Havens v. Irvine

157 P.2d 570, 61 Wyo. 309, 1945 Wyo. LEXIS 15

• Court: Wyoming Supreme Court
• Decided: April 10, 1945
• Docket: 2258
• Status: Published

Opinions

. OPINION

Tidball, District Judge.

This is an appeal from a judgment of the District Court of Platte County. The action was for a commission of §1,100 and interest alleged to be due plaintiff on account of a sale of defendant’s ranch by plaintiff, a licensed real estate broker. The case was tried without a jury, resulting in a judgment for plaintiff as prayed. The only error assigned was that the evidence was in sufficient to support the judgment. Such being appellant’s claim, under the rule laid down in several cases by this court, we must view the case from the standpoint of plaintiff’s evidence, assuming that plaintiff’s evidence is true, leaving out of consideration entirely the evidence of defendant in conflict with plaintiff’s evidence, and give to plaintiff’s evidence every favorable inference which may reasonably and fairly be drawn from it. Willis v. Willis, 48 Wyo. 403, 49 Pac. (2d) 670.

Plaintiff’s evidence shows that late in March, 1941, defendant, William Irvine, owner of a ranch in Platte County, listed his ranch with plaintiff, H. C. Havens, a licensed real estate broker, for sale at 322,000 cash. The listing was not exclusive, that is, defendant had the right to sell it himself or let others do so, and no time limit was set on the contract. The listing of the property was made through S. W. McGinley, a salesman employed by plaintiff. The commission to be paid plaintiff if he sold the ranch was five percent, or $1,100. McGinley undertook the sale ,and through Ward Hil-dreth, a Torrington real estate broker ,a Mr. Von Forell was contacted and the property offered to him for §22,-000 cash. Von Forell visited the defendant’s ranch on May 19th, 1941, in company of McGinley and Hildreth, and again about a week later. On the first visit Mc-Ginley told Von Forell the price was $22,000 cash. Von Forell looked over the place a time or two when Mc-Ginley was not with him as late as July. In June Von Forell asked McGinley to try to get better terms. He was willing to buy the ranch if terms could be secured that he was able to meet. Thereupon, McGinley contacted defendant and procured terms on one-half cash and the balance at six percent. Just how the balance was to be handled is not clear from the evidence. Hil-dreth testified that the terms were all cash or one-half cash and a short time to get a loan to take up the bal- anee, which was “equivalent and tantamount to all cash,” and he told McGinley the terms were prohibitive. McGinley conveyed this information to Von Forell by letter in June, which letter was received by Von Forell the last of June. No terms other than all cash were ever discussed when Von Forell, McGinley and defendant were together. As stated above, the prospective purchaser, Von Forell, was produced by Ward Hildreth, to whom plaintiff had sent details of the listing of defendant’s ranch for the purpose of interesting Hildreth, a real estate broker, in the sale. Hildreth was plaintiff’s agent in the matter. McGinley had three plats made of the ranch, sending one to Hildreth, one to George Vogler, and kept one himself. He showed the ranch to at least one other prospect besides Von Forell.

About May 19th or shortly thereafter, Von Forell told Hildreth he could not raise more than $5,000 or $6,000 cash, and could make further payments in the spring (presumably the spring of 1942). This offer of Von Forell to pay $5,000 or $6,000 in cash and the balance on time was never, so far. as plaintiff’s evidence shows, communicated to defendant. In fact, Hildreth never communicated the terms offered by Von Forell to either McGinley or to the defendant. Von Forell never had any further contact concerning the place with McGinley after June. Von Forell at no time was able to raise $22,000 cash or one-half cash, and this fact was communicated to both McGinley and Hildreth. No attempt was made to interest defendant in accepting $5,000 or $6,000 cash. McGinley always told Von Forell he could not get better terms than one-half cash. Hildreth, however, contacted Von Forell off and on during the summer to keep up his interest in the place. Von Forell never had any contact with McGinley about the ranch after June 1st, when he found he could not 'meet the terms. Von Forell testified, as a witness for plaintiff, that there was never a possibility of his meeting any terms offered by plaintiff or his agents, and the terms he could meet were never communicated to defendant by plaintiff or his agents.

Thus matters stood until August 27th, 1941, when defendant orally told plaintiff and his agent McGinley he was withdrawing the ranch from sale for the time being ,at least, and he also wrote a letter to that effect which was received by plaintiff on August 28th.

On August 28th defendant, through the intervention of A. S. Neeley, a rancher of Platte County and a friend of defendant, sold his ranch to Von Forell for |22,000, the terms being .$2,000 cash, $3,000 February 1, 1942, $2,000 May 1, 1942, and $1,000 a year beginning February 1, 1943. Von Forell did not know until the day he bought the ranch what terms defendant would make.

Under the above circumstances, was the evidence sufficient to support a finding and judgment for plaintiff? This is a difficult question to answer. In the case of Owens v. Mt. Sts. T. & T. Co., 50 Wyo. 331, 63 Pac. (2d) 1006, this court, in an elaborate opinion by Justice Blume, said, at page 342:

“Whether or not a commission is due to a broker depends, largely upon the contract entered into between him and the owner. If he has not complied with his contract; if he has not accomplished or done what he has undertaken to do, while his authority exists, he is not, in the absence of some fault of the owner, entitled to a commission. He must fulfill, if not prevented by the owner ,the duty undertaken by him, and within the time given him, or he is not entitled to any compensation.”

Further, on page 343 of the same case, it is said:

“There can be no doubt that if the parties make a special contract, one, for example, to the effect that no commission will be due unless the property in question shall be sold for a definite price, and on definite terms, or that a definite result shall be reached, no commission will be due if those terms are not complied with, unless they are waived by the owner.”

And further, in the same case, on pages 344 and 345, it is said:

“And the majority of the courts hold that where a broker is employed to sell property at a definite price and within a definite time, and the broker fails to perform his contract, and fails to complete the sale within the time given him, the owner, unless he waives the requirements as to time, may treat the contract at an end and may, after the expiration of the time limited, at least when he acts in good faith, himself sell the property to some one else, or to the customer produced by the broker, on different, or according to some of the authorities, even on the same terms as those offered through the broker.”

And again, on the same page, it is said:

“The same rule has been held to apply, when the agency is for no definite time and when, before the broker has accomplished what he undertook to do, the agency is terminated in good faith, at least after the agent has been given a reasonable time to perform his services.”

And again, on page 343 of this same case, it is said:

“But it must be observed that a material distinction must be drawn — applicable throughout — between cases in which no sale is made, and those in which one is actually made by the owner to the customer produced by the broker. And a waiver of the condition as to terms is readily and generally implied, where the owner proceeds to negotiate with the customer furnished' by the broker and concludes a sale satisfactory to him.”

The cases on this latter point are collected in notes in 43 ALR, 1104, and 44 ALR 350 (g). An examination of these cases will, we believe, disclose that no court has held that a broker is entitled to his commission where the sale is made after his agency is termin ated either by the express terms of the contract or by the act of the principal after the lapse of a reasonable time, where no time is specified in the contract, unless it was further found that the principal did not act in good faith or acted fraudulently, as is sometimes stated, in terminating the contract or in postponing the sale until the agency was terminated by the lapse of time specified in the contract. “Bad faith” in respect to the right of a broker to his commission has been said to arise where the owner revokes the broker’s authority, or makes the sale through other means, when the broker has performed all he has undertaken or is plainly or evidently approaching success in his undertaking, or where a sale is made behind the broker’s back. In another case it is said that “bad faith” means a purpose to obtain profits from the broker’s exertions without payment, and exists where the employer revokes the broker’s authority and makes the sale through other means when the broker has performed all he has undertaken or is plainly or evidently approaching success. Sherman vs. Briggs Realty Co., 310 Mass. 408, 38 N. E. (2d) 637, 640, and Kacavas vs. Diamond, 303 Mass. 88, 20 N. E. (2d) 936, 938. In Kellogg vs. Rhodes, 231 Ia. 1340, 4 N. W. (2d) 412, 415, it is said:

“If the principal acts in bad faith in a fraudulent attempt to avoid paying a commission to the broker who is the moving cause of the sale, the principal is held liable. It cannot be said as a matter of law, however, that appellee so acted.”

For other cases holding that where the broker is to receive his commission only when he sells on certain terms fixed by the principal, he cannot recover his commission even though the principal sells to someone introduced by the broker on different terms, unless the owner acts in bad faith, see cases cited on page 1112 of 43 ALR, and on page 857 of 44 ALR, and especially the cases of Patton, Temple & Williamson vs. Garnett, 147 Va. 1009, 133 S. E. 495; Walsh vs. Grant, 256 Mass. 555, 152 N. E. 884; Kellogg vs. Rhodes (supra); and Hodgin and Sharman vs. Palmer, 72 Colo. 331, 211 Pac. 373.

We do not think the evidence in this case was sufficient to support a finding that defendant acted in bad faith in the sale of his ranch to Von Forell. There was no evidence on the part of the plaintiff on that point except the fact that defendant withdrew the listing of his property from the plaintiff on August 27th and sold his property to Von Forell the next day at the same price at which it had been listed but on much more unfavorable terms that those on which it had been placed with the broker for sale. The contract with the broker was for no definite term and hence was for a reasonable time. We think it could not be successfully claimed that the plaintiff did not have a reasonable time to make the sale. He had five months to do that and failed to do so. The only prospect he produced was Von Forell, to whom the best terms submitted were for one-half cash and the balance at six percent for a short term. Von Forell’s counter-terms of $5,000 to $6,000 cash and the balance on time were never submitted to defendant by plaintiff or his agents. At the time the contract was withdrawn on August 27th, the negotiations between the defendant and Von Forell were at a practical standstill and had been since June. It was not a case that came within the definition of bad faith contained in the Massachusetts cases above cited, where the broker had performed all he had undertaken or was plainly or evidently approaching success. No claim was made by the broker nor by anyone representing him that defendant did anything to prevent him from earning a commission on the terms upon which the property had been'listed up to August 27th; and the broker’s agents never, either before or after the revocation of the listing, produced a buyer able to perform under the contract. Von Forell, plaintiff’s witness, testified that on receipt of the June letter telling him he could buy for one-half cash and the balance on time, that was the end of the negotiations with Mr. McGinley regarding the place; and, further, that from the time Mr. Hildreth first brought his attention to the place in May up to August 27th, there was no time that he was able to buy it on the terms quoted; and the terms on which he notified plaintiff’s agent he was able to buy were never communicated to the defendant.

The outstanding fact is that here we have always non-success on the broker’s part to comply with the listing contract which had been agreed upon. The owner had waited five months for the broker to fulfill that contract. Yet at the time the termination of the authority took place, the entire business of selling the ranch was at a complete standstill. There is, we think, not a scintilla of evidence or any circumstances whatsoever in the case that disclose that the broker would have earned a commission if Irvine, the defendant, had refrained from doing what he did in terminating the former’s authority.

The rule in such a situation has been concisely stated'by Mr. Justice Campbell in Hodgin and Sharman vs. Palmer, 72 Colo. 331, 211 Pac. 373, 376, thus:

“The plaintiffs never succeeded in bringing the minds of the buyer and seller to an agreement of sale at the price and terms upon which sale was authorized by the owner, and there is no proof that they probably could or would have succeeded, within a reasonable time, in doing so. In the absence of such proof, the right to a commission does not accrue. That has been often decided by this court.”

This court has said that fraud will not be imputed to any party when the facts and circumstances out of which it is supposed to arise are consistent with hon esty and purity of intention. Goldberg vs. Miller, 54 Wyo. 485, 96 Pac. (2d) 570. Also, that fraud must be established by clear and convincing evidence. Brown vs. Wintermute, 59 Wyo. 254, 139 Pac. (2d) 435. These are all well-known rules.

Again ,plaintiff’s witness Von Forell, the ultimate purchaser, testified, “I did not know when I came over whether I could buy or not.” He was referring to August 28th, when the sale was made to him., The formal notice of revocation of the broker’s authority, which was a part of plaintiff’s evidence, merely says that the authority is withdrawn “for the present time.” If Irvine, the defendant, was sure he could “make a sale, why say “for the present?” Evidently, all Irvine wanted was to see, after five months of fruitless waiting, what he himself could do with Neeley’s help toward accomplishing a sale. If he failed, he could at any time thereafter relist the property. This conduct does not bear the badge of bad faith.

In the Owens case, to which reference has been made, on page 345 of 50 Wyo. 63 Pac. (2d) pp. 1009, 1010, are listed certain cases which, the opinion says, fall within, the rule that where a broker has failed to perform according to the terms of the contract the principal may himself sell without incurring liability for a commission. In the first one, Price vs. Cocke, 23 Ga. App. 578, 99 S. E. 47, the court, writing the syllabus, says:

“Where a suit for a commission on a sale of land is based upon a contract authorizing the plaintiff to sell the land for the defendant for a fixed price per acre within a specified time, and it does not appear from the petition that the plaintiff procured a purchaser ready, able, and willing to buy at the price stipulated, or that during the life of the contract there was such interference on the part of the defendant as to prevent a sale of the property, or any secret agreement, collusion, or mutual understanding between the defendant and the prospective buyer, while negotiations were pending, to delay the consummation of the trade until after the expiration of the contract the petition is subject to general demurrer, even though it be alleged that im-medaitely after the expiration of the contract, time being of the essence, the defendant sold the property to one who had been negotiating with the plaintiff.”

It was held that the trial court was correct in dismissing the petition as failing to state a cause of action. Another case there cited is Westerman vs. Peer Inv. Co., 197 Mo. App. 278, 195 S. W. 78. There the court said:

“That the defendant or the bank ultimately saw fit to sell the property for $50,000, thereby suffering a loss, after giving the plaintiff full opportunity to procure a purchaser at the price named in the contract, does not entitle plaintiff to a commission.

There is no evidence whatsoever that defendant in any wise interferred while plaintiff’s contract was in force, preventing a sale in accordance with the stipulated terms, or acted otherwise than in the utmost good faith toward plaintiff. Indeed, it is clear that plaintiff, without molestation or hindrance, was allowed the full contract time in which to procure a purchaser at the agreed price, and that he wholly failed in his undertaking.”

We may also add that the good faith of Irvine in revoking the contract was never in issue under the pleadings. Plaintiff claimed in his petition that he performed the contract, not that he was prevented from performing by any act of the defendant. We presume the plaintiff’s theory in formulating his petition was that, the contract not being limited by its terms to any set time, and the defendant having attempted in bad faith to revoke it on August 27th, the attempt was a nullity and the contract was still in effect at the date of sale. If that was his theory, then, assuming that his claim might be pleaded in the manner he did, a point we need not decide, we think it clear the burden was on him to prove fraud, and we-think he failed to do so.

The judgment is reversed with instructions to dismiss plaintiff’s action and enter a judgment for the defendant.

Reversed.

Riner, J., concurs.