Mello v. Coy Real Estate Co.

• Decision Date: 06 November 1967
• Docket Number: No. 10133,10133
• Citation: 103 R.I. 74,234 A.2d 667
• Parties: Jacintho MELLO et ux. v. COY REAL ESTATE CO. et al. Ex. &c.
• Court: Rhode Island Supreme Court

Page 667

234 A.2d 667

103 R.I. 74

Jacintho MELLO et ux. v. COY REAL ESTATE CO. et al.

Ex. &c. No. 10133.

Supreme Court of Rhode Island.

Nov. 6, 1967.

Cappuccio & Cappuccio, Louis B. Cappuccio and Frank S. Cappuccio, Westerly, for plaintiffs

James D. Thornton, Westerly, for Coy Real Estate Co.

Harold B. Soloveitzik, Matthew L. Lewiss, Westerly, for Mary Elizabeth Welch Connell.

OPINION

KELLEHER, Justice.

This is an action of assumpsit to recover money damages incurred by the plaintiffs as a result of the defendants' failure to carry out an alleged agreement to sell certain real estate to the plaintiffs. It was heard in the superior court by a justice thereof, sitting without a jury, who rendered a decision for one of the defendants and awarded the plaintiffs the sum of $50 against the other defendant. Thereafter the plaintiffs duly prosecuted their bill of exceptions to this court. Since they have briefed and argued only their exception to the decision, the other exception is deemed to be waived.

While the evidence given in this case by the various parties was in many respects contradictory, it is possible to set forth the various transactions which gave rise to this litigation. On September 5, 1945, plaintiffs agreed with defendant realty company, through its president and treasurer Edward B. Coy, to purchase a parcel of real estate located in Westerly. The property was owned by the realty company and defendant Mary Elizabeth Welch as tenants in common. This agreement was evidenced by a written memorandum which was delivered to plaintiffs as a receipt for a $50 deposit they gave to Coy. It reads as follows:

'Sep 5-1945

'Received of Jacintho B. & Eleanor Mello Fifty # . . . Dollars Deposit for purchase of land between Old and New Post Roads, owned by Coy R.E. Co & Elizabeth Welch. Balance due on delivery of deed $950.00

'$50.00

Coy Real Estate Co. Agts

(signed) E B Coy'

It was agreed that no transfer could take place until the estate of defendant Welch's mother, who was her daughter's predecessor in title, was closed and the title to this half interest perfected. The estate, however, was not closed until four years later.

The defendant Welch testified that during this period she spent little time in Westerly as she taught school in New York; that defendant realty company at no time was authorized by her to sell this property to plaintiffs for the sum set forth in the agreement; that while defendant realty company had previously sold one other parcel of real estate for her, it had received her prior approval before any agreement had been executed; and that she did not know plaintiffs. The plaintiff Jacintho Mello corroborated this last statement and stated that he had never met defendant Welch.

The attorney for defendant realty company during this time was a witness. In his testimony he stated that, after informing plaintiffs of defendant Welch's unwillingness to concur in the desired sale, he, on behalf of the realty company, agreed with plaintiffs to make an effort to arrange the purchase by his client of the outstanding Welch half interest. If this were accomplished, the realty company would then execute and deliver to plaintiffs a proper deed in conformity with the original understanding of September 5, 1945. It was further understood that if he were unsuccessful in his negotiations with Welch, the $50 tendered by plaintiffs would be returned and any and all obligations incurred pursuant to the earlier agreement would cease. The attorney testified that he was unable in his attempt to acquire the half interest of defendant Welch. While plaintiffs deny this portion of the testimony, the record shows that on November 25, 1950, the realty company conveyed its interest to defendant Welch and on the same day its attorney tendered a check in the amount of $50 to plaintiff Jacintho. The plaintiffs never cashed the check and it is an exhibit in this case.

In his decision, the trial justice first ruled that defendant Welch had never authorized defendant realty company to represent her in any negotiations it had with plaintiffs and he then found that defendant realty company and plaintiffs did enter into a second argeement relative to the property which extinguished the first agreement of September 5, 1945, and any liability of the realty company thereunder. The plaintiffs in their appeal take issue with these findings.

I Defendant Welch

In finding for this defendant the trial justice remarked on the almost complete lack of testimony that the realty company was ever authorized to sell the Welch interest in the subject property. The plaintiffs, however, alleged in their amended declaration that the September 5, 1945 memorandum was signed by defendant realty company as the agent for Welch. The burden of proving such an agency was upon them. H. W. Ellis, Inc. v. Alofsin, 87 R.I. 252, 140 A.2d 131. We reiterate here what we held in Furlong v. Donhals, Inc., 87 R.I. 46, 137 A.2d 734. In cases where the existence of a principal-agent relationship is alleged and in issue, it is generally held that extrajudicial statements and declarations sought to be attributed to the purported agent are inadmissible to prove the agency under the hearsay rule. 3 Am.Jur.2d, Agency, § 354, p. 711. We also pointed out in Furlong that an agency cannot be established by acts of a professed agent unless the acts are of such a character and so continuous as to justify a reasonable inference that the principal had knowledge of them.

We have reviewed the record in the light of the law of agency set forth above. In so doing we point to our longstanding rule that where parties submit their case on law and facts to a trial justice sitting without a jury, his findings are entitled to great weight and will not be disturbed by this court unless they are clearly wrong. Abilherira v. Faria, R.I., 229 A.2d 758. We find no error in the ruling of the trial justice for defendant Welch.

II

Defendant Coy Real Estate Co.

While plaintiffs contend that the trial justice's finding of a second agreement between them and the realty company is contrary to the evidence, the place particular emphasis that this portion of the decision is against the law. If there was in fact a new agreement, plaintiffs describe it as a novation. ¹ Accordingly, they point to our holding in New England Doll & Novelty Co. v. Del Dio, 95 R.I. 450, 187 A.2d 781, wherein this court ruled that a novation is an affirmative defense which must be pleaded specially with the burden on the pleader to prove the existence of the new contract by a fair preponderance of the evidence. No such plea being in the record of this case, plaintiffs state that the decision in the realty company's behalf has no validity.

The plaintiffs declare that although this defendant filed a plea of an account stated, it does not encompass a plea of novation, substituted contract or accord and satisfaction. They assert that when the trial justice ruled in favor of the realty company on the basis of the plea of an account stated, ² he misconceived the distinction between these enumerated defenses and therefore his decision cannot stand. They also argue that a decision premised on a defense not contained in the pleadings constitutes a material variance between the pleadings and the proof which requires a reversal of the action of the superior court. The plaintiffs further allege that it was inconceivable for them to anticipate that the trial justice would support his opinion by a theory wholly beyond the pale of the pleadings.

This appeal antedates by a considerable period of time the advent of the new rules of civil procedure of the superior court. ³ Accordingly we shall, where necessary, dispose of the issues presented herein by recourse to the former rules of civil procedure of the superior court.

We concur in plaintiffs' assertion that an account stated, precisely defined, does not include a plea of accord and satisfaction or one of novation. There are differences and distinctions to be observed in the use of these pleas. An account stated is merely a striking of a balance by an arithmetical computation of debits and credits resulting from a running account between the parties and followed thereafter by an expressed or tacit promise by one, found to be indebted to the other, to pay the agreed balance determined to be owed. See 6 Corbin, Contracts, chap. 72, § 1303 et seq. It is to be noted also that as we have defined the term, an account stated does not operate as an automatic discharge of the debt previously existing between the parties. On the other hand, the theories of both accord and satisfaction and novation, the dissimilarities of which are of no concern here, operate to discharge all the rights and obligations emanating from a prior agreement. Priest v. Oehler, 328 Mo. 590, 41 S.W.2d 783; 6 Corbin, Contracts, § 1293, p. 185.

The language used by the trial justice in his decision plainly indicates...