Kahn v. Gerth's Realty Express

— 539 — MILE KAM VS CSHTK'S REALTY EXPRESS Ho. 8276 CHARLES E. CLAI30HHE, JUDOS. This is a suit for a commission for the sale of property. The defendants were engaged in the lousiness of selling real estate. J. K.Evans was employed by them to solicit and secure auction 3ales contracts for then; he was to have a one-half interest in such sales as he secured and the defendants the other half • It seems that the plaintiff was also in the real estate business. He was interested in some lots which the Lockport Realty Co. had for 3&le. He met ¿ir. Evans and offered to put the lots in the hands of the Gerth Company if some suitable arrangements could be made. Svan3 held himself out "as being connected with and representing Gerth's Realty Experts". On May 20th, 1915, he wrote to the plaintiff Kahn the following letter on one of the defendants' letter heads: "Gerth's Realty Experts Ino. The Greatest Land Selling Organization on Earth. Southern Office: 302 Liverpool & London & Globe Building, Hew Orleans. 30 Church Street, Hew York; Stephens Girard Building, Philadelphia. George Montgomery President; Henry Gassie, Vive-President; Allen R. Beary, Seoty-Treas.; Charles S. Gerth, Gen'l. Mgr. Morgan City, La., May 20th, 1915. Mr. Shile Kahn, Raceland, La. Dear Sir, VJhet have you decided to do about the lot sale — 540 — at Locknort? If you are interested i'i Laving us handle this sale for you please advise us at once as we would .Like to make arrangements to put the sale on during the coming month. Yours very truly, Gerth's Realty Experts Inc. per J. H. Evans." The plaintiff thereupon arranged an interview with Evans when they made an agreement. This agreement was confirmed by letter addressed by Evans to Emile Kahn, upon one of the same letterheads of the defendants 'company reproduced above. .The letter is as follows: !,¿organ City, La.,Kay 27th, 1915. hr. Emile Kahn, Iiaceland, La. Dear Sir: 'fe beg to confirm the offer made you by our i'r. J. H. Evans, Viz: that, for the services you are to render us in obtaining a certain contract for the sale at auction of a tract of land in the town of Lockport, La., we are to divide equally with you any net profit that we are able to make out of the deal. Yours very truly, Gerth's Realty Experts, Inc. Per J. H. Evans, Rep. Yr. Kahn then brought Kr. Evans and the Lockport Company together at Raceland, where a contract was drawn up on June 8th, 1915, between the Lockport Realty Co., represented by Prank L. Barker, and the Gerth's Realty Experts, Inc. represented by J. H. Evans, by which the Lockport Realty Co. gave to the Gerth's Realty Experts certain lots in Lockport for sale at auction on terns and conditions specified in said contract. By this contract the Lockport. people agreed-to pay the Gerth's Realty Exnerts certain commissions and — 541 — certain expenses of sale, therein stated. No mention is made of the plaintiff. In pursuance of said contract the Gerth's Eealty Experts, sold certain lots to the amount of $3076.69, andaeceived payment for the same. After deducting expenses of sale $ 217.11 and their commission 498.34 ■Making a total of $ 715.45 the defendants turned over the balance to the Lockport people. On the day of the sale there ms nothing said about plaintiff's commission. In July 1916 the plaintiff.sued the defendants for one-half of their comnission, $498.34, basing their claim mainly ' upon the letter of Evans to him dated May 27th, 1915, copied above, and upon the other features, of the deal narrated above. The defendants denied any indebtedness to plaintiff. They specially averred "that J. H. Evans is not, and was not its representative at ány time, and has never been authorized by petitioner (respondent) to negotiate with plaintiff to handle any sales, or to divide equally or otherwise with plaintiff-the net profits of any sales at all, and particularly the sale mentioned in this paragraph x x further .answer*, ing this paragraph respondent-denies that J.; ,H. Evans" - has ever had any authority from respondent to sign the letter mentioned in this paragraph (May 27th, 1915) or any other letter in behalf of respondent; responden! :ad* mits the contract agreed on in paragraph 7 of plaintiff's-petition (dated June 8th, 1915).- and is.willing to be bound by that contract, but denies specifically that J.E. Evans had any power or authority from respondent-to enter into any other contract; the power and authority of Brans to act for respondent being limited to obtaining the con — 542 — tract from the Lockport Realty Company". There ms judgment for the plaintiff for the amount claimed ($249.17) and the defendants have appealed. The plaintiff has not attempted to prove his case by any documentary evidence other than the two letters and the contract above referred to. As a general proposition, a corporation, such as the defendant can contract only through a resolution of the Board of Directors. In the asase of Bright vs Metairie Cemetery Association 33 A. 58, the Court said: "A corporation which by its charter can -only act through its board of Directors, cannot be bound to contracts by its President, without the authorisation 'of the Board, unless it is in acts of simple administration which of necessity should be done without that authorization"'. See also 148 La. 455. Corporations have sometimes been held liable by contracts, not of mere administration, made by officers of the corporation or managers, in the course of their functions or by authority impliedly delegated to them. But Evans was not an officer nor a manager of the defendant corporation} he was not even an employee; he was enployed as agent, solely to secure sales for the defendants and for no other purpose. In the two letters addressed by Evans to the plaintiff, the letter-heads contained the list of all the officers, and the. name of Evans does not appear as one of them. The plaintiff in his testimony admits that he "never had any conversation with Mr. Gerth or any-other officer of. the Company or its Board of Directors", and that he "never met Mr.- Gerth until the day of the sale" and that there was nothing said about his commission on the day of the sale. It was incumbent upon the plaintiff to show that Evans was — 543 — an agent of thSdefendant corporation authorized to make a contract similar to the one sued on. 6 A. 524; 21 A. 592; 23 A. 274; ^ 34 ^ 9f=4 c^%nlv *s B ^ The’plaintiff does not claim, as we have saidyto have relied upon any action of the Board of Directors or of any officer of the corporatidft. Therefore his only hope is to show that the defendants held out -Evans as their agent, or that, hy virtue of his employment fte was impliedly clothed with authority to hind the corporation in such a contract. Plaintiff testifies that Evans held himself out as representing the defendants^If the plaintiff himself’'to he deceived hy what Evans said or did, he has himself to blame. He does not testify, nor prove^that defen|.dants ever held out Evans as representing them otherwise than as of business. It is out of defendants' words or actions that they can he affected. It is not shown that Evans had made a contract, of any kind for the corporation. By procur-this sale from the plaintiff and the Lockport Company, Evans secured for himself one-half of the coircnission the defendants to earn. But nothing shows that he had the authority to bar-away the other half of the commission belonging to the defendants, thus leaving them without any compensation whatever. Hr. the General Manager, and Hr. Montgomery, the President, of the defnndant corporation, both swear that he had no such authority - and it is easy to believe them. Evans was never examined as a witness. The argument that the contract of June 8th, 1915 made hy Evans cannot he divided, that it must he the whole or none, - is in the extreme. There is no attempt hy defendants to divide the contract,, to accept a oart, and to repudiate the other - the simple reason that the^ontract of June 8th makes no mention of any commission to be paid to the plaintiff. IS it had made such mention, the position assumed by the plaintiff might have had weight. Nor is there any evidence that the defendants had know — 544 — ledge^of any one of the two letters of 'fay 20 end of !"ey 27 written by Evans, pretending to act for the defendant^, nor of their contents, nor of any other contract, verbal or üwrised, made by Evans with plaintiff, nor that Evans, acting for the cor.-par.y, had promised to plaintiff to divide with hin any part of the comdssion which the defendants were to earn. We conclude with this axiom: that an agent employed on commission, by one in the real estate business, to solicit and procure for him sales of property, is not authorized thereby to bind his principal to pay another comrrission to s third person who may assist the agent in securing a sale. It is therefore ordered that the judgment herein be reversed and annulled and that there now be judgment in favor of the defendants rejecting plaintiff's demand at his cost in both Courts. Judgment reversed. June 5th, 1922.