Kirchoff v. Cummard

• Decision Date: 16 June 1924
• Docket Number: Civil 2160
• Citation: 26 Ariz. 512,226 P. 1092
• Parties: A. C. KIRCHOFF, Appellant, v. JOHN CUMMARD, Appellee
• Court: Arizona Supreme Court

226 P. 1092

26 Ariz. 512

A. C. KIRCHOFF, Appellant, v. JOHN CUMMARD, Appellee

Civil No. 2160

Supreme Court of Arizona

June 16, 1924

APPEAL from a judgment of the Superior Court of the County of Maricopa. R. C. Stanford, Judge. Affirmed.

Messrs Silverthorn & Van Spanckeren, for Appellant.

Messrs Allen & Alldredge, for Appellee.

OPINION

McALISTER, C. J.

This is an action to recover a real estate broker's commission. Appellant, defendant below, signed a listing contract by which he employed appellee to procure a purchaser for 80 acres of land situated in Maricopa county, this state for a consideration of $48,000 to be paid upon the following terms: $14,000 cash, and the balance at $5,000 per year deferred payments to bear 8 per cent interest. The contract was dated January 5, 1920, and provided for the payment of a commission of 5 per cent of selling price.

Some time thereafter appellee found and offered as purchasers Reaves A. Bird and Harry H. Smith, who were able and willing to purchase the land for a consideration of $48,000 to be paid as follows: $6,000 cash; $4,000 as soon as an abstract to premises could be had and examined; $7,500 on or before January 1, 1921; $6,000 on or before January 1, 1922; $5,000 on the first of each year thereafter until total amount should be paid. This proposal was accepted, and on February 5, 1920, appellant and his wife entered into a binding contract with Bird and Smith by which they agreed to sell, and the latter to purchase, the land, and this agreement, together with deed conveying the premises, was placed in escrow. On the day this contract was executed and at the same time, however, appellant and appellee entered into an agreement in words and figures as follows, to wit:

"This agreement, made and entered into this 20th day of February, 1920, by and between Adolph c. Kirchoff, party of the first part, and John Cummard and O. C. Kleinman, parties of the second part, witnesseth:

"That whereas, the party of the second part has, as agent for the first party, negotiated sale of eighty acres in section 18, one north of range 6 east, of the first party to Reaves Bird and Harry Smith, it is hereby agreed as follows:

"That out of the payment of seven thousand five hundred ($7,500.00) dollars coming to the first party under escrow agreement of even date herewith on January 1st, 1921, provided, said payment be made, party of the first part will pay to the second party the sum of twenty-four hundred ($2,400,00) dollars as commission for making said sale, and interest thereon at 8% from Feb. 20th, 1920, and the Salt River Valley Bank of Mesa, the bank in which said escrow papers are to be held is hereby authorized to pay to the second party out of said payment of seventy-five hundred ($7,500900) dollars when made the said sum of twenty-four hundred ($2,400,00) dollars.

"Witness the hands of the parties this 20th day of February, 1920.

"ADOLPH C. KIRCHOFF.

JOHN CUMMARD."

THE $7,500 WAS NOT PAID WHEN IT BECAME DUE, NOR AFTERWARDS; BUT IN THE SPRING OF 1921 APPELLANT AND BIRD AND SMITH, WITHOUT APPELLEE'S KNOWLEDGE OR CONSENT, ENTERED INTO A SUPPLEMENTAL AGREEMENT BY WHICH THE PAYMENT OF THIS INSTALLMENT WAS EXTENDED TO JANUARY, 1933, AND THE ANNUAL INSTALLMENTS REDUCED FROM $5,000 TO $3,000, AND SOME TIME IN THE SPRING OF 1922 THEY ENTERED INTO ANOTHER AGREEMENT, ALSO WITHOUT APPELLEE'S KNOWLEDGE OR CONSENT, BY WHICH THE CONTRACT OF PURCHASE, TOGETHER WITH THE SUPPLEMENTAL CONTRACT, WAS CANCELED AND POSSESSION OF THE PREMISES REDELIVERED TO THE SELLER.

APPELLANT CONTENDS THAT THE ABOVE CONTRACT SUPERSEDED THE LISTING CONTRACT ON THE QUESTION OF THE PAYMENT OF THE BROKER'S COMMISSION; THAT, UNDER IT, THIS DID NOT BECOME DUE UNTIL THE $7,500 WAS PAID; AND THAT INASMUCH AS THIS PAYMENT HAS NEVER BEEN MADE NO RIGHT OF ACTION EXISTS. HIS CLAIM BASED UPON THIS LANGUAGE OF THE CONTRACT:

"THAT OUT OF THE PAYMENT OF SEVEN THOUSAND FIVE HUNDRED ($7,500.00) DOLLARS COMING TO THE FIRST PARTY UNDER ESCROW AGREEMENT OF EVEN DATE HEREWITH ON JANUARY 1, 1921, PROVIDED, SAID PAYMENT BE MADE."

THE FIRST CLAUSE, IT IS SAID, RESTRICTS THE PAYMENT OF THE COMMISSION TO A PARTICULAR FUND AND CREATES NO LIABILITY UNTIL THAT FUND COMES INTO EXISTENCE, AND THE SECOND REFERS TO THE $7,500 DUE JANUARY 1, 1921. THE TWO CLAUSES, IT IS URGED, HAVE THE EFFECT OF PROVIDING THAT THE COMMISSION WAS PAYABLE ONLY OUT OF THE $7,500, AND THAT NO LIABILITY EXISTED UNTIL THIS PAYMENT WAS MADE. THE WORD "PROVIDED," IT IS CONTENDED, MEANS "ON CONDITION" AND CREATES A CONDITION PRECEDENT. DE VITT V. KAUFMAN COUNTY, 27 TEX. CIV. APP. 332, 66 S.W. 224; Robertson v. Caw, 3 Barb. (N.Y.) 410.

Appellee contends, however, that this contract does not supersede the listing contract upon the question of the payment of the broker's commission, nor do its terms constitute a condition precedent, but, upon the contrary, recognize a pre-existing debt due appellee and merely fix the time of its payment.

There is no question but that the parties could have provided that the payment of the commission should be from a particular fund -- for instance, the $7,500 due January 1, 1921 -- and that such a provision would have been binding (1 Amer. Eng. Cyc. of Law, 2d ed., 1095, 1096; 9 Cyc. 616), and in support of the contention that such is the effect of this contract, appellant relies largely upon Frank v. Butte & Boulder Mining & Lumber Co., 48 Mont. 83, 135 P. 9004, in which the following provision of a contract was given such construction:

"It is further understood and agreed that the said thirty thousand dollars so advanced and to be advanced by the said H. L. Frank, shall be repaid to the said H. L. Frank by the said company, out of the first earnings of its business, after deducting running expenses, which said earnings are to be computed and paid over at the monthly meetings of the board of directors of said company."

A company had been organized to carry on a general lumber business, and $30,000 had been advanced by Frank to carry out that purpose to be repaid out of the first earnings of the company, after the deduction of operating expenses, and the court very properly held that this language did not create a general liability but provided for a special fund from which Frank's indebtedness should be paid. In the other cases cited by appellant the language used to define when and how the commission shall be paid leaves no doubt as to the meaning intended. For instance, in Edwards v. Baker, 39 Cal.App. 755, 180 P. 33, the notes given for the commission contained this recital:

"Said note to be paid only out of the money to be paid by P. Weisendanger or his assigns for purchase price of G. L. Baker ranch and not out of interest."

It will be observed that the contract in the Frank case did not provide that the payment of the $30,000 should be made out of the first earnings, provided there were any, but, so far as appears, from that source or not at all. In the case at bar however, the contract, after first recognizing the negotiation of a sale of the land by appellee, provides that out of the $7,500 due thereunder on January 1, 1921, "provided, said payment be made," appellant will pay appellee his commission of $2,400 for making the sale. Whether this means that h...