Brown & Brammer v. WM. Pearson Co., Ltd.
| Decision Date | 13 February 1915 |
| Docket Number | 29730 |
| Citation | 150 N.W. 1057,169 Iowa 50 |
| Parties | BROWN AND BRAMMER, Plaintiffs, Appellants, v. WM. PEARSON COMPANY, LTD., et al., Defendants, Appellees |
| Court | Iowa Supreme Court |
Appeal from Taylor District Court.--HON. THOS. L. MAXWELL, Judge.
ACTION by a real estate agent to recover a commission under and by virtue of an oral contract. The answer was a general denial and an affirmative plea that the alleged oral contract was entered into in the state of Nebraska and was invalid under the statute of that state. At the close of the evidence there was a directed verdict for the defendants and the plaintiffs appeal.
Affirmed.
Jennings & Mattox, W. M. Jackson, for appellants.
Tobin & Jensen, G. B. Haddock, for appellees.
The plaintiffs were partners engaged in the real estate business in Shenandoah. There are two defendants, Wm Pearson Company and R. S. Dewar. The Pearson Company is a corporation organized under the laws of Canada and its principal office is and was located at Winnipeg. The business of the company was to deal in Canada lands and doubtless to unload them upon credulous Americans. R. S. Dewar was its superintendent of agencies and he had an office at Omaha, Nebraska. The contract sued upon is alleged to have been entered into by means of a conversation between the plaintiff Brown and the said Dewar. It occurred at the office in Omaha. Brown was contemplating the acquiring of an agency to procure purchasers for the Pearson Company. He desired that such agency should include several counties in southwestern Iowa. The desired territory had already been given to other agents, but the possibility was open to the plaintiffs to become sub-agents in some of such territory. One of the agents who had already secured the principal part of the territory desired by the plaintiffs was McKinney. Prior to this conversation at Omaha, there had been some correspondence between Brown and McKinney. A contract of sub-agency under McKinney was discussed. No contract was entered into, neither were the negotiations terminated. Some investigation of the Canada lands was desired by the plaintiffs. On the other hand, McKinney would be the other party in interest in a contract of sub-agency. The claim of the plaintiffs at this point is that notwithstanding that no general contract had been entered into by the plaintiffs for any particular territory, a special contract was then and there entered into for one customer out of McKinney's territory; that Brown said to Dewar that he had a customer who might buy Canada land; that he would bring such customer to Dewar in time for the next excursion; that Dewar agreed to pay him one and one-half dollars an acre as commission for any of their lands which such customer should buy; that on June 7th following Brown brought his customer, Nugent, to the office of Dewar at Omaha and introduced him as a prospective buyer; that Nugent joined Dewar's excursion and joined McKinney at Minneapolis and afterwards bought 640 acres of land, whereby the plaintiffs claim a commission of $ 960. As against this, it is made to appear for the defendants that Nugent was himself a land agent, or that he desired to be one; that he desired territory as such agent and later procured some; that it was made to appear to McKinney by Brown and by Nugent that Nugent was or would be associated with the plaintiffs and that any arrangement made with Nugent would be satisfactory to the plaintiffs; that Nugent purchased a section of land, but as a condition of such purchase, he insisted upon the allowance of one and one-half dollars an acre out of the purchase price as the equivalent of a commission; that such allowance was made to him. This contention is supported by the testimony of Nugent upon the trial. It has some support also in Brown's letter of introduction of Nugent to McKinney. The foregoing is a sufficient statement of the salient facts pro and con to indicate that the case presented an issue of fact for the jury unless the oral contract sued on was invalid under the Nebraska statute, which was pleaded by the defendants. To this statute, therefore, we direct our attention.
I. The statute relied on is Sec. 10856, Cobbey's Annotated Statutes of Nebraska, and is as follows: "Every contract for the sale of lands, between the owner thereof and any broker or agent employed to sell the same, shall be void, unless the contract is in writing and subscribed by the owner of the land and the broker or agent, and such contract shall describe the land to be sold, and set forth the compensation to be allowed by the owner in case of sale by the broker or agent."
This statute has been repeatedly sustained by the Supreme Court of that state. The reasons underlying such statute have been stated by such court as follows:
Covey v. Henry, 71 Neb. 118, 98 N.W. 434.
Danielson v. Goebel, 71 Neb. 300, 98 N.W. 819.
"The foregoing section has been before this court several times and the uniform holding has been that there can be no recovery by a real estate agent or broker on a verbal contract for the sale of real estate." Barney v. Lasbury, 76 Neb. 701, 107 N.W. 989.
Similar holdings also have been made by such court in the following cases: Allen v. Hall, 64 Neb. 256, 89 N.W. 803; Spence v. Apley, 4 Neb. Unoff. 358, 94 N.W. 109; Baker v. Gillan, 68 Neb. 368, 94 N.W. 615; Blair v. Austin, 71 Neb. 401, 98 N.W. 1040.
Giving effect to this statute according to its terms, there was no completed and valid contract between Brown and Dewar.
The appellant presents in argument several reasons why such statute should not be deemed as controlling or as applicable to the case and we turn to the consideration of this contention.
II. The first general proposition urged is that this statute, being analogous to if not a part of the Nebraska statute of frauds, is a remedial statute and is not binding upon the courts of this state. The contract sued on was concededly made at Omaha, Nebraska, and at no other place. It was therefore necessarily a Nebraska contract. If the contract was valid in Nebraska, it must be held valid here. If it was not valid in Nebraska, then there was no contract in Nebraska. If the contract was invalid when and where made, when and where did it become valid? Was the contract rendered valid simply by bringing an action upon it in Iowa? Subject to some exceptions, the general rule is that the validity of a contract in its inception is to be determined by the law of the place of its making. This rule is sustained by the great weight of authority and we are unequivocally committed to it. Nichols & Shepard Co. v. Marshall, 108 Iowa 518, 79 N.W. 282; Hazel v. Chicago, M. & St. P. R. Co., 82 Iowa 477, 48 N.W. 926.
One of the exceptions to this rule is that where the contract involves an interest in real estate, its validity must be determined according to the law of the state where such real estate is situated. This requirement is an incident of the sovereignty of the state and of its necessary jurisdiction over its own domain. Whether the same exception would obtain where the contract involves an interest in specific personal property, we need not inquire. This action is transitory and in personam only.
Another exception is that under some circumstances a contract may be entered into in one state to be performed in another state. In such case, if the parties so intended, the validity of the contract will be determined under the law of the state where it is to be performed. An illustration of this exception will be found in Arnold v. Potter, 22 Iowa 194. In that case, a promissory note was executed and delivered in Massachusetts by a resident of Iowa as payor to a resident of Massachusetts as payee, whereby the payor agreed to pay 10% interest. This rate was legal in Iowa and...
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