Jones v. Holladay

Mr. Justice Shepard delivered the opinion of the Court: 1. Strictly construed as it must be, the letter of Holladay to Kimball of October 26, i88g, did not authorize him to enter into the contract with Ryon. The power conferred upon Kimball was that of a broker simply to “ negotiate a sale.” We have held in the case of Mannix v. Hildreth, (ante, p. 259), that mere authority to a real estate agent, or broker, to sell does not carry with it the implied power to make a contract for sale, upon the owner’s terms, that will bind him. Such authority must be given by express grant, or by certain implication from the words used. The reason for applying the rule in this case is stronger than in that. Here Holladay was a trustee and bound to act for the best interest of those whom he represented. While this property did not pass by the will, it was the intention of the testator that it should, an intention which only failed because of the omission to have his signature attested by three witnesses as required by the law of the District of Columbia. To cure this the sale of the property was procured. Holladay bought it in for the estate of Ewing, and then caused the title to be vested in himself as trustee therefor, and always treated it as held under the same trusts provided in the will. These proceedings, we think, had the effect, so far as Holladay was concerned, to subject the properly to the said trusts; he at least would have been estopped to deny it. His requirement, then, and previously insisted upon, that the appraisement should be made as provided in the will, before concluding a sale, shows clearly that he did not contemplate conferring on Kimball the power to enter into a binding contract of sale with any purchaser he might find. Possibly, as has been suggested, Kimball’s anxiety to fix his right to the commission may have influenced his action to some extent. But if so, he need not have gone as far as he did. By procuring a bona fide offer on Holladay’s terms, from one able and willing to complete the purchase, his right to compensation would have been as well fixed as it could be under a contract of sale, and far better than under [288] the instrument which he did make. This instrument is not a mutual contract of purchase and sale. It is nothing more than the sale of an option, running the unreasonable period of two months and a half, to purchase property worth $80,000.00 upon a forfeit of $500.00 if not exercised within that time. Suppose that Holladay had ratified this contract, and the other parties had declined to complete tire purchase, what would have become of Kimball’s claim to a commission? If it were conceded that the authority given Kimball to sell included the power to make a contract of sale upon Holladay’s terms, this instrument could not be in execution thereof. The power to contract for the sale of a lot does not authorize a contract for the sale of an option. Coleman v. Garrigues, 18 Barb., 60; Jackson v. Badger, 35 Minn., 52. 2. The property being held under the trusts of the will by Holladay, it was proper that he should require an appraisement as prerequisite to any sale. Kimball in his letters expressed the opinion that the property was not subject to the trusts of the will; but he well knew from letters of Holladay, long prior to this transaction, that, he at least, considered himself bound thereby in dealing with it. Ryon also had knowledge of the title under which Holladay held, and claimed to hold. He was bound, too, to inquire into his powers and duties as trustee as well as into the authority possessed by Kimball. His knowledge and the duty of inquiry imposed upon him bind his principal, whether nominal or real, as fully as they would him if he had acted directly on his own behalf. The appraisement of Stickney and Harding was procured by Kimball not only after the contract was made, but also after notice from Holladay repudiating it and denying his authority. Evidently it was not made in good faith to comply with the terms of the trust; but for the sole purpose of strengthening the case of the “ syndicate ” and of Ryon, who stood behind the name of the pretended purchaser. [289] 3. -Even if Holladay had conferred full power upon Kim-ball to make this contract, and then refused to perform it, because he might have discovered that the property was really worth more and ought to.be sold for more, there would still remain an insuperable obstacle to a decree of specific performance. Holladay is not the beneficial owner of the property. He holds it for the estate of George W. Ewing, of which he is the trustee under the appointment of a court of another jurisdiction. It is questionable if a court of equity ought ever to decree specific performance of a contract of sale made by a trustee of this kind. If. ratified by the cestui que trust, laboring under no disability at the time, or clearly proved to be to his interest, it would seem that performance might be decreed; nor will we now say thaf there are not other instances in which it might be done. However this may be,, it will never be decreed where the purchase price is not clearly shown to be equal to, or greater than, the value of the property. He who contracts with a trustee must do so at this risk. The testimony in this case shows that the property was worth something more than the price contracted for at the time, and that it increased in value before and after the institution of the suit. From what has been said it follows that the decree appealed from must be affirmed with costs to the appellee ; and it is so ordered.