Ketchum v. Zeeland Mercantile Co.

Goss, J.

Suit in equity to compel specific performance of an alleged oral contract to convey real .estate, performed on the part of the purchaser, the plaintiff. Title is in defendant. The answer is a general denial. The property is a village lot, alleged to have.been sold plaintiff by defendant corporation for a consideration of $75. Part of a livery barn subsequently has been built on the lot, and balance fenced. Defendant relies upon an alleged want of authority of its officials to sell this real estate, and also upon the statute of frauds.

It is established, by at least a preponderance of the evidence, that the treasurer of defendant, one Lew Feinstein, also shown to be ostensibly the active-manager of defendant, sold this lot to plaintiff in behalf of the corporation. Several hundred dollars’ worth of personal property was sold at the same time with the lot and as a part of the same transaction, and upon the sale of which a part payment of $25 was made. This payment was made by a cheek in evidence, the receipt of the proceeds of which by defendant is uncontroverted. The evidence is sufficient to sustain the trial court’s finding that a written receipt was also then given plaintiff by said corporation, “which receipt stated upon its face that it was received in part payment upon said lot, and that said receipt had been lost.”

The defendant was in the mercantile business at Zeeland. Its minutes and by-laws disclose Lew Feinstein to have been its treasurer, and his mother, Sarah Feinstein, its president and manager, at all times in *122 •question; that tbe board of directors bad tbe “general charge, control, and supervision of tbe business of said corporation that tbe treasurer and bis father and mother were majority shareholders, bolding two thirds of tbe corporate stock. Tbe three Feinsteins constituted tbe majority of tbe board of directors. Both tbe president and general manager, tbe mother, and tbe son admittedly were present when tbe deal was made, and both bad knowledge of tbe receipt of tbe initial payment thereon, although tbe mother seeks to disclaim knowledge, and charged that her son acted without authority. Tbe circumstances strongly refute her contention. A statement of account rendered by tbe corporation to plaintiff is in evidence. One of tbe items therein charged against plaintiff, along with tbe personal property then sold, and other various items of merchandise later sold and delivered him, is “lot, $75.” It shows total payments of $503, and debits in which tbe lot item is included, of $645. All credits, excepting $169, was paid at or after the charge made on tbe books for tbe lot. Defendant’s books of account show tbe same charges and credits. It is admitted that plaintiff’s promissory note for tbe $142, balance due, was taken by defendant, upon which plaintiff afterward paid $35. Tbe lot sale was made October 14th, and tbe note closing balance of account was given in March following. Next August plaintiff notified defendant that be was ready to pay tbe balance of tbe note, $123, as soon as defendant could deliver him a deed to tbe lot. Both Feinstein and plaintiff then went to tbe village banker, tbe former taking defendant’s deed along with him. Tbe banker notified them of tbe fact that tbe defendant corporation did not own tbe lot, and could not give title by its deed, and that tbe title was outstanding in one Borofsky. Plaintiff bad on deposit tbe amount of tbe note, and be then issued bis check for said amount, running to tbe defendant, and delivered it to tbe banker, who, in tkg presence of both Feinstein and plaintiff, made tbe following memorandum of agreement as there entered into between plaintiff and defendant, tbe latter acting by its said treasurer. “This is to certify that Herbert C. Ketchum has this day deposited tbe sum of $123.75, to be paid to tbe Zeeland Mercantile Company as soon as clear title to lot No. 5 in block No. 5, in tbe town of Zeeland is furnished. Also a receipt in full for all indebtedness to the above stated incorporation to date. The attached check and note is to bind each party to fulfil tbe *123 above obligation.” Defendant was given a copy of tbis agreement. Both parties fully agreed to said conditions. Eeinstein, in defendant’s behalf, delivered np plaintiff’s note, and it and check were attached to this memorandum agreement, and left in the banker’s hands August 15th. During the previous fall, plaintiff had built a portion of a livery barn on said premises, and made other valuable improvements thereon. The lot was only about 100 feet from the defendant’s place of business. On cross-examination, treasurer fails to satisfactorily explain why, if defendant’s contention be correct, he caused this memorandum agreement to be made; and why he went with plaintiff to the bank, admittedly taking with him a deed to this property and plaintiff’s note to defendant; or why the corporation books, and also the account as rendered as above to plaintiff, each and all evidence a sale of the property. Admittedly, too, the defendant, soon after August 15th, procured the outstanding title, apparently to convey the lot to plaintiff in performance of the contract. These circumstances amply support plaintiff’s straightforward testimony, while the testimony of the defense is probably false, and always evasive and unsatisfactory. About this time, too, and concededly after the transaction at the bank, plaintiff’s brother contested the homestead entry of Lew Deinstein. Immediately trouble began, and this lawsuit was in embryo. Although the treasurer and the other members of the corporation have endeavored to find some defense, it is transparently clear that this contest is the cause of this litigation, and until then no thought of refusal to convey this lot to plaintiff had ever been entertained by defendant’s managing officers. The actions of the parties, the books of account, the written note and memorandum referred to, the knowledge of all the officers of the corporation, of its books, and all these transactions, including the many payments made, final settlement by note, the fact that the sale of the lot was made by the treasurer, with his mother, the manager and president of the corporation, present, with the father and one other director, the secretary, assisting in running the corporation business; and with knowledge in all of them that within thirty days after the initial payment had been made on the lot, plaintiff had assumed control and started to build thereon, and occupied it for nearly a year, as well as the total failure of the defense on facts, — all lead to the only conclusion possible under the evidence, and that is, that the defense is utterly without *124 merit. These facts render needless any extended discussion of the statute of frauds. The initial payment, subsequent payments, attempted performance by defendant, and the memorandum agreement, and performance thereunder, take the case from under the operation of that statute. As to the authority of the corporation to sell real estate, the corporate by-laws in evidence disclose who are the officers, directors, and managing officials, and establish actual authority in the president and treasurer to do in its behalf all they have done. The facts as 'to ostensible authority, including the plaintiffs proof thereon, not recited, also would be ample to support findings as to ostensible authority and bind the corporation on that score. Then, again, defendant is estopped to deny said contract, or question the authority of its officials acting for it, as it is retaining a portion, if not all, of the proceeds of the sale of this lot, when the whole record is considered, besides having allowed plaintiff to spend many times the price of the lot on the improvements thereon, all with full knowledge of the source of plaintiff’s claims of ownership therein. The decision of the trial court is in all things affirmed. Respondent will recover costs on this appeal.