Harman v. Moss , 121 Va. 399 ( 1917 )

Sims, J.,

after making the foregoing statement, delivered the opinion of the court.

The assignments of error and cross-error before us raise the questions for our decision which will be disposed of in their order as stated below.

1. What was a reasonable compensation to appellant for his services in making the sale of timber in controversy in this causej

We think the finding of the commissioner iu favor of appellant on this question, above stated — of 10 per cent, of the share of appéllees in the purchase money for said timber — allows the former a reasonable compensation for his services aforesaid, for the reason stated by the commissioner quoted above. The facts and circumstances supporting this finding sufficiently appear from the record on the former appeal, the findings of the commissioner quoted above, the further reference to facts made below, and they need not be here set forth in detail. It is deemed sufficient here to say that this is not a case within the class of a sale by a real estate agent or broker, where the usual commissions of such an agent or broker would be the correct measure of the compensation. Appellant did not undertake the sale as an ordinary real estate agent or broker. That was not his undertaking with or relation to the other parties. Further, the sale was of a special character. Appellant’s situation and qualifications for maldng the sale were exceptional and the benefits flowing to appellees as the result of a very advantageous sale were peculiar. We think the compensation of appellant in question should have been fixed, as it was fixed by the commissioner, by the measure of quantum meruit. On the other hand we do not think that, fixed by this measure, the compensation should have been more, as appellant contends it should be.

2. What was a reasonable compensation to appellant for the value of the right of way over the forty-six-acre tract which is alleged to have entered into the price obtained for the timber aforesaid?

We think the finding of the commissioner on this question, above quoted, of $1,000.00, is reasonable, fair and just to all parties, for the reasons given by the commissioner, also quoted above, further developed below. We think the proper measure of compensation for the right of way was the price therefor at which appellant, under the circumstances, could reasonably have expected to sell it, in connection with the sale of his interest and the other interests which he was authorized to sell in the Sayers estate timber and in connection also with the sale of the timber on his forty-six-acre tract of land. Measured in that way we think the commissioner arrived at a correct valuation of such right of way as entering into and making up a part of said purchase money. We do not think that a valuation of such right of way on the basis of its salable or condemnation value, independent of its acquisition by the vendee in connection with the purchase of timber aforesaid, as contended for by appellees, would be a correct measure of such value. Nor do we think that a valuation of it on the basis of the price at which the timber in which appellees were interested would have sold in a sale made of the latter, differently from that in fact made of it, that is to say in a sale of such timber independently and separately made from the sale of the timber on the forty-six-acre tract and the right of way across the latter, etc., as contended for by appellant, would be a correct measure of such value. Both contentions ignore the fact that in the sale under consideration all of the things sold were sold together, their respective values were, therefore, naturally fixed upon by vendors and vendee relatively to each other and were inseparably affected by the advantage to the vendors of selling and the advantage to the vendee of buying all the subjects entering into the sale and purchase. It would therefore bring about a distorted and unfair result to take apart any subject entering into the sale in fact made; regard the sale as made or proposed to be made without this one subject; and then inquire what this separate subject would have been worth as a factor to defeat or to consummate the sale. This would be to ignore the real inquiry we have to make with respect to the transaction as it in fact occurred and substitute an inquiry in regard to a situation which did not in fact exist.

3. At what value did the claim of appellant that he owned a one-seventh undivided interest in certain land acquired by him under the will of his grandfather, Kiah Harman, deceased, enter into the sale of timber in question ?

That this mere claim of title did enter into such sale at some valuation is clearly proved. Judge Strother, counsel for the vendee of said timber, testified positively that the vendee would not have purchased the timber without the inclusion of such claim of title in the sale of it. This being true, it was immaterial that the title claimed was not proved in this suit to be a valid claim. It constituted a cloud upon the title and its extinguishment was of some value to the vendee of the timber.

It is true the burden was upon the appellant to show by a.preponderance of evidence that said cloud upon the title to the timber had some definite value, so as to enable the commissioner and court to determine upon the value of it. The proof furnished by appellant on this subject consisted of the testimony of Judge Strother, counsel for the Ritter Lumber Company, as aforesaid, taken by said commissioner. He testified positively that in the early part of 1909 his said company had an option from appellant to purchase the said claim of title, constituting said cloud upon said title, at the price of $1,000.00 and that such company was then willing to pay that sum for it, in order to extinguish it, had it then been able to make the purchase of timber aforesaid which it afterwards made; but that when the option agreement of November 10, 1909, was made, which covered the aforesaid sale of timber afterwards consummated, the $1,000.00 option above referred to had expired and appellant then asked $2,000.00 to extinguish such cloud upon the title. Judge Strother testified that his company was not willing to pay $2,000.00 to extinguish such cloud on the title. He adds, in answer to another question, “I don’t recall at this time whether at that time,” (November 1909) “we made him an offer of $1,000.00 or not, but I am under the impression we were willing to carry out the original agreement with reference to that interest, and when Mr. Harman raised the price to $2,000.00, we declined to purchase.” We consider that the whole of this testimony satisfactorily establishes the fact that the said vendee of the timber sold as aforesaid, would have paid $1,000.00 for said cloud upon the title to such timber in order to extinguish it, had the latter been sold to it separately at the time the timber was sold to it. This proves in a most satisfactory way a definite selling value of such cloud upon the title at the very time in question and sustains the burden of proof which rested upon the appellant on this subject.

4. Should appellant have been denied all compensation for his services in making sale of said timber?

Appellees on cross-assignment of error make this claim, under the well settled rule that a broker or agent guilty of bad faith to his principal forfeits all commissions or compensation for his services.

As we have above seen, this case does not fall within the class of cases relied on by appellant. Under appellant’s bona fide construction of the contract with appellees, under which he made the sale of timber in question, he believed that he occupied the relation of an optionee purchaser and had the right to resell the timber and retain all of the purchase money over and above $10.00 per acre for the timber. In view of this situation and of the further fact that the vendee had an interest not to have the records disclose the true consideration for the purchase of the timber-and other subjects of said sale, the conclusion that appellant was guilty of fraud and deception towards appellees does not follow from the fact that the papers recorded in connection therewith did not disclose the true consideration for such sales. Even with respect to the fact that appellant induced appellees to unite in the deed to said vendee by t]ie representations that appellant sold the timber for $10.00 per acre and that that was the best price he could get for it and was the amount'that he and his wife were to receive, while not a frank statement and not to be commended, was one which appellant could have made consistently with his position, which seems to have been bona fide on his part. This position of appellant, as appears from the record on this and the former appeal, was that his personal services; money expended; the true value of the timber, his own forty-six-acre tract of land; the said right of way over the latter; the said claim of title derived from his grandfather; his personal undertaking to guarantee to the vendeed the passing to it of the interest of one of the parties to the contract, first above mentioned, who was an infant; his personal agreement to save the vendee harmless from any claim of damages by the infant on attaining lawful age and the giving up by appellant of his right to purchase at $10.00 per acre the timber sold, which was fifteen inches and over in diameter included in said sale, but to which he was entitled under a lease of the coal with certain timber rights, of date April 18, 1908, from appellees and others, were worth all the purchase money over and above $10.00 per acre which the said vendee was to pay in the transaction of the sale to it of the timber, etc., in controversy in this suit. That is to say, appellant’s bona fide claim all along seems to have been that said timber itself sold for only $10.00 per acre.

Moreover, the bill in this cause did not make any issue that appellant was not entitled to any commissions or compensation for his services aforesaid. On the contrary the bill expressly stated that appellant was entitled to “reasonable commissions.” The issue that appellant should be denied all compensation for his services not having been made in the pleadings or in the court below, it cannot be made by assignment of error in this court.

5. Should the costs of the reference to the commissioner in the court below have been decreed against the appellant?

In view of the respective contentions of the parties before the commissioner, we are of the opinion that the appellees substantially prevailed in the result of that inquiry and wé think there was no error in the adjudication of the court below of the costs under consideration against the appellant.

For the foregoing reasons we are of opinion to amend and correct the decree complained of on the subject of the disallowance to appellant of the $1,000.00 for his claim of title aforesaid derived from his grandfather and the consequential allowance of $100.00 to appellant on commissions more than was allowed by the report of said commissioner; and with these corrections and amendments such decree will be affirmed, with costs against the appellees.

Amended and affirmed.