Solmson v. Deese

• Decision Date: 09 February 1920
• Docket Number: 175
• Citation: Solmson v. Deese, 218 S.W. 657, 142 Ark. 189 (Ark. 1920)
• Parties: SOLMSON v. DEESE
• Court: Arkansas Supreme Court

218 S.W. 657

142 Ark. 189

SOLMSON v. DEESE

No. 175

Supreme Court of Arkansas

February 9, 1920

Appeal from Pulaski Chancery Court; John E. Martineau, Chancellor affirmed.

Decree affirmed.

Cohn Clayton & Cohn and Moore, Smith, Moore & Trieber, for appellant.

1. The relation between Solmson and Deese had changed from that of principal and agent to that of vendor and vendee at the time the purchase contract was entered into on March 23, 1919. The testimony of the members of the Board of Control reveals the true facts as to the purchase of the farm as they occurred and they had undertaken the performance of the obligation placed upon them by the Legislature. The contract actually entered into is the best evidence of what the parties agreed to. There is no other testimony than that of Deese himself that Solmson claimed to be buying for another party. All the circumstances of the trade and all that followed are strongly opposed to the contention of Deese. If Solmson was selling to another party for the account of Deese and did not disclose to whom the sale was being made until after Deese executed the deed to him and then disclosed it by a statement that he was "unloading" the property on this party, that is, the State, this would naturally immediately arouse the suspicion of Deese as to the price at which he was selling to the State, because the word "unload" would convey to the mind of even an ignorant person that it was done in an unconscionable way, for an excessive consideration. The greater weight of the evidence supports the contention that Solmson from the beginning negotiated with Deese for the purchase of the place and in taking the agency contract considered it as the equivalent of an option to purchase. The payment of the additional sum was consistent with his position as a purchaser, and inconsistent with Deese's contention that he continued as Deese's agent. All the facts and circumstances show that when Solmson entered into the second contract with Deese on March 23 he had had no prior negotiations with the Board of Control or any one for them, and that there was nothing for him to disclose to Deese except that he personally desired to purchase the place and would pay the price offered. No other finding can be made except by wholly disregarding the evidence of the members of the Board of Control, whose statements have the stamp of truth and frankness.

2. The evidence shows ratification by all parties of the sale of the place to Solmson. Notice of the facts and circumstances would put a man of ordinary intelligence and prudence on inquiry and this is equivalent to knowledge of all the facts that reasonably diligent inquiry would disclose. 58 Ark. 91; 104 N.W. 820; 2 Pom. Eq. Jur., sec. 959. See also 31 N.W. 52; 40 F. 777.

3. There was a shortage in acreage, but a mistake of Deese as to his acreage was not the fault of Solmson. If Deese elects to take the benefit of the relation of agency, he must assume the burdens incident to it. If the State can not recover then it would be unconscionable to permit Solmson to recover from Deese. The board bought the place en masse without regard to the acreage, and the board is presumed to have had knowledge. If the actual shortage is too large to be embraced under the "more or less" clause, the abatement should be made for not exceeding 52 acres instead of 66 acres. 18 S.E. 355; 12 Id. 389; 54 Ind. 374; 29 Md. 305; 41 N.E. 599; 213 S.W. 201.

Assuming that Solmson told the Board of Control that he would make good the shortage, the promise, if made, related to a past and completed transaction, and there was no new consideration therefor, and no liability. 26 Ark. 160; 2 Id. 160; 66 Id. 26; 68 Id. 276; 70 Id. 232; 112 Id. 227; 37 L. R. A. (N. S.) 930; 73 S.E. 56; 70 W.Va. 38; 9 Cyc. 356; 30 S.E. 364; 51 Id. 603; 102 Am. St. 779; 76 S.W. 821. The decree should be reversed with directions to dismiss the complaint, the cross-bill of Solmson and the intervention of the Board of Control; or, in the alternative, that Solmson be given judgment against Deese and the judgment in favor of the Board of Control be credited on the $ 15,000 note executed by Solmson to Deese to the extent of the judgment recovered by Solmson against Deese and the balance of the judgment in favor of the State be credited on the note of the board to Solmson first maturing.

John F. Clifford, for appellee Deese.

1. It is conceded that the first contract was one of agency, and that the court was correct in its conclusion that the status of principal and agent, once fixed, could not be changed by Solmson into that of vendor and purchaser without full and complete disclosure to Deese of all the facts which Solmson knew at the time. The burden of proving this full, complete and honest disclosure was upon Solmson, and there is no testimony that he disclosed anything to Deese. The testimony of Deese is clear and convincing that he did not know who the purchaser was and did not know the price Solmson received for the land until some days thereafter. In transactions between principals and agent uberrima fides is required, and if not the transaction is voidable and will be set aside at the option of the principal. 73 Ark. 575; Pom. Eq. Jur. (4 Ed.), par. 951.

2. Where the evidence is conflicting in chancery cases, the finding of the chancellor will not be reversed unless clearly against the preponderance of the testimony. 101 Ark. 503; 85 Id. 105; 101 Id. 522.

3. The contract executed on Sunday was void and of no effect either as a contract or evidence of change of status of the parties. An agent can not, without the clear consent of his principal, suddenly change the relationship and buy for himself at a reduced figure. The decree of the chancellor is sustained by the evidence as to Solmson's acts and statements, and that he did not make a full statement of what he knew, and the finding of the chancellor is conclusive.

4. Discrepancies in testimony are natural and usual, but the great preponderance of the testimony is in favor of Deese's contention and against Solmson. The doctrine of ratification does not affect the issues here between Deese and Solmson, but there was in fact no ratification of Solmson's acts, and the chancellor in effect so found. The chancellor properly held that the $ 250 payment was not in accord and satisfaction of Deese's claim. As to the shortage in acreage Deese stated clearly and definitely that he did not know the acreage--had never had it measured or surveyed. The relationship of principal and agent existed from the date of the signing of the contract upon March 19 until April 2, when the place was delivered to the Board of Control. The paper signed on Sunday was a nullity because of fraudulent representations and because also it was altered. There was no accord and satisfaction and the decree should be affirmed.

John D. Arbuckle, Attorney General, and Robert C. Knox, Assistant, for appellee Board of Control.

The board knew no one in this transaction except Solmson, and if he acted as agent for Deese but held himself out as the true owner and did not disclose his principal, he becomes personally liable for any misrepresentations and false warranties he may have made. So far as these interveners are concerned it is unnecessary to discuss the liability of Deese, as we did not deal with him in any way and were not apprised of the fact that they were dealing with his agent. All our late cases on this subject are bottomed upon 19 Ark. 103. See 25 Ark. 541; 30 Id. 535; 61 Id. 120; 71 Id. 97. The deficiency here is 21.7 per cent. For decisions of other courts on the questions involved, see 11 S.E. 218; 79 S.W. 185; 51 S.E. 827; 122 S.W. 220; 5 N.E. 375; 4 Ind. 512; 152 Mass. 60; 170 Mo. 121; 4 N.J.Eq. 212; 25 N.Y. 224; 29 A. & Eng. Enc. Law 629.

After appellant was advised of the shortage he agreed to hold the State harmless and that he would be liable for any shortage in acreage. There was a new consideration for his agreement. The decree below is right and should be affirmed.

OPINION

SMITH, J.

J. R Deese brought this suit, and for his cause of action alleged that he had employed H. B. Solmson as his agent to sell his farm, and that the contract of agency authorized a sale for $ 50,000, with a commission of a thousand dollars, if a sale was made at that price, together with any excess over $ 49,000 net to Deese, but that his said agent had made a sale at $ 62,500 and had only accounted to him for $ 45,000, and judgment was prayed for $ 16,500.

Solmson filed an answer denying the allegations of the complaint, and alleged the facts to be that, acting solely for himself, he took a contract from Deese for a period of thirty days for the sale of the farm together with certain personal property for the net sum of $ 49,000, Solmson to receive all in excess of that sum as compensation. That, while said contract was in the form of an agency contract, Solmson in fact intended to obtain an option for the purchase of said property, and in pursuance of this purpose he, in a few days after obtaining said contract, entered into negotiations with Deese to purchase said property for himself, and on March 29, 1919, Deese and his wife conveyed said property to him for the consideration of $ 46,950.

It very clearly appears that Solmson is a man of much more experience in the transaction of important business than is Deese in fact, Solmson is a man of large and successful experience, yet the original contract entered into between the parties is very clearly an agency contract, a form being used in its preparation which was in common use by real estate agents in Little Rock in taking contracts to sell land. Solmson admits that he knows, and knew, the difference between an agency contract and a...