Hall v. Rankin , 22 Ariz. 13 ( 1920 )

BAKER, J.

Action of assumpsit for work and labor done and performed by the plaintiff for the defendant, at his special instance and request, in and about “the examination, investigation and sale of certain mining properties.” The plaintiff offered oral testimony tending to prove that tbe Henrietta mine belonged to tbe Braganza Mines Company, tbe defendant owning sixty-five per cent of tbe capital stock of tbe company; that tbe defendant approached the plaintiff and said to him substantially:

“I have been trying to sell the Henrietta mine to the Big Ledge people, but the mine must stand the inspection of Mr. Shockley, their engineer. I have had a ‘racket’ with him and I cannot get them to go out and look over the property. You know these people, and I want you to get their engineer on the ground, and if I get $150,000 for it I will pay you $25,000 for your services, and if I sell it for less I will pay you very liberally, and in any event I will pay you for your trouble and expense.”

The plaintiff offered to prove also that he succeeded in causing the officers and the engineer (Shockley) of the Big Ledge Company to examine the mine, and that the defendant practically closed a sale of the mine for $100,000 and received a bonus or commission to himself of $25,000, and thereupon the defendant said to the plaintiff: “This is a good day’s work and I will pay you liberally.”

The defendant took the objection that the contract, not being in writing, was void, under the statute of frauds. The trial judge held the objection to be well taken and rejected the evidence and rendered judgment for the defendant.

We construe the contract as one of employment or agency rather than one to “sell real estate, mines or other property, for compensation or commission.” Statute of Frauds, paragraph 3272, subd. 7, Rev. Stats. Arizona 1913, as amended by chapter 135, Session Laws of Arizona of 1919. We would not be justified in straining the terms of the contract so as to bring it within the statute of frauds and thus do a great injustice to the plaintiff. It is a familiar canon of construction to construe a contract, if it may consistently be done, to be effective, rather than ineffective. “Where a . . . contract as a whole is susceptible of two meanings, one of which will uphold the contract or render it valid and the other of which will destroy it or render it invalid, the former will be adopted so as to uphold the contract.” 13 C. J. 539; Hobbs v. McLean, 117 U. S. 567, 29 L. Ed. 940, 6 Sup. Ct. Rep. 870 (see, also, Rose’s U. S. Notes). The statute of frauds, of course, is binding upon us and must be obeyed and enforced whenever a case falls within its provisions, but it was remarked by Chief Justice BUCHANAN, in delivering the opinion in Lamborn v. Watson, 6 Har. & J. (Md.) 255, 14 Am. Dec. 275, where the defense under the statute was successfully relied on, for the protection of a dishonest defendant, that the statute “probably generates as many frauds as it prevents.” The subdivision of the statute referred to was clearly designed to protect owners of real estate against unfounded claims of brokers (Gorham v. Heiman, 90 Cal. 346, 27 Pac. 289) and contemplates a transaction between parties contracting with each other as principals. That is not the case here. In this case the plaintiff, as agent, undertook to perform for the defendant, who was not the owner of the mine, certain services, and the defendant undertook to make compensation therefor. The plaintiff was employed to get the engineer of the Big Ledge Company on the mine for the purposes of inspection; he was not employed to sell the mine — that was the business of the defendant. The only characteristic in the contract, indicating that the employment of the plaintiff was to sell real estate, is the stipulation that his compensation for his services should be $25,000 if the defendant sold the mine far $150,000, and if the mine was sold for a less amount that the plaintiff should he paid liberally. We think that this provision should be construed as fixing merely the “measure” of the plaintiff as compensation and not that it is to be considered as one of the terms of a contract for the sale of the mine.

It is true that the plaintiff’s proposed testimony further tended to show that the plaintiff explained the merits of the property to Shockley, including that portion of the property which was inaccessible by reason of being under water or from, the tunnels, drifts, and shafts being caved in; hut these services seem to have been voluntary and merely incidental and collateral to the contract. The suit is not one to recover “compensation” or “commission” for the sale of real estate, hut to recover the reasonable value' of the services of the plaintiff as the agent of the defendant. That the pleader did not have a clear concept of the principles of law governing the facts of the case is apparent, and the complaint in this respect may stand in need of amendment; but no objection was made to the evidence on the ground of a departure or variance and that question is not before us.

The defendant accepted the benefits of the plaintiff’s services and practically completed the sale of the mine for $100,000 and received a bonus or commission to himself of $25,000. It seems to us that it would be highly inequitable to construe the contract so as to bring it within the provisions of the statute of frauds and thus enable the defendant to perpetrate a wrong, unless that is the only reasonable construction which can he given to the contract.

We do not think that the California cases (Aldis v. Schleicher, 9 Cal. App. 372, 99 Pac. 526, and Sellers v. Solway Land Co., 31 Cal. App. 259, 160 Pac. 175) should govern the present case. They were clearly suits instituted to recover ‘ ‘ commissions ’ ’ for the sale of real estate. The contract in this case contains elements differentiating it from the contracts in the California cases.

We cite in support of our conclusions the cases: Wilson et al. v. Morton et al., 85 Cal. 598, 24 Pac. 784; Sherman v. Clear View Orchard Co., 74 Or. 240, 145 Pac. 264; Griffith v. Daly, 56 N. J. L. 466, 29 Atl. 369; Watters v. McGuigan, 72 Wis. 155, 39 N. W. 382; Carr v. Leavitt, 54 Mich. 540, 20 N. W. 576; Rose v. Hayden, 35 Kan. 106, 57 Am. Rep. 145, 10 Pac. 554. The facts of the cases cited may, and do, differ from the facts of the present case in several particulars; hut it is clear to us that the' principles of law running-through the cases are applicable to, and must control,, this case.

The judgment is reversed and cause remanded.

BOSS, J., concurs.