Keinath v. Reed.

• Decision Date: 05 December 1913
• Citation: 137 P. 841,18 N.M. 358
• Court: New Mexico Supreme Court
• Parties: KEINATH, SCHUSTER & HUDSONv.REED.

18 N.M. 358

137 P. 841

KEINATH, SCHUSTER & HUDSON

v.REED.

Supreme Court of New Mexico.

Dec. 5, 1913.

Syllabus by the Court.

In an action for commission earned by a broker in effecting an exchange of property of his principal, where the complaint pleaded a written contract of employment of the broker by the principal to make an exchange and a written contract of exchange between the principal and a customer procured by the broker, an answer which alleged (a) that the principal had not accepted the property of the customer; (b) that the principal had not accepted the customer as a proper party with whom to make an exchange other than on the terms of the written contracts entered into by them; (c) that the written contracts of exchange were intended by the parties to be merely stipulations by which an exchange of property might be effected, and not a valid, binding, and enforceable contract of exchange; (d) that the broker had not done all he was required to do in order to earn his commissions; (e) that the customer had failed to perform his part of the contract--tendered issues of law and not of fact.

Where the answer raises issues of law only, the case is ripe for judgment on the issues of law involved, and a motion for judgment on the pleadings is properly entertained.

Under an employment to sell or exchange the property of his principal, a broker has fully performed his undertaking when he procures a customer with whom the principal makes a valid contract of sale or exchange.

In an action by a broker for commissions earned by him in effecting an exchange of the property of his principal, where the complaint pleads a valid and enforceable written contract, between the principal and a customer procured by the broker, to exchange property, it was not necessary for the complaint to allege that the customer was “in a position and able to convey a perfect title to the property which he proposed to exchange.”

In such a case the principal, by entering into a contract of exchange with the customer produced by the broker, accepted the customer as able, ready, and willing to make the exchange.

A stipulation that “both parties hereunto have this day deposited in escrow with K., S. & H. this contract and a copy of the original contract, his demand note for $1,000 as evidence of good faith and as a forfeit in event either party hereto fails or refuses to comply with the terms of the contract as therein provided,” held to be a penalty.

In an action for a broker's commissions for effecting an exchange of real estate, where the complaint states the making of a valid written contract of exchange between the principal and the customer procured by the broker, the complaint need not further state that the customer was able, ready, and willing to complete the exchange on the terms of the contract, or that he made any effort to that end, or the refusal of the principal to complete it.

In an action based upon a written contract which is admitted by the answer, the intentions of the parties as to what should be the effect of the contract is to be decided by the court upon an inspection of the contract.

An allegation in the answer of what the parties intended or did not intend the contract should effectuate raises a question of law to be decided by the court.

Additional Syllabus by Editorial Staff.

The word “forfeit,” in its ordinary use in cases, is synonymous with “mulct,” “fine,” or “penalty.” (Citing Words and Phrases, vol. 2, p. 2893. See, also, vol. 8, p. 7665; vol. 5, p. 4616; vol. 3, pp. 2810-2813; vol. 6, p. 5272-5276; vol. 8, p. 7750.)

Appeal from District Court, Eddy County; McClure, Judge.

Action by Keinath, Schuster & Hudson, a partnership, against J. D. H. Reed. From a judgment for plaintiff, defendant appeals. Affirmed.

Where the answer raises issues of law only, a motion for judgment on the pleadings is properly entertained.

The appellee, plaintiff below, brought this action to recover the sum of $500 as a commission for the sale of certain real estate belonging to the appellant. The complaint alleges: (a) That on or about the 13th day of June, 1912, the defendant was the owner of certain real estate, and that defendant listed said real estate with plaintiff for sale or exchange, by executing a written list contract, a true copy of which is attached to the complaint marked “Exhibit A.” The listing contract recites: “I, J. D. H. Reed, hereby authorize and appoint Keinath, Schuster & Hudson, of Artesia, N. M., as my agent to sell or exchange the within described real estate, now owned by me to wit: [Describing the real estate and prices fixed.] For services rendered by said agent in making the sale of said land, or being instrumental in any manner whatsoever in selling or transferring said property, I agree to pay to said agent a commission of five hundred dollars.” (b) That acting by authority of and in pursuance to the agency so created the plaintiff did procure one G. E. Shackleton, who was an acceptable party to defendant, and with whom defendant entered into a valid binding written contract, providing for the exchange of said defendant's real estate for certain real estate of the said Shackleton, a copy of which written contract is attached to the complaint as a part thereof and marked “Exhibit B.” By the contract mentioned the defendant and Shackleton agree to exchange properties, each assuming certain incumbrances existing on the other's property, each to have full and peaceable possession of the property of the other on or about October 1, 1912, or as mutually agreed otherwise, with the further provision that Shackleton was to have until July 10, 1912, to investigate and approve the property he was trading for. (c) That on the 6th day of July, 1912, the defendant and Shackleton entered into another written contract, designed and intended to be a continuation of contract herein referred to as Exhibit B, which supplemental contract is attached to and made a part of the complaint and marked “Exhibit C,” and at the same time the defendant and Shackleton executed their promissory notes each for the sum of $1,000, payable on demand, copies of which notes are attached to the complaint as parts of Exhibit C. The contract marked “Exhibit C” is as follows: “Continuation of contract of sale made between G. E. Shackleton, party of the first part, and J. D. H. Reed, party of the second part, in the exchange of the several properties as provided for, in the original contract made and executed in Palisade, Colo., on June 28, 1912, witnesseth: Party of the first part has this day accepted the property of party of the second part, and agrees to accept the trade and deed his property to said second party as provided for in the original contract above mentioned and of which this is a part. Both parties hereunto have this day deposited in escrow with Keinath, Schuster & Hudson this contract and a copy of the original contract, his demand note for $1,000 as evidence of good faith and as a forfeit in event either party hereto fails or refuses to comply with the terms of the contract as therein provided.” The note of Shackleton was payable to Reed, and vice versa. (d) That at the time defendant entered into said contract the defendant accepted said Shackleton as a proper and suitable person with whom to make such contract, and that plaintiff, “acting in good faith, did all it was requested or required to do by defendant in the way of effecting a valid and binding contract aforesaid, did by its efforts become the procuring cause in producing for said defendant the said G. E. Shackleton for the purposes aforesaid.”

The defendant's answer admits (a) the execution of Exhibit A; (b) admits that appellee procured Shackleton to exchange property with him, but denies that he entered into a valid and binding contract with said Shackleton, but admits he did enter into a stipulation, setting out the terms upon which he and Shackleton were to exchange properties, and that Exhibit B attached to the complaint is a copy thereof; (c) admits the execution of contract Exhibit C attached to the complaint and the notes therein mentioned, but denies that the notes were to be a payment on the properties, or for any other purpose, except to be a forfeit and for the special purpose of indemnifying each, respectively, against the loss which they might...