Killam v. Tenney

• Jurisdiction: Oregon
• Parties: Graham KILLAM, dba Graham Killam Co., Respondent, v. G. U. TENNEY, dba West Coast Pictures, Appellant.
• Citation: 366 P.2d 739,229 Or. 134
• Court: Oregon Supreme Court
• Decision Date: 22 November 1961

Page 739

366 P.2d 739

229 Or. 134

Graham KILLAM, dba Graham Killam Co., Respondent, v. G. U. TENNEY, dba West Coast Pictures, Appellant.

Supreme Court of Oregon, Department 1.

Argued and Submitted Sept. 7, 1961.

Decided Nov. 22, 1961.

Denton G. Burdick, Portland, argued the cause for appellant. On the brief were Hutchinson, Schwab & Burdick, Portland.

Mark A. Hathaway, Portland, argued the cause for respondent. On the brief were Hathaway & Arnold, Portland.

Before McALLISTER, C. J., and ROSSMAN, WARNER, PERRY, and LUSK, JJ.

LUSK, Justice.

This is an action to recover a real estate broker's commission. In a trial before the court without a jury the court entered a judgment for the plaintiff in the sum of $10,000 as an agreed commission and $1,750 attorneys' fee. Defendant appeals.

The plaintiff Graham Killam, dba Graham Killam Co., is a licensed real estate broker in the city of Portland, Oregon. The defendant G. U. Tenney, dba West Coast Pictures, was the owner of real property in Portland improved by a building in which the business referred to was conducted. On December 9, 1958, the defendant signed a listing agreement by which he gave the plaintiff

LNJ GUT

'* * * the sole and exclusive right to sell, exchange, or lease the property hereinafter described, at the price and terms hereinafter specified, or at such lesser price and upon such terms as the Owner may hereafter accept for a period of sixty (60) days from the date hereof, and continuing thereafter as a nonexclusive right to sell, exchange or lease for a like period of time unless terminated by a ten day notice in writing.'

Other material parts of the listing agreement are the following:

'The owner agrees to accept the following prices:

'1. $100,000.00 for the real property located at 4321 N. E. Cully Blvd. This property is also known as Lot Nine (9), Block One (1), COMMUNITY ACRES.

'2. $62,000.00 for the machinery, furniture, fixtures, name and good will.

'3. Inventory at cost or wholesale market, whichever, is lower, with the proper allowance for obsolescence and unsalable items, the amount of the inventory to be determined at date of closing, but is estimated to be $100,000.00.

'The owner agrees to accept $70,000.00 down payment on entire transaction with the balance of the payments due in 180 monthly installments including interest at the rate of six (6) per cent per annum.

'In the alternative, the owner agrees to lease the real property for a period of ten years with a ten year option of renewal at the rate of $750.00 per month with escalator clause for increases in taxes and insurance. In the event of lease the sales price of the business assets will remain at $62,000.00 and the inventory at price indicated above. In the event of lease of real property, down payment to be $70,000.00 on entire transaction.

'For performing the above services for the seller, either for the sale or lease of the real property and for the sale of personal property and inventory, the owner agrees to pay Graham Killam Co. a fee of $20,000.00.

* * *

* * *

'* * * Graham Killam Co. shall have the right to retain from any deposit or payment on the purchase price the above fee for services rendered, directly or indirectly, in negotiating a sale of said property. In the event a purchaser makes a deposit or part payment on the price of said property and thereafter forfeits the same, or any part thereof, Graham Killam Co. shall be entitled to receive from said amount a sum equal to the extent of their fee as fully as if the said sale or exchange had been fully consummated.

'In the event said property is sold, leased or exchanged during the period of this contract, or Graham Killam Co. procures a purchaser ready, able and willing to purchase at the terms above specified, or places the Owner in touch with a purchaser to whom at any time subsequent to the termination of this contract the Owner sells or conveys the said property, or if the Owner during the period of this contract withdraws the authority hereby given, the Owner shall pay to Graham Killam Co. the same fee as hereinabove specified, and in any such event, the amount of said fee shall be a lien upon said property. In case of suit or action on this contract, Owner agrees to pay in addition to the above specified fee such sum as the Court may adjudge reasonable as attorney's fees. * * *'

A salesman employed by the plaintiff introduced Mr. Carter Stanley as a prospective purchaser to the defendant and as a result of direct negotiations between the defendant and Stanley, the defendant gave to the latter on January 13, 1959, the following option agreement:

'Portland, Oregon

January 13, 1959

'Option Agreement

'For $10.00 (ten dollars) in hand received and other good and valuable consideration, G. U. Tenney, dba West Coast Pictures, 4321 N. E. Cully Blvd., hereby gives to Carter Stanley and associates, with right of assignment to a corporation to be formed, this option, to exprie [sic] March 15, 1959, as follows:

'Option to purchase the machinery, equipment and name of said business for the sum of $50,000.00, and the inventory of said business as of the date this option is exercised, at 75% (seventy-five per cent) of cost or market value thereof whichever is lower. The right to fully verify the inventory and to examine the company's books is extended.

'Mr. Tenney agrees to lease the existing premises to Carter Stanley and associated [sic] at the monthly rental of $700.00 (seven hundred dollars) for a period of ten years with an option to renew for a period of ten years. Mr. Tenney further agrees that said lease shall contain an option good for the term of the lease, to purchase the building and land for the sum of $100,000.00 (one hundrend [sic] thousand dollars), 75% (seventy five per cent) of the $700.00 (seven hundred dollar) per month rent paid prior to the exercise of this purchase option, to apply as down payment. As a further consideration of rent, the lesee [sic] agrees to pay all property taxes and to keep the building adequately insured.

'Down payment is not to exceed 29% of total of inventory and equipment values as above set forth, and balance to be paid in equal payments of 10% each year with ten annual interest payments of $875.00 (eight hundred seventy-five dollars) per year.

'G. U. Tenney

'Garnet R. Tenney

'Witness: Roy E. Thomas

'This option is given with the consideration tha[t] the real estate borker [sic] representing Mr. Tenney will accept a sales commission of not more than $10,000.00 (ten thousand dollars).'

Garnet R. Tenney is the wife of the defendant G. U. Tenney.

On February 16, 1959, Mr. Stanley informed the defendant and his wife orally that he was exercising the option. Getting 'no reaction' from the defendant, Mr. Stanley had his attorney, Mr. Donald J. Griswold, write the following letter addressed to the defendant and his wife under date of February 25, 1959:

'February 25, 1959

'Mr. and Mrs. G. U. Tenney

4321 N. E. Cully Blvd.

Portland, Oregon

'Dear Mr. and Mrs. Tenney:

'The purpose of this letter is to repeat and confirm the verbal exercise of the option dated January 13, 1959 of Carter Stanley, which verbal exercise was made on February 16, 1959.

'As you know this option includes the right to purchase the machinery, equipment and name of said business (which name is West Coast Pictures) for $50,000.00, and the inventory of said business as of the date this option is exercised, at 75% of cost or market whichever is lower. Mr. Stanley also exercises the right to lease your existing premises in accordance with the option agreement.

'If possible we would like to make arrangements to close this purchase prior to March 1, 1959, and to this end will look forward to hearing from you immediately in regard to the inventory valuation and other matters which must be resolved. You are also requested to name the escrow agent for purposes of the down payment, transfer of title, etc.

'Very truly yours,

'Donald J. Griswold

'Donald J. Griswold

'djg:w

'cc: Mr. Wilmot K. Royal, Attorney

Failing Building

Portland, Oregon

'Mr. Graham Killam

4400 N. E. Hancock

Portland, Oregon'

Following the mailing of the foregoing letter, a meeting was had between Mr. Griswold, his partner Mr. David D. Pattullo, and Mr. Royal, who was then attorney for the defendant. Thereafter, on March 5, 1959, Mr. Griswold wrote Mr. Royal the following letter:

'March 5, 1959

'Mr. Wilmot K. Royal, Attorney

Failing Building

Portland, Oregon

'Re: Tenney-Stanley Sale

'Dear Mr. Royal:

'Reference is made to the conference held in my office between yourself, Mr. Pattullo and this writer in regard to concluding the arrangements for the transfer of the business and assets of Mr. Tenney to Mr. Stanley pursuant to the option agreement entered into on January 13, 1959.

'In order to expedite this matter and in order to avoid question as to which party was to proceed, it was decided that I would write you a letter setting forth our conclusions. If you disagree with any of my statements, please get in touch with me immediately so that we may iron out any differences.

'You pointed out the fact that your client was in Grants Pass and you did not know when he would return and be available for consideration of the necessary matters. It will, of course, be necessary that Mr. Tenney himself or an agent appointed by him be available in order to resolve the inventory valuation and other matters which must be done. We urge that you impress upon Mr. Tenney, Mr. Stanley's desire to consummate this action as soon as possible. If Mr. Tenney is not physically able, perhaps there is someone else who has the know-how and whom he would trust to act as his agent.

'Below is a list of the items to be decided upon and, in some cases, an indication of our understanding of the disposition of these items:

'1. The first thing that should be done before we proceed further is to determine whether or not the broker. Mr. Graham Killam, will accept the...