DocketNumber： No. 19085
Citation Numbers： 39 Ohio Law. Abs. 281, 52 N.E.2d 758, 1943 Ohio App. LEXIS 894
Judges： Lieghley, Morgan, Skeel
Filed Date： 5/17/1943
Status： Precedential
Modified Date： 10/18/2024
The plaintiff herein, a real estate brokerage company, brought this action seeking to recover a commission from the defendant, claiming to have been employed as its agent to procure for it, as purchased, a certain piece of property. The property concerned was adjacent to that of the defendant’s manufacturing plant on Carnegie Avenue in Cleveland, Ohio. The property which the plaintiff desired the defendant to buy was under 99 year lease to the Cleveland Builders Supply Company.
The plaintiff first talked to the owner of the fee and was referred to the Cleveland Builders Supply Company. Plaintiff’s purpose at that time was to secure the right to act as the agent of the owner of the fee and lessee for the purpose of selling the property. The asking price was given to Mr. Spitz by Mr. Barkwell of the Cleveland Builders Supply Company as $225,000.00. Mr. Spitz suggested that the price was too high and that he felt that $150,000.00 would be a reasonable figure. To this suggestion Mr. Barkwell told Mr. Spitz, the president pf the plaintiff company, that they would not sell it for that “but if I have an offer with.a check for more than $150,000.00 I should bring it in and they would have a meeting and decide whether to accept it or reject it.” Mr. Spitz testified at this point that it was his belief that the property could' be bought for about $175,000.00.
After these negotiations with the owner and lessee of the property, Mr. Spitz contacted the defendant company, by having his office girl call the president of the company and after she disclosed the nature of the business which Mr. Spitz desired to take up with the defendant company, she was told by Mr. Stilwell’s secretary to see Mr. McDonald, one of the defendant’s vice-presidents.
The foundation of plaintiffs claim against the defendant begins with what was said on this occasion which was late in November, 1939. Mr. Spitz told Mr. McDonald that he would like to interest defendant company in the Cleveland Builders Supply Company property but McDonald expressed some doubt as to whether his company would be interested in expanding in that neighborhood, Mr. Spitz told McDonald that he thought the property could be bought for between $165,000.00 and $175,000.00 but that the asking price was $225,000.00: He further stated that if the Cleveland Builders Supply Company knew that The Warner & Swasey Company was interested in the property they would “stick up their price” and so he suggested what he termed a “three-cornered deal” by which he thought he could deliver the property to the defendant for about $175,000.00 but in that event “they (referring to the defendant) would have to pay me a commission as the deal would have to be a net deal.” To which suggestion the plaintiff claims McDonald replied.
Mr. Spitz further testified that McDonald asked to keep the tracing of the property so he could have blue-prints made. This was done, and the next day the tracing was returned to the plaintiff with two extra blue-prints. At that time McDonald told Mr. Spitz that lie did not think his company would do anything about the property until after the first of the year.
Mr. Spitz further testified that on January 2, 1940, McDonald phoned him asking that plaintiff get a thirty day option on the property. Mr. Spitz replied to that request by saying that no one •else would want the property and to get an option would disclose the identity of the Warner & Swasey Company as a prospective purchaser. McDonald, it is also claimed, asked for the tracing again .so he could make more blueprints for the use of his engineers by way of making up a lay-out of the property. At this point McDonald said it would be at least thirty days before the lay-out could be finished and that the plaintiff should call him about the last of January. Mr. Spitz did call at that time and was informed that an .additional thirty days would be necessary.
In March when Mr. Spitz called McDonald he was told to see Mr. Warren Morris, a real estate broker, and upon contacting him, Spitz was asked what made him think he could get the property for $175,000.00; to which he replied that he had a way to get it. Morris then told him to go ahead and if he could get it for $175,000.00 to do so and Warner & Swasey would “pay full commissions” but when Morris told Spitz that The Cleveland Builders Supply Company had been approached on behalf of Warner & Swasey Company, he said “in that case it would be futile for me to negotiate for any such figure. * * *”
The record discloses that the property was bought by Warner & Swasey Company through Mr. Morris who had been hired by Mr. Stilwell, the president of the defendant company, for that purpose, for the sum of $180,000.00. What commission was paid and by* whom is not disclosed in the record.
The plaintiff, as a part of its case, introduced the Cleveland Real Estate Board rules on commissions and referred specifically to Section 3 of Article A which the court rejected for the reason that said Article referred to cases where the seller employed the services ■of a real estate broker and not, as is claimed in this case, the buyer employs the real estate broker’s services. There can be no doubt, referring to plaintiff’s Exhibits A and B. that Article A, Section 3, when read in connection with the rest of the exhibit, does refer to cases where the seller employs the broker’s services.. The plaintiff seeks to overcome this deficiency by attempting to establish a custom in this community among real estate dealers to use the Real Estate Board formula for determining the commission to be paid bv the seller as a means of determining the amount that a buyer should
The court refused to receive the Rule Book (plaintiff’s exhibit B) into evidence on the ground that it was no relevant. There was no other evidence of damages offered or received into evidence.
The court offered to permit the plaintiff to amend its petition to found its action on quantum meruit but the plaintiff refused to do so, desiring to stand upon the terms of the contract as pleaded.
At the conclusion of the plaintiff’s case the court granted defendant’s motion for judgment.
The plaintiff presents two claims of error:
1. That by the evidence taken in its most favorable light a contract is made out between the plaintiff and the defendant whereby the plaintiff was employed to procure'for the defendant the property leased by the Cleveland Builders Supply Company.
2. That the rules of the Real Estate Board providing for the amount of commission to be paid by a 'Seller, together with the general understanding of real estate brokers that said rules are applicable to cases where the purchaser employed the services of the broker to purchase property for him, were properly admissible under the plaintiff’s theory of the case.
In considering the first of these two questions, that is, whether or not a contract is made out between the parties by giving the evidence the most favorable interpretation toward the plaintiff’s contention, we are met at the very beginning with the authority of McDonald to bind the defendant with regard to the subject matter under consideration. In the first place, the plaintiff was referred to McDonald by an employee in the president’s office and secondly, there is not a word of evidence in the record as to the nature and scopé of McDonald’s duties. If the matter in hand was one which, could be said to be daily routine and in the usual course of the defendant’s business, the fact of continued negotiations might be said to be some evidence of his authority. But the transaction before us presented a very unusual transaction and the contract contended for is said to have been made at the very first meeting between the plaintiff, (who in fact came-to see the defendant as the agent of the Cleveland Builders Supply Company) and McDonald. Upon the face of the record, therefore, it is clear that there is no evidence toy which the authority to contract with an agent to buy real property for the. defendant was conferred upon McDonald nor was there a course of dealing which would estop the defendant to deny his authority so to act.
In Ohio Jurisprudence, Vol. 10, ¶556, page 754, the rule as to the authority of a vice-president is stated as follows:
“The powers inherent in the office of vice-president of a corporation are necessarily very limited; broad powers may of course*285 be conferred by express or implied authorization, or the corporation may be held estopped to deny the existence of such powers. Thus, it has been held that the vice-president as an agent of the corporation has no inherent power or authority to bind the corporation by a contract for the purchase of land; such a contract, to be binding upon the corporation, must be in pursuance of authority expressly granted or authority that will be deemed to have been delegated by a course of conduct or dealing with the world clearly implying such delegation.”
Boss v Alms & Doepke Co., 17 Oh Ap 314, was a case where the vice-president who had, because of failing health of the president, begun to take up the duties of that office and that the board acquiesced in matters done by him in the same way as they had done with the president. As vice-president he signed a contract to purchase certain real property and gave a company check of $1000.00 as down payment. When the matter came to the attention of the Board they refused to be bound thereby and this action followed.
The court held, in paragraph 2 of the syllabus:
“The power of an Ohio corporation to acquire real estate being vested by statute in the board of directors, the vice-president of a corporation, as its agent, has no authority to bind the company with a contract to purchase realty, being a transaction of considerable magnitude and not in the usual or ordinary course of a mercantile business, unless such authority is delegated either expressly by action of the board of directors or by such a course of conduct or dealing with the world as would clearly imply authority in the agent.”
See also, Bradford Realty Co. v Gibson, 68 Oh St 442.
It is true that the corporate code of Ohio was revised and that §8660 which was the basis of the court’s opinion in the above cases was repealed but §§8623-55 and 8623-62 GC, which are a part of the present Corporation Code dealing with the authority of the directors and officers, does not change the rule as therein stated. If the defendant would not have been bound by a contract to purchase land because of the lack of authority of its vice-president, Mr. McDonald, it must follow that a like result would obtain in any attempt on his part to contract for the services of a broker to accomplish such purpose without a showing that he acted upon proper authority, express or implied.
We come now to the question of whether or not the acts of McDonald (conceding for the purposes of the argument that he was authorized to do so) did in fact create a contract between the plaintiff and the defendant whereby the plaintiff was employed as de
The conversation upon which the plaintiff relies as set forth in the statement of facts, in this opinion, was:
“Well, if we agree to buy this property we certainly will buy it through you and gladly pay you your real estate board commission."'
This is alleged to have been said by Mr. McDonald at the time-Mr. Spitz first met him. Mr. Spitz had called on McDonald after having been employed by the Cleveland Builders Supply Company to find a purchaser for the property. Mr. Spitz as the representative of plaintiff had concluded that if the Cleveland Builders Supply Company knew who the prospective purchaser was they would attempt, to hold up the price. At least this was the reason which he gave for suggesting a three-cornered deal which, if worked out, he said would require the purchase of the property at a net price from The-Cleveland Builders Supply Company and therefore he would expect, the purchaser to pay his regular real estate board commission on. the deal.
It must be remembered that this was the first time Spitz had ever met McDonald and suggested this property to the defendant. McDonald’s reaction was that he did not know whether his company would be interested in the property or not. Some conversation was had about the difficulty of his company operating their business in a five-story building. It was on the occasion of this preliminary talk about the property that it is claimed that Mr. McDonald said, after Mr. Spitz suggested that- if a three-cornered deal was-worked out, that the defendant would have to pay the real estate-board commission, “Well, if we agree to buy this property we certainly will buy it through you and gladly pay you your real estate-board commission.”
Giving this language the most favorable interpretation in the-interests of the plaintiff’s claim, when considered in the light of all the surrounding circumstances, the majority of this-court conclude that a contract to employ the services-of the plaintiff was not thereby created but that what was intended was an expression of intention or willingness to enter into a contract at some time in the future.
In Volume 1, paragraph 25 of Williston on Contracts (revised edition) the rule as to whether or not an expression of intention to-do something upon the happening of a particular event amounts to-a contract, is stated as follows:
“Since an offer must be a promise, a mere expression of intention or general willingness to do something on the happening of a particular event, or in return for something to be received does not amount to an offer.”
“Frequently negotiations for a contract are begun between parties by general expressions of willingness to enter into a bargain upon stated terms and yet the natural construction of the words and conduct of the parties is rather that they are inviting offers * * * . Even when the parties are dealing exclusively with one another, by private letters or telegrams, or by oral conversations, the same question may arise; and language that at first sight may seem an offer may be found merely preliminary in its character.”
This is certainly true in the instant case. If a contract was created, as claimed by the plaintiff, what were the terms? Must the defendant pay a commission if the price exceeds $175,000.00? If so, to what price level would this be true? If the plaintiff is unable to get the property for the price suggested, but another is able to do so, could the defendant safely buy without becoming liable to the plaintiff? These and many other questions of doubt about the terms of the alleged contract come to mind which the court would be powerless to clear up, when giving the full text of the testimony consideration. The result points to but one conclusion — that the negotiations were yet in a preliminary stage when another was employed to carry out the deal.
Again referring to Volume 1, Williston on Contracts, (revised edition) paragraph 72, page 207:
“An acceptance must be positive and unambiguous. * * * But even though no change in the offer is suggested in the reply of the referee, it nevertheless may not so clearly indicate assent to the offer as to create a contract. Thus a reply to an offer to lease premises in the following terms was held not to make a binding contract: T have decided on taking No. 22 Belgrade Road and have spoken to my agent, Mr. C. who will arrange matters with you.’ The same is true of a telegram to a bidder for public work: ‘You are low bidder. Come on morning train.’ Also of the following reply to an offer to sell coal, ‘telegram received. You can consider the coal sold. Will be in Cleveland and arrange particulars next week.’”
Section 25, Restatement of Law of Contracts, is as follows:
“If, from a promise or manifestation of intention, or from the circumstances existing at the time, the person to whom the promise or manifestation is addressed knows of or has reason to know that the person making it does not intend it as an expression of his fixed purpose, until he has given a further expression of assent, he has not made an offer.”
*288 “If lack of a fixed purpose to make an offer will prevent the manifestation of intention, to make an offer, from binding the of.ferer when the offeree knows or has reason to know that fact, certainly the same lack of a fixed purpose known to the offerer would prevent a manifestation of intent to accept from binding the ■offeree.”
As indicated, therefore, the majority of this court find that the .statements of Mr. McDonald amounted to nothing more than statements of a promissory intention to give further consideration to plaintiff’s offer of services at a future date.
We come now to the final question presented, which is as to ■whether or not the court was' in error in refusing to receive into •evidence the rules of the Real Estate Board (plaintiff’s exhibit B) in .support of its attempt to prove its damages on the claimed breach ■of contract.
There is no ambiguity about the meaning of the testimony of Mr. Spitz on page 9 of the record when he testified:
“* * * but that I could work out a three-cornered deal- and ■deliver them the property for certainly no more than $175,000.00 but .in that event they would have to pay a net deal.”
This evidence is certainly susceptible of the interpretation that because the working out of a three-cornered transaction requires a net deal with the seller, that the buyer should pay the commission that the .broker would otherwise be entitled to recover from the .-seller.
This then would produce a jury question as to the terms of the agreement on the question of compensation and the evidence offered was admissible under the plaintiff’s theory of the case.
We conclude that the court was in error in excluding this testimony and in holding that the only right of recovery must be upon quantum meruit as a matter of law.
The-judgment of the court being correct, for the reasons herein •stated the same is affirmed.