| N.D. | Mar 19, 1909
Lead Opinion
This is an action by respondent, a real estate dealer of Minneapolis, Minn., to recover damages against appellant, a N!ew Jersey corporation, that owned a large number of tracts of land in Barnes, Stutsman, and other counties, in this state. On January 20, 1897, they entered into the following contract:
“This agreement, made this 20th day of January, A. D. 1897, by and between the Metcalf Land Company, of New Jersey, party of the first part, and James C. Young, of Minneapolis, Minnesota, party of the second part.
“Witnesseth: Whereas said Metcalf Land Company is the owner in fee of the following described lands in the County of-State of North Dakota, as shown by Schedule ‘A’ hereunto annexed, and marked ‘Exhibit A.’
“And whereas, the said Metcalf Land Company has this day given the exclusive sale and management of said lands to said James C. Young, now, therefore, the said parties hereto hereby agree with each other, as follows: That said James C. Young has caused to be made a careful^ examination of said lands and an appraisement thereof, which said appraisement is marked opposite each tract upon said Exhibit A and is hereby accepted by said Metcalf Land Company. That said James C. Young shall have the authority to sell said land, or any part thereof, at such a price as he may deem best, provided, however, that no tract shall be sold for less than the appraised value named in said schedule A and it is distinctly understood that before any sale shall be binding upon the said Metcalf Land Company, the contract shall be approved and terms of payment thereof accepted by the said Metcalf Land Company. That said James C. Young is further to give reasonable amount of time and attention to the management and sale of said lands, and agrees to give to the benefit of the said Metcalf Land Co., the highest price for the sale of such lands which he can obtain, and to faithfully account to said Metcalf Land Company for all the proceeds which may be derived from such sales and make quarterly return of such sales and payments of such funds as may then be in his possession. And said James C. Young further agrees that he will use all faithful and reasonable effort to have the land sold under this contract put under cultivation as rapidly as possible by the purchasers thereof,*444 and it is mutually agreed that in case of said James C. Young advancing money for the purchase of seed, grain or any other necessary improvements on premises sold under this contract, that he may take as security the seed lien on crops, or take any other sort of security which he deems expedient or desirable, and the money so advanced by the said James C. Young shall be first returned with interest from the purchaser before any application of payment is made under the contract of sale, any -balance remaining, or paid in by the purchaser after the money so advanced has been returned shall be applied in the usual way under the contract of sale.
“It is further mutually agreed, that the proceeds derived from the sale of said lands shall be applied as follows:
“First: To the payment of said Metcalf Land Co. of the sum of two dollars ($2) per acre, together with interest thereon at six per cent. (6%) per annum, from the date of this contract, and also o-f all taxes accruing or becoming -due upon said lands from and after the date of this contract, including the tax of 1896, paid by said Metcalf Land Co., together -with interest at the rate -of six per cent. (6%) -per annum thereon, from date of -payment thereof.
“Second: The remainder of said proceeds shall be divided equally and one-half part thereof shall be paid to the said Metcalf Land Co., its successors or assigns, and the remaining one-half part thereof shall be paid to James C. Young, his heirs, administrators or assigns.
“It is further mutually agreed, that said James C. Young shall retain no profit under this contract until the whole amount of two dollars ($2) per acre, with interest thereon, and taxes, with interest thereon as herein provided, has been returned to the said Metcalf Land Company.
‘It is further mutually agreed, that this contract shall remain in force and be mutually binding upon the -parties hereto for a period of ten years (10) from the date hereof, unless sooner dissolved by written mutual consent, or by the death of James C. Young.
“It is distinctly understood and agreed that this contract is personal to James C. Young, and that no interest of any kind whatsoever in said lands, or any paid thereof, is hereby -conveyed or intended so to be conveyed by -the said Met-calf Land Company to said James C. Young, and same shall terminate upon the death of the said James C. Young, provided, however, that in the event of the death of said James C. Young be*445 fore the expiration of this contract, his administrators or assigns are to be entitled to his interest in the proceeds of all lands which have been sold, either for cash or on credit, and shall receive therefor the same amount as he himself would have done had he continued to live. It is understood and agreed that said James C. Young shall have no right or claim against the said Metcalf Land Company, or on said lands, or any part thereof, for commissions, expenses, or otherwise, except only for his one-half share of the profits arising from said sales, to be ascertained and divided as hereinbefore mentioned, stipulated and agreed.
“In witness whereof, the said parties hereto have hereunto set their hands and seals the day and year first above written.”
Afterwards, and on or about the 18th day of November, 1905, the parties entered into a supplementary contract for the purpose of settling some disputes between them; none of .them, however, relating to the transactions mentioned in this action. The-supplementary contract, so far as material here, is as follows: “As a part of this proposition it is understood that under the original contract Mr. Young has the right to sell the lands at reasonable figures, not less than the appraised values, and that it is the duty of the company to approve of such sales without delay. And Mr. Young concedes that as to all tracts of land which he has not contracted for sale or sold prior to the expiration of the ten-year period prescribed in the original contracts, he will make no further claim upon or assert any agency rights therein when said ten-year periods have expired, and contracts for sale have not been made.”
The complaint contains 17 causes of action. Briefly stated the allegations are: That appellant is a corporation organized under the laws of New Jersey; the execution of the contract; that the respondent proceeded to carry out the terms .thereof, and sold a large quantity of the lands at prices, and on terms mutually satisfactory to both of said parties, and in accordance with the contract; that appellant duly approved of said sales; that each of the parties to this action made a profit after paying to appellant its fixed charges; that respondent negotiated the sale of one tract covered by the contract on the usual terms at a fair price; that appellant refused to sell at the price named; and arbitrarily fixed a higher price on the land, and declined to permit respondent to sell land at a fair price fixed by him. In other words, respondent claims that appellant violated the terms of the contract by withdrawing from
This action was tried in the district court of Cass county before Judge Pollock and a jury. Respondent dismissed as to his sixth cause of action. After both parties rested, respondent asked leave to amend his complaint by adding thereto in each of the causes of action a paragraph to the following effect, viz: “That said purchaser so contracting or offering to purchase said land was one who was ready, willing, and able to purchase the said land on the terms stated.” Appellant objected to the allowance of the amendment, and insisted that it came too late, having been made after all the evidence was in, which objection was overruled, and amendment allowed.
At the commencement of the trial appellant objected to the introduction of any evidence under the complaint, as follows: “The defendant objects to the introduction of any evidence in this case upon the ground that the complaint does not state a cause of action, or sufficient facts to constitute a cause of action, and specified as grounds for the objection that it appears from the complaint that the plaintiff is seeking to recover commissions as a real estate broker for the sale of real estate; that it appears that his action is based upon a written contract of agency, ‘Exhibit 1’ attached to the complaint, and that under such contract he is entitled to no commissions except upon sales actually made and approved, and it appears affirmatively from the complaint that no' sales were made or consummated upon which he is claiming commissions; the sales were not approved; further, that if plaintiff’s complaint be construed as; an action to recover damages for the. arbitrary refusal of the defendant to approve the sales that it does not constitute a cause of action, for the reason that the complaint, with the contract attached
At the close of the respondent’s case appellant moved for a directed verdict, as follows: “The plaintiff having rested its case, the defendant now moves the court for a directed verdict in its favor upon all the issues and as to each cause of action, upon the ground that the plaintiff has failed to make out a .case, and without waiving, and intending to reserve all other grounds for this motion, the defendant specifies particularly the following reasons for the granting of its motions: (1) That the plaintiff has not alleged or proved the consummation of any sale of land under the contract attached to agency .contract attached to the complaint, which would entitle him to a commission. (2) That the plaintiff does not allege, and the proof does not show, facts sufficient to entitle the plaintiff to recover commissions in the absence of the consummation of the proposed sales. (3) Upon the ground that the' undisputed evidence shows that the authority of the plaintiff to sell at a price of his own making, or at a reasonable price, if any such authority he had was revoked, and terminated prior to the making of the sales which constitute his causes of action; and the only authority as shown by the undisputed evidence which the plaintiff had at the time of making the sales in question was.to sell at the figures named by defendant. The foregoing motion is made applicable to each and every one of the 17 causes of action, and is not meant to be exclusive, but for the purpose of attracting the count’s attention to the chief grounds upon which we rely in this motion. And this motion is made with the sole purpose of obtaining a ruling upon a question of law, and reserving its right to a submission of the issues of fact to the jury, notwithstanding the making of this motion. That there is no pleading or competent evidence upon which a recovery can be had for a wrongful revocation of plaintiff’s agency as to the lands in question, if there was in fact a revocation, and it was in fact wrongful.” This motion was denied. Appellant rested without introducing any evidence. The appellant renewed the motion for a directed verdict which was made at the close of the
It was stipulated that respondent’s share of the profits which he would have made had the sales been approved by the appellant were $7,592.26. The terms of the sale were not fixed in the contract, but the evidence shows that their course of dealing had established a form of sale contract, which both parties understood, consented to, and acted upon. Nio question' had been -raised as to respondent’s right to fix the selling price of each tract until near the end of the contract period. On April 13, 1906, appellant wrote respondent complaining of the prices at which he was selling the land, and stating that it would not approve any more sales unless they showed an advance over previous ones. To this respondent replied that he did not recognize appellant’s right to make any ruling that would prohibit him from making sales at reasonable prices. The first sales made by respondent which were disapproved by appellant (unless possibly one of which the -evidence is not very clear) were made during the months of May and June, 1906, and were disapproved by appellant on-June 13, 1906. From this time on appellant insisted on fixing the selling price of the lands, but did not furnish any new appraisement of the lands remaining unsold until Septenaber, October, and November, 1906. During the period from June, 1906, until the end of the contract period, January 20, 1907, respondent sold some lands at prices fixed by appellant but at the same time denied the right of appellant to fix arbitrary prices on the lands. Between May 18, 1906, and January 20, 1907, appellant refused to approve of 16 sales made by respondent on the ground that the prices were inadequate; these being the sales involved in this action. “In construing contracts, regard must be had to the surrounding circumstances and the situation of the parties; and the real intent of the -parties must be given effect -if that can be done without doing violence to the language of the contract.” Stewart v. Marvel, 101 N.Y. 357" court="NY" date_filed="1886-02-09" href="https://app.midpage.ai/document/stewart-v--marvel-3599000?utm_source=webapp" opinion_id="3599000">101 N. Y. 357, 4 N. E. 743; Taylor v. E. M. S. Co., 124 N.Y. 184" court="NY" date_filed="1891-01-14" href="https://app.midpage.ai/document/taylor-v-enoch-morgans-sons-co-3580973?utm_source=webapp" opinion_id="3580973">124 N. Y. 184, 26 N. E. 314; Jacquin v. Boutard, 89 Hun 437" court="N.Y. Sup. Ct." date_filed="1895-10-18" href="https://app.midpage.ai/document/jacquin-v-boutard-5509322?utm_source=webapp" opinion_id="5509322">89 Hun. 437, 35 N. Y. Supp. 496. “A contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting so far as the same -is -ascertainable and lawful.” Rev.
In Hunter et. al. v. Wenatchee Land Company, supra, the Wenatchee Land Company, owning large tracts of land in the state of Washington, entered into a written contract Vith the plaintiffs by the terms of which they were to have the exclusive sale of the land at a fair value and not less than $2.52 per acre. Out of the proceeds derived from the sale of said land they were to pay to defendants the sum of $1.52 per acre, together with the interest thereon at the rate of 6 per cent, per annum from date of the contract. The remainder of the proceeds arising from such sales to be divided equally, one-half to each party. This land was chiefly valuable for timber. After making the contract, and before any sales had been made, the defendant sold the timber on said lands. The plaintiffs then brought an action for breach of contract. The jury found that plaintiff would have sold the land for $146,000, which was $2.52 per acre, had not the contract been broken by the defend-ant. Held, that the plaintiffs were entitled to recover the profits they would have made, -had they sold the land- at the price hereinbefore mentioned.
It is urged that the court erred in overruling appellant’s objection to the introduction of any testimony in behalf of respondent under his complaint, in allowing respondent to amend his complaint at the close -of the testimony, in denying appellant’s motion for a directed verdict, and in its ruling on the admission of evidence against the objections of appellant. Under our view of the case, as hereinbefore stated, these rulings were correct. Appellant makes :a very elaborate argument on the theory thait a broker is not entitled to his commissions unless he alleges and proves that he found a purchaser who was financially ready, able, and willing to purchase on the proposed terms, and cites a large number of authorities. We have examined the authorities thus cited. Most of them hold that a broker, to recover his commissions for producing a purchaser where the sale is not made, must show that the person presented by him was able
Appellant urges that, under the terms of the contract, respondent was not entitled to any commissions until he secured an offer which was accepted by his employer. We do not think the contract bears this construction. It is true that it required all sales negotiated by respondent to be made, subject to the approval of appellant, but this did not mean that the company could arbitrarily withhold its approval. To so construe the contract would defeat its purpose. Taylor v. E. M. S. Co., 124 N.Y. 184" court="NY" date_filed="1891-01-14" href="https://app.midpage.ai/document/taylor-v-enoch-morgans-sons-co-3580973?utm_source=webapp" opinion_id="3580973">124 N. Y. 184, 26 N. E. 314. Appellant insists that respondent’s agency not being coupled with an interest was revocable, and that, before any of the alleged sales upon which respondent relied were made, appellant revoked any authority that respondent had to sell at prices fixed by 'him if he ever had any such authority. However this may be, appellant would still be liable to respondent for all damages resulting from the breach of the contract. Hawley v. Smith, 45 Ind. 183" court="Ind." date_filed="1873-11-15" href="https://app.midpage.ai/document/hawley-v-smith-7039911?utm_source=webapp" opinion_id="7039911">45 Ind. 183; Durkee et al. v. Gunn, 41 Kan. 496" court="Kan." date_filed="1889-01-15" href="https://app.midpage.ai/document/durkee-v-gunn-7887693?utm_source=webapp" opinion_id="7887693">41 Kan. 496, 21 Pac. 637, 13 Am. St. Rep. 300.
Thi-s is not an action to recover commissions for the sale of real estate, but an action to recover damages for breach of contract.
Finding no reversible error in the record, judgment affirmed.
Dissenting Opinion
(dissenting). I cannot agree with the construction 'placed by my Associates upon the contract involved in the case at bar to the effect that respondent had the sole right to fix the selling price of the lands subject only to the condition that the price should not be less than the value fixed by the first appraisement. The clause, “and it is distinctly understood that, before any sale shall be binding upon the said Metcalf Land Company, the contract shall be approved and terms of payment thereof accepted by the said Metcalf Land Company,” is obviously intended as a limitation of the' power granted to Young to sell at such a price as he may deem best; and there is great force in the suggestion that it was the original intent of the parties that appellant should approve the contracts of sale with reference to the price at which the-land was sold as well as in other particulars. The .parties themselves, however, seem to have agreed upon a certain construction of this' clause of
Respondent, therefore, could maintain his cause of action only upon the theory that he sold the lands at reasonable prices and a fair market value, which appellant arbitrarily refused to accept. He assumes that proof of such facts is a necessary element of his cause of action when he alleges in his complaint that the price offered “was the reasonable and fair market price, and was the fair market value per acre for said tract of land, and that it was the highest price that could be obtained for said land by plaintiff.” There is no presumption of law, however, that the prices at which respondent claims he sold the lands were reasonable or a fair market value at the time of the sale. Appellant in each case claimed that the price offered was below the actual value of the lands, and for that reason refused to approve the contract or accept the price. The denials of the answer raised a direct issue upon the allegations last quoted, and
The question whether the action is one to recover a broker’s commission or for damage for breach of contract has received a great deal of attention in the briefs of counsel; but whatever distinctions may be made in the character of these actions, respectively, there is little distinction in the proof required to establish a measure of damage. In the first case, in order to recover, respondent must show that he had produced a purchaser ready, willing, and able to carry out a contract of sale at a reasonable price, and that appellant then refused to convey. In the second case he must show a breach of contract by appellant, and prove “detriment proximately caused thereby, or which in the ordinary course of things would be likely to result therefrom.” Section 6563, Rev. Codes 1905. Such damages must be clearly ascertainable in both their nature and origin. They must be actual, not speculative; founded on fact, not conjecture. Hudson v. Archer, 9 S. D. 240, 68 N.W. 541" court="S.D." date_filed="1896-10-10" href="https://app.midpage.ai/document/hudson-v-archer-6684683?utm_source=webapp" opinion_id="6684683">68 N. W. 541. In order that he might recover such damages, respondent must satisfy the jury that he could and would have made bona fide sales of the lands to responsible purchasers for their reasonable market value within the time fixed by his contract if he had not been prevented from so doing -by the unauthorized acts of appellant.
In the status of the case at the close of the testimony, in my opinion, respondent’s evidence under the most favorable construction falls short of proof of a cause of action either for the recovery of a broker’s commission or for damages for breach of contract. The entire failure .of any competent evidence upon several essential points might have justified the trial court in directing a verdict for defendant. Certainly, in view of the vague, doubtful and conflicting character of the evidence offered on these points, the trial court was not warranted in holding that intelligent minds might not fairly differ in the conclusions necessary to sustain respondent’s ’cause of action and in directing a verdict for the plaintiff.
Rehearing
ON REHEARING.
A rehearing was granted in this case, and elaborate and exhaustive oral and written arguments were made on both sides. After carefully reconsidering the case, we are convinced that the result reached in the former opinion is right. On the trial of this action in the district court defendant contended that the evidence did not show facts sufficient to -entitle the' plaintiff to -recover commissions in the absence of the -consummation, of the proposed sales;
Appellant strenuously contends, as it did on the first argument, that plaintiff had to show by competent evidence that each proposed purchaser was able, ready and willing to make the purchase. This question, as far as the record shows, was not raised in the court below, but, assuming its contention in -this respect to be correct, we think the evidence sufficiently shows that each purchaser was able, ready, and willing to complete his purchase, and that each sale would have been made if the defendant had approved of it. The proposed purchaser for each tract of land made a binding written offer which defendant could enforce as soon as it accepted the said offer. We
Dissenting Opinion
(dissenting.) I deem that a 'better understanding of all matters passed upon by the court in this case can be secured by making the points considered on rehearing the subject of a separate dissent as suggested by the arrangement adopted in the majority opinion. The remarkable shift in position of the parties which took place upon the rehearing of this appeal renders such division into parts almost necessary. Further than this, it better serves to illustrate the changes in view of the parties and of -a majority of the court between the first hearing and rehearing and to bring out perhaps somewhat more clearly the reasons for my dissent.
As shown by an examination of the opinion upon the first hearing, the basis and groundwork of. the decision was ¡a 'construction of the contract involved by a majority of the court, to the effect “that the dealer [that is, the respondent] had the sole right to fix the selling price of the lands.” It was also contended by respondent, and held in that opinion, that the respondent, having been prevented by act of appellant from making sales under the contract, was entitled to recover the profits he would have made had the offers received by him been accepted without reference to the usual test of whether or not the purchaser presented by him was ready, willing, and able to make the purchase. My dissent to that opinion was based upon the considerations: (1) That a proper construction of the contract did not give respondent the absolute right to fix the selling price of the lands, but required him to make sales at reasonable figures not less than the appraised values; and (2) that the sales not having been consummated, in order to prove a cause of action against appellant, respondent must, among other things, produce satisfactory and competent evidence that the purchasers whose offers he claimed to hold were ready, willing, and able to make the purchase. Both of these propositions were combatted by respondent in his original brief and on his first argument of the case. On the rehearing, in strong contrast to his first contention, respondent, conceded that the correct construction of that clause of the contract providing for fixing a selling price is that “Young had no right to arbitrarily fix the selling price; on the contrary, he was bound
The only support to such evidence suggested by the majority opinion is that “the evidence abundantly discloses plaintiff’s qualifications as an expert witness to testify on the question of the reasonable values of the land in controversy.” I do not think that it has ever been held in any court that the value of real estate is a proper subject for expert testimony, and know of no reason why
As said in a well-considered opinion of the Supreme Court of Colorado: “Refusal of the defendant to consummate the sale has not damaged the plaintiff unless he can show that if the defendant had carried out his contract the sale would have been made. How can he show this except by proving that at the time the contract was repudiated, as claimed, he was in a position to have effected a sale in conformity with the conditions under which the property was placed in his hands ? Certainly he has not been prevented from earning his commission by the mere fact that defendant refused to sell the property unless he proves that, but for the conduct of the defendant, the sale would have been consummated. The refusal of the owner to sell according to contract does not prove, neither does it raise a presumption, that the alleged purchaser was. able to purchase, but renders the owner liable to the broker for commissions, the same as though the sale had actually been effected, provided the latter establishes that the proposed purchaser was ready, able, and willing to make the purchase upon the terms stipulated by the owner to the broker. The repudiation of the contract h}*' the defendant did not change the rule of law that the plaintiff ¡must make out a prima
Of the decision of the majority of the court as it now stands as compared with the conclusions ainnounced on the first hearing of the case it may truly be said that the last state is worse than the first, in that the rehearing seems to have resulted only in the adoption of what I believe to be an unsound rule of practice, which, if sustained, can scarcely fail to be productive of confusion, if nothing worse, in future cases.