Flower v. Davidson

• Decision Date: 11 July 1890
• Citation: 46 N.W. 308,44 Minn. 46
• Parties: FLOWER v DAVIDSON ET AL.
• Court: Minnesota Supreme Court

44 Minn. 46

46 N.W. 308

FLOWERvDAVIDSON ET AL.

Supreme Court of Minnesota.

July 11, 1890.

(Syllabus by the Court.)

1. The contract between the parties construed as providing that plaintiff should be entitled to a commission for a sale of defendants' property to purchaser of his procuring, only upon the consummation of the sale by the transfer of the property and payment of the purchase money.

2. Hence, although plaintiff procured a purchaser with whom defendants entered into a contract for the sale of the property, yet he would not be entitled to his commission if the sale was not consummated for any cause not the result of conduct on part of defendants amounting to fraud or bad faith towards him, such as an arbitrary or merely capricious refusal to carry out the contract.

3. A refusal of defendants to convey to the purchaser a part of the property because of a discovered want of or defect in their title, or on account of a reasonable and honest doubt as to their title because of an adverse claim to the property by a third person, would not be arbitrary or capricious, or amount to fraud or bad faith towards the plaintiff.

Appeal from district court, Ramsey county; OTIS, Judge.

Lusk & Bunn, for appellant.

Williams & Goodenow, for respondents.

MITCHELL, J.

This action is brought to recover an agreed commission of $5,000 for plaintiff's sale of the St. Paul Opera-House to one Crabtree. The contract on which plaintiff relies is contained in the correspondence between the parties which was carried on for the defendants by James H. Davidson. This correspondence culminated in the letter and accompanying postscript of August 31, 1888, in which the defendants, after extending the option to purchase the opera-house to September 5th with certain modification of terms, add: “If a sale is made by you to a customer within the time limited in the option of even date herewith, and on terms mentioned therein, the estate of W. F. Davidson will allow and pay to you, on the completion of the transfer of said property,a commission of $5,000 in cash; but if for any reason a sale is not consummated there shall be no commission paid, or any obligation whatever in the premises. If there should be any unexpected delay, and a sale should ultimately be consummated to a customer whom you have found, and who has come to us through your negotiations, and on terms contained in the option, you shall nevertheless be paid the $5,000 when the sale is actually consummated.” As this letter, which varied the terms and extended the duration of plaintiff's agency, was retained and acted on by him, it must be considered as having taken the place of any prior agreement between the parties, and as embodying the terms of their contract. Therefore plaintiff's rights to a commission must be measured by this letter. The first question is, when, by the terms of this contract, was plaintiff entitled to his commission? The general rule undoubtedly is that a real-estate agent is entitled to his commission when he finds a purchaser ready, willing, and able to purchase on the proposed terms; and, if the vendor makes a contract of sale with the proposed purchaser, his agent is entitled to his commission, irrespective of whether the contract is ever carried out by conveyance of the property and payment of the purchase money. The same would be true if the vendor should decline to make a contract of sale when such proposed purchaser is produced. But it is entirely competent for the parties to make a different contract, and to stipulate that the agent shall be entitled to his commission only when the contract of sale is carried out by transfer of the property and payment of the purchase money in accordance with terms proposed. Such, we think, is the clear and plain meaning of the contract between these parties. Its language will admit of no other reasonable construction. The promise of the defendants is to pay plaintiff the commission “on completion of the transfer of said property.” It is also expressly provided that, “if for any reason a sale is not consummated, there shall be no commission paid,” etc. It is undoubtedly true, as counsel suggests, that the words “sale consummated” may have one meaning under one set of circumstances, or as between certain parties, and a different meaning under other circumstances, and as between other parties; but, in view of all the provisions of this contract, it is clear to us that the expressions, “if a sale is not consummated,” “and a sale should ultimately be consummated,” and “when the sale is actually consummated,” all have reference to the preceding one, “on the completion of the transfer of the property,” which was made a condition precedent to payment of a commission; in short, that the expression “consummation of the sale” is used as...