Sanders v. Rudd

• Citation: 427 So.2d 1271
• Decision Date: 22 February 1983
• Docket Number: No. 15177-CA,15177-CA
• Parties: Fount L. SANDERS, et ux, Plaintiffs-Appellees, v. William L. RUDD, III, Defendant-Appellant.
• Court: Court of Appeal of Louisiana — District of US

Page 1271

427 So.2d 1271

Fount L. SANDERS, et ux, Plaintiffs-Appellees, v. William L. RUDD, III, Defendant-Appellant.

No. 15177-CA.

Court of Appeal of Louisiana, Second Circuit.

Feb. 22, 1983.

Bodenheimer, Jones, Klotz & Simmons by J.W. Jones, Shreveport, for plaintiff-appellee.

Schober, Clawson & Brabham by John L. Schober, Jr. and Russell O. Brabham, Shreveport, for defendant-appellant.

Before PRICE, MARVIN and JASPER E. JONES, JJ.

PRICE, Judge.

This is an action by the vendors for specific performance of an alleged agreement to purchase an oil, gas and mineral lease. Defendant-vendee appeals the judgment of the trial court ordering him to purchase the property pursuant to the alleged agreement. The issues for consideration are (1) whether the petition properly stated a cause of action, (2) whether the agreement was invalidated for lack of a written mandate between vendors and the attorney who negotiated the sale, (3) whether parol evidence was admissible to prove the agency relationship, and (4) whether the lease itself was suggestive of litigation such that the vendee could not be compelled to accept title.

The relevant facts of this case are essentially undisputed. Plaintiffs are lessees of the mineral interests in certain properties in Vernon Parish. The defendant is an individual engaged in the oil and gas industry for investment purposes. Subsequent to telephone conversation with Charles B. Bice, an attorney in Winn Parish, defendant made an offer by letter to purchase the mineral lease of plaintiffs on 2,729 acres in Vernon Parish on the following terms:

1. $35.00/acre

2. 81.25 net revenue interest as to all depths other than the Wilcox.

3. 78% net revenue interest for those depths in the Wilcox formation.

Bice conveyed plaintiffs' acceptance of this offer to defendant by letter dated July 17, 1981, which acknowledged receipt of Rudd's letter, stated that the terms therein were acceptable to the Sanders, and referred to future arrangements to deliver the assignments.

With defendant's assent, Bice then prepared the necessary act of assignment which was signed by plaintiffs and submitted to defendant. Defendant testified that he then told Bice he would begin checking title to the property and mail a check payable to plaintiffs when that was satisfactorily completed. Bice contacted Rudd several times during the month of August, 1981, with regard to payment for the assignment. On August 24th, the defendant informed Bice that he could not conclude the transaction because he did not have the money, and that he had decided the deal was not right for his company. He then returned the act of assignment to Bice.

By letter dated August 28, 1981, Bice made formal demand for payment. After Rudd failed to respond, this suit was filed for specific performance.

Defendant filed an exception of no cause of action based on the contention that the agreement was unenforceable because his offer to purchase was directed to Bice rather than to plaintiffs, and Bice could not make a valid agreement to sell without a written mandate from plaintiffs. The exception was overruled and the case proceeded to trial on the merits. The lower court concluded that the defendant could not complain of lack of written authority because he failed to object when made aware of the agency relationship between Bice and the plaintiffs. The court also rejected defendant's claim that the lease was not merchantable because of a self-terminating provision. Judgment was therefore rendered ordering specific performance.

The defendant first contends that the trial court erred in rejecting his exception of no cause of action. He argues the petition alleged neither a written agreement between the parties nor specific written authority for their attorney to act on their behalf; therefore, there is no valid agreement and no cause of action.

It is axiomatic that the exception of no cause of action raises the question of whether the allegations of the petition entitle the petitioner to a remedy under any theory of law. For the purpose of deciding this exception, all well-pleaded allegations of fact in the petition must be accepted as true. Every reasonable interpretation must be afforded the language of the petition so as to maintain its sufficiency and afford the plaintiff his or her day in court. Hero Lands Co. v. Texaco, Inc., 310 So.2d 93 (La.1975); Androwski v. Ole McDonald's Farms, Inc., 407 So.2d 455 (La.App. 1st Cir.1981), writ denied 409 So.2d 666 (1982). We find the trial court properly overruled defendant's exception of no cause of action.

We recognize that, according to LSA-C.C. arts. 2996 and 2997, a mandate to buy or sell must be express and special and, with regard to immovable property, a writing is required. See also LSA-C.C. arts. 2275 and 2992; Bordelon v. Crabtree, 216 La. 345, 43 So.2d 682 (1949). We are also mindful that our law characterizes a mineral lease as immovable property. See LSA-R.S. 31:2, 16 and 18.

The defendant relies on Lake v. LeJeune, 226 La. 48, 74 So.2d 899 (1954), a suit by a buyer whose offer had allegedly been accepted by the attorneys of record for the defendants. The court held the acceptance ineffective and the alleged agreement unenforceable for lack of allegations of fact from which it might be concluded that the defendant had granted any express authority to their attorneys to confect a binding agreement to sell.

However, the lack of an express written power of attorney does not render a transaction involving immovable property an absolute nullity or subject it to nullity at the will of third persons. Rather, it is merely voidable as between the parties. Bolding v. Eason Oil Co., 248 La. 269, 178 So.2d 246 (1965). As noted by our Supreme Court in Rebman v. Reed, 286 So.2d 341 (La.1973), appeal after remand 335 So.2d 37 (La.App. 4th Cir.1976), certiorari denied 338 So.2d 699 (La.1976), our substantive law does recognize that a principal may ratify the unauthorized acts of his agents. See LSA-C.C. arts. 1840 and 3010. Therefore, where the petition alleges facts to support a conclusion of ratification by the principal, plaintiffs have the right to attempt to prove these factual allegations on the merits.

In the instant case, it might be said that the very filing of the petition by plaintiffs connotes ratification of the agent's actions, inasmuch as the suit is for the purpose of enforcing the alleged agreement made on their behalf by their attorney. The petition goes even further, however, in that it alleges ratification of the agent's actions by the plaintiffs. Thus, the trial court properly allowed the plaintiffs the opportunity to prove these allegations at trial on the merits.

The defendant contends on the merits that the agreement reached through his negotiations with plaintiffs' attorney was invalid for lack of express written authority, and that parol evidence to prove the agency relationship was improperly admitted since such agreements are required to be express and in writing. We concede that this is an accurate statement of the general rule. LSA-C.C. arts. 2275, 2992 and 2996; Lake v. LeJeune, supra. However, a contract entered into by an agent, though voidable for lack of authority to act, may be ratified by the principal. Rebman v. Reed, supra; Daigle Associates, Inc. v. Coleman, 385 So.2d 349 (La.App. 1st Cir.1980). In the law of agency, ratification is the adoption by one person of an act done on his behalf by another without authority. It amounts to a substitute for prior authority. The burden of proof is on the party asserting ratification and a clear and absolute intent to ratify the act must be shown by the facts. Bamber Contractors v. Morrison Engineering, 385 So.2d 327 (La.App. 1st Cir.1980), and cases cited therein. LSA-C.C. art. 1840 provides in pertinent part:

"Art. 1840--* * * Contracts, however, made in...