Aetna Life Ins. Co. v. Home , 193 Okla. 478 ( 1943 )

This is an action by a real estate broker against his principal to recover a commission. Verdict and judgment were for plaintiff, and defendant appeals.

Plaintiff based his action on an alleged oral contract entered into with certain local agents of the defendant corporation whereby plaintiff was to receive a commission of $325 for procuring a purchaser for a 340-acre farm known as the Drake place. The petition states the usual cause of action upon the ordinary oral contract of employment arising from the mere listing of property for sale with a broker at specified prices and commissions, and the performance of services thereunder by the broker in procuring a purchaser ready, willing, and able to buy except for refusal of defendant, for no just cause, to consummate the deal.

Defendant denied the oral contract, and took the position that plaintiff was operating under a special written contract containing definite conditions upon which the commission of $325 was to be paid, and alleged that those conditions failed.

Among the errors assigned is the action of the court in overruling defendant's demurrer to all the evidence, and denying its request for a peremptory instruction.

The evidence refutes plaintiff's testimony that he Was operating under an oral contract. When he was engaged as an agent to sell defendant's property, he received a written statement containing the terms and conditions upon which commissions were to be paid. He seems to have considered the document of no legal effect since he failed to sign the same as requested by defendant. But, nevertheless, it was the written memorandum of employment, and it had not been waived or altered in any way. By its own terms it was an integral part of a commission agreement later signed by plaintiff and hereafter mentioned.

Said instrument provided, among other things, that if the broker furnished a prospective purchaser "and we then close the deal within 90 days, you will be entitled to receive a commission of 5% of the purchase price up to Three Thousand no/100 Dollars, and 2 1/2% on all amounts above Three Thousand no/100 Dollars, or as otherwise provided in the commission statement which must accompany each purchase application."

A commission statement was submitted along with the purchase application. It was signed by plaintiff, and contained the following provisions:

"No. RE 4425-S Name of Farm Drake —

1 County Wagoner State Oklahoma

"The undersigned submits herewith proposal of purchase of the above numbered property belonging to the Aetna Life Insurance Company of Hartford, Connecticut, by Clarence P. Bradfield and Lucie K. Bradfield of Route 1, Ames, Oklahoma for a consideration of $10,000.00, said offer being subject to the acceptance of said Company. . . .

"If this proposal of purchase is accepted by the Company and contract of sale is signed by the buyer and the Company, and the purchaser accepts the title, I agree to accept as full commission for the sale the sum of $325.00. Such commission to the amount aforesaid will be paid when, as and if adequate cash is received by the Company from the prospective purchaser on account of the agreed purchase price, and with the further understanding and agreement that in no event will the remittance to the agent be in excess of 25% of any one payment received by your Company from the purchaser. If the contract of sale is terminated by reason of default in fulfilling same, all right to further payments on account of commission shall forthwith cease."

This commission statement constituted a clear and concise agreement on the part of the plaintiff to accept $325 commission subject to the conditions therein contained, and he was bound thereby.

The commission statement specifically provided that the offer or purchase application was subject to acceptance by defendant company, and the written list of farms for sale as sent to plaintiff contained the statement, "All deals are subject to the acceptance of the Home Office of the Aetna Life, at Hartford, Conn."

The purchase application with which the commission statement was submitted to defendant at its home office contained certain pertinent provisions which were wholly in line and consistent with the provisions of the employment contract, and not unknown to plaintiff. They read as follows:

"This application does not constitute an agreement binding upon the Company until finally accepted by an officer of the Company at its Home Office in Hartford, Connecticut.

"In case this application shall not be accepted, it is understood that the payment made on account shall be refunded to me."

The evidence shows that the Drake farm consisted of 500 acres in one body. In the listing submitted to plaintiff it was set out in two separate tracts, both under No. 4425-S, Drake; one containing 340 acres at a price of $10,000; the other containing 160 acres at a price of $5,000. The purchase application covered only the 340 acres.

It is further shown that defendant refused the application for the reason that all improvements were located on the 340 acres, and to sell off the portion with all improvements would lessen defendant's chances to sell the remainder unimproved.

Defendant took the position that by reason of the terms of the special contract of employment it had a right to reject the purchase application for any reason it saw fit. The application, it is said, was merely a proposal to purchase submitted for defendant's acceptance or rejection, and the offer was rejected, all of which was agreed to by plaintiff as a special condition of his employment.

Plaintiff relied on the general rule applied in the ordinary brokerage case to the effect that where the broker furnishes a purchaser ready, willing, and able to buy upon the terms and conditions proposed by the seller, such broker has earned his commission. Koch v. E. D. Smith Co., Inc., 170 Okla. 136,39 P.2d 18; Equitable Life Assurance Soc., etc., v. Home,184 Okla. 542, 88 P.2d 887.

It may be said that the rule cited covers this case in a broad, general way. But, aside from furnishing a purchaser ready, able, and willing to buy on the terms fixed by the seller, the question here is whether all the conditions upon which depended the payment of commission had transpired. Ordinarily, the plaintiff might have been entitled to commission in this case by furnishing such a purchaser at the price fixed by defendant, but there was a special contract to the contrary that imposed an extra condition, a condition that the offer be accepted by defendant at its home office. The rule stated in 9 C. J. 623, § 102, covers this case in a general way. It reads as follows:

"As a general rule, where a broker finds a customer able and willing to enter into a transaction on the terms proposed by the principal, he cannot, unless there is a special contract to the contrary, be deprived of his right to his commissions by reason of the transaction failing on account of some fault of the principal, such as by the principal refusing to complete the transaction."

It is within the right of the seller to make the payment of commission subject to his acceptance of an offer. And when he imposes such a condition, the broker is not entitled to any commission until he has secured an offer which his principal accepts. 9 C. J. 590. There the rule is expressed as follows:

"Where by the agreement between the broker and his employer no terms of sale or exchange are fixed or the broker is required to submit any offer or proposition received by him to his employer for his acceptance or rejection, the broker is not entitled to any commissions until he has secured an offer which his employer accepts."

In the broker's contract the seller may impose any conditions, arbitrary or otherwise, upon which the payment of commission shall be dependent. The performance of those conditions may rest entirely with the seller, and lie wholly without the power of the broker to perform, and where the transaction fails, nothing short of a willful or fraudulent act on the part of the seller in violation of his agreement will permit the broker to recover.

The right of a real estate broker to recover commission for his services depends upon the contract between the seller and the broker. Williams, Ex'x, v. Seminole County Oil Gas Co.,171 Okla. 406, 43 P.2d 59. In that case the court approved and applied the rule stated in Hinds v. Henry, 36 N.J. Law, 328, to a situation where, as here, the contingency upon which depended the payment of commission never transpired. The rule there quoted reads as follows:

"In an action for the payment of money on a contingency, the pleader must aver, and it must be proved, that the contingency has happened, or that performance was prevented by the other party by some willful or fraudulent act, in violation of his own undertaking, express or implied."

Here, plaintiff neither alleged nor attempted to prove that the action of defendant in refusing the offer was a willful or fraudulent act in violation of its undertaking. The contingencies imposed by the commission contract were clear and unambiguous. Plaintiff accepted those conditions. In order to recover, the burden was his to show by allegation and proof that the defendant by some arbitrary or fraudulent act prevented the contract from being fully carried out. This he did not do. The trial court therefore erred in submitting the case to the jury over defendant's request for an instructed verdict.

The judgment is reversed and the cause remanded, with direction to enter judgment for defendant.

OSBORN, BAYLESS, WELCH, and DAVISON, JJ., concur. CORN, C.J., and RILEY, HURST, and ARNOLD, JJ., dissent.