Wolverton v. Tuttle , 51 Or. 501 ( 1908 )

Opinion by

Mr. Commissioner King.

1. The only question necessary for determination is as to whether the motion for nonsuit was properly overruled, and if there was sufficient evidence adduced at the trial to sustain the judgment. It is well settled that, to enable a real estate broker to recover a commission for the sale of land, it is only necessary to show his employment, either express or implied, and that he was instrumental under and by virtue of such employment in bringing the buyer and seller together: Good v. Smith, 44 Or. 578 (76 Pac. 354). It is necessary, however, that sufficient facts be established by the proof to show that the real' estate broker was employed for that purpose, either by express agreement, or that sufficient was done and said to enable the jury, or court sitting as such, to imply an agreement to that effect.

The testimony as first given by Wolverton, in his direct examination, to the effect that he said to Tuttle, in reference to going over to Tarpley’s office, that he could go over with him if he wished, and that he would introduce him to the purchaser, but that if he did so he must have a commission in the event the sale should go through, and the statement of Kinsell to the effect that, in his first interview with Tuttle in reference to the property, Tuttle told him to ascertain what was the best price his people would give for the property, standing alone would be sufficient to make a prima facie showing to the effect that they were employed by Tuttle to bring about the sale. This, however, must be construed in connection with other testimony and statements of the plaintiffs when testifying in their own behalf, in which they clearly state that Tuttle insisted that he would pay no commission, but must receive $20,000 net for the property. This prima facie showing, therefore, is overcome by their own testimony; and whatever may have been the understanding between the plaintiffs, or their intention in reference thereto, among themselves, in consummating the deal, it is obvious and, in fact, established beyond question, that Tuttle did not agree or intend to pay any commission whatever. It is immaterial that he went to the office of the purchaser in company with the plaintiffs. True, they stated to him that if he went along they would expect a commission, but this is also overcome by the further statement to the effect that they thought if he would go over to see Tarpley and Manning, they could probably make satisfactory arrangements with the purchasers for the payment of the commission, and that Tuttle expressly stated that, while he realized they could not work for nothing and must pay office expenses, etc., he would not make the sale unless he received the full purchase price net to him.

2. From the testimony given we think it impossible to draw any other inference than that Tuttle, by his insistence that he must have the sum mentioned net to him, meant that he would pay no commission, and expected that the real estate brokers would either secure their compensation from the purchaser for their profits, or could depend upon such sum as they might receive in excess of the net price stated, and as to which it would be immaterial to the vendor. When a broker is notified by the vendor that he will pay no commissions, and, after receipt of such notice, the broker continues the negotiations for the sale, it is presumed that he is agent of the purchaser, and looking to him for his compensation: Synnott v. Shaughnessy, 130 U. S. 572, 580 (9 Sup. Ct. 609: 32 L. Ed. 1038). Tuttle had a right, therefore, to act upon this presumption, and, after giving such notice, to assume that plaintiffs were expecting either their commission from the purchasers or a greater sum than that demanded by him in the transaction. His price was $20,000 regardless of who became the vendee. Accordingly it was immaterial to the vendor whether the brokers paid the purchase price and took over the property and then sold to their customers for a greater sum, or whether the conveyance should be made direct to plaintiff’s purchasers ; for, in any event, as stated in Synnott v. Shaughnessy, it was immaterial to Tuttle what plaintiffs should get for it. He had stated his price in a net sum.

3. As held in Evans v. Wain, 71 Pa. 69, the phrase “net profits,” as applied to the proceeds of the sale of stock, means, in commercial usage, the. balance of the proceeds after deducting the expenses incident to the sale. In Scott v. Hartley, 126 Ind. 239 (25 N. E. 826), the word “net” is defined as “that which remains after the deduction of all charges and outlay, as net profits,” etc.

A case very similar to the one under consideration is Beatty v. Russell, 41 Neb. 321 (59 N. W. 919), in which the vendor, when asked by a real estate broker as to the terms on which he could sell his farm, “told him they might sell it for $4,800 to me net”; that the price was $5,000, but the agent might sell it so as to realize him the net sum named. The farm was sold for $4,800 and no more, for which commission was demanded, but refused. In passing upon the question the court there held that the testimony established that the contract made at the time gave the broker authority to sell the land for the sum of $4,800 net to the owner, and the agent was to have as commission any sum in excess of that amount, observing that this view of the case precluded the agent from any claim to a commission when the price obtained did not exceed that named; that the commission or compensation for effecting the sale was to be measured “by the sum received in consideration for the land in excess of $4,800”; and that the vendor “having named to the purchaser this sum as the amount required to buy the farm, there could be and was no excess, and hence no commission.”

Notwithstanding the rule that, where a sale is effected through the efforts of a broker or information derived from him, so that he may be said to be the procuring cause, the law leans to that construction of his contract with the vendor which will secure the payment of his commission, rather than to the contrary construction (Bell v. Siemens & H. E. Co. 101 Wis. 320, 323: 77 N. W. 152), we are of the opinion, as announced in Beatty v. Russell, that the use of the expression “net” to the vendor necessarily precludes any inference that Tuttle was to pay a commission in the event of a sale, unless the sum received should exceed the specified “net” price. It can only be inferred that plaintiffs were either to look to this excess, if any, or to the purchasers for their compensation. After such notice by Tuttle plaintiffs necessarily acted at their peril in bringing the buyer and seller together without an understanding in respect to their commission.

4. It is further urged that Mrs. Tuttle, by her statements, ratified her husband’s acts, and this appears to have been the opinion of the circuit court. This, however, overlooks the governing feature that the proved facts rebut any inference that Tuttle either expressly or impliedly agreed to pay any commission, except such as might have been received above the net price fixed by him for the property. Any ratification, therefore, of her agent’s acts in this respect, cannot strengthen plaintiff’s position. In this.connection our attention is called to Mrs. Tuttle’s statements to the effect that, if plaintiffs were instrumental in bringing about the deal, they were entitled to their commission, and it would be paid if the deal went through, in respect to which it is urged that this constituted a specific agreement on her part to pay the claim. This position might be tenable, if the statements alluded to had been made by her with full knowledge of all the dealings had, and prior to the consummation of the sale; but everything having been done and the sale completed prior to the conversation with Mrs. Tuttle, there was no consideration for her promise, and, whatever view might be taken as to her moral obligation to do as agreed, it was insufficient in law to constitute a binding contract. The purchase price had been agreed upon, part of the consideration paid, and a written memorandum thereof sufficient to bind the buyer and seller had been executed. In fact, all had been done that was possible for the brokers to do in the matter, thereby constituting what is commonly termed a “consummation .of the sale”: Micks v. Stevenson, 22 Ind. App. 475 (51 N. E. 492).

For the reasons given, the judgment of the court below should be reversed, and the cause remanded.

Reversed.