Hjorth Oil Company v. Curtis

• Decision Date: 05 March 1917
• Docket Number: 853
• Citation: 163 P. 362,25 Wyo. 1
• Parties: HJORTH OIL COMPANY v. CURTIS
• Court: Wyoming Supreme Court

163 P. 362

25 Wyo. 1

HJORTH OIL COMPANY v. CURTIS

No. 853

Supreme Court of Wyoming

March 5, 1917

ERROR to the District Court, Natrona County; HON. CHARLES E WINTER, Judge.

Action by Frank E. Curtis against Hjorth Oil Company, a corporation to recover compensation for services rendered and expenses incurred in the negotiation of a sale of defendant's property. Judgment for plaintiff and defendant brings error. The material facts are stated in the opinion.

Affirmed.

William J. Miles, for plaintiff in error.

Plaintiff was not employed as a broker to perform the services for which he seeks a recovery; he was not a broker in fact, but an attorney in the employ of defendant. He was also assistant secretary of the company and a stockholder therein. He was working largely in his own interest in negotiating for a sale of the lease. The resolution referred to in the evidence had reference solely to the expenses of plaintiff's trip as a member of a committee. There could be no brokerage contract between plaintiff and defendant, unless authorized by resolution. Contract relations require that the parties be consenting factors and the consent or assent must be manifested by affirmative conduct. (Wood v. Ayers, 39 Mich. 349, 39 Am. Rep. 396; Trever v. Wood, 36 N.Y. 307, 93 Am. Dec. 511; Titcomb v. U.S. 14 Ct. of Cl. 263; Frazier v. Dick, 5 Rob. (La.), 249; Central of Ga. Ry. v. Gortakowsky, 122 Ga. 366, 51 S.W. 469; Bowen v. Hart, 191 F. 376; Lord v. U S. Trans. Co., 128 N.Y.S. 461, 149 A.D. 437.) Stockholders have no power to contract for their company. (3 Cook on Corporations, 708, 709.) Even though such stockholder owns practically all of the shares. (Sellers v. Greer, 172 Ill. 549; 2 Morawetz on Corporations, Sec. 475, p. 448; 3 Clark & Marshall on Corporations, p. 1905; Bank v. Bank, 4 Clark (Pa.) 125; Cairo v. Company, 12 Barb. (N. Y.), 27; Flagg v. Manhattan Realty Co., 10 Mich. 413; Beverig v. New York Elevated R. R. Co., 112 N. Y.; Leslie v. Lorillard, 110 N.Y. 519; People ex rel. Marrice v. Powell, 201 N.Y. 194.) The evidence shows that plaintiff was not the procuring cause of the sale. The evidence shows that plaintiff made no impression upon the purchaser. Before a broker is entitled to recover for services he must show that he was the procuring cause of the sale. Merely contributing toward the sale does not constitute him the procuring cause. Ware v. Dos Passos, 4 App.Div. (N. Y.) 32; Alden v. Earle, 121 N.Y. 686; Shano v. Sarch, 107 N.Y.S. 26; Marcus v. Kenneally, 19 Miscl. (N. Y.), 517; Sibbald v. Bethlehem Iron Co., 83 N.Y. 383, 32 Am. Rep. 441; Crane v. Miles (Mo. App.), 134 S.W. 52; Ramsey v. West, 31 Mo.App. 676; Lord v. U. S. Transp. Co., 118 N.Y.S. 451, 143 A.D. 437; Moore & Hill, Inc., v. Brunninger, 34 App. D. C. 86; Sexton v. Goodrich, 131 Wis. 146, 111 N.W. 206; Camp v. Van Stone, 73 Mo.App. 84, 87; Brown v. Shelton (Tex. Civ. App.), 23 S.W. 483.) A broker cannot interpose himself between parties who are already negotiating and thus recover a commission. (Campbell v. Van Stone, supra.)

B. D. Townsend, H. R. Nichols and Fred C. Rabb, for defendant in error.

It was undisputed that plaintiff performed service for defendant in negotiating the sale, and that he was to receive compensation for such service, and be reimbursed for his expenses. The controversy arises as to the amount of his compensation. The court below found for the plaintiff and the finding and judgment are sustained by the evidence. While admitting that plaintiff was authorized to negotiate for the sale, defendant undertakes to deny that he was authorized to make the sale and that he actually made the sale of the leasehold in controversy. The evidence proved that the services rendered by plaintiff were of far greater value than the amount of the judgment rendered in his favor. It was shown that he had devoted the greater part of three months working night and day in connection with the transaction and exercised the usual functions and authority of a broker; it was proven that the conduct of the parties after the sale indicated an understanding that plaintiff was to be paid for his services which were in every way satisfactory. Neither the fact that plaintiff was a stockholder in the company, assistant secretary thereof, or attorney, will invalidate his claim for the performance of services outside of his regular official duties, whether he was a broker or not; and irrespective of what the express agreement was as to compensation, the fact that he performed services by request and authority of the board of directors created an implied agreement to pay the reasonable value thereof. He is entitled to reimbursement for expenses. (19 Cyc. 229.) A broker who procures a purchaser is entitled to compensation, even though the sale be completed by the principal. (22 N.Y.S. 255.)

William J. Miles, in reply.

The brief of defendant in error does not contain a fair statement of the evidence. The argument undertaken with reference to the question of his alleged employment is vague. The sale was in fact concluded by the committee appointed by the board of directors. Defendant in error was acting for himself as an interested stockholder and not for the company. The brief of defendant in error cites no authorities in support of its position.

POTTER, CHIEF JUSTICE. BEARD, J., concurs. SCOTT, J., did not sit.

OPINION

POTTER, CHIEF JUSTICE.

Frank G. Curtis brought this action against the Hjorth Oil Company, a corporation, to recover the alleged value of his services and expenses in negotiating and making a sale of that company's leasehold interest in a certain tract of land in Natrona county, this state, upon which the company had drilled a productive oil well, and in procuring from the purchasers an agreement to take the oil produced by the company upon land owned by it at the market price. Such services and expenses were alleged to be of the reasonable value of thirty-five thousand dollars, and it was alleged that no part thereof had been paid except sixty dollars advanced by said company for expenses. On the trial in the district court without a jury it was found that the plaintiff was entitled to recover for his services in negotiating and making the sale aforesaid the sum of ten thousand dollars, as the reasonable value thereof, together with interest thereon at the legal rate of eight per cent. per annum from a specified date, and judgment was rendered in his favor for said sum and interest, aggregating $ 11,497.80.

The petition alleges that the plaintiff is and during the period mentioned therein was an attorney and counsellor at law and engaged in the practice of his profession in the city of Jamestown, New York, and also in the business of a broker and in the sales of stocks, bonds and other properties, and that he was a stockholder of the defendant. Stripped of all other matter of inducement the petition alleges in substance that the plaintiff undertook the sale of the defendant's interest in the lands aforesaid, and to provide for the sale of oil produced on lands owned by it, at the special instance and request of the defendant, and that the defendant agreed to pay the plaintiff a reasonable sum for his services in addition to his actual expenses in conducting the necessary negotiation for said sale; that pursuant to said agreement the plaintiff made the sale for the sum of seventy-five thousand dollars in cash and 750 shares of the capital stock of a company to be organized by the purchasers, said shares to include 250 shares of seven per cent. cumulative preferred stock and 500 shares of common stock; that the proposed company was organized, and the stock aforesaid, of the value of $ 35,000 or more, was about to be issued to defendant pursuant to said sale and the terms thereof; that an agreement was procured from the purchasers to take oil from the defendant at the market price for an indefinite period of time; that plaintiff's services and expenses in making said sale and contract were reasonably worth the sum of $ 35,000.

The answer admits that plaintiff was an attorney and counsellor at law engaged in the practice as alleged, but denies, for want of information, his having been engaged in the business of broker as alleged. It further denies his alleged employment to make the sale or that the sale was made by him, and alleges that the plaintiff was one of defendant's stockholders, and the only agreement with him by the company was to pay him, in addition to his actual expenses, the sum of fifteen dollars per day for such time as he should be actually absent from the city of Jamestown upon any business of the defendant; that the sale aforesaid was made by the defendant itself acting through certain of its officers and stockholders; that plaintiff's only connection therewith was as one of a committee of three stockholders appointed by the board of directors for the sole purpose of acting for it in its corporate capacity and not as brokers or promoters.

The findings of fact were stated in writing substantially as follows: 1. That defendant is a corporation organized under the laws of New York. 2. That plaintiff is and was since prior to January 1, 1913, engaged in practice as an attorney and counsellor at law and in the business of a broker in the sale of stocks and bonds and other properties. 3. That defendant, prior to January 1, 1913, became the owner of a certain leasehold estate in an oil placer mining location upon a certain tract of public land situated in Natrona county, in this state, and continued to be the owner thereof until its sale on April 16, 1913. 4. That subsequent to January 1, 1913, and prior to April 16, 1913, the defendant employed the plaintiff to sell said leasehold interest and agreed to pay him and he...