Tyng v. Constant-Loraine Inv. Co.

• Decision Date: 03 January 1916
• Docket Number: 2655
• Citation: 154 P. 767,47 Utah 330
• Court: Utah Supreme Court
• Parties: TYNG v. CONSTANT-LORAINE INV. Co.

154 P. 767

47 Utah 330

TYNG v. CONSTANT-LORAINE INV. Co.

No. 2655

Supreme Court of Utah

January 3, 1916

For former appeal see 37 Utah 304, 108 P. 1109.

Appeal from District Court, Third District; Hon. F. C. Loofbourow Judge.

Action by Charles Tyng against the Constant-Loraine Investment Company.

Judgment for plaintiff. Defendant appeals.

REVERSED and REMANDED.

Howat MacMillan & Nebeker for appellant.

APPELLANT'S POINTS.

Notice of facts and circumstances sufficient to put a purchaser of land upon inquiry, is notice of all the facts that an honest and diligent inquiry would disclose. (Simmons Coal Co. v Doran, 142 U.S. 438; Paxton v. Brown, 61 F. 883.) An officer, such as a president, secretary, manager, etc., has no inherent power by virtue of his office, to contract for his company. (Kansas Co. v. Deval, 72 F. 717; Tobin v. Roaring Railroad, 86 F. 1020; Twelfth St. Market Co. v. Jackson, 102 Pa. St. 269; Stanley v. Sheffield L. I. & C. Co., 83 Ala. 260, 4 Southern, 34; Templin v. C. B. & Q. R. Co. [Iowa], 35 N.W. 634; Griffith v. Railroad Co. [Iowa], 36 N.W. 901; Missouri & J. R. Co. v. Looney, 71 Am. Dec. 491; Blair v. Bear River, 20 Cal. 602; Millville T. Co. v. Goodwin, 53 N. J. Eq. 448, 32 A. 263.) All persons dealing with officers of the corporation are chargeable with notice of the limitations upon their authority by the charter of general laws. (Clark & Marshall on Private Corp., p. 2171 (c); Relfe v. Rundle, 103 U.S. 226; Louisville T. Co. v. Louisville Ry., 75 F. 450.) In order to make a ratification of an unauthorized act of an agent effectual, it must be made with full knowledge of all the material facts on the part of the principal and the burden is on the party affirming the ratification to prove that the principal had such knowledge and acquiesced in and adopted the agent's acts. It is not enough for him to show that the principal might have known the facts by the use of diligence. (Murray v. Nelson L. Co. [Mass.], 9 N.E. 637; Nixon v. Palmer, 8 N.Y. 401; Smith v. Tracy, 36 N.Y. 79; Yellow Jacket Co. v. Stevenson, 5 Nev. 224; Owings v. Hull, 9 Peters [U.S.] 629.) Even though Rowan was acting as the agent merely of defendant, the authority granted to him to sell does not carry with it the power to bind his principal to convey by warranty. (Nixon v. Hyseratt, 5 Johns. 58; Heath v. Nutter, 50 Me. 378; Howe v. Harrington, 18 N. J. Eq. 495.)

Pierce, Critchlow & Barrette for respondent.

STRAUP, C. J. FRICK and McCARTY, JJ., concur.

OPINION

STRAUP, C. J.

The substance of the complaint is, that the defendant, a resident corporation of California doing a real estate business, was, subject to a $ 20,000 mortgage, "the record owner, as appeared from the plat books and other records in the office of the county recorder of Salt Lake County, Utah," of particularly described real property, a lot 55x165 feet, on the west side of State Street, in the City of Salt Lake; that the defendant, on the 9th of September, 1907, gave the Equity Investment Company, a Utah corporation doing a real estate business in Salt Lake City, an option to purchase the property subject to the mortgage, for $ 30,000, $ 1,000 cash, and $ 29,000 on or before 30 days thereafter, and that in pursuance thereof the equity investment company for the credit of the defendant, deposited with the National Bank of the Republic at Salt Lake City, $ 1,000, and took the bank's receipt therefor, which, so far as material, acknowledged payment of the $ 1,000 "on account of the purchase price" of the property described in the complaint, a lot 55x165 feet, and recited the further payment of $ 29,000, to be made within thirty days thereafter, when the property was to be deeded by warranty deed, free from all incumbrances, except the mortgage, and the taxes for 1907. The receipt or writing further recited that:

"This deposit is made with the National Bank of the Republic and accepted by them under authority of the following telegram from R. A. Rowan: 'Los Angeles, California, Sept. 6-7, 1907. Thomas E. Rowan, Salt Lake, Utah: Will accept one thousand for thirty days option for property west side State street. Price fifty thousand subject to twenty thousand mortgage. Balance thirty thousand to be paid in cash on or before thirty days from date. Taxes to be pro-rated. One thousand to be deposited to my credit immediately with National Bank of Republic, they to notify me by wire. R. A. Rowan.'"

It then is alleged that the Equity Investment Company, in paying the money and taking the receipt, acted for the plaintiff and that he understood and believed that the defendant was the owner and in possession of 55x165 feet, and that it legally could convey that much ground by warranty deed, and that the Equity Investment Company, immediately upon paying the money, made over and assigned the bank's receipt or writing to the plaintiff. It further is alleged that on the 9th of October, 1907, and within the option period, the plaintiff tendered the sum of $ 29,000 and demanded a warranty deed, but that the defendant tendered a warranty deed for only 53 1/2x165 feet and a quitclaim for 1 1/2x165 feet. This the plaintiff declined to accept and averred that the defendant was the owner and in possession of only 53 1/2x165 feet, and that it, at no time, was the owner or in possession of the 1 1/2x165 feet, which, as is averred, was possessed and held adversely by another, by reason of which the defendant, at no time, could grant or convey any interest therein, but of which the plaintiff had no knowledge until after the payment of the $ 1,000. It further is alleged that the deed tendered by the defendant "was not in conformity with the terms of said option or offer or agreement to sell" as evidenced by the bank's receipt and writing; that upon the defendant's failure to give a warranty deed for the whole of the fifty-five feet, the plaintiff demanded a return of the $ 1,000 theretofore paid, which was refused. Hence the plaintiff prayed judgment for $ 1,000 and interest.

The case was tried to a jury who rendered a verdict in plaintiff's favor in accordance with the prayer of the complaint. The defendant appeals and urges that the court erred in refusing to direct a verdict, to charge the jury as requested, in misdirecting the jury, and in permitting answers to be made to certain questions propounded to the plaintiff as a witness.

As shown by the records in the recorder's office of Salt Lake County, one Colgate, in 1903, by warranty deed, conveyed the lot, 55x165 feet, to one Halloran. In June, 1905, Halloran, by warranty deed, conveyed 53 1/2x165 feet, and by quit-claim 1 1/2x165 feet, to R. A. Rowan of Los Angeles. In December, 1905, Rowan, by warranty deed, conveyed 53 1/2x165 feet, and by quitclaim 1 1/2x165 feet to the defendant, and in July, 1908, the defendant, by R. A. Rowan, its president, and P. D. Rowan, its secretary, by warranty, conveyed 53 1/2x165 feet, and by quitclaim, 1 1/2x165 feet to one Snell of Salt Lake City. The plat in the recorder's office shows the lot to be as conveyed by Colgate to Halloran, 55x165 feet. When thereafter it was conveyed by Halloran and Rowan, 53 1/2 feet by warranty and 1 1/2 by quitclaim, the plat continued to show the lot to be 55x165 feet, and showed the necessary substitutions of names of grantees. The recorder testified that when conveyances are made either by warranty or quitclaim, no change as to the description or dimension of the lot conveyed is made on the plat, but that the grantee's name merely would be changed. He further testified that:

"Colgate having given a warranty deed to all of the fifty-five feet, we don't question whether he owned it or not; so that the plat itself would not reveal whether the man or the corporation in whose name the property stood held title by warranty or quitclaim deed; in order to ascertain that it would be necessary to go to the deeds themselves or to the abstracts. We have an abstract book of all the transactions; a mere glance at that abstract book will show whether it is a quitclaim deed or what it is,"

--and that the record of deeds showed the character of title acquired and held by the defendant. Thus, the plat in the recorder's office indicated that the defendant was the owner of a lot 55x165 feet; but whether by warranty or quitclaim deed would not there be disclosed. The abstract book and records of deeds, however, readily disclosed the defendant's title, and the number of feet of ground 53 1/2 feet it had by warranty and 1 1/2 by quitclaim, the same as was conveyed to it by Rowan and by Halloran to Rowan.

Some time prior to September 4, 1907, the plaintiff informed the Equity Investment Company that he was desirous of purchasing property on the west side of State street, between Second and Third South, and in the block where the property in question is located. In pursuance of that, one T. E. Rowan, a real estate agent at Salt Yake City, but not related to the Rowans at Los Angeles, nor in any manner connected with the defendant, on September 4, 1907, wired R. W. Rowan at Los Angeles:

"Advise cash price west side State, taxes prorated, whether leased."

R. W. Rowan, the next day replied:

"Will accept fifty thousand. Property now mortgaged for twenty thousand at five per cent. Leases very short. See Kelsey and Gillespie for exact information. Several people now figuring on this property. Doubtless will be sold, as figure named is ten thousand less than its present value."

The same day, T. E. Rowan wired R. A. Rowan:

"Responsible party offers one thousand for thirty days' option, recommend."

R. A. Rowan, the next day replied:

"Will accept one thousand for thirty days' option for property west side State street, price fifty thousand, subject to...