Harp v. Gourley

• Decision Date: 03 March 1961
• Docket Number: No. 6530,6530
• Citation: 359 P.2d 942,1961 NMSC 26,68 N.M. 162
• Parties: C. A. HARP, Plaintiff-Appellant and Cross-Appellee, v. W. J. GOURLEY, W. S. Ranch Co., a Corporation, and Maxwell Land Grant Company, a Corporation, Defendants-Appellees and Cross-Appellants.
• Court: New Mexico Supreme Court

Page 942

359 P.2d 942

68 N.M. 162

C. A. HARP, Plaintiff-Appellant and Cross-Appellee, v. W. J. GOURLEY, W. S. Ranch Co., a Corporation, and Maxwell Land Grant Company, a Corporation Defendants-Appellees and Cross-Appellants.

No. 6530.

Supreme Court of New Mexico.

March 3, 1961.

Modrall, Seymour, Sperling, Roehl & Harris, Allen C. Dewey, Waldo Spiess, Albuquerque, for appellant.

Seth, Montgomery, Federici & Andrews, Santa Fe, for appellee.

On Motion For Rehearing

PER CURIAM.

Upon consideration of Motion for Rehearing, the original opinion heretofore filed is withdrawn and the following is substituted therefor.

MOISE, Justice.

This is a suit to collect a commission on the sale of a ranch. The right to the commission is based upon a letter from defendant Gourley to the plaintiff, dated August 6, 1945, the material portions of which read as follows:

'Finally, I think we have closed the deal for the 90,000 acres on the leasepurchase basis, however as far as the purchase end is concerned, don't know when that will take effect owing to Holland has instigated a law keeping directors from having a meeting and disposing of any of their property, but the best of all is that we got the lease for ten years.

'Maxwell Land Grant Company would like to have you sign the enclosed letter, which I have already signed, and return same to them in the enclosed envelope.

'As per our understand----, I am to take care of the commission, as, if, and when we are able to get title on this acreage.

* * *

* * *

'It is the writer's opinion that we will eventually get the entire grant. I think it is also the opinion of Mr. Van Houten and Mr. Van Lint.'

The 'enclosed letter' referred to in the letter above was addressed to The Maxwell Land Grant Company, was signed by plaintiff and defendant Gourley, and reads as follows:

'The transaction embodied in my written lease agreement with you dated July 5, 1945, which agreement contains certain provisions respecting the possible sale and conveyance to me of the land therein described, was negotiated largely by Mr. C. A. Harp. I have arranged with Mr. Harp to take care of his commission on this transaction, and this will confirm my understanding with you that you are not to pay any part of the commission.' (Note that lease was actually dated August 2, 1945, though reference is July 5).

The letters resulted in the following manner. Defendant Gourley, in the year 1945, was a ranch operator and the plaintiff was his foreman or manager. The Maxwell Land Grant Company was a corporation whose directors lived in Holland and one Victor L. Van Lint was its local manager. The company was the owner of large tracts of ranch land. In May, 1945, Mr. Van Lint gave the plaintiff a list of the various holdings of the company in New Mexico, and he was told to get all the prospective buyers or lessors he could, and the directors in Holland would establish a price. Plaintiff stated that he expected a 'fair commission' but he also stated that he had nothing concerning a commission in writing and that all that was said about his commission was to the effect that Mr. Van Lint stated that if he 'could find some buyers' they would probably give him a commission; that it would be up to the directors, and plaintiff stated he was 'just trusting the Maxwell Land Grant Company would shoot square.'

Immediately thereafter plaintiff, who knew defendant Gourley was interested in increasing his ranch holdings, told Mr. Gourley about the possible availability of the property in question, took him and showed him the property, and introduced him to Mr. Van Lint. Thereupon, a written agreement dated August 2, 1945, was negotiated between Mr. Van Lint on behalf of the Maxwell Land Grant Company and the defendant Gourley which was denominated a lease but contained two parts. Part I was a lease on the property for a term expiring December 31, 1955. Part II of the lease was in the nature of an agreement by Gourley to pay $4 per acre in cash for the land upon delivery of warranty deed thereto. The instrument stated that this promise on the part of Gourley was made notwithstanding the inability of the attorneys in fact for the owners to bind them, but:

'said agents and attorneys in fact shall endeavor to obtain from the Lessor a warranty deed to be made, executed and delivered by the Lessor acting through its proper officers and conveying to the Lessee in fee simple the land and real estate above described, all upon the following terms * * *'

Then follow the price and other terms and conditions and the following:

'If it should be impossible or impracticable for the Lessor to make such conveyance prior to the termination of this lease, or if the Lessor should be unwilling to make such conveyance upon the terms above specified, upon the termination of this lease, then all the provisions hereof concerning the possible sale and purchase of said lands shall be automatically abrogated.

'This instrument shall not be construed as obligating the Lessor to make conveyance or to sell or convey said land and real estate, or as imposing any personal liability or obligation upon said agents or attorneys in fact, or either of them.'

The letters quoted above were written at the time of the execution of the lease, the letter to Maxwell Land Grant Company being written at the request of the attorney for the company. In addition, defendant Gourley stated that his agreement to pay the commission contemplated $1,000, which amount he told plaintiff he would pay; however, plaintiff denies that this figure or any amount was ever mentioned or agreed upon.

Gourley went into possession of the property leased, and retained possession for the entire lease term. There followed certain efforts to negotiate the purchase under Part II of the lease; however, without success, and accordingly some time in 1945 further efforts were abandoned. On October 26, 1955, when the lease had less than three months to run (although a one-year license to graze the premises had been entered into for 1956) a contract of purchase was negotiated by Gourley in the name of W. S. Ranch Co., a corporation, at a price of $13 per acre, or a total price of $1,080,000. Thereafter, in April, 1956, title was transferred to the W. S. Ranch Co. This corporation had been incorporated in 1946 by Gourley, and another corporation owned by him was the owner of all its stock. No issue is made of the fact that title was taken in the name of the corporation instead of in the name of Gourley.

Plaintiff had continued to work for defendant Gourley for approximately 18 months after the lease was negotiated, then moved to Colorado for about two years and then returned to New Mexico. However, he had nothing further to do with the negotiations after August, 1945, to and including the purchase in October, 1955. Upon learning of the purchase of the ranch, plaintiff made demand for payment of a commission, and upon the same being refused instituted this suit seeking 5% commission on the purchase price from Gourley, W. S. Ranch Company and Maxwell Land Grant Co. This latter defendant was dismissed out by the court and no appeal from this action was taken. The case proceeded against the other two defendants. They answered setting up five defenses, i. e., (1) failure to state a cause of action; (2) bar of the statute of limitations; (3) plaintiff was not a licensed broker; (4) agreement was not in writing, and (5) denying certain material allegations of the complaint. A motion to strike defenses (1) to (4) was sustained, whereupon both plaintiff and defendants filed motion for summary judgment. The motion of defendants was sustained and judgment in their favor entered. From this action by the court this appeal is prosecuted, and the defendants in turn have perfected and prosecute a cross-appeal because of the court's action in striking the four affirmative defenses as set forth above.

Plaintiff argues (1) that the pleadings, exhibits and depositions establish as a matter of law that defendants were liable to pay a commission, and (2) that the granting of summary judgment in favor of defendants was error because of the presence of disputed issues of fact. Since Gourley and W. S. Ranch Company are identical for all practical purposes, we will discuss the situation as if Gourley were the only defendant.

It is plaintiff's position under his first point that he was entitled to a commission with the question of the amount about which admittedly there is a difference between the parties to be determined subsequently. Stated differently, it is plaintiff's position that the first letter quoted above established a contract between the parties entitling plaintiff to his commission upon condition the defendant got title to the property, and this condition having come to pass the commission was earned. This position arises out of Gourley's statement in his letter that '* * * I am to take care of the commission, as, if, and when we are able to get title on this acreage.' As a part of the argument plaintiff asserts that there is no room for any parol evidence which would have the effect of altering the agreement as expressed.

Plaintiff, in support of his position that there was a binding contract between the parties, argues that there was a good and sufficient consideration to establish a binding contract between the parties in the nature of a novation by virtue of plaintiff's agreement to release any claim for a commission from Maxwell Land Grant Company, in consideration of Gourley's promise to pay the same and that this is true whether plaintiff was legally entitled to a commission, or only was of the honest and reasonable belief that he was entitled to it. In this position we believe him to be correct. That plaintiff agreed to release any claim against Maxwell Land Grant Company is amply clear by the language of the letter approved by plaintiff and defendant, wherein it is stated, '* * * this will confirm...