Harris v. Van Vranken

• Decision Date: 30 November 1915
• Citation: 155 N.W. 65,32 N.D. 238
• Parties: HARRIS et al. v. VAN VRANKEN.
• Court: North Dakota Supreme Court

32 N.D. 238

155 N.W. 65

HARRIS et al.

v.VAN VRANKEN.

Supreme Court of North Dakota.

June 19, 1915.

On Rehearing, Nov. 30, 1915.

Syllabus by the Court.

Action by real estate brokers against the seller for refusing to convey land to a purchaser to whom plaintiffs had negotiated a sale after defendant had listed the land with them for sale. Held, an action for damages will lie under such circumstances.

That the measure of damage is the amount plaintiffs would have received as commissions from the intending purchaser had defendant complied with his contract and conveyed to such purchaser, who was ready, able, and willing to pay both purchase price and commissions.

Defendant had agreed with the purchaser to furnish an abstract of title showing perfect record title. The record disclosed that a deed in defendant's chain of title was taken to one “Krups,” grantee, and that the next grant was executed by one “Krepps.” The purchaser took exception to this title of record. Defendant failed and neglected to produce on demand original deeds or to cure the defects, except a statement by affidavit that the grantee and the grantor so named were the same person. Defendant refused to convey unless the purchaser would accept such record title. Held, that the title was not marketable, and that defendant, and not the intending purchaser, breached the contract.

That the contract negotiated amounted to a double one under which defendant agreed to convey to plaintiffs purchaser with the purchaser agreeing to purchase of defendant and to defendant's knowledge to pay commissions to plaintiffs. Defendant's purchase price was fixed with a commission payable from the purchaser to plaintiffs. Louva v. Worden, 30 N. D. 401, 152 N. W. 689, a recent decision of this court to recover commissions from the seller for a purchase negotiated, distinguished.

Demurrers to the complaint and to the evidence offered were properly overruled.

Appeal from District Court, Burleigh County; Nuessle, Judge.

Action by Eliza W. Harris and another, partners as Harvey, Harris & Co., against Peter J. Van Vranken. From judgment for plaintiffs, defendant appeals. Affirmed.Hanley & Sullivan, of Mandan, and Miller & Zuger, of Bismarck, for appellant. Newton, Dullam & Young, of Bismarck, for respondents.

GOSS, J.

This action is by real estate brokers to recover damages for defendant's breach of contract in refusing to convey to a third person a section of land belonging to defendant, and for which plaintiffs had, at his solicitation, secured said third person as a purchaser, and who had agreed with defendant to buy. The plaintiffs' damages arise from defendant preventing their securing commissions from the purchaser by breaching the contract. A general demurrer was interposed to the complaint, and the order overruling it is the first error assigned. The material parts of the complaint will be set forth at length.

It is alleged:

That plaintiffs are real estate brokers engaged in buying and selling real property on commission for others “to the knowledge of the defendant.” That defendant was the owner of said section of land. “That on and prior to the said 21st day of September, 1906, the defendant had employed the plaintiffs to sell such real property, and had directed and authorized them to offer for sale and to sell the same for and at the price of $15 per acre net to him, and that on or about said date they offered the same to one Julius C. Kunze, then of the town of Lewis, and state of Iowa, at and for the price of $17 per acre, and that the said Julius C. Kunze then and there offered to buy the same at said price, upon the terms and conditions of a payment of $1,780 down, of which $1,280 was the plaintiffs' profit and commissions, and as to the net price to the defendant and terms of payment thereof, as follows, viz.: $500 cash on delivery by the defendant of a contract for a warranty deed conveying the land free from all incumbrances whatsoever when the terms of the contract are complied with by such purchaser-such purchaser to pay an additional $1,300 on or before the 1st day of March, 1907, and the balance of the purchase price to be paid in six equal annual payments, with interest at the rate of 6 per cent. per annum, payable annually-the defendant to furnish an abstract showing perfect title continued to date; when purchaser has paid one-fourth of the purchase price, defendant to give him a warranty deed and take back a mortgage for the unpaid balance due on the purchase price; the purchaser to have the privilege of paying at or before maturity. That said Julius Kunze was then and there able, ready, and willing, and ever since said time has been able, willing, and ready, to carry out and perform said offer, and that thereupon on the said day the plaintiffs submitted said offer to the defendant in writing, and that thereupon, to wit, the 24th day of September, 1906, the defendant accepted such offer in writing, and thereby entered in a contract for the sale of such property for and at the price of $15 per acre net to him.” That defendant refused to “carry out said agreement for the sale and conveyance of such real property,” and still refuses to do so, of which he has notified plaintiffs, who demanded that he comply with his contract.

Then follows the allegation of damage:

“That by reason of the premises and the defendant's refusal to carry out his said agreement hereinbefore shown, the plaintiffs have lost the commission and profit that otherwise they would have received upon the sale and conveyance of said real property, to wit, the sum of $2 per acre upon said 640 acres contained in said section 21, being the aggregate amount of $1,280.”

Prayer is for damages in the sum of $1,280, and interest. The complaint may properly be subdivided and epitomized as follows: (1) Defendant listed the land with plaintiffs for sale at $15 per acre net to him; (2) they offered to sell it to Kunze for $17 per acre cash; (3) instead of accepting that offer, Kunze made a counter proposition to plaintiffs that he would buy it at $17 per acre, with a cash payment down of $1,780, “of which $1,280 was the plaintiffs' profit and commissions,” and coupled with it the following offer “as to the net price [$15 per acre] to the defendant,” with “terms of payment thereof to defendant of said purchase price,” viz., “$500 cash on delivery by defendant of a contract for warranty deed conveying the land free of all incumbrances whatsoever,” with time on terms stated as to the balance of the $15 per acre coming to defendant over the $500 cash; that plaintiffs immediately submitted in writing said offer (of Kunze) to defendant; and (4) that on September 24, 1906, the defendant accepted in writing such offer of Kunze's so communicated to defendant through plaintiffs; and (5) defendant executed said contract, and thereby entered into a contract for the sale of such property “for and at the price of $15 per acre net to him” (defendant); (6) that he subsequently refused to convey, and plaintiffs lost a profit of $2 per acre, or $1,280, which they would have received from Kunze, and which sum they demand as damages resulting to them from defendant breaching said contract.

[1][2][3][4][5] These brokers were not the agents, strictly speaking, of defendant to sell, but only to procure a purchaser. Hayes v. McAra, 166 Mich. 198, 131 N. W. 535, 35 L. R. A. (N. S.) 116, and note; Fulton v. Cretian, 17 N. D. 335, 117 N. W. 344, distinguishing this action in principle from those similar to Ballou v. Bergsvendsen, 9 N. D. 285, 83 N. W. 10. See, also, Brandrup v. Britten, 11 N. D. 376, 92 N. W. 453 and Larson v. O'Hara, 98 Minn. 71, 107 N. W. 821, 116 Am. St. Rep. 342, 8 Ann. Cas. 849, and note. But, if considered defendant's brokers, they may have an interest antagonistic to him arising out of the transaction negotiated when he had, as here, shared full knowledge that they were acting for both, and no fraud is involved. 4 R. C. L. 262 to 277, and authority there cited. The complaint pleads that defendant knew plaintiffs were real estate brokers and listed with them his land for sale at a net price to him. And he authorized them to offer it for sale with no other restrictions upon the selling price except the implied one that good faith would be exercised toward him and the property would be sold as advantageously as possible for defendant. They offered it at $17 per acre to Kunze, presumably for cash. Had Kunze accepted and paid cash without further negotiations or understanding between plaintiffs and defendant as to commissions for negotiating the sale, the recent decision of Louva v. Worden, 152 N. W. 689, 30 N. D. 401, would apply (quoting from the syllabus):

“Where the owner lists real property for sale with a broker at a net price, such broker, in the absence of an express contract to that effect, is not entitled to receive as a commission on the selling price in excess of such list price, but is merely entitled to reasonable commission not exceeding such excess.”

Had nothing further been said about commissions, and had Kunze bought for cash when the land was offered him, there would have been no express contract that the margin of $2 per acre should be commission and profit to plaintiffs. All that plaintiffs could then have recovered would have been the reasonable value of services rendered and upon a quantum meruit. But right here enters facts entirely distinguishing this case from Louva v. Worden, supra. Kunze did not accept the offer of the defendant by his brokers to him, but, instead, came back with a different offer, to wit, to pay $15 per acre net to defendant, and $1,280 to plaintiffs as their commission for negotiating for Kunze a purchase at $15 net to defendant and upon Kunze's terms as specified. Thus at this point in the negotiations these brokers were communicating, not defendant's offer or their own for defendant to Kunze, but, instead, Kunze's offer to defendant...