Berwald Stewart Co. v. Mitchell

174 N.E. 148 | Ohio Ct. App. | 1930

The parties appear in the same relation as they did in the common pleas court. The plaintiff, the Berwald Stewart Company, filed its petition in an action founded upon a contract in writing between itself and the defendant, Earl L. Mitchell, whereby defendant agreed to pay plaintiff a brokerage commission of $3,900 for the sale of his property to the First National Bank of Rocky River, Ohio. The petition sets up the execution of the contract, and avers performance, while the defendant in his answer admits the execution of the agreement, but denies performance.

Plaintiff is now, and has been for many years, engaged in the real estate brokerage business in this community. The defendant is the owner of a parcel of property located on Detroit Road in the village of Rocky River, Ohio. The property is improved with a two-story brick building, covering the entire frontage, consisting of stores on the first floor and offices and living rooms on the second floor. The First National Bank of Rocky River occupied one of these storerooms under a five-year lease, which expired April, 1928.

On February 4, 1928, the plaintiff company and the defendant entered into a written contract wherein the defendant agreed to pay the plaintiff $3,900 upon the sale to the bank of the property above referred to. The contract reads as follows:

"Cleveland, Ohio, "February 4, 1928.

"The undersigned hereby agrees to pay to The Berwald Stewart Company the sum of Thirty-nine Hundred Dollars upon the consummation of a sale to the First National Bank of Rocky River, Ohio, of property located at No. 19132 to 19150 Detroit Road, Rocky River, Ohio.

"$3900.00. Earl L. Mitchell.

"The B.S. Co., by D.C. Dunlap."

At the time this agreement was entered into, the defendant authorized the plaintiff to offer the property for sale at $110,000, "and for nothing less." On February 7, 1928, the representative of the plaintiff company called at the bank and talked with Mr. Hoag, the president of the institution. Mr. Hoag refused to buy at the price which the defendant had authorized. Later he prepared an offer which he handed to the representative of the plaintiff company, for defendant Mitchell's consideration. The offer reads as follows:

"Rocky River, O., Feb. 7, 1928.

"The undersigned do hereby offer and agree to buy the following described property:

"The Mitchell Block, consisting of Nos. 19132 to 19150 on Detroit Rd., being a parcel of land with 100 feet frontage on Detroit Rd., 155 ft. plus on easterly of W. 192nd St., and 104.47 feet on easterly line of said property, for which we agree to pay the sum of $99,000.00 on the following terms:

"Ninety-Nine Thousand and no/100 Dollars payable cash in full.

"Present owner to give good and sufficient deed and title to said property and furnish abstract or statement showing same to be free from all encumbrances. Taxes to be pro-rated as date of transfer.

"The First Nat'l Bank, "By John Hoag, Pres., "Frank Mitchell, Cashier.

"R.F. Brueggemann "N.W. Gales Witnesses

"We, the undersigned, hereby accept the above offer, and acknowledge the receipt of $_____ which is to apply on the purchase price. _______"

It will be noted that at the conclusion of the above document there is a space for the signature of Earl L. Mitchell upon acceptance of said offer. The defendant, Mitchell, signed his name thereto some time before noon, February 11, 1928.

After Mitchell signed what purports to be an acceptance of the offer, upon the space reserved for that purpose, to wit, early on Monday, February 13, 1928, the Berwald Stewart Company, having accomplished the acceptance of the offer wrote to the First National Bank of Rocky River, Ohio, as follows:

"February 13, 1928.

"The First National Bank of Rocky River, "Rocky River, Ohio.

"Gentlemen: Attention Mr. John Hoag, Pres.

"The owners of property situated at 19132-19150 Detroit Road, accepted your offer of $99,000.00 and the escrow is being handled by The Cleveland Trust Company, attention Mr. Ferris. Mr. Ferris informs us that an escrow agreement will be ready for your counsel to approve any time after Monday afternoon.

"We wish to thank you for this business and hope that we may be of service to you in the future.

Yours very truly,

"The Berwald Stewart Co. "DCD-MPS Mgr. Brokerage Dept."

This letter so addressed was mailed in the forenoon of said day by the Berwald Stewart Company. Some hours after the plaintiff had mailed the foregoing communication, in the afternoon of the same day, it received the following letter from the bank:

"The First National Bank of Rocky River

"John Hoag, President

"C.A. Stein, Vice President

"Chas. Glendenning, Vice President

"Frank Mitchell, Cashier.

"Rocky River, Ohio, "February 11, 1928.

"The Berwald Stewart Co. "813 Williamson Bldg. "Cleveland, Ohio.

"Gentlemen:

"We, The First National Bank of Rocky River, do hereby withdraw our offer of $98,000.00, also one of $99,000.00 for property situated at 19132 to 19150 Detroit Road, corner of West 192nd St., to take effect at once.

"Thanking you for giving this offer due consideration, we remain.

"Respectfully yours,

"The First National Bank of Rocky River,

John Hoag, President, "H:R Frank Mitchell, Cashier."

The theory of plaintiff is that it performed all that was required of it under its contract with Mitchell, and that it earned its commission under said contract.

During the progress of the trial, under the ruling of the court, the existence of a binding and enforceable contract of sale between defendant and the bank became and was the controlling issue.

The right of the plaintiff to commission under its contract with Mitchell arose upon the consummation of a sale of defendant's property to the First National Bank of Rocky River, Ohio. If it be held from the facts narrated that a binding contract was effected through the instrumentality of the plaintiff company by and between Mitchell and the bank, it would follow that the sale was consummated and the plaintiff company would be entitled to its commission.

If it be held from the facts narrated in the record that a binding contract between Mitchell and the bank was not effected, then the right of the plaintiff company to commission did not arise, for the reason that the sale was not as yet consummated.

There is no dispute in the evidence of the fact that a valid offer was made by the bank, accepted by the defendant, and that notice of the defendant's acceptance was mailed by the plaintiff company to the bank before plaintiff had received the bank's letter requesting a withdrawal of the offer.

The court instructed the jury that whether or not such contract was completed depended upon whether notice of the defendant's acceptance was communicated to the bank before the defendant received notice of the bank's revocation. Whether the act of mailing the notice of acceptance concluded the contract was submitted to the jury as a question of fact, in the following language, used in the court's charge:

"Did the dropping of the notice of acceptance, did the dropping of that notice into the mail, notify the bank, or would the notification to the bank be at the time the bank received that letter? * * *

"If the mail was the agent of the bank then the dropping of the letter into the mail would be notice to the bank. If, however, the mail was the agent of Mitchell and The Berwald Company, then the receipt by the bank of that letter would be communication to the bank of the acceptance. * * * It was the bank's agent provided the bank authorized The Berwald Company to communicate the fact of acceptance through the mail. It was not the bank's agent unless the bank did so authorize The Berwald Company to communicate that fact through the mail.

"Now, the bank could authorize the Berwald Company to use the mail for the purpose of communicating that fact, in two ways, first, by express authority, and there is no evidence tending to show there was any express authority, and, second, by implied authority.

"Now, was there or was there not any implied authority from the bank to the Berwalds for the Berwalds to use the mails in communicating to the bank the fact that Mitchell had accepted the offer? What was their relationship before in the matter of negotiating as to terms and so on? How had they come together? Had they ever used the mails before? If so, how often? Or had the Berwald people and the bank people always had their contact personally? How were these different offers transmitted between the parties? Were they through the mail, or personally from hand to hand? Take all of the relationships between the bank and The Berwald Company regarding this deal, and then determine from those matters, together with anything that may have been said upon the subject, and determine from those things, in connection, also, with any evidence that there may be in the case as to the location of the offices of the two persons, and determine from all the evidence that has any bearing upon it whether or not there was an implied authority from the bank to the Berwald people for the Berwald people to use the mail in communicating to the bank the fact that Mitchell had accepted the offer.

"If the plaintiff had failed to prove that there was such authority from the bank to the Berwald people to so use the mail, that is the end of this lawsuit and you will return a verdict for the defendant."

At the close of the court's charge, the following interchange occurred:

"The Court: Has the plaintiff any suggestions to make or changes to suggest?

"Mr. Cole: I have no suggestion except possibly I might ask the Court to charge a little bit further to the effect that the implied authority to use the mails in accepting this offer could be determined from the circumstances surrounding the transaction and the general usages of business, as to whether or not it was within the contemplation of the parties that such means would be used.

"The Court: That would be a proper charge if there was any evidence as to general usage. I don't think there is a scintilla of evidence upon that subject. I refuse to give that charge.

"Mr. Cole: Note an exception."

The plaintiff also took a general exception to the court's charge.

The questions presented to this court for review are two:

1. Did the court err in its refusal to charge as requested?

2. Did the court err in its charge to the jury as to the time when an acceptance merges an offer into a binding contract?

It is contended by plaintiff that the bank in making its offer had the right to specify how it was to be accepted; that an inspection of the offer indicates that the bank intended that contractual relations were to arise immediately upon its acceptance; that having submitted an offer which did not restrict in any manner the means, way, or method by which it was to be accepted, except by the offeree affixing his name thereto, the offer was one which was to be accepted by the performance of an act, and that the defendant's signing his name in the place provided, and the plaintiff's mailing a notice of such acceptance before the revocation was received, were such acts, and that the contract was complete when the notice of acceptance was dropped in the mail, and that therefore the court's charge upon this subject was erroneous and prejudicial.

We are cited to many authorities on this subject, notably the case of Shubert Theatrical Co. v. Rath, (C.C.A.), 271 F., 827, from which we quote, at page 834:

"Authorization to communicate acceptance by mail is implied in two cases:

"(1) Where the post is used to make the offer and says nothing as to how the answer is to be sent.

"(2) Where the circumstances are such that it must have been within the contemplation of the parties that according to the ordinary usages of mankind the post might be used as a means of communicating the acceptance."

We also quote from Williston on Contracts, page 146, Section 83:

"If an offer is made orally, but is left open for subsequent acceptance and the parties reside at a distance so that no subsequent personal meeting is apparently contemplated, an acceptance by mail would be authorized * * * The question whether that medium was authorized is one of fact; depending upon what would reasonably be expected by one in the position of the contracting parties, in view of prevailing business customs."

The defendant relies for the law applicable to this case on 6 Ruling Case Law, 613 and a quotation from 9 Ohio Jurisprudence, 267, which is as follows:

"Acceptance by mail of offers made otherwise. — Where the mail is used to accept an offer not made by mail, it seems clear that if the letter of acceptance is actually delivered to the offerer within the time that the offer remains open, a contract results. Acceptance by mail of an offer made other than by mail may be impliedly authorized by the circumstances of the case. Where the circumstances are such that it must have been within the contemplation of the parties that according to the ordinary usages, the postoffice might be used as a means of communicating the acceptance of an offer, the acceptance is complete as soon as it is posted. But in the ordinary case of the acceptance by mail of an offer made other than by mail, the contract is not completed when the letter of acceptance is mailed; the acceptance must be actually communicated to the offerer."

It will be noticed that in the very authority cited by the defendant it is therein stated that "acceptance by mail of an offer made other than by mail may be impliedly authorized by the circumstances of the case."

It would seem, therefore, that the request of the plaintiff, suggesting to the court that he charge to the effect that "the implied authority to use the mails in accepting this offer could be determined from the circumstances surrounding the transaction and the general usages of business, as to whether or not it was within the contemplation of the parties that such means would be used," was a proper request and should have been given by the court. The refusal of the court, to use its own language, was based upon the ground that there was not a scintilla of evidence upon that subject. While it is true that nothing was said between the parties as to the manner in which the acceptance was to be communicated, yet it is not unreasonable to infer that since the method of communicating most important matters by means of the mail is a mode recognized in all commercial circles, and the parties not having specified any particular method of communication, their acceptance by mail was impliedly authorized in this case. It is not correct to say that there is no evidence whatsoever on that subject, for the reason that we find that when the bank withdrew its offer and directed a communication to that effect to the plaintiff company it did so by posting a letter in the mail to that effect. It would at least indicate the usage adopted by banking and commercial business houses.

This act of the bank in resorting to the mail when it posted its letter of withdrawal of the offer, addressed to the plaintiff company, would seem to indicate, in the absence of anything to the contrary, that using the mail for the transaction of business was the approved method of the bank, and it would not be unreasonable to infer from that that it expected to be communicated with, with reference to the acceptance of its offer, by its own approved method, namely, by means of the United States mail.

The refusal of the court to charge as requested is, in our opinion, substantial error requiring the reversal of this case.

There is another point which occurs to us, even though it was not briefed by counsel, namely, the question whether, in order that the transaction between Mitchell and the bank constitute an offer and acceptance, and hence a binding contract, the acceptance would have to be first communicated to the bank. It will be seen that the plaintiff company was the instrumentality upon which the offeror and the offeree depended. When the bank made its offer in writing, with a space reserved for the acceptance of the same by Mitchell, it handed the same to the plaintiff company. There was, of course, clear authority given to the plaintiff company by the bank to transmit the offer, or to hand it in person to Mitchell. This the plaintiff company did, and after some time had elapsed, enabling defendant to make a decision, defendant signed the acceptance and gave the same to the representative of plaintiff company. The plaintiff company was the medium through which the minds of the banking company and defendant met. The very moment Mitchell signed the acceptance, and handed the same to the representative of plaintiff company, it can reasonably be urged that the contract was then consummated. There is enough in the record to justify the submission, as a question of fact, of the question whether or not the banking company and defendant Mitchell intended that the contract should be considered accepted, and hence consummated, the moment the space reserved for acceptance by Mitchell was signed, and the instrument handed over to the representative of the plaintiff company. It it should be found, as a matter of fact, that the parties intended that the plaintiff company be the means, or instrumentality, to act for them, and in their behalf, then the moment the offer with the signed acceptance by Mitchell was handed over to the representative of the plaintiff company the contract between the parties would be regarded as completed and in that event it would be too late for either party to withdraw from the same.

Holding as we do, the judgment of the common pleas court will be reversed, and the cause remanded for a new trial.

Judgment reversed and cause remanded.

VICKERY, P.J., and CLINE, J., concur.