Hodson v. Wells & Dickey Co.

Burke, J. Plaintiff is a resident of Indiana, fifty years- of age, and a farmer by occupation. The defendant is a well-known real estate brokerage company with an office in Minneapolis, Jamestown, and other places. Mr. Weese was their agent under the terms of a written appointment, which will be hereinafter set forth. His duties were to bring prospective buyers to North Dakota, and plaintiff was one of his customers. When Weese and plaintiff arrived at Courtenay, they were joined by Mr. De Nault, manager of the Jamestown office of the defendant company, in an automobile, and plaintiff was shown several tracts of land. Among those tracts was one known as the Hamilton Farm and another known as section 35,143 — 65. Plaintiff personally examined both of those tracts, especially the Hamilton Farm, upon which he made a thorough examination of the soil with a spade. There is some dispute as to the extent of his examination of section 35, which, however, we do not consider material to a determination of this appeal. Plaintiff returned to Indiana, and, after some negotiations, decided that he would purchase the Hamilton Farm at around $50 an acre. However, by the time he had decided to make the purchase, the Hamilton Farm had been disposed of to other parties, and Weese suggested that he take in place thereof section 35, which he had seen upon his visit to North Dakota, at a price of $32.50 per acre. This purchase was [403] accordingly made. Something over a year later, plaintiff brought this action alleging that he had been deceived by Weese as to the character of the soil and subsoil, and the value of section 35, alleging that if the land had been as represented to him it would have been worth $40 per acre, whereas in truth and fact it was not worth to exceed $20 per acre, wherefore he demands judgment for the difference, $12,800. Upon a trial to a jury, plaintiff recovered judgment for the sum of $4,800. Defendant appeals, assigning numerous errors, of which, however, we need mention but one group, — those relating to the scope of the authority of the agent, Weese. (1) As already stated, defendants are real estate brokers with main offices in Minneapolis and a branch office at Jamestown, North Dakota. They employed Weese under a written appointment headed: “Authorization of Sales Solicitor,” and reading in part as follows: “During the year 1910, or until written notice given to you, you are hereby authorized to act as sales solicitor to solicit applications and secure buyers in the county of . . . for the purchase of lands in North Dakota, South Dakota, and Minnesota, which Wells & Dickey Company has for sale. For the services in obtaining the applications for the purchase of lands, the said Wells & Dickey Company agrees to pay you in the case where, as a direct result of your efforts, sales of such land are finally consummated, . . . the sum of $1 per acre. . . . It is hereby understood and-agreed that sales are not fully closed, and under the commissions are not payable, until the entire cash payments have been made to this company at its office in Minneapolis, Minnesota, or Jamestown, North Dakota, accompanied by the execution and delivery to it of the required notes and contracts, or mortgages, and the acceptance on the part of-the purchaser of the titles to be conveyed. It is understood and agreed that the foregoing commission will be paid only in ease you bear all the traveling, entertainment, and general expenses incidental to bringing purchases to- this company. . . . No advertisement, or other representation on your part that you are for any purposes an ageni of said company will be permitted. The term, ‘sales solicitor’ being invariably used, and am/ violation of this pro-~ [404] vision shall of itself revolee this appointment and terminate your authority thereunder. “(Signed) Wells & Dickey Company. “By-. “I accept the foregoing appointment upon the terms above stated. _» Appellant insists that the sale was made after a personal examination of the land, and that if any misrepresentations regarding the land were made, the same consisted of merely “trade talk,” but more especially it insists that if any statements were made by Weese which could be construed to be fraudulent, the same were not within the scope of his authority, and not binding upon the defendant. In this we think appellant is correct. There is no claim that the defendant personally made any misrepresentations, nor that Mr. Weese’s authority was anything excepting that shown by the written appointment, which we have quoted. It is well settled that a party dealing with the agent of a corporation must, at his peril, ascertain what authority the agent possesses, and is not at liberty to charge the principal by relying upon the agent’s assumption of authority, which may prove to be entirely unfounded. Rice v. Peninsular Club, 52 Mich. 90, 17 N. W. 708; Mechem, Agency, § 137; Plano Mfg. Co. v. Root, 3 N. D. 165, 54 N. W. 924. An examination of the appointment of Mr. Weese shows that his authority was limited to the duties of a sales solicitor. In Samson v. Beale, 27 Wash. 557, 68 Pac. 184, it is said: “An agent with restricted power to sell a tract of land at a given price has no power to bind his principal by any representation as to the quantity or quality of the land.” At 31 Cyc. 1363, 1364, it is said: “The authority to sell land must be strictly pursued, and acts outside of the authority will not bind the principal.” In Mayo v. Wahlgreen, 9 Colo. App. 506, 50 Pac. 40, it is said: “Where a vendor’s agent has misrepresented lands sold by him, and there is no attempt on the part of the purchaser to rescind, he may bring his action for deceit only against th¿ agent, unless he can trace some connection between the principal and the agent and thereby charge the principal with responsibility for the agent’s misrepresenta [405] tions.” In National Iron Armor Co. v. Bruner, 19 N. J. Eq. 335, it is said: “An agent with restricted power to sell a tract of land at a given price has no power to bind his principal by any representation as to the quantity or quality of the land.” See also Lansing v. Coleman, 58 Barb. 619, a leading case wherein it is said: “To hold that a person not authorized to make a sale, but simply to advertise the property for sale and procure someone to negotiate with the owner, can make representations or warranties binding upon the owner, without his authority or knowledge, would be too dangerous. The well-known office of such an agent is merely to initiate a negotiation, not to complete one. The parties proposing in such a case to purchase are necessarily referred to the principal for the actual negotiations, and there is no hardship in requiring, but, on the contrary, common prudence and justice to the vendor would seem to demand that the purchaser should come to him for the facts which are to influence the purchase.” See also Ballou v. Bergvendsen, 9 N. D. 285, 83 N. W. 10; Brandrup v. Britten, 11 N. D. 376, 92 N. W, 453; Larson v. Newman, 19 N. D. 153, 23 L.R.A.(N.S.) 849, 121 N. W. 204; Kuhnert v. Angell, 10 N. D. 59, 84 N. W. 579, 1 Am. & Eng. Enc. Law, 981; Fanset v. Garden City State Bank, 24 S. D. 248, 123 N. W. 688. Without going further into the case, it is sufficient to say that plaintiff, under the proofs, cannot maintain this cause of action against the defendant, and a verdict should have been directed accordingly. Judgment of the trial court is reversed, and the proceedings ordered dismissed.