Weinstein v. Newman

The plaintiff-appellee describes this action, in which he obtained a judgment from which the defendant-appellant took this appeal, as one "in quantum meruit on an implied contract for the reasonable value of services rendered by the plaintiff, a real estate broker who was orally requested by the defendant to procure a certain parcel of real estate for him."

The plaintiff testified that the defendant expressly promised to pay him for his services, but there was no evidence as to any agreement as to the amount of compensation.

The defendant denied that he had entered into any contract with the plaintiff. By way of explanation of his denial he testified that he bought and sold real estate; that he and the plaintiff were business and social friends, having been acquainted for about 25 years; that they were accustomed to consult about real estate matters and assist each other in their business transactions, as a matter of friendship, without receiving or expecting to receive any compensation; and that the service which the plaintiff performed in this instance was of the same kind and under similar circumstances as the gratuitous services theretofore performed. Defendant denied that he had ever promised to pay the plaintiff and that plaintiff had ever demanded any compensation until a disagreement developed between them in another transaction having no relation to this one.

The defendant's evidence tended to prove such denial.

There was a wide divergence between the evidence of the plaintiff and that of the defendant, as to the facts and circumstances surrounding the service performed by the plaintiff, the inferences to be drawn therefrom, and the intention of the parties as disclosed thereby.

In submitting the cause to the jury, the court treated it as one in which the plaintiff was suing to recover a commission for procuring a purchaser of real estate. The controversy does not fall in that category. The defendant was not an owner seeking a purchaser. He was the purchaser and the plaintiff admits that the defendant had been negotiating through another real estate broker. According to the defendant, all the plaintiff did was to go with him to the home of one of the co-owners and prevent the owners from taking advantage of his illiteracy. There was a general exception to the charge, but whether the error was one of commission and so prejudicial as to require a reversal on that ground we do not determine. However, as we are obliged to reverse the judgment on another ground, necessitating a new trial, we call attention to it so that the error will not be repeated.

The error which requires a reversal is found in the special charge which the plaintiff requested and which the court gave. This special charge is as follows:

"I charge you that if you find, by a preponderance of the evidence, that the plaintiff, Maurice L. Weinstein, was orally requested by the defendant, Jacob Newman, to procure certain real estate, and if you find that he thereafter did procure said property, then you must find for the plaintiff, Maurice L. Weinstein, in an amount that will adequately and reasonably compensate him for the services he rendered the defendant.

"In the absence of a specific agreement to the contrary, the law implies an agreement to pay what the services are reasonably worth."

In determining the validity of this special charge, it must be kept in mind that the issue raised in this case is whether an actual contract was entered into by these parties. It is not a case in which a duty to pay is imposed by law, which, because of the rigidity of forms of actions at common law, was enforceable in an action ex contractu notwithstanding no contract had been intended by the parties — even though the idea of agreement was entirely repugnant to their intent. In this case there must have been an intent to agree and an actual meeting of the minds, otherwise the defendant was under no obligation to the plaintiff.

The existence of this meeting of the minds with the intent to create an obligation is a fundamental principle in the law of contracts.

In 4 American Jurisprudence, 499, Section 9, it is stated:

"As ordinarily understood, the only difference between an express contract and a contract implied in fact is that in the former the parties arrive at their agreement by words, either oral or written, sealed or unsealed, while in the latter their agreement is arrived at by a consideration of their acts and conduct. In both of these cases there is, in fact, a contract existing between the parties, the only difference being in the character of evidence necessary to establish it. To constitute either the one or the other the parties must occupy toward each other a contract status, and there must be that connection, mutuality of will, and interaction of parties, generally expressed, though not very clearly, by the term ``privity.' Without this a contract by implication is quite impossible. It follows that assumpsit will not lie where there is a spontaneous service as an act of kindness, and no request, or where the circumstances account for the transaction on some ground more probable than that of a promise of recompense, for no promise will be implied, and the contract connection is not established."

In Price v. Cleveland Trust Co., 45 Ohio Law Abs., 606, 68 N.E.2d 133, it is stated in the opinion:

"Any true contract exists as an obligation because the parties to it have willed, in circumstances to which there is attached in law the sanction of an obligation, that they shall be bound. This is true of both express contracts and those implied in fact."

It is stated somewhat differently, but with the same meaning, in 12 American Jurisprudence, 501, 502, Section 5:

"A promise to pay for services can, however, only be implied when they are rendered in such circumstances as authorized the party performing to entertain a reasonable expectation of their payment by the party benefited. The service or other benefit must not be given as a gratuity or without expectation of payment, and the person benefited must do something from which his promise to pay may be fairly inferred."

The decision in Potter v. Carpenter, 76 N.Y. 157, as summarized in the syllabus, is:

"Where it appeared, and was found, that the parties were in the habit of rendering mutual services to each other without any agreement as to payment, and that although, during the time, they had pecuniary transactions to a considerable amount, their services were not brought, or intended to be brought, into their accounts, a promise to pay cannot be implied, and the services will be regarded as matters of mutual accommodation, for which neither party intended to make any charge against the other; and this, although it is found that they did not suppose one service was equal to, or was to be setoff against the other." See, also,Gross v. Cadwell, 4 Wash. 670, 30 P. 1052.

The case of Columbus, Hocking Valley Toledo Ry. Co. v.Gaffney, 65 Ohio St. 104, 61 N.E. 152, sheds much light upon this subject. For that reason we quote the entire syllabus:

"1. The meeting of the minds of parties upon its terms is necessary to the making of a contract; and this is so whether it be an express contract or an implied one, if, in the latter case, the contract to be proved is an actual one as distinguished from a constructive contract.

"2. Where it is shown, or admitted, that a party performing services, that should have been performed by another, had no intention at the time to claim compensation, and did not expect to receive any from the other, no recovery therefor can be had upon a quantum meruit against the party for whom the work was done.

"3. Where it is averred in a petition that the plaintiff performed services for the defendant ``at his instance and request,' the averment may be supported by evidence of the circumstances under which the services were performed tending to show a contract; evidence of an express request is not required." See, also, Carlson v. Krantz, 172 Minn. 242,214 N.W. 928, 54 A. L. R., 545.

The fact that the services were performed on request does not under all circumstances impose an obligation to pay. It is said in the third paragraph of the A. L. R. headnote to Robinette v.Hubbard Coal Mining Co., 88 W. Va. 514, 107 S.E. 285, 25 A.L.R., 212, that "the mere request for the additional service, in the absence of an express agreement in regard thereto, generally does not justify the inference of an offer to pay anything in addition to the compensation specified in the original contract, it being assumed that the extra services were requested and performed as an incident of the employment."

Even where promissory words are used by the parties, they do not under all circumstances create contractual obligations. We had such a case before us in Woods v. Fifth-Third Union TrustCo., Exr. and Trustee, 54 Ohio App. 303, 62 N.E.2d 987. The promissory words were uttered by a mother to her son. In holding that under the circumstances there was no intent to contract, we quoted from New York Trust Co. v. Island Oil Transport Corp., 34 F.2d 655, 656, the following passage, which we think pertinent here:

"``However, the form of utterance chosen is never final; it is always possible to show that the parties did not intend to perform what they said they would, as, for example, that the transaction was a joke (Keller v.Holderman, 11 Mich. 248, 83 Am. Dec., 737; McClurg v.Terry, 21 N. J. Eq., 225; Theiss v. Weiss, 166 Pa. 9, 20,31 A. 63, 45 Am. St. Rep., 638; Bruce v. Bishop, 43 Vt. 161); or that it arose in relations between the members of a family which forbade it (Earle v. Rice, 111 Mass. 17; Bundy v. Hyde,50 N.H., 116). It is quite true that contracts depend upon the meaning which the law imputes to the utterances, not upon what the parties actually intended; but, in ascertaining what meaning to impute, the circumstances in which the words are used are always relevant and usually indispensable. The standard is what a normally constituted person would have understood them to mean, when used in their actual setting.'"

In the instant case, in the first paragraph of the special charge, the jury was instructed that if the defendant requested the plaintiff to procure the real estate and the plaintiff did procure the real estate then it "must find for the plaintiff" in an amount that would reasonably compensate him for his services. This instruction required the jury to entirely disregard the facts and circumstances, surrounding the defendant's request, tending to prove that the plaintiff as a reasonable man would not have thought that the defendant intended to pay for the services requested. The charge imposed a liability regardless of the intent of the parties and, therefore, was intrinsically erroneous.

In the second paragraph of the charge, the jury was instructed that in the absence of a specific agreement to the contrary the law implies an agreement to pay what the services are reasonably worth. The vice in this instruction is that it ignores the denial of the defendant that there was any contract. Taken in conjunction with the entire special charge, it, in effect, is a statement to the jury that the only way the defendant could escape liability was by proof of a specific agreement on the subject.

There are cases, such as Hinkle et al., Exrs., v. Sage,67 Ohio St. 256, 65 N.E. 999, and Merrick v. Ditzler, 91 Ohio St. 256,110 N.E. 493, holding that where a family relationship exists between the parties and the services rendered are the kind rendered by a member of a family, no liability exists in the absence of an express contract to pay. However, this charge declares not that it takes an express contract to impose a liability, but that it takes a specific or actual agreement to the contrary to avoid or limit liability. We have been cited to no case so holding. We have found none.

Our conclusion is that the second paragraph of the charge states an incorrect rule.

The legal effect of the entire charge was to require the jury to find for the plaintiff for the reasonable value of the services upon proof that defendant requested and the plaintiff performed services unless the defendant proved a specific agreement that no compensation or a different compensation was to be paid. It relieved the plaintiff of the necessity of proving that the request was made with intent to contract to pay, cast upon the defendant the burden of proving that there was no such intent, and declared that he could only discharge that burden in one way, and that was by proving a specific agreement to the contrary.

In placing this burden upon the defendant, the court erred. On this subject the principles announced in Dykeman v.Johnson, 83 Ohio St. 126, 93 N.E. 626, rule this case. In that case, as in this case, the defendant's answer contained a general denial followed by an explanation. It was contended that this placed the burden upon the defendant of proving the explanation, that is, of proving that the services were rendered under a specific agreement that under certain circumstances which had transpired the plaintiff was not to charge for his services. The court held that the entire burden in the case rested upon the plaintiff.

In the second paragraph of the syllabus of the Dykeman case, the court said:

"The legal effect of such an answer taken as a whole, is merely to deny the cause of action asserted by plaintiff in his petition, and the burden of proof upon the issues thus joined rests with the plaintiff * * *." The court distinguishedSanns v. Neal, 52 Ohio St. 56, 38 N.E. 881, as we construe the opinion, on the ground that the answer in that case pleaded payment, the burden of proving which, of course, rested upon the defendant. The facts in the Sanns case are as dissimilar to the facts in the case at bar as they are from the facts ofDykeman v. Johnson, supra. The latter case is supported by a long line of cases, some of which are cited in the opinion in that case. They furnish the rule to guide us in this case.

For these reasons the judgment is reversed and the cause remanded for further proceedings according to law.

Judgment reversed.

HILDEBRANT and MATTHEWS, JJ., concur in the syllabus, opinion, and judgment.