Naylor v. Parker
Naylor v. Parker
Opinion of the Court
S. A. Naylor and Arthur Lile have appealed from a judgment for $8,-856 rendered against them in favor of G. A. F. Parker and S. S. Evants as damages for the breach of the following contract in writing:
“This agreement this day made by and between S. A. Naylor, of Hardeman county, Texas, and Arthur Lile, of Sherman county, Texas, owners of the following described land, and G. A. F. Parker, of Deaf Smith county, Texas, witnesseth:
“For and in consideration of one dollar this day paid to said Naylor and Lile by said Parker, the receipt of which is hereby acknowledged, said Naylor and Lile do hereby grant unto said Parker an option to buy the land herein described, at the price and upon the terms herein set out, for a period of fifteen days from the date of this agreement.
“This agreement is conditioned that said Naylor and Lile are possessed of a good and sufficient title to said land, and that upon the terms of this agreement they shall convey to said Parker by their warranty deeds, good and sufficient titles to all of the land herein described. The attorneys for said Parker shall decide upon the sufficiency of the titles and conveyances.
“Should the titles prove defective, then this option money shall be returned to said Parker if he shall demand it, but if the titles and conveyance shall be declared good by said Parker’s attorneys, then no option money shall be refunded, but shall be retained by said Naylor and Lile.
“Should said Parker buy said lands under this option contract, then the money so paid by him as an option shall be credited upon the amount hereafter named, to be placed in escrow by said Parker, pending the completion of title papers and conveyances.
“The land referred to in this contract is what is known as the Sherman county school land, located in Cochran county, Texas, and consists of four leagues of land containing 17,712 acres of land, divided into tracts of 492 acres each, a separate title is held by said Naylor and Lile to each tract of 492 acres, and each tract carries its share of the debt due to Sherman county and no more, that is to say, there is not a blanket indebtedness covering the whole tract of 17,712 acres, but each tract of 492 acres is security for its assigned part of said indebtedness and for no more.
“The entire debt due to Sherman county upon the entire 17,712 acres is declared to be $35,924.00, or an average of $2 per acre, plus $500.00. The land, however, is classified; the debt against some tracts of 492 acres being more than $2 per acre, and the indebtedness against other tracts being less than $2 per acre.
“The debt due to Sherman county will be due in seventeen years from some day in March, 1909, and bears 5 per cent, interest; the interest payable the 29th day of every July — option of ten years extension.
“In case said Parker shall buy said land under this agreement, the price agreed upon is $5 per acre for the entire tract of 17,712 acres, plus an additional amount of $500. The purchase price shall be paid by said Parker as follows: First, the amount due against the land shall be deducted, and the land deeded to said Parker subject to said indebtedness. 'Second. Said Parker shall within fifteen days deposit in the Western National Bank of Hereford $1,500, in escrow pending the fulfillment of this agreement.
“Upon the completion of this agreement, and the acceptance by the attorneys for said Parker of the title and conveyances, said Parker shall pay an additional amount of ($13,500.00) thirteen thousand five hundred dollars. The remainder due to Naylor and Lile shall be divided into three equal payments, running one, two and three years, respectively, all notes to be drawn ‘on or before’ said due dates, and to draw interest at the rate of eight per cent, per annum. Failure to pay any of the three notes when due shall at the option of said Naylor and Lile mature all of the three notes.
“The land shall be deeded to said Parker in tracts of 492 acres, separate deeds to be given to each tract, and abstracts of title to be furnished by said Naylor and Lile.
“Each tract shall carry its own indebtedness and be independent of all other land, so far as indebtedness is concerned.
“In case said Parker shall fail to carry out this contract, the escrow money shall be paid to said Naylor and Lile as liquidated damages, and the remainder of this contract shall then become null and void.
“Witness our hands this 17th day of February, A. D. 1909.
“[Signed]
Naylor and Lile.
“S. A. Naylor.
“G. A. F. Parker.”
It was alleged in the plaintiffs’ petition that in making the contract Parker acted for and on behalf of himself and coplaintiff, *96 Evants, .who was equally Interested with Parker. The proof says that the $1,500 nam■ed in the contract was deposited within the period of time stipulated. In one count of the petition plaintiffs sought to have the contract specifically enforced, and in other counts damages were sought for the breach ■of the contract. It was alleged that Naylor was duly authorized by Tile to execute the contract, but that, if such was not true, then plaintiffs prayed in the alternative for specific performance to the extent of decreeing •title in plaintiffs to defendant Naylor’s undivided one-half interest in the land and for ■damages against Naylor as compensation for the remainder upon his implied warranty and representation that he had authority from Lile to sell the latter’s interest in the land. It was further alleged that, if Lile did not authorize Naylor to execute the contract, he afterwards ratified the same.
By verified answer Lile denied that he authorized Naylor to execute the contract for him, and upon the trial testimony was intro-•dueed to support that plea. Upon the issue thus presented the trial court charged the jury as follows:
“(9) You are instructed that the matter of Naylor being the agent for Lile in the sale of the land in controversy is a question of fact for the jury, to be determined from the testimony. And, to aid your investigation, you are instructed that an agency may be created by recognizing the acts of an agent with reference to the matter in hand, and acquiescence on the part of the principal as well as by special appointment or agreement with reference thereto, if any. And you may look to all the facts and circumstances surrounding the parties with reference to the holding ■of the land, their management of the same, and their dealings therewith. The act of the agent, in order to bind the principal, must have been done in jrarsuance to his duty and powers as such agent, or it must be approved and ratified by the principal after it has been committed. You are further instructed in this case that; if Naylor had the authority to contract for the sale of the land for Lile, such authority need not be in writing, but the same may be verbal or may arise from their holdings and dealings with reference to the land, as above given you in charge.”
“(11) If Naylor could only contract to sell the land, and had no authority to sell the land, without having the purchaser to assume the indebtedness due Sherman county, then, if you so find, you are instructed that, under the facts in this case, Naylor exceeded his authority in making said contract with Parker, in that Parker is not bound by such contract to .assume such indebtedness, but agrees to purchase the land subject to such indebtedness, and, unless you find that Lile, with knowledge of such provision in the •contract, or of the facts which if pursued with reasonable diligence would have led to such knowledge, consented to such contract, or ratified the acts of Naylor therein, then, if you so find, you should find for the defendants in this case.
“(12) You are further instructed that if it was privately understood between Naylor and Lile that said debt was to be assumed by whoever should purchase said land, and that Parker at the time he made the contract had no knowledge that Naylor had not the authority to contract to sell without such assumption being made, and relying upon Naylor’s apparent authority, and you find that such contract was within the apparent scope of Naylor’s authority, if any he had, and that, so relying, he (Parker) entered into the contract with Naylor, and in good faith carried out his undertaking, or offered to do so, and that Lile or Naylor did not within a reasonable time inform him that such contract was entered into without authority, but permitted him to proceed thereunder after having learned of the terms of the contract, or could have known of the same by the use of reasonable diligence on the part of Lile, then you should find for the plaintiffs.
“(13) If you find that Naylor did not have authority to make the contract for Lile, yet if he did so and notified Lile that he had made such contract; and you further find that Lile did not within a reasonable time notify Parker that Naylor had no such authority from him, and that he (Lile) stood by and permitted Parker to go forward under such contract, and to place himself in a worse condition than he was before; and you find that Lile knew of such contract and its terms, or could have learned of same by the exercise of reasonable diligence, and that without notifying Parker that he would not and could not be bound by said contract, —then you are instructed that Lile would be estopped from denying Naylor’;? authority to make such contract and cannot for that reason defeat specific performance of the contract.
“(14) If you find that Lile permitted Parker to go forward with the contract, and that he accepted part of the performance of the contract, after learning that the same had been entered into, and after learning of its terms, and permitted Parker to exercise his option to take the land and put up the money, and did not before that time notify him that the contract was made without authority, and therefore sought to make a new and different contract, and did not disaffirm the acts of Naylor in making said contract before that time, then you are instructed that Lile would not be permitted in law to accept part performance under the contract, and repudiate the remainder thereof.
“(15) You are further instructed in this case that agency cannot be proved by the acts and declarations of the agent. And, if you *97 find from all the facts and circumstances in this case that Naylor was not the agent of Lile to contract for the sale of his interest in the land, then you should disregard the acts and declarations of Naylor made with reference to such right, if any, he made to Parker. But, if you find there was such agency, then his acts and declarations so made, if any, should be given such consideration as you may find they are entitled to in this case.”
“The frequent statement of the rule of mutuality- — ‘that the contract to be specifically enforced must, as a general rule, be mutual, that is to say, such that it might, ar the time it was entered into, have been én-forced by either of the parties against the other’ — is open to so many exceptions that it is of little value as a rule. But, in view of the firm place that the doctrine of mutuality has obtained in the courts of equity, it seems well to attempt a restatement that shall be more free from exceptions. The following form seems to meet the cases generally: If, at the time of the filing of the bill in equity, the contract being yet execu-tory on both sides, the defendant, himself free from fraud or other personal bar, could not have the remedy of specific performance against the plaintiff, then the contract is so lacking in mutuality that equity will not compel the defendant to perform, but will leave the plaintiff to his remedy at law. This rule, it is believed, cover's the circumstances in equity where, according to the weight of authority, the court refuses its aid for lack of mutuality.
Accepting appellants’ interpretation thereof, the contract was in the nature of an option. Parker, for a consideration of $1,500, which was deposited in escrow, and as a forfeit in event he should fail to purchase, had the option to purchase the property upon the terms stated. When he deposited the $1,500, the consideration for the option was executed, and the institution of the suit was an election on his part to be bound by the terms of the purchase and to waive any right he had to terminate the contract by a surrender of the forfeit money. Indeed, this election was made prior to the institution of the suit, when he notified Naylor that he was ready to comply with the terms of the purchase and demanded of him abstracts of title thereto. When he thus elected to-purchase the property, the mutuality of remedy between the parties existed, as Naylor and Lile could then enforce specific performance against him. The general rule is that an assignee of a contract may sue for specific performance. 36 Cyc. 758; Ery on Specific Performance, 93.
There was no merit in the exception to the petition presenting the contention that there was no allegation that the damages claimed were occasioned by the alleged breach of the contract, as the petition clearly shows the contrary.
The writer, howéver, is unable to agree with this conclusion. He believes that the only measure of damages for the breach of the contract would be the difference between the. contract price and the market value of the land, as this measure, and no other could have been within the contemplation of the parties at the time the contract was executed, even though Naylor knew that Parker was purchasing the property for the purpose. of selling the same again as a speculation. He bases his dissent upon the decision of our Supreme Court in the case of M., K. & T. Ry. Co. v. Belcher, 89 Tex. 428, 35 S. W. 6, in which a recovery of special damages accruing after the shipment, and of which the railway company had no notice at the time of the contract, was denied. In the Bourland Case the correctness of the decision in the Belcher Case is not questioned, but the distinction is based upon the fact that in the Bourland Case the contract to carry had been fully performed and the special damages occurred through the negligence of the railway company in Refusing to deliver the shipment after it had reached its destination, and after the railway company had received notice of such special damages. The peculiar facts of that case were held to be a sufficient excuse for a departure from the general rule announced in the Belcher Case; but in the present case the writer does not believe that there were any peculiar facts or circumstances which would require a different rule from that applied in the Belcher Case. Many • assignments’ are presented to the admission of testimony to prove the special damages referred to above; the objections to the testimony in the main presenting the same contention made in the special exception to the petition alleging such damages. The majority of this court are of the opinion that these assignments should be overruled for the reasons already stated; but the writer is of the opinion that the assignments should be sustained for the same reasons expressed in his dissent stated above.
The writer is unable to agree with the conclusion of the majority last stated and is of the opinion that all evidence of declarations by Naylor referred to should have been excluded. The contract upon which plaintiffs’ suit was based was attached to plaintiffs’ petition and made a part thereof, and in the petition plaintiffs alleged that it was executed by Naylor both for himself and as the agent of Lile. The legal effect of the contract was to warrant Naylor’s authority to bind Lile thereby. Naylor filed no verified answer denying the execution of the contract and filed no other pleading which would serve as a basis for a denial by him that he did wararnt to Parker that he had authority from Lile to bind the latter by the contract. The failure of Naylor to file such a pleading was equivalent to an admission by him that he did warrant to Parker that he was the duly authorized agent of Lile to *101 execute the contract in Lite’s name, and upon the trial it was not necessary for plaintiffs to prove the declarations complained. of in order to show that Naylor had represented himself to be the legally constituted agent of Lile to execute the contract. The authority of Naylor to hind Lile by the contract in question was denied by Lile in his testimony, and Lile’s testimony upon that issue was supported in part by that of Nay-lor.
The rule is well established that agency cannot be proven by evidence of declarations made by the alleged agent. Coleman v. Colgate, 69 Tex. 88, 6 S. W. 553; Noel v. Denman, 76 Tex. 306, 13 S. W. 318; Mills v. Perla, 23 S. W. 310; Higley v. Dennis, 40 Tex. Civ. App. 133, 88 S. W. 400; Dyer v. Winston, 33 Tex. Civ. App. 412, 77 S. W. 227; Aultman & Taylor Mfg. Co. v. Cappleman, 36 Tex. Civ. App. 523, 81 S. W. 1243; Mechera on Agency, § 100. The writer recognizes, of course, that under ordinary circumstances a party may introduce testimony to prove some allegation material to his cause of action or defense where the same is competent for that purpose, even though the evidence would be otherwise objectionable upon some issue presented by'his adversary; the only recourse left to the adversary in that event being an instruction from the court limiting the purpose for which the testimony may be considered. But he is unable to perceive how the declarations of Naylor could serve any necessary purpose to plaintiffs, and they were certainly of a nature tending strongly to prejudice Lile. Where the reason for the rule which would permit the plaintiffs to offer proof of those declarations ceases, then the rule should no longer apply. Nor does the writer believe that it can be said that the harmful effects of that testimony to Lile were removed by the court’s instruction that Naylor’s agency to bind Lile by the contract could not be established by proof of declarations made by Naylor. In McAuley v. Long & Co., 61 Tex. 74, our Supreme Court expressed very grave doubt whether evidence was ever in fact withdrawn from the consideration of the jury. In the case of 6., C. & 8. F. Ry. v. Levy, 59 Tex. 642, 46 Am. Rep. 269, the judgment was reversed because of error in admitting illegal evidence, although that evidence was subsequently withdrawn by the court. Also in the ease of Smyth v. Caswell, 67 Tex. 576, 4 S. W. 848, our Supreme Court condemned the practice of admitting improper testimony and then excluding it, intimating that such an error would be cause for a reversal unless it be apparent from the record that the error was harmless.
For the reason indicated, the judgment is reversed, and the cause remanded.
Reference
- Full Case Name
- NAYLOR Et Al. v. PARKER Et Al.
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- Published