Weatherhead v. Cooney

FLYNN, District Judge.

This is an action brought to recover the reasonable value of services actually rendered by appellant in finding a purchaser for and making a sale of certain mining claims and for expenses incurred in connection therewith, which services were rendered at the request and with the knowledge and consent of respondent, who accepted and retained the services and fruits thereof.

The complaint admits that there was no written contract between the parties, and a demurrer thereto, based on Sess. Laws 1915, chap. 131, p. 287, C. L., sec. 6012, and on other grounds, not necessary to be discussed in view of the conclusion we have reached, was sustained.

The statute relied on is as follows: “No-contract for the payment of any sum of money or thing of value, as and for a commission or reward for the finding or procuring by one person of - a purchaser of real estate of another, including mining or mineral claims, shall be valid unless the same shall be in writing, signed by the owner of such real estate or mining or mineral claim, or his legal, appointed and duly qualified representative.”

The vital question is whether recovery can be had on a quantum meruit in the face of this statute, there being admittedly no written contract.

The appellant contends that the statute of frauds cannot be set up against an executed contract, and that the statute above quoted is a virtual extension or enlargement of the statute of frauds (Selvage v. Talbott, 175 Ind. 648, Ann. Cas. 1913C, 724, 95 N. E. 114, 33 L. R. A., N. S., 973), and should be construed as in pari materia (Doney v. Laughlin, 50 Ind. App. 38, 94 N. E. 1027); that there can be no difference in principle between this ease and cases where the conveyance of real property is made without a written agreement but there has been performance of the verbal contract by one party, or cases where a person has been employed under a verbal contract to render services requiring more than one year for the performance thereof, or any other cases falling within the statute of frauds where an oral contract has been fully executed.

We think the construction contended for by appellant would absolutely nullify the statute. From its very nature a claim for commission cannot be made until earned. The sale is made, or the agent procures the purchaser ready and able to buy, and not until then does the right to the commission accrue. It accrues by virtue of a contract express or implied. But the statute says that no such contract shall be valid unless in writing. To hold that performance takes a claim of this character out of the operation of the statute would, in our opinion, leave nothing for the statute to operate on. Such construction would render the statute useless and meaningless and would be tantamount to saying that any contract for a commission or reward for the finding or procuring of a purchaser of the real estate of another is valid, though not in writing and not signed by the owner of such real estate, which is directly opposite to the expressed will of the legislature. The causes, theory and necessity of such legislation are discussed in some of the following cases, which support the conclusion we have reached: McCarthy v. Loupe, 62 Cal. 299; McGeary v. Satchwell, 129 Cal. 389, 62 Pac. 58; Rodenbrock v. Gress, 74 Neb. 409, 104 N. W. 758; Barney v. Lasbury, 76 Neb. 701, 107 N. W. 989; Selvage v. Talbott, supra; Keith v. Smith, 46 Wash. 131, 89 Pac. 473; 13 Ann. Cas. 975, and cases cited in the note thereto.

Some of the statutes construed in the eases cited by appellant provide that no such contract shall be valid unless in writing; other statutes make such contract void unless in writing; others provide that no action shall be' brought on such contract unless it is in writing. Though we recognize the distinction between void and voidable contracts, we are, nevertheless, unable to see why recognition of the right to recover under the oral contract alleged herein, or under a quantum memit for the reasonable value of services rendered by the appellant herein, would not completely abrogate the statute.

The second cause of action alleges that appellant, in effecting the sale of respondent’s ipining claims, incurred and expended necessary expenses amounting to $150, which is alleged to be a reasonable amount, and that defendant undertook and agreed to pay said amount but has refused to pay. The claim for expenses is evidently based on an implied contract dép ending on and intimately connected with the claim for commissions. The expenses were incurred by appellant on his own account and in conducting his business as a broker. This being true, he is in no position to recover a judgment for such expenses in the absence of a direct request or express authorization to incur them.

As alleged, the claim for expenses is directly dependent on the validity of the claim stated in the first cause of action. In effect, we have held that the consummation of the sale is not a ratification of the agent’s acts so as to entitle him to a commission contrary to the statute, and it seems to us that it would necessarily follow that there is no ratification of his expenditures, and that to allow recovery therefor, in the absence of a contract or proifiise to pay, would evade the statute.

There may be cases where an agent would be entitled to recover expenses incurred in effecting the sale of real estate, even thongb there was no written contract between the owner and the agent, and it may be that expenses are not included within “a commission or reward” as used in the statute above discussed, but in such cases there must be a separate or sever-able contract for such expenses. (Barney v. Lasbury, supra; Stout v. Humphrey, 69 N. J. L. 436, 55 Atl. 281.)

The judgment is affirmed, with costs to respondent.

Morgan, C. J., and Rice, J., concur.

Petition for rehearing denied.