Robeson & Weaver v. Ramsey

• Decision Date: 13 December 1922
• Citation: 245 S.W. 413
• Parties: ROBESON & WEAVER et al. v. RAMSEY et al.
• Court: Tennessee Supreme Court

Page 413

245 S.W. 413

ROBESON & WEAVER et al. v. RAMSEY et al.

Supreme Court of Tennessee.

December 13, 1922.

Appeal from Chancery Court, Hamblen County; M. H. Gamble, Chancellor.

Suit by Robeson & Weaver and others against W. B. Ramsey and others. Decree for complainants, and defendants appeal. Affirmed.

Rufus M. Hickey, of Morristown, for Robeson & Weaver and others.

James A. Carriger, of Morristown, and John W. Green, of Knoxville, for W. B. Ramsey and others.

GREEN, J.

The defendants W. B. Ramsey and Z. G. Sprinkle and A. F. Sprinkle in August, 1920, owned as tenants in common a large farm of about 750 acres, lying in the counties of Cocke, Hamblen, and Jefferson on Chuckey river. On August 5, 1920, these parties entered into a contract with the complainants, licensed real estate agents, whereby the complainants undertook to sell at auction the said farm. Complainants were to do all necessary advertising, offer the usual prizes, furnish an auctioneer, and generally to look after the things required of such agents at a big sale. This contract was reduced to writing, and the third paragraph thereof was as follows:

"It is agreed and understood that if the said property does not sell for a price that is satisfactory to the party of the first part that they are to pay to the party of the second part all actual and legitimate expenses incurred in putting on said sale, which amount shall not exceed $400.00, this amount to be in full for services rendered, but if the sale of said property is confirmed at the price it brought then the party of the first part is to pay the party of the second part 5%, five per cent., of the amount the property is sold for. It is further understood and agreed by the party of the second part that no part of said property shall be sold unless the price bid on the sale is satisfactory to the party of the first part, and if the sale of $8,000.00 worth of the property is confirmed by the party of the first part, then the party of the second part is to pay all expenses limited to $400.00."

The sale was had under the auspices of complainants on August 26, 1920, and the property brought $123,782. This bill was filed to recover 5 per cent. on said sum by the complainants, which was not paid to them, and the chancellor decreed in their favor. From this decree the defendants have appealed.

After the sale was over A. F. Sprinkle expressed himself as being satisfied with the price the land had brought, and he was willing to confirm. Ramsey and Z. G. Sprinkle however, asked for a conference with A. F. Sprinkle before announcing their intention with reference to confirmation, and later they decided not to confirm said sale, alleging that the price brought was not satisfactory. It appears without controversy that Ramsey and Z. G. Sprinkle had procured two men from North Carolina, one Roberts and one Byrd, to act as by-bidders at this sale. The farm was sold in several tracts, and a very considerable portion of it was knocked off to Roberts and Byrd.

We think the weight of the proof is that A. F. Sprinkle did not know that these by-bidders had been employed to represent the other tenants in common. It is very clear that the complainants who were conducting this sale did not know that by-bidders were to be employed, or had been employed. They say that they would not undertake to promote a sale where there were by-bidders, their experience as real estate agents leading them to believe that such sales are seldom confirmed. The auctioneer undoubtedly announced that there would be no by-bidding at the sale. He stated that the owners reserved the right to bid, but that such bids from any of them would be bona fide. He further asked, if any one suspected by-bidding that the attention of the auctioneer be called to it. The defendants were present at the sale, and this announcement of the auctioneer was not contradicted by them.

Under these circumstances we do not think, in a controversy with the real estate agents, that the defendants can be heard to say that these bids, made for them by Roberts and Byrd, were not valid and binding. We need not discuss the effect of by-bidding generally on an auction sale. The authorities are not in accord as to this. 2 R. C. L. 1129; Davis v. Petway, 40 Tenn. (3 Head) 667, 75 Am. Dec. 789. The arrangement to procure by-bidders here was certainly fraudulent as to the complainants, and the defendants cannot rely on such an arrangement for the purpose of avoiding their liability to the complainants.

The defendants, however, insist that the sum brought by the farm at the sale was not a satisfactory price to them, and that for this reason they were within their rights in refusing to confirm said sale. This is the theory put forth by defendants in their testimony. In their answer they admit that the several tracts of land knocked off to the by-bidders brought more than they were worth.

Quite an amount of proof was taken by the complainants and the defendants on the value of this farm at the time of this sale. The great weight of all the proof is that the farm brought more than it was worth — several thousand dollars more. A. F. Sprinkle, who was not responsible for the by-bidding, was entirely satisfied with the price and willing to confirm the sale. He is accordingly not sued in this case.

It is urged for the defendants that under the terms of their contract with the agents they were not obligated to confirm the sale made, unless it was satisfactory to defendants, and that defendants had the absolute right to determine whether or not the price was satisfactory, and to act accordingly. This brings us to a consideration of the meaning of the word "satisfactory" in a contract like this.

In Heating & Ventilating Co. v. McKnight & Merz, 140 Tenn. 563, 578, 205 S. W. 419, 423, the court, speaking through Chief Justice Neil, said:

"There is a conflict in the authorities as to the meaning of the term `satisfactory,' so used in a contract. It is held, perhaps, by the weight of authority, that where such term appears in the contract, the party in whose favor it was reserved has the absolute right to determine the question, and to act accordingly — that is, either accepting or rejecting the work, provided his act is not merely capricious. Other authorities hold that such term is fully met where the work, as done, should be satisfactory to a reasonable man. Without now deciding between these two views, it is sufficient to say that this particular term was not lightly used in the contract. It was made the subject of correspondence between the parties. Complainant was very loath to use it, saying it had had so much trouble with agreements in which this word appeared that it had ceased to admit such term into its contracts. Williamson insisted, and would sign no other;...