Brown v. Maris

• Decision Date: 21 February 1958
• Docket Number: No. 18934,18934
• Parties: Edwin L. BROWN, Appellant, v. Frank MARIS, Appellee. *
• Court: Indiana Appellate Court

Page 915

147 N.E.2d 915

Edwin L. BROWN, Appellant, v. Frank MARIS, Appellee. ^*

No. 18934.

Appellate Court of Indiana, In Banc.

Feb. 21, 1958.

Ward S. Williams, Covington, Karl Overbeck, Veedersburg, for appellant.

Wallace, Wallace & Mason, Covington, for appellee.

CRUMPACKER, Judge.

In this action appellant chose to stand on a contract which the appellee had breached and sued to recover the commission stipulated therein. The contract involved is what is known as a real estate broker's listing contract and reads as follows:

'Listing Contract

8-21-52

'In Edwin L. Brown Real Estate

'In consideration of your listing for sale and your services in undertaking to find a purchaser for the following described real estate in Liberty Township of Park County, State of Indiana, to-wit: 142 A, I hereby grant and give you the exclusive right to sell the same for a period of 7 mo. from date of this contract at and for the price of ..... Dollars. (25,000). Said consideration to be paid in the following manner: $5000 20 years to pay 4 1/2%. In the event you find a purchaser for, or that said real estate is sold by or through you, or otherwise, during said time for the price and upon the terms above state, or for any other price or terms or any other consideration acceptable to me, or if sold within ninety (90) days after the expiration of this contract to anyone who has been shown said property by you; then, in consideration of your services tendered I hereby agree to pay you five per cent (5%) on the selling price. I also agree to furnish a complete abstract, showing a merchantable title to said real estate and warranty deed for same.

'/S/ Frank Maris.'

The appellant's complaint pleads the above contract and alleges that immediately after its execution the appellant advertised the land involved for sale, contracted and interviewed prospective purchasers one of whom he took into the country to view the property. That on November 18, 1952, while said contract was in full force and effect, the appellee sold said property to one Merrill L. Bannon and Ruth L. Bannon, husband and wife, for $25,000. That thereupon the appellant demanded of the appellee the sum of $1,250 'for his commission on the selling price of said real estate' but the appellee then and at all times since has refused to pay said commission or any part thereof wherefore the appellant prays judgment in the sum of $1,250 and interest at the rate of six percent per annum from November 18, 1952. A demurrer for want of facts to this complaint was sustained and the property of such action is the sole question presented by this appeal.

Although there is authority to the contrary in other states we think the better rule is as stated in an annotation in 64 A.L.R. 410 which we quote as follows: 'A broker who has been given an exclusive right for a definite time to negotiate a sale of property, and who has not succeeded in producing a purchaser ready, able, and willing to comply with the terms of the contract, at a time when the owner succeeds in making a sale himself, cannot recover on the contract for the stipulated commissions. The reason for the rule is that the broker has not complied with the terms of the contract on which he seeks to recover.' Waterman v. Boltinghouse, 1890, 82 Cal. 659, 23 P. 195; Wiggins v. Wilson, 1908, 55 Fla. 346, 45 So. 1011; South Florida Farms Co. v. Stevenson, 1922, 84 Fla. 235, 93 So. 247; Garfunkel v. Byck, 1922, 28 Ga.App. 651, 113 S.E. 95; Crawford v. Cicotte, 1916, 186 Mich. 269, 152 N.W. 1065; Compare Jones v. Hollander, 1925, 3 N.J.Misc. 973, 130 A. 451; Beck v. Howard, 1920, 43 S.D. 179, 178 N.W. 579; Sunnyside Land & Investment Co. v. Bernier, 1922, 119 Wash. 386, 205 P. 1041, 20 A.L.R. 1261; Elsom v. Sanders, 1922, 121 Wash. 391, 209 P. 842; Cadwell v. Stephenson, 1912, 5 Sask.L.R. 308, 3 D.L.R. 759; 8 Am.Jur., Brokers, § 193.

Though acknowledging authority to the contrary the general rule is stated thus in 8 Am.Jur., Brokers, § 193: 'Where an exclusive agency or right of sale is conferred upon a broker to extend over a specified period of time, the owner may make a sale within that time without rendering himself liable to the broker for commissions provided the broker has not at the time of such sale procured a person who is ready, able, and willing to complete the contract. If, however, the broker has procured a person ready, able, and willing to complete the contract, the owner may render himself liable for commissions or breach of contract by selling to a person of his own procuring, provided that sufficient consideration was furnished on the part of the broker.' (Our emphasis.)

The principle underlying the above rule was announced in this state as early as 2 Blackf. 149 in the case of Justice v. Board of Justices of Vermillion County, 1828, wherein the court said: 'Where the undertaking is founded on a contract in which something is to be done by the plaintiff, on condition of which the defendant undertakes to pay, it is necessary for the plaintiff in his declaration to aver a performance or a readiness to perform on his part.' See also Pickens v. Bozell, 1858, 11 Ind. 275; Louisville, New Albany and Chicago Railway Company v. Widman, 1894, 10 Ind.App. 92, 37 N.E. 554; Huxtable v. Shumate, 1923, 79 Ind.App. 293, 134 N.E. 896.

There can be no doubt that the appellee breached the contract when he sold the property involved before the appellant's exclusive right to sell it had expired. This vested two remedies in the appellant. First, he could treat the contract as still in force and if he had already found a purchaser able and willing to buy the property at the contract price or if able to find such a buyer before his exclusive right expired he could sue for the commission provided by the contract as under such circumstances he has performed all of the covenants on his part to be performed. Second, he could treat the breach as putting an end to the contract and sue at once to recover the damages occasioned thereby. Armstrong v. Illinois Bankers Life Ass'n, 1940, 217 Ind. 601, 29 N.E.2d 415, 953, 131 A.L.R. 769. In this case the appellant chose to regard the contract as alive and sued for the specific commission provided thereby. In doing so he brought himself squarely within the rule laid down in the Justice case as the contract on which he sued contemplated that he should find a purchaser able and willing to buy upon the stipulated terms as a condition upon which the commission he sues for was to be paid. As his complaint contained no allegations of performance by him it was fatally defective on demurrer.

The appellant contends, however, that the provision in the contract to the effect that he is to be paid a commission in the event the property is sold otherwise than by or through his efforts, excuses him of performance as a condition precedent to a recovery of such commission. It seems clear to us that primarily the appellant was employed to find a purchaser for the appellee's property and a promise on the part of the owner to pay his agent a commission for a sale with which he had nothing to do and which he did nothing to earn seems unusual. On the other hand it seems perfectly reasonable that the owner should agree to pay his agent a commission based on the sale price if the owner sells otherwise than to an able and willing buyer who had been procured by the agent. In Thomas v. Hennes, 1922, 78 Ind.App. 275, 135 N.E. 392, we held that where one construction of a contract would make it unusual and extraordinary and another construction equally consistent with the language employed, would make it reasonable, just and fair, the latter must prevail. With that principle for the construction of written instruments as a guide we are constrained to hold that the word 'otherwise' as used in the present contract did not excuse the appellant of the necessity of performance if he chose to stand on the contract and sue for the commission stipulated therein. Appellant contends that under the terms of the contract sued on he was to be paid a commission upon the happening of any one of three events: (1) If he sold the property; (2) if the property was sold through him; and (3) if the property was sold by someone else, including the owner, independent of any assistance on his part. A promise to pay upon the happening of the first two contingencies is supported by ample consideration but a promise to pay based on the third contingency is wholly without consideration as being of no legal benefit to the promisor or legal detriment to the promisee.

That the appellant's complaint does not contain facts sufficient to constitute a cause of action is conclusively determined by the following comment in Thomas v. Hennes, supra [78 Ind.App. 275, 135 N.E. 395]: 'It will be observed that this contract did not give appellant the exclusive right to sell the land for such period; but, even if it did, that fact alone would not entitle him to recover the commission he was to receive in the event he made a sale. Under such circumstances, his right of action, if one existed, would be for damages, resulting from a breach of the contract, and not for an amount earned in the performance of services thereunder.' Although this statement might be considered obiter it is none the less convincing and there being no Indiana authority to the contrary we choose to be guided by it.

As we have heretofore stated there can be no doubt that the appellee breached the contract in suit when he sold his land before the appellant's exclusive right to sell it had expired. That compels us to examine the appellant's complaint with the view of determining whether it states a cause of action for damages resulting from such breach. The case of Wellinger v. Crawford, 1911, 48 Ind.App. 173, 89 N.E. 892, 93 N.E. 1051, answers the question for us and we quote therefrom as follows: 'Appellee urges that his complaint shows that he had a contract which gave him the...