of directors voted that the corporation sell to the plaintiff 'a piece of land on the easterly side of Lenox Road in Richmond, Massachusetts, for the sum of Sixty-Five Thousand ($65,000.00) Dollars and that the President be authorized to sign the deed and any other papers needed to effectuate this transfer.' No other corporate vote on this matter was ever taken.
At a closing on March 13, 1969, the defendant conveyed to the plaintiff by warranty deed dated March 10, 1969, the five acre parcel. The transaction was consummated by the defendant's attorney, who, the master found, had authority to deliver the deed and accept the sale price on behalf of the defendant. At that same meeting, the plaintiff executed a real estate sales agreement which contained a paragraph granting the plaintiff 'an option to purchase additional land belonging to . . . (the defendant), which said land shall be Northerly of the conveyed premises and along Lenox Road as mutually agreed upon by both parties.' The option further provided that the land would be sold at a rate of $1,000 an acre. The master found that the words 'as mutually agreed upon by both parties' were inserted at the suggestion of the defendant's attorney 'in order to prevent the possibility that the option might be exercised by the purchase by the plaintiff of any portion of the seller's remaining land which would destroy the value of the residue of the land owned by the seller.' The agreement also provided that the option provision 'shall survive the closing.'
The agreement was mailed to Rose who, without consulting the other officers of the corporation, deleted from the option paragraph the words 'which said land shall be Northerly of the conveyed premises and along Lenox Road' and signed the agreement as so modified. The agreement was forwarded to the plaintiff's attorney whose attention was directed to the deletion made by Rose. The attorney was requested to have the plaintiff initial the modified agreement which was subsequently done. The master found that the plaintiff initialed the agreement 'for the purpose of indicating his assent to all of the changes made thereon.'
In late August, 1969, the plaintiff met Rose and told him that the defendant was obliged to sell to the plaintiff 'whatever portion of the defendant's remaining land he wished to buy.' Thereupon, the plaintiff hired a registered land surveyor who prepared a plan and a legal description of a five acre parcel selected by the plaintiff alone. The parcel selected was the one located immediately north of the parcel previously purchased. On September 2, 1969, the plaintiff's attorney notified the defendant that the plaintiff had elected to exercise the option with respect to the five acre parcel previously surveyed. Subsequently, Rose offered to sell and convey to the plaintiff a different parcel of land. No agreement was reached, whereupon the plaintiff commenced this litigation.
Since the evidence is not reported, the master's subsidiary facts must stand unless they are 'mutually inconsistent, contradictory, or plainly wrong.' Madigan v. McCann, 346 Mass. 62, 64, 190 N.E.2d 215, 216. Since his ultimate findings are conclusions of law, they are subject to review by this court on appeal. Ryan v. Stavros, 348 Mass. 251, 253, 203 N.E.2d 85.
The defendant advances as grounds for reversing the final decree that (1) Rose lacked authority to enter into the option agreement on behalf of the corporation; (2) the option agreement was too indefinite to be specifically enforceable; and (3) in any case, the option was not properly exercised by the plaintiff. Since we agree with points (1) and (2) of the defendant's arguments, the final decree must be reversed.
1. The plaintiff has the burden of showing that Rose, as president of the corporation, had authority, either actual or apparent, to enter into the option agreement on behalf of the corporation or that the corporation ratified it with full knowledge of its provisions. James F. Monaghan, Inc. v. M. Lowenstein & Sons, Inc., 290 Mass. 331, 333, 195 N.E. 101. There were no findings by the master to support an inference that Rose had apparent authority to enter into the option agreement. Horowitz v. S. Slater & Sons, Inc., 265 Mass. 143, 148, 164 N.E. 72. On the basis of the facts, as found by the master, no actual authority existed nor was there any ratification by the corporation. For this reason, the final decree as ordered by the judge was wrong.
The principles applicable to the present case were fully stated in Kelly v. Citizens Fin. Co. of Lowell, Inc., 306 Mass. 531, 532--533, 28 N.E.2d 1005, 1006, wherein this court said that ...
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