Anderson v. Craig

On motion for rehearing further consideration of this case impels me to the conclusion that the district court was correct and that the judgment should be affirmed. The court found that if Wegner should not pay the $2,800 on or before the first day of March, 1939, "he would forfeit the amount paid for failure to carry out the terms of said offer, but that he would not be obligated to complete the purchase of said property or to further complete the said contract."

If this finding was justified, then the contract gave Wegner the option to either pay the $2,800 on March 1, 1939, and carry out the contract, or to elect not to pay it and to forfeit the down payment and terminate the contract. There is evidence in the record supporting the court's finding above quoted. Wegner testified that Anderson told him at the time the contract was made that "if you can't make it [referring to the payment of $2,800] the first of March you just lose this two hundred dollars."

Wegner and Craig both considered the contract as an option giving Wegner the right to elect whether he would complete the contract of purchase or forfeit the payment of $200 and treat the contract as at an end. It is contended that such evidence is inadmissible as varying the terms of a written contract. The rule of excluding parol evidence offered to vary the terms of a written contract applies only to controversies between parties to the contract or their successors in interest. "It has no application in controversies between a party to the instrument on the one hand and a stranger to it on the other." (22 C.J. 1291 et seq.) And, hence, in a suit for broker's commission the seller may show that the contract even though in form a sale, was merely an option. (Brown v. Wisner, 51 Wash. 509, 99 P. 581.)

It follows that plaintiff did not procure a purchaser ready, able and willing to buy, but only a purchaser who reserved the right not to be a purchaser if he saw fit to so elect. (Simpson v. Eardley, (Tex.Civ.App.) 137 S.W. 378; Moss Raley v.Wren, 102 Tex. 567, 113 S.W. 739, 120 S.W. 847, and see cases cited in note in 43 L.R.A. (n.s.) 91.) The fact that defendant approved the contract is of no consequence if the contract was such as the court found it to be. This question was before the court in Warnekros v. Bowman, 14 Ariz. 348, 128 P. 49, 51, 43 L.R.A. (n.s.) 91, where the court said: "It is argued by appellee that Warnekros waived the requirement that an actual sale be made by Bowman before earning his commission when he accepted and entered into the optional agreement, procured by appellee, with C.H. Young. We are unable, however, to see wherein the mere act of entering into and accepting the optional contract of purchase by Warnekros of itself can be construed as a waiver by him of the requirement that Bowman make the sale, or secure a binding contract of sale, before earning his commission. It is a matter of common knowledge that sales of mining stock and mining property are frequently effected through options. If a real estate owner employs a broker to negotiate a sale of and find a purchaser for his property for which he agrees to give the broker a reasonable commission, and afterwards gives an option for the sale of his property to a person produced by the broker, he does not thereby waive the requirement that a sale must be effected before he is entitled to his commission. By granting the option the owner is merely helping to bring about the sale which he employed the broker to make. It is a step in that direction. It is not the end, but rather the means to an end. And such action on the part of the owner does not imply that he has made a new contract with the broker by which he agrees to pay for something different from the services he originally contracted for, but merely indicates a channel through which he is willing to go in order that the object aimed at from the beginning by both him and the broker might be accomplished. To hold that the mere acceptance of the option is a waiver of the requirement that an actual sale be made before the commission is earned would be against the decided weight of authority."

There being competent evidence supporting the court's judgment, I think it should be affirmed.