White v. Thomas

Betty Simpson was a part-time employee of Bradford White, Sr. (defendant) who performed various administrative tasks. White had once granted Simpson a power of attorney to sign real estate closing documents on his behalf, but never authorized Simpson to negotiate or undertake any other deals. White asked Simpson to attend an auction and purchase a 217-acre property on his behalf. White authorized Simpson to bid up to $250,000 and gave her a blank check for the deposit. Simpson won the property for a bid of $327,500. Realizing her mistake, Simpson negotiated to sell forty-five acres of the property to Stanley and Mary Thomas (plaintiffs). The Thomases asked if Simpson was authorized to sell the land, and later alleged that Simpson claimed to have a power of attorney. The Thomases did not contact White or ask to examine the power of attorney documents before signing the contract. When White learned about the deals, he was upset. White went through with the purchase of the property, but immediately informed the Thomases that he was repudiating the deal to sell part of the tract. The Thomases sued White and Northwest National Bank (Bank) (defendant), seeking specific performance of the sale contract and release of the Bank’s mortgage on the 45 acres. The Washington County Chancery Court concluded that the Thomases reasonably relied on Simpson’s apparent authority and granted them specific performance. The court also held that it would be “inequitable” to allow White to deny Simpson’s authority to sell the forty-five acres after ratifying her unauthorized purchase of the land. Bradford appealed to the Arkansas Court of Appeals.