Ladd v. Teichman

• Decision Date: 06 June 1960
• Docket Number: No. 28,28
• Citation: 103 N.W.2d 338,359 Mich. 587
• Parties: Lyster C. LADD, Plaintiff and Appellant, v. Ferdinand TEICHMAN and Barbara Teichman, his wife, William A. Teichman and Helen D. Teichman, his wife, Defendants and Appellees.
• Court: Michigan Supreme Court

Page 338

103 N.W.2d 338

359 Mich. 587

Lyster C. LADD, Plaintiff and Appellant, v. Ferdinand TEICHMAN and Barbara Teichman, his wife, William A. Teichman and Helen D. Teichman, his wife Defendants and Appellees.

No. 28.

Supreme Court of Michigan.

June 6, 1960.

Dell, Heber & Shantz, Royal Oak, for plaintiff and appellant.

Arthur M. Lang, Detroit, for defendants and appellees.

Before the Entire Bench.

EDWARDS, Justice.

This is a suit in assumpsit to recover a commission plaintiff claims to be due under a contract to sell real estate for defendants. The trial court which heard the case without a jury held that the particular sale and interest sold were not within the contemplation of the contract, and entered judgment for defendants from which plaintiff appeals.

There are no important disputes as to the facts. The defendants-appellees, Teichmans, a father and son and their 2 wives, owned an unsubdivided tract of land consisting of 80 acres in Oakland county. The plaintiff-appellant, Ladd, was a licensed real estate broker and a land developer. The parties entered into a written agreement for Ladd to subdivide and develop the Teichman property and sell it in parcels, with the Teichmans bearing the development expense and Ladd receiving a commission of 25% of each sale price.

The relevant portions of the contract follow:

'Whereas parties of the first part desire to subdivide said property and desire that said second party shall look after the details of subdividing said property and promote the sale thereof, but the expenses of surveys, construction of roads, and all things incidental to subdividing of said property to be paid by parties of the first part, and

'Whereas it is the desire of the parties that the property shall be subdivided into parcels as per the attached plat, the overall price of said property when subdivided, to be not less than $160,000, and

'Whereas said party of the second part desires to promote the sale and sell said property, in accordance with the attached plat, and price list to be later approved by both parties hereto, equalling above amount, and made a part of this agreement and kept known as exhibit 'A,' and

'Whereas both first and second parties desire that said second party shall receive, as commission for the sale of said parcels in the subdivision, 25% of the sale price.

* * *

* * *

'Now, therefore, in consideration of the mutual covenants, conditions, and stipulations to be by each of said parties performed, it is agreed and understood as follows:

'That said first parties hereby appoint said second party as its sales agent for the promotion and sale of property hereinbefore described and that said second party is to do the detail work in connection with the subdividing of the property, but all expenses of subdivision to be paid by first parties and each of said parties agree that the property shall be subdivided into parcels as per the attached plat, the overall price of said property when subdivided to be not less than $160,000, in accordance with the attached plat, and a price list to be later approved by both parties hereto, equalling the above amount and made a part of this agreement and kept known as exhibit 'A,' and

'It is further agreed that second party is to do everything necessary to prepare said property, as hereinbefore described, for the purpose of marketing same in parcels as per the attached plat, and shall have a plat prepared and obtain the approval of the proper authorities and record the plat, expenses to be borne by first parties, and present a copy of the plat together with a price list to first parties, to be approved by first parties, which price list shall be the basis of all selling and shall be marked exhibit 'A' and attached to this agreement.

'It is further agreed that second party shall have exclusive sale of this property until the 31st day of December, 1957, * * *'

Subsequent to the execution of the contract above, and during the period of appellant's 'exclusive sale' rights, the Detroit Edison Company approached the owners concerning a right of way for a power 'high line' ove the property in question. Defendant William Teichman referred the matter to appellant:

'Dr. William A. Teichman

15319 Wyoming Avenue

Detroit 38, Michigan

'September 21, 1956

'Mr. B. F. Wagner

Detroit Edison Company

Room 858 G. O.

2000 Second Avenue

Detroit 26, Michigan

'Dear Mr. Wagner:

'I have turned the property settlement claim adjustment over to Mr. L. C. Ladd of the Ladd Realty Company in Royal Oak, Michigan.

'Will you please contact Mr. L. C. Ladd to arrange a meeting for a Thursday so that I may be present also.

'Thanking you for your cooperation, I am

'Very truly yours,

'William A. Teichman'

'WAT:hp' Subsequently plaintiff negotiated with the Edison representatives and participated in several conferences between them and William Teichman representing the owners. On July 13, 1957, defendants-appellees granted Detroit Edison an easement for its high line over 7 of the lots in the subdivision. The easement, in addition to being a right of way, also gave Edison the right to cut trees and brush on the 7 lots, and required its prior approval of the construction of any buildings thereon. The Teichmans received $17,500 for the easement. They declined to pay Ladd any commission. In discussion of this latter topic, Ladd prepared an amendment to the sales agreement by which his commission would have been reduced to approximately 10%. On the Teichmans' refusal to sign this, Ladd filed the instant suit for the full amount claimed due under the original contract.

The trial judge, relying on Johnson v. Sirret, 153 N.Y. 51, 46 N.E. 1035, held that the sale of an easement was not the sale of a 'parcel' under the contract. Further, he held that the contract created an 'exclusive agency' but that where the owner produced and negotiated the sale, the agent was not entitled to a commission. In this regard, he relied on Crawford v. Cicotte, 186 Mich. 269, 152 N.W. 1065, and McOmber v. Campion, 219 Mich. 604, 189 N.W. 181.

We agree with appellees that appellant having drafted the contract, any ambiguity contained in it must be construed against him. Bonney v. Citizens' Mutual Automobile Ins. Co., 333 Mich. 435, 53 N.W.2d 321; Veenstra v. Associated Broadcasting Corporation, 321 Mich. 679, 33 N.W.2d 115. We do not, however, find this contract unclear.

It seems likely, from its wording and from the circumstances of its negotiation, that the parties did not contemplate the exact sort of sale which the Edison Company easement represented.

Even so, however, we find it impossible to agree with the trial judge in holding that plaintiff was not entitled to recover a commission under the contract.

The unambiguous language of the contract gave plaintiff the 'exclusive sale of this property until the 31st day of December, 1957.'

This language appears to grant an exclusive right to sell for a specific period of time, rather than an exclusive agency as held by the trial judge. And appellant suggests that this disposes of the matter.

We do not find Michigan precedents (or those of our sister States) as clear on this point as is suggested.

Most Michigan real estate commission disputes have revolved around whether the agent was the producing cause of the sale. Recovery of the commission was allowed on an affirmative finding in Davis-Fisher Co. v. Hall, 182 Mich. 574, 148 N.W. 713, L.R.A.1915A, 1224, and Advance Realty Co. v. Spanos, 348 Mich. 464, 83 N.W.2d 342. Where the broker was held not to have produced the sale, recovery was denied in Crawford v. Cicotte, supra, and Pittelkow v. Jefferson Park Land Co., 283 Mich. 374, 278 N.W. 102.

Where the broker was not the producing cause of the sale made but had performed in accordance with his contract, he was held entitled to his commission in McOmber v. Campion, supra, and Gonte v. Rosenberg, 221 Mich. 283, 191 N.W. 198.

In McOmber, supra, 219 Mich. at page 608, 189 N.W. at page 182, quoting a Wisconsin case, the Court recognized the right of an owner to sell without paying commission in spite of an exclusive agency contract:

"It is well settled that the giving of an exclusive agency to sell real estate does not preclude the owner from selling within the life of the contract to one who he has reason to believe has not been procurred by the agent.'

Roberts v. Harrington, 168 Wis. 217, 169 N.W. 603, 10 A.L.R. 810.'

But in 2 cases where the language of the agreement granted what we construe to be exclusive sale rights for a specified period and there was specific language which purported to assure a commission to the broker even if the owner made an unassisted sale, the broker was allowed to recover after the owner sold. Axe v. Tolbert, 179 Mich. 556, 146 N.W. 418; DeBoer v. Geib, 255 Mich. 542, 238 N.W. 226. Even as to these last 2 cases, however, there was either claim or recital of consideration on the part of the broker.

None of these cases is squarely in point as to our present situation, but they help to illustrate the preoccupation of the Michigan Court with the question of consideration as it relates to a claim for commission under a contract to sell real estate.

In other States, the courts are divided as to the right to commission on an unassisted owner sale under an exclusive right to sell provision in a contract to sell real estate. There is substantial authority for recovery: Harris v. McPherson, 97 Conn. 164, 115 A. 723, 24 A.L.R. 1530; Jones v. Hollander, 130 A. 451, 3 N.J.Misc. 973; 8 Am.Jur., Brokers, § 57, p. 1015. There is also substantial authority against: South Florida Farms Co. v. Stevenson, 84 Fla. 235, 93 So. 247; Beck v. Howard, 43 S.D. 179, 178 N.W. 579; 64 A.L.R. 410.

Where, however, recovery has been granted, it has generally been where there was proof of consideration for the contract in performance by the real estate agent. Where it has been denied, the courts appear to...