Henry S. Grinde Corp. v. Klindworth

• Decision Date: 08 July 1950
• Docket Number: No. 7168,7168
• Citation: 44 N.W.2d 417,77 N.D. 597
• Parties: HENRY S. GRINDE CORPORATION v. KLINDWORTH.
• Court: North Dakota Supreme Court

Page 417

44 N.W.2d 417

77 N.D. 597

HENRY S. GRINDE CORPORATION v. KLINDWORTH.

No. 7168.

Supreme Court of North Dakota.

July 8, 1950.

Rehearing Denied Oct. 23, 1950.

Syllabus by the Court.

1. Where listing contract makes broker exclusive agent to make sale of real estate and authorizes him to execute binding contract on behalf of principal, collect down payment, have and retain major portion of commission arising from proceeds of sale, and specifies listing period, principal is not liable until binding contract of sale is first effected during the life of, and in accordance with, terms of listing contract.

2. Where listing contract makes broker exclusive agent to make sale of real estate within specified time and provides if sale is made within such time through any person other than broker, principal will pay agreed commission to broker, a sale made through any other person entitles the broker to his commission.

3. Part payment of purchase price under verbal agreement of sale of real estate is not, in and of itself, sufficient to take verbal agreement out of the statute of frauds.

4. Constructive possession is that possession which the law annexes to the legal title or ownership of real property when there is a right to immediate actual possession thereof.

5. Constructive possession is without force as a factor to take verbal agreement for sale of real estate out of statute of frauds.

6. Where a vendor while engaged in farm field work makes verbal agreement to sell farm and at the same time vendee pays him the sum agreed on for the work done and to be done, isolated act of such payment does not, in and of itself, operate to change the actual possession of farm from vendor to vendee.

7. Possession of real estate in order to operate as a factor in part performance of verbal contract for the sale thereof, must be actual, open and notorious.

8. Improvements, in order to operate as a factor in part performance of verbal contract for sale of real estate, and be sufficient to take it out of the statute of frauds, must be valuable, substantial and permanent, and such that an action at law for damages would not afford adequate relief.

9. An estate in fee simple is the greatest and most extensive estate a person can possess in real estate and embraces all of the estates that may be carved therefrom.

10. Binding contract of sale of real estate works an equitable conversion, vesting the equitable title in vendee and leaving the legal title in vendor as security for payment of purchase price.

On Petition for Rehearing.

1. Party relying on former judgment as estoppel has burden of proving identical issue determined therein.

2. Findings of Fact to not constitute adjudication. The estoppel resides in the judgment.

3. A judgment should be construed so as to give effect to its every part and bring all parts into harmony.

4. A judgment, plain and unambiguous in its terms may not be modified, enlarged, restricted or diminished by reference to Findings of Fact.

5. In equitable actions the relief to be administered is such as the nature of the case and the facts, as they exist at the close of the litigation, demand.

Sinness & Duffy, Devils Lake, for appellant.

Edgar P. Mattson, New Rockford, for respondent.

KEHOE, District Judge.

This is an action to recover a broker's commission on account of a sale of real estate. The case was tried to a jury in the District Court. The jury returned a verdict in favor of the plaintiff. The defendant moved for judgment notwithstanding the verdict or for a new trial on the grounds that the evidence was insufficient to justify the verdict. The motion was denied and judgment was entered on the verdict. The defendant has appealed from the judgment and the order denying the motion.

On July 16, 1947, the defendant signed, acknowledged and delivered to the plaintiff a listing contract under the terms of which he appointed the plaintiff as his exclusive agent to make a sale of Section 29, Township 148, Range 67, in Eddy County, North Dakota, for the price of $19,200, and agreed to pay the plaintiff $1920 for his services. The listing contract was to continue until September 1, 1947, and thereafter until the expiration of 30 days after the date of the service of notice by the defendant upon the plaintiff revoking the latter's authority. Such notice was served on the 4th day of November, 1947, thus terminating the listing contract on the 4th day of the following December. The listing contract will be later considered more in detail.

On September 1, 1947, the defendant desiring to seed rye on some of the land and to plow and prepare the balance for the 1948 cropping season, it was then verbally agreed between him and the plaintiff that he might do such work and that if the land should be sold, the purchaser would be required to pay him therefor in addition to such $19,200 sale price. In the latter part of that month one Walter Krueger became interested in the purchase of the land and enlisted the help of one George Aljets to aid him in making contract with the defendant. On October 2d following, the defendant and Krueger entered into a verbal agreement for the sale of the land to Krueger. At that time the defendant had the rye seeding partially done, and under such verbal agreement the defendant was to continue until he had seeded 200 acres of rye and was to plow the balance of the land and remove the rocks therefrom, and Krueger was to pay him, and did pay him at that time the sum of $2,130 therefor. Under such agreement Krueger agreed to purchase the land and to pay $19,200 as the purchase price, paying $4,600 thereof at the time and agreed to pay $5,000 after January 1, 1948, and the balance of the purchase price in deferred payments. No written contract was entered into at that time. The parties agreed that they would later execute one. The rye seeding, plowing and rock removal were completed by March 1948, but the record is silent as to the date of such completion. Immediately after entering into such verbal agreement the defendant notified the plaintiff thereof and on the 8th day of October, 1947, the plaintiff caused such listing contract to be recorded in the office of the Register of Deeds of Eddy County. On the 8th of November, 1947, the plaintiff interviewed Krueger, showing him the listing contract, and advising him that he still had thirty days in which to sell the land. Krueger replied that he did not know whether his deal with the defendant was going through, that he did not care whether he got the land, and that the plaintiff might go ahead and sell it. On the 12th day of November, 1947, the plaintiff entered into a written contract with John J. Nelson and Lyman Moberg wherein the latter agreed to purchase the land. Such written contract was executed by the plaintiff as agent for the defendant. Notice of such sale was thereupon recorded in the said office of the Register of Deeds. The defendant then commenced an action in the District Court of Eddy County to quiet title to the land in himself against Walter Krueger, John J. Nelson, Lyman Moberg and the plaintiff herein as defendants. The Henry S. Grinde Corporation, as such defendant, and Nelson and Moberg interposed their joint answer praying that Klindworth be directed to convey the property to Nelson and Moberg and that The Grinde Corporation have judgment against Klindworth for the $1920 commission and interest. The issue therein was between Klindworth on the one side and The Grinde Corporation and Nelson and Moberg on the other. Krueger interposed his separate answer asking for the specific performance of his October 2, 1947 verbal contract for sale. The issue therein was between Klindworth on the one side and Krueger on the other. The action was tried in the District Court of Eddy County in March 1948, the Hon. George Thom, Jr., presiding. That action will be hereinafter known as the 'prior action.' Findings of fact, conclusions of law and order for judgment were made therein on the 21st day of April, 1948, and judgment was entered thereon on the 6th day of May, 1948. In such judgment, the Court decreed that it in no way passed upon the rights claimed by such corporation for said commission, that such claim was not properly at issue and dismissed the same without prejudice to further action. The Court therein further found that the written contract of sale made by said corporation, as agent, with Nelson and Moberg on November 12, 1947, was not binding upon Klindworth for the reason, among others, that it did not comply with the listing contract and decreed that said corporation, Nelson and Moberg, and each of them, had no estate or interest in, or lien or encumbrance upon or right or title to or against such land. The Court therein further found that Klindworth and Krueger raised no question as to the validity of the October 2d verbal agreement of sale, waived all legal objections to its enforcement and expressed their willingness to perform it if permitted or ordered so to do by the Court and decreed that Krueger had an enforcible agreement for the purchase of such land and that he was entitled to have such agreement specifically performed on the terms mentioned in the decree by Klindworth executing a formal contract for the sale to Krueger.

The substance of the material parts of the listing contract is: I, (the defendant) hereby appoint you (the plaintiff) my exclusive agent to make a sale of (the above land) for the sum of $19,200, and you are hereby authorized to accept a deposit to be applied on the purchase price and to execute a binding contract for sale on my behalf. In case said property is sold or disposed of within the time specified, it is further agreed that you shall have and may retain from the proceeds arising from the sale, $1000 when the deal is made, $920 commission on the above price; and all of the consideration for which said property is sold over and above the price herein...