Leathers v. Canfield

• Decision Date: 07 June 1898
• Citation: 117 Mich. 277,75 N.W. 612
• Court: Michigan Supreme Court
• Parties: LEATHERS v. CANFIELD.

75 N.W. 612

117 Mich. 277

LEATHERS v. CANFIELD.

Supreme Court of Michigan

June 7, 1898

Error to circuit court, Kent county; William E. Grove, Judge.

Action by Don J. Leathers against John Canfield. From a judgment for plaintiff, defendant brings error. Reversed.

Hanchett & Hanchett and Butterfield & Keeney, for appellant.

McGarry & Nichols and Judkins & Perkins, for appellee.

LONG J.

This action is brought to recover a commission of $30,000, which plaintiff claims was agreed to be paid to him by defendant for plaintiff's services as a broker in procuring the purchase by the Thayer Lumber Company from defendant of 10,000 acres of pine land situated in Missaukee and Kalkaska counties. Plaintiff's claim is that in June, 1895, he met Mr. Monroe, superintendent of the Thayer Lumber Company, at Muskegon, and arranged with him to open negotiations with defendant for the purchase of this tract of timber, and in pursuance of which certain correspondence was had with defendant. Defendant would not consent to put these lands into the market, and refused to give an option thereon, but stated in a letter of November 6, 1895, that he would not refuse an offer of $1,500,000. On November 11, 1895 plaintiff called on defendant at his place of business, and as to that interview testifies: "Mr Canfield said (in speaking of this timber) that he had always intended it should be manufactured at Manistee, and he would prefer to sell it at less money to come to Manistee than to come to Muskegon, or anywhere else. I told him the price which he always held it at was altogether too high, and these folks would be glad to look at it at a price they thought they could afford to buy it. Mr. Canfield said to me that he had been offered $1,200,000 or $1,225,000,-I am not positive which. I asked him if he would give me an option on it for thirty days for $1,300,000 for the Thayer Lumber Company to look at it, or rather for my parties to look at it. I guess I did not tell him the Thayer Lumber Company then. He said not he would not give me an option in writing, but would withhold it from market for thirty days' time in which the parties could have to go and estimate it." The plaintiff further testified: "I asked him about commissions in case I found a purchaser for it-in case my parties should take it after looking it. He said he had expected to pay a good commission to any one in case it was sold. I asked him what he called a good commission, and he said he thought $25,000 was a good, fair commission. I told him it was not enough for a deal of that kind at any such price. He said he would wait until they got through looking it to see whether they wanted it or not, and then we probably would have no trouble in agreeing upon a commission." Plaintiff testified that he had another interview with defendant on December 3d, in which he told defendant that his offer of $25,000 commission was not enough, and that he ought to have a commission of $32,500. He says in this interview he told defendant, "I was getting a small commission from the other side." The Thayer Lumber Company completed the examination of the land, and on December 13th Mr. Monroe went with plaintiff to Manistee to see defendant. No arrangement was made in regard to the purchase, and the parties separated. Plaintiff says that on that day, after Mr. Monroe had gone, he again told defendant that he was getting a small commission from the other parties,-from Mr. Monroe. About the 3d of January following this last interview, the defendant was in Grand Rapids, and plaintiff sent for Mr. Monroe to meet him. Before Mr. Monroe came, plaintiff says he had a further talk with defendant about commissions, in which it was agreed between them that he should receive $30,000. At this meeting no arrangement was made for the sale of the land, as the parties could not agree upon the price. It appears that before the time plaintiff met defendant at Manistee, and at which time he claims to have told defendant he was getting a small commission from Mr. Monroe, he had arranged with Monroe for a commission of $10,000. This agreement Monroe put in writing on December 11, 1895, as follows: "Dear Sir: Confirming our verbal agreement of on or about the 22d ultimo, and our further conversation at Grand Rapids today, as requested by you, I write to say that if you negotiate with John Canfield the purchase by this company of the Canfield pine lands, so called, in Missaukee and Kalkaska counties, amounting to about 10,000 acres, we are to pay you $10,000, which will be in full of your commissions and services and expenses in the matter. Otherwise we are under no obligations to you on account of any services you may have rendered or expenses incurred; it being the understanding that if we so purchase we are to get the property for the amount actually going to Mr. Canfield for the same." In reference to this agreement plaintiff testified: "At the time Mr. Monroe said he would give me $10,000 if I would use my influence to get the timber for them at a price they could afford to buy it at, I said to him that I would do what I could, but I did not want that to bar me from any commissions from Mr. Canfield; that it would be no price as a commission for a deal of that size,-of that magnitude. He said he did not care anything about how much commission I got from Mr. Canfield as long as he got the timber for the actual price going to Mr. Canfield." It appears that after this meeting of the parties in Grand Rapids on January 3, 1896, no further negotiations were had between the parties in reference to purchase and sale of the lands until in December following, when negotiations were opened between defendant and Mr. Monroe, and the lands were purchased from defendant by the Thayer Lumber Company for $1,200,000 some time in January, 1897, the contract being finally made, and first money paid, in February following. Mr. Monroe testified: "During the fall of 1895 and up to January 3, 1896, when they [the negotiations] terminated, Mr. Leathers was acting in my behalf and in my interest. I had an arrangement with him, in case he got a satisfactory price for the timber, and negotiated the trade, we were to pay him a certain sum of money. *** Before we sent our man onto the lands, I saw Mr. Leathers, and asked him, 'What do you want out of this?' *** and he said in a trade of that kind he ought to have $25,000 from us. I told him if that was his bottom figure, we would go no further. *** He said he could do us a lot of good in a trade of that kind, and wanted to work for our interest alone. *** We finally agreed that if Mr. Leathers would work solely for our interest, and for no commissions from the other side, and we were to have the timber for the net amount that Mr. Canfield sold it for, we would pay him $10,000 in cash, in case he negotiated the sale at a price satisfactory to us. *** In doing what he did during the fall of 1895, I understood he was acting for me." The defendant testified that he made no agreement with Mr. Leathers to pay him a commission, but, on the contrary, stated to him that he would not pay him any commission. He further testified that Mr. Leathers wanted a commission of $40,000, and he told him he would have nothing to do with the deal, as he was able to make his own sales and handle his own lands as well as any one could do it for him.

The defendant's claims on the trial were: (1) That he did not employ plaintiff; and (2) that plaintiff was in the employ of the Thayer Lumber Company, and working for and in its interests, and not in the interest of defendant. Plaintiff's claim was that he stood in relation to the parties as a broker, acting for both. The court charged the jury upon that question as follows "Upon the question of double commissions,-whether a broker may act for both parties to a deal, whether he may be agent for both buyer and seller,-I understand the law to be that the broker cannot act as the agent of both parties where their interests are adverse, without their knowledge and consent. Where the double agency is unknown to either party, the broker cannot recover from both; that is, he cannot enforce the payment of commissions from the party who was ignorant of his being employed by the other,-who was ignorant of the double employment. Where the double agency is known and assented to by both parties, and each agrees to pay the broker a commission, he may recover from both; and where the broker is simply acting as a middleman to bring the parties together, and takes no part whatever in the negotiations between them, he may, to this extent, act as the agent of both parties, and recover commissions from each; and it is immaterial in such case that either party was unaware that he was employed by the other. It is claimed by the plaintiff in this case that that was his relation to this deal,-that he was simply a middleman to bring the parties together, they to make their own contract as to price and terms; while on the defendant it is claimed that he was at least employed to serve the Thayer Lumber Company to a greater extent; he was to do something more, as it is claimed by the defendant, in behalf of the Thayer Lumber Company; that he was to do everything he could to obtain a purchase for them on as reasonable terms as he could. There is a question of fact over which there is a...