Paulson v. Reeds

156 N.W. 1031 | N.D. | 1916

Burke, J.

Defendant listed 800 acres of land for sale. Unfortunately, tbe contract was not reduced to writing, and there is a dispute not only as to tbe price and terms wbicb be desired, but tbe amount of commission wbicb be should pay. Plaintiff’s version is tbat first in 1909, again in January, 1910, at least once between January and June, and again on June 28, 1910, tbe subject of commissions was discussed. Tbat just prior to tbe sale itself when tbe contracts with tbe purchaser were awaiting signature, defendant promised to pay bis commission upon tbe sale actually made.

He testifies:

After be (Reeds) read this little statement there be say, “I can’t pay you a commission on tbat, Paulson.” “Well,” I says, “tbat is not to you.” Then be says, “What do you get for it — I suppose you get $20 an acre?” I said, “No, I don’t. I get ’$17.50.” He says, “All right,” and then be signs it. Tbat was all there was to it. . . .

Q. Now, Mr. Paulson, when these contracts were signed by Mr. Reeds and Mr. Huey in your office, I mean tbe contracts, exhibit “B” (by wbicb tbe land was sold), was there anything said between you and Mr. Reeds at tbat time about tbe payment of commissions, or what should become of tbe excess of tbe purchase price of these lands over $16 an acre?

A. Yes, sir.

Q. What was tbat ?

A. He said tbat I can’t pay your commissions out of these payments. “Well,” I said, “I will wait until tbe November 15th settlement is made for my commissions.”

Q. When did you have tbat talk, before or after tbe contract, exhibit “B” was signed?

A. Before.

Plaintiff had already testified that he was to receive as his commission all over $16 an acre of the purchase price. lie had also testified that the first listing proposition had with defendant was one third cash and deferred payments to bear 6 per cent interest. Defendant’s contention is that he listed the land for sale at $17.50 per acre, one third cash, deferred payments 7 per cent. That the commission should be $1 per acre if plaintiff furnished the buyer himself, but that if the sale was made to a purchaser who was introduced to plaintiff hy the defendant, the commission should be 50 cents per acre. It thus appears that there are two separate disputes: first, as to the terms upon which the lands could be sold; and, second, the amount of the commission to be paid for producing a purchaser. These questions were necessarily complicated in the trial below by the injection of exhibit “A,” — a paper signed by defendant at plaintiff’s request, just prior to the sale,, and reading as follows:

Wyndmere, N. D., June 28, 1910.

Martin Paulson:

Ton are hereby authorized to sell my land, W|- SE-J 21, and E-|- of 20, 133-52, at $16 per acre net to me.

(Signed) J. A. Reeds.

It will be noticed that this merely authorizes a sale of the land at $16 per acre, but does not mention the matter of commissions, we having already held in Louva v. Worden, 30 N. D. 401, 152 N. W. 689, that using the word “net” does not amount to a contract to pay all of the purchase price over the net to the agent. The jury found for plaintiff in the full sum demanded, $1,200. No motion for a new trial was made, and the matter is before us upon assignments of error. The trial below occurred before the Louva v. Worden, supra, and Harris v. Van Vranken, — N. D. —, 155 N. W. 65, opinions were handed down by this court. Many of the questions raised in the briefs have' been decided by those two cases, and will not be further discussed. Plaintiff brings this action upon an express contract alleging that he produced a purchaser able, willing, and ready to buy upon the listing’ terms. That the land was actually sold upon those terms. That under "his contract he was to receive the difference between $16 per acre and $17.50, or $1,200. The answer of defendant is a general denial.

(1) Appellant’s principal assignment challenges the court’s instructions to the jury. He insists that the court told the jury that the contract regarding the commissions was contained in exhibit “A” alone, and that if they found as a matter of fact that defendant had signed exhibit “A,” then plaintiff was entitled to recover $1,200. ■ If the charge bears this interpretation, it is clearly erroneous. An examination of the whole charge becomes necessary, and we quote from the charge covering this phase: “Plaintiff contends . . . that Mr. Paulson was authorized by Mr. Reeds, the defendant, to sell the land described in the complaint, amounting to 800 acres, for the sum of $16 an acre net to Mr. Reeds; . . . that in pursuance of said contract Paulson did sell the land to Mr. Huey for $17.50 per acre; . . . that the entire compensation therefore would be $1,200; . . . the defendant . . . admits that there was some talk to the effect that if a sale was made he would give him $1 an acre if he sold the land for $17.50 an acre, but in that event he claims that the land must be sold in such a manner that the defendant could have one third of it in cash and 7 per cent interest on all deferred payments. . . . He contends that in the event he, Reeds, brought the purchaser to Paulson ... in that event, he, Reeds, would pay to said Paulson the sum of 50 cents an acre for his services. . . . He denies that at the time of signing the contract with Mr. Huey, exhibit B,’ that there was any further or additional contract; ... he further claims that, before signing the contract with Mr. Huey, he did not agree to any modification or change whatsoever in the contract as claimed by Mr. Paulson, as above set forth, and that the reason why he signed the contract was that at that time Paulson agreed that the question of commissions should be later adjusted between the two. . . . You will see that before you can proceed further, it will be necessary for you to find what the contract between the parties was. . . . There is, as I understand it, a dispute as to whether Mr. Reeds signed exhibit A.,’ and perhaps the first thing for you to do will be to determine this disputed question. The burden of proof is upon the plaintiff to show that Mr. Reeds signed this exhibit. You will observe that exhibit A’ — and I so charge you — is not a complete contract, as it does not provide for interest and payments in case of a sale, and, therefore, to determine as to the terms and conditions upon which plaintiff was authorized to sell the land you are to consider all the evidence of the case. It is contended by the plaintiff that the terms not mentioned in exhibit ‘A’ were that the land should be sold at one third cash at the time of the giving of the deed, and interest was to be at the rate of 6 per cent per annum. Whereas the defendant insists that the terms as to time and rate were that the one third should be paid at the time of the making of the contract, and that interest was to be figured at the rate of I per cent per annum. If you find, by a preponderance of the evidence, the burden being upon the plaintiff, that the defendant, Reeds, signed exhibit ‘A,’ then that settles the contract as between them in so far as Paulson’s authority to sell the land at $16 per acre net to Mr. Reeds is concerned. In that event, to determine what the other portions of the contract were, you will look to the other evidence to find what the time of making the payments and the rate of interest were to be. This is not an action to recover the reasonable value of the services of Mr. Paulson, if any he performed. As called at law, it is not an action upon quantum meruit, but is based upon a contract for a specific sum, and the obligation now falls upon you, gentlemen, to determine what that contract was. There has been a good deal of evidence offered and presented to you, and under the rules of law you are to consider it all for the purpose of trying to put yourselves in the situation of the parties when having the transaction about which testimony has been given. ' In making up your judgment as to what the contract was, you ought to consider all the testimony, whether the conversations happened on one day or whether they continued through several days or weeks, provided it was one continuous transaction and had reference to the making of the deal in question, if upon all the testimony you find that the contract was for 50 cents an acre, . . . he would be entitled to a verdict of $100. If you believe by a preponderance of the evidence that the defendant, Reeds, signed exhibit ‘A’ and thereafter entered into the contract, exhibit IB’ under the terms as therein stated, . . . then I charge you that the plaintiff would be entitled to a judgment for the sum of $1,200 and interest at the rate of T per cent from and since November 15, 1910; the principle of law being that where a person agrees with a real estate broker to pay him a commission if he procures a purchaser on specified terms, the broker, in order to entitle him to his commission, is bound to present a purchaser who is ready, able, and willing to buy on the proposed terms; . . . and if, without any fraud, concealment or other improper practice on the part of the broker, the principal accepts the person presented, either on the terms previously proposed, or on modified terms, then agreed upon, and enters into a binding and enforceable contract with him for the purchase of the property, the commission is fully earned. . . . If you believe by a preponderance of the evidence that exhibit ‘A was signed and delivered to Mr. Paulson, and you further believe that there was a dispute between Reeds and Mr. Paulson as to the time of the cash payment and the rate of interest, it was the duty of Mr. Reeds when the contract, exhibit TB’ was presented, to repudiate the same, refuse to sign it, and cancel the agency of Mr. Paulson; ... or declare that he would not accept the trade upon any other terms than those for which he was contending. But if he did not do that for any reason, and accepted the terms of the contract as made by exhibit ‘B,’ then he would be regarded in law as having approved such terms, and, having entered into the contract, he would be required to pay the commission agreed upon. If his consent to enter upon the agreement was induced by any other evidence or offer, that question cannot be heard at this time to modify or reduce the amount coming to the plaintiff Paulson under the terms of the contract, as you shall have found it to be. \ . . If you find that Mr. Reeds did not sign exhibit A’ , ■ you are still to say whether from the talk between the parties, Mr. Reeds did agree to give Mr. Paulson any compensation whatever, — and when you find out what it was, then the same rules will apply as to the liability of Mr. Reeds as I have heretofore described with reference to his liability in case you shall find that he signed the exhibit ‘A.’ ”

Much of the charge given is correct, but we cannot escape the fact that the court understood the signing of exhibit “A” to settle the question of commission at $1.50 per acre. In this there was error. Much has been written upon the subject of brokers’ and real estate agents’ commissions. Valuable notes will be found in 21 L.R.A.(N.S.) 935; 29 L.R.A.(N.S.) 533; 34 L.R.A.(N.S.)1050; and 139 Am. St. Rep. 225; 2 Hill’s Dakota Dig. pp. 174-177. There is nothing unusual about a real estate commission contract. It is governed largely by the ordinary rules of contracts. If the ag'ent is to furnish a buyer at $16 an acre and receive all he can get from the purchaser over that sum as his commission, that is one contract. If he is to furnish a buyer and receive $1 an acre as his commission, that is another contract. If he is to furnish a buyer with whom the owner makes a satisfactory contract, and is to receive as his commission a certain percentage of the purchase price, that is still another contract. The last-mentioned state of affairs presents different problems entirely from the one in the case at bar. Respondent has cited us to a few eases based upon this last kind of contract as precedent for the case at bar, but obviously they have no application. In the case before us there were two disputes, — one as to the terms upon which the land could be sold, second, as to the amount of the commission to be paid. The trial court correctly outlined the issues as to the first dispute, and correctly outlined the issues as to the second dispute, excepting that he told the jury that if he had signed exhibit “A,” then the question of commissions was settled at $1,200. This, we think, is erroneous. If it is kept in mind that the commission is earned when the purchaser able, willing, and ready to buy according to the listing terms is found,' a better understanding of the law will obtain. After the purchaser has been produced and the commission earned, the owner and the purchaser may change the terms all they please, and it does not affect the matter of the commission. Much of the so-called confusion of the cases results from a failure to keep this simple proposition in mind. Our own court in Ward v. McQueen, 13 N. D. 153, 100 N. W. 253, failed to make this plain although they did say, after setting out the facts, “this shows a full performance by plaintiff of the duties of the employment under the listing contract and entitled them to their commission. . . . The terms of sale agreed upon and assented to by the defendant were different in some respects from those stated in the listing contract. Nor this reason it is contended that the plaintiffs are not entitled to the compensation provided for in the agency contract, but that they must show that the defendant expressly agreed to allow the same compensation for the sale upon the modified terms as was fixed by the agency contract. . . . There is no merit in this contention.”

It is evident that the court had in mind the fact that the commission had already been earned, and it made no difference that thereafter the actual sale was made on slightly different terms. The balance of the ■opinion is therefore obiter, and we fear overlooked this basic principle, —that the agent must have first produced a purchaser able and willing to take the land under the listing contract, and that, having produced such a purchaser, it was immaterial that the sale is made upon different terms. For that matter, it was not material whether the sale is made at all. That this was the laws appears from the citations given by this court towards the bottom of page 156 of said opinion. The first case cited is Huntemer v. Arent, 16 S. D. 465, 93 N. W. 653. We quote from the syllabus in that case, the italics being ours: “1. Evidence in an action by a real estate broker for commissions considered, and held to show that the broker had procured a purchaser able, ready ■and willing to purchase on terms acceptable to the owner, and that a failure to complete the sale was the owner’s fault. 2. The fact that the terms of sale of realty, as stated to a broker, were modified by the owner’s acceptance, in the broker’s presence, of the purchaser’s proposal •as to the method of payment, would not relieve the owner from liability for commissions.”

The second case is Knowles v. Harvey, 10 Colo. App. 9, 52 Pac. 46. Again we quote from the syllabus, italicizing the portions we wish to emphasize: “1. When a broker in whose hands property has been placed to exchange, finds a person who is willing to trade on the first party’s proposition, and he brings the parties together, with the result that a trade is made, though on somewhat different terms than in the original proposition, he earns a commission.”

The third case cited, Magill v. Stoddard, 70 Wis. 15, 35 N. W. 346, is to the same effect. Paragraph 2 of the syllabus reads: “Plaintiffs, real estate agents, agreed for a certain per cent on the price, to procure a purchaser for defendant’s land. The evidence showed that plaintiffs procured a purchaser for the land on the terms agreed upon, and that defendant then refused to sell but wanted a higher price. Held, that the evidence warranted a verdict for plaintiffs for the agreed compensation.” From the body of the opinion we quote: “There was evidence that the parties made another contract in November, following. . . ,. The instruction, of the court that this new arrangement to sell on different terms would not destroy the plaintiffs’ right to recover the commissions they had already earned, . . . was clearly correct. . . . The new contract, therefore, cuts no figure in the case on this appeal.”

In Welch v. Young, — Iowa, —, 79 N. W. 59, it is said: “There is no doubt that Mr. Bennett was able, willing, and anxious to perform the contract on his part; but it appears that the defendants were unable to furnish an abstract of clear title at that time, wherefore the contract was not performed.” In the syllabus it is said: “An agent employed to effect a sale of land is entitled to compensation where he obtains a person who executes a contract with the owner, and is able, anxious and willing to perform, but, because of the owner’s inability to furnish a sufficient abstract of title, the sale is not consummated.” It is therefore apparent, first, that Ward v. McQueen is subject to the criticism above mentioned. The conclusion is right, though part of the reason is wrong. The correct rule is stated by this court in Anderson v. Johnson, 16 N. D. 174, 112 N. W. 139, where it is said: “It seems to have been the theory of plaintiff’s counsel and also the trial judge that all it was necessary for them to prove in order to recover was the existence of the contract as pleaded, and that they produced the person claiming to own the property, and he, in fact, entered into a contract with defendant to sell the same to him upon some terms acceptable to defendant. In other words, even though Staiger was unwilling and refused to sell at the price of $2,300 [the listing contract] that, if defendant dealt with him on any other terms whatever, plaintiffs would still be entitled to their commission. . . . This is clearly erroneous.” In respondent’s brief and upon oral argument it was insisted that there were but two lines of authority, one being the “Minnesota rule.” We do not believe there is any distinction. Francis v. Baker, 45 Minn. 83, 47 N. W. 452, cited by respondent in support of this theory, contains the following language: “Where a person agrees with a real estate broker to pay him a commission, if he procures a purchaser for his property on specified terms, the broker, in order to entitle him to his commission, is bound to present a purchaser who is ready, able, and willing to buy on the proposed terms.”

And Ketcham v. Axelson, 160 Iowa, 456, 142 N. W. 62, also cited by respondent, contains the following language in the syllabus, paragraph one: “When a broker contracts to procure a purchaser for his principal, who will purchase on terms satisfactory to the latter, and produces a purchaser who is ready, able, and willing to purchase on such terms, and with whom the'principal enters into an enforceable contract, the broker has earned his commission though the contract is afterwards canceled by the principal without the broker’s consent.”

It will thus be seen that the only objection to the charge given in this case is the interjection of the paragraph by reference to exhibit “A.” If this unfortunate reference had been omitted, there could be no criticism of the charge. It is undoubtedly correct, as stated by the trial court, that if a dispute existed as to that part of the listing contract having reference to the terms upon which the land should be sold, and pending this dispute exhibit “B” was produced and shown to Beeds as plaintiff’s version of the listing contract, and Beeds then accepted the same, it would probably be presumed that he had receded from his position upon the contract, and had accepted the version contended for by plaintiff. In such a case he would be liable for some commission, either $1,200 as claimed by plaintiff, or $100 as claimed by himself, but there would still be a dispute upon this proposition. The trial court evidently considered the signing of exhibit “A” a conclusion of this dispute, and instructed the jury that if Beeds signed exhibits “A” and “B” he would owe the $1,200 commission. Herein lies the error. Exhibit “A,” as we have already shown, does not refer to commissions at all, and this question should have been submitted to the jury upon the oral testimony. Eor this error a new trial must be had.

2. Shortly after the completion of the sale to Huey, defendant wrote a letter to a banker in Wyndmere, inclosing a check for $600 payable to Paulson, and stating that this was all that he owed him, and asking the banker to pay the same to Paulson and report to him what Paulson said. The letter has the appearance of having been first written $1,000 and the 6 written over the 10. This letter was properly admitted as a declaration against interest.

3. While defendant was being cross-examined he was asked whether he had not attempted to have plaintiff arrested because he had sent him a dunning letter regarding this commission. Defendant was not .given an opportunity to admit prejudice or bias against plaintiff, and tbe admission of tbe testimony was for that reason error.

There are other assignments of error, but we do not believe they will arise upon a second trial of tbe action. Judgment is reversed and a new trial ordered.