KLEINHANS et al. v. JONES et ux., 68 F. 742

Having stated the case as above, SEVERENS, District Judge, delivered the opinion of the court.

We think it quite clear that it was competent for the parties to become bound by correspondence carried on in the way in which this was, — -by letters and telegrams,- — -and that these, when put together, if they made out an assent of the parties to the terms of sale, would make a binding agreement, which could be specifically enforced, and that such a mode of creating a binding contract would be sufficient under the statute of frauds of the state of Kentucky, which seems to be not essentially different from that of other states, in requiring written evidence of the agreement of the vendor of real estate, and of the authority of the attorney, when the making of the agreement is not the personal act of the owner, but is made by his agent in his name.

Lyon v. Pollock, 99 U. S. 668; Ryan v. U. S., 136 U. S. 83, 10 Sup. Ct. 913; Minnesota Linseed Oil Co. v. Collier White-Lead Co., 4 Dill. 431, Fed. Cas. No. 9,635; Fry, Spec. Perf. 291; Mechem, Ag. § 92; Godwin v. Francis, L.R.5 C. P. 295; Saveland v. Green, 40 Wis. 431. Negotiations on the part of the vendors were carried on through Pope, as their agent We say the “vendors,” intending thereby, of course, to include Mrs. Jones, because it was undoubtedly expected that she would join in making the proper conveyance.

We do not, however, intend to imply that she was, in any legal sense, a party to these negotiations. Counsel for complainants attributes to Mr. Pope a larger capacity, as agent, than we think the evidence justifies. We can entertain no doubt, after an examination of the testimony, that Pope had no general authority to make a sale of the Mozart Hall property, and that his powers were limited to a mere communication of the proposals of the buyer to Jones, and of Jones’ responses to such offers.

He was therefore a special agent, the limitation of whose powers was well known to the complainants; and they can rely upon no act of his in fixing the terms of purchase, which he was not specially authorized to make. Morrill v. Cone, 22 How. 75; Butler v. Maples, 9 Wall. 766; Hennessey v. Woolworth, 128 U. S. 438, 442, 9 Sup. Ct. 109; Chinnock v. Ely, 4 De Gex, J. & S. 638; Hamer v. Sharp, L. R. 19 Eq. 108; Pom. Spec. Perf. § 77; Mechem, Ag. § 288. We come then to the main question in the case, which is whether the principals ever came to an agreement.

When the original petition in the case was filed in the state court, the complainants based their suit upon a supposed contract created by their offer of October 10th, and the acceptance thereof on October 11th by Pope, for Jones, under the authority of Jones’ telegram to Pope bearing the same date as Pope’s acceptance of the offer made on October 10th.

This telegram of October 11, 1893, was as follows: “I accept the offer in your telegram of October 2nd, provided the notes are properly secured on the property.” Thus it will be seen that the authorization of Pope by Jones was to accept a contract of the terms of October 2d. This is plainly indicated by the language of the telegram itself; and, if that were doubtful, it is made clear that Jones’ authorization of acceptance had no reference to the offer made on October 10th, for he then had no knowledge of that proposition.

It follows that Pope was without authority to bind his principal ito the terms contained in complainants’ proposition of October 10th, unless that proposition was in fact identical with, and a mere continuation of,- the proposition of October 2d. Whether it was so or not we will consider further on.

The statement of the alleged contract made in the original petition leaves a fatal hiatus, in not setting forth what was the offer contained in Pope’s telegram of October 2d, for it was that offer only which the petitioner shows Jones had given Pope authority to accept It was not stated in the petition that the offer of October 2d was the same as the offer of October 10th, and there was no presumption that it was so.

After the case was removed info the circuit court of the United States, and during its pendency there, the incongruity of the contract, as originally stated in the petition, seems to have occurred to the learned counsel for the complainants; and, in the hope of putting the alleged contract upon a surer foundation, leave was obtained from the court to amend the bill, and this was done, By this amendment the complainants’ ground was shifted, and the contract which the amended hill asked the court to enforce was a contract constructed upon the proposition of the complainants’ communication by Pope to .Jones of October 2, 1892, and the alleged acceptance thereof by Jones in his telegram to Pope of October 11th, and the proposition of the complainants of October 10 th was relegated to a new place, the allegation being that this was drawn up merely for tin; purpose of carrying into more expanded form the contract alleged to have been made by complainants’ proposition of October 2d and Jones’ telegram of October 11th; and it is alleged that the instrument hearing date October 10th, was not intended to vary the original contract, and that if it does so it is a mistake, and contrary to the intention of the parties, and should he reformed.

Put, unfortunately for the complainants, the new ground does not furnish them any better standing Ilian that originally taken, in the first place, the evidence fails to-show a binding acceptance by Jones of the offer of October 2d. The telegram indicating an acceptance was addressed to Pope,his ownagent. and not to the complainants. It is manifest: that the understanding of all parties was that the acceptance was to he made by Pope by some further affirmative act on his part to he done, in the way of closing the sale.

That this was so is also shown by the actual transaction which occurred on the 11th of October, when Pope signed the complainants’ offer of October 10th in behalf of Jones, and then attached the telegram of that date as his authority for signing Jones’ acceptance. Jones’ telegram, in the circumstances, amounted to only an authorization, and indeed, being addressed, as it was, to one who was in no sense the agent of the proposed purchasers, was not sufficient to hind the vendor, under the statute of frauds. But there is another difficulty.

The instrument of October 10th, made by the complainants, was made the day before the date of Jones' telegram authorizing the acceptance of their offer, and this circumstance negatives the contention that it was made in the elaboration and further explanation of the contract already made; and the oral testimony taken in the case fails to satisfy us that this paper of October 10th, signed by the complainants, was in fact intended to be anything else than to be the foundation of the contract they proposed to make.

We are convinced that the fact was that, while the complainants were waiting for Jones’ reply to their offer of October 2d, they formulated a fresh offer, and then, when Jones’ telegram came, Pope, instead of executing his authority by accepting the original offer of October 2d, accepted the other offer of October 1.0th, assuming that that amounted to practically the same thing as the first offer, and would be equally acceptable to his principal. We have no doubt that this general statement embodies the substantial fact.

We are therefore to consider whether the complainants’ proposition of October 10th, which Pope, in behalf of Jones, accepted, was in truth the same thing as the offer of October 2d, which Jones authorized Pope to accept. The offer of October 2d, as communicated, reserved to the payee the privilege of paying all notes for the deferred purchase money on or before five years. That of October 10th made them payable on or before maturity, the maturity of the last note being ten years after date. The offer of October 2d was to pay all the notes, if desired, at the end of five years, if money should be easy.

There was nothing of that kind in the offer of October 10th. In the original offer it was stipulated that the purchasers would improve the property at once. There was no stipulation of that kind in the offer of October 10th. ' In the offer of October 2d was a proposition to insure for the benefit of the vendor, to secure him, no amount at which the insurance should be made being stated. In that of October 10th the agreement wq,s to insure for the same purpose for at least $20,000, and an insurance for that amount would have answered that stipulation.

In the offer of October 2d, possession was required to be given in 60 days from that date. In that of October 10th, possession was to bé given within 30 days after the date of the deed of conveyance. And an entirely new term was inserted in the offer of- October 10th-, in the form of a stipulation that the vendor should pay the commission of Stratton & Oo. for selling the property, thus attempting to convert Stratton & Oo. into the relation of agents for Jones. In fact, Stratton & Co. were never the agents of Jones, but were, and continued to be, acting as the agents of the complainants in the transaction.

If, on the other hand, we compare the offer of October 10th with that laid before Pope on October 2d, instead of the form in which the latter actually transmitted it to Jones, upon the assumption that Jones was responsible for Pope’s negligence in the transmission of the offer, and that the complainants had the right to suppose that the vendor was dealing with them upon the footing of their offer as made (see Insurance Co. v. Waterman, 6 U. S. App. 549, 560, 4 C. C. A. 600, 54 Fed. 839), it will be found that the variations are quite as important, and trench quite as deeply into the substance of the contract.

Now, some of these stipulations in the complainants’ offer of October 2d, it must be confessed, were somewhat vague, and it may be that their vagueness would start a doubt whether the terms of their offer were sufficiently definite to make a legally binding contract.

But several of the stipulations we have referred to are sufficiently definite and distinct to furnish the basis of a comparison with those contained in the later offer, and it is manifest from such comparison that it is impossible to say that the acceptance of one would make a contract identical with one made by the .acceptance of the other.- While it may be — and we think it quite probable that such would have been the result — that Jones would not have objected to the variations from the first offer contained in the second, which was accepted by Pope, but for the inter** vention of other parties, and the prospect of obtaining a larger purchase price by disavowing the act of Pope and accepting the better bid of the interveners, yet we are not at liberty to act upon any con-jeeture as to whether Jones would have ratified Pope’s act, whether or not the new parties had come into the field.

In the first place, a court of equity has no power to enforce the specific performance of a contract which is not already established between the parties; an, / in order to give ground for the action of the court, it must be made clearly to appear that a definite and binding1 legal contract exists. Carr v. Duval, 14 Pet. 77; Marble Co. v. Ripley, 10 Wall. 339, 359; Nickerson v. Nickerson, 127 U. S. 668, 8 Sup. Ct. 1355; Dalzell v. Manufacturing Co., 149 U. S. 315, 13 Sup. Ct. 886.

Then, recurring to the rules of law whereby such binding contract may be formed, it is an elementary doctrine that, to constitute a valid contract, the minds of the parties must have met, aud agreed to the terms of their agreement. It is necessary, not only that the parties shall have assented to the several terms of the contract, but, in order that there shall be any bond which shall tie the parties in mutual obligations, their assent must be communicated to each other, Smith v. Hughes, L. R. 6 Q. B. 607, per Blackburn, J.; Cornish v. Abington, 4 Hurl. & N. 549; Cox v. Troy, 5 Barn. & Ald. 474; Browne v.

Hare, 3 Hurl. & N. 495; Shepherd v. Gillespie, 3 Ch. App. 764; In re East of England Banking Co., 4 Ch. App. 14; Mactier v. Frith, 6 Wend. 103; White v. Corlies, 46 N. Y. 467. Where it is apparent that one party has not consented to the several terms to which the other has agreed, no contr ac t is formed.

If the divergence is of any thing wh ich partakes of the substance of the contract at all, there is no legal agreement; and the court is not at liberty to speculate upon the question whether some stipulation which it might think of minor importance, or some variation which it might think would not have influenced the parties in making the contract, can be dispensed with, and the parties held, in disregard of them. Bank v. Hall, 101 U. S. 50; Eggleston v. Wagner, 46 Mich. 610, 620, 10 N. W. 37; Pol. Cont. c. 1; Leake, Cont. 17 (3d Ed.); De Sollar v. Hauscome, 158 U. S. 216, 15 Sup. Ct. 816.

In the case last cited the bill was filed to compel specific performance. The vendor had given authority to his agent to sell certain real estate in Denver for $5,000, one-half cash, and the balance one-half in one and one-half in two years. The agent had sold by contract which required only $200 of the cash payment down, and $2,300 in three weeks. And, while the con tract price was nominally $5,000, the actual price war, $4,950, the agent throwing oil §50 from his commission. It was held that the agent had transcended his authority, and specific performance was refused.

Applying these rules to tire present case, we can reach no other conclusion than that arrived at by the court below, which was that the proof failed to establish a contract between the parties for the purchase and sale of the property in question. As this result is fatal to the case of the complainants, it is unnecessary to discuss the other questions which were argued at the hearing. The result is that the decree of the court below must he affirmed.