Pond v. Anderson

• Decision Date: 17 October 1950
• Docket Number: No. 47716,47716
• Citation: 241 Iowa 1038,44 N.W.2d 372
• Parties: POND v. ANDERSON et al.
• Court: Iowa Supreme Court

Page 372

44 N.W.2d 372

241 Iowa 1038

POND v. ANDERSON et al.

No. 47716.

Supreme Court of Iowa.

Oct. 17, 1950.

John L. Mowry, of Marshalltown, for appellant.

R. A. Rockhill, of Marshalltown, for appellees.

GARFIELD, Chief Justice.

Plaintiff's petition alleges defendants (husband and wife) engaged plaintiff, a real estate broker, to assist them in finding a purchaser for certain business property in Marshalltown; plaintiff found and introduced to defendants Houghton and Yerkes who purchased the property on terms acceptable to defendants; plaintiff's services were of the reasonable value of $3100.

Defendants' amended answer denies the above allegations and states that before the sale was made plaintiff told defendant J. C. Anderson he could see Houghton and Yerkes and make his own deal and whatever defendants sold the property for would be net to them; Anderson then negotiated the sale to Houghton and Yerkes; plaintiff waived and abandoned all right to a commission and is estopped to maintain the action. Plaintiff's reply denies the affirmative allegations of the amended answer and denies any waiver, abandonment or estoppel.

At the conclusion of the testimony plaintiff moved for a directed verdict on the ground a verdict for defendants would be contrary to the evidence. The motion was denied and the jury returned a verdict for defendants. Plaintiff's motion for judgment notwithstanding verdict or for a new trial was overruled and judgment was entered on the verdict. Plaintiff has appealed.

Defendants owned a business building in Marshalltown. On the first floor were two store fronts and above were offices and apartments. They sold the property to Houghton and Yerkes for $74,000.

In the summer or fall of 1947 plaintiff asked defendant J. C. Anderson who acted for his invalid wife, the titleholder, if their building was for sale. Anderson replied they might sell. Price or terms of sale seem never to have been agreed upon nor was there ever any definite agreement to pay a commission. Plaintiff got Anderson's permission to show the building to one Dorosin who made an offer for it that Anderson refused. After some negotiations Dorosin purchased other property and by May 1948 was no longer a prospect for the Anderson building.

Sometime in May, June or July, 1948, plaintiff inquired from Houghton if he would be interested in the property and with Anderson's consent and in his presence showed it to Houghton and his partner Yerkes. Negotiations with Houghton and Yerkes continued for several weeks. Final negotiations were largely between the purchasers and Anderson after consulting their respective attorneys. A preliminary memorandum of sale was signed September 30, 1948, followed by the final contract on October 22 and deed on November 12. Defendants refused to pay plaintiff a commission and this suit followed.

Plaintiff's principal witnesses were plaintiff himself and Houghton, one of the purchasers. Plaintiff says Anderson told him just after the deed was made he had arranged with the purchasers to pay plaintiff's commission. Anderson denies this. Houghton says there was no such arrangement. In any event the purchasers refused to pay plaintiff a commission.

Principal basis for the affirmative defense is testimony of Anderson, defendants' main witness, that during the negotiations in late August or in September, 1948, plaintiff told Anderson to see Houghton and Yerkes and 'make your own deal and whatever deal you make will be net to you.' Anderson further says, 'I asked him (plaintiff) where he was going to come out--he couldn't run his office for nothing, and he said he would come out all right and there would be some insurance and one thing and another.' Anderson also testifies that on September 30, 1948, before the preliminary memorandum was signed, 'I wanted to know it was understood on both sides that whatever deal I made with Mr. Houghton it would be net to me. He (plaintiff) said, 'Absolutely. Whatever deal you make, that will be net to you.''

Anderson says he asked Diggins, his son-in-law, an attorney since deceased, to call plaintiff and 'verify the agreement we had on the sale of the building.' Anderson then signed the memorandum and accepted a down payment of $500. Anderson further testifies that the same day (September 30, 1948) plaintiff phoned him that Diggins had called him to verify what Anderson claimed was his agreement about commission and he (plaintiff) had told Diggins the same as he had told Anderson that the price Anderson got for the property would be net to him.

In rebuttal plaintiff denies the above testimony tending to show he would claim no commission. He admits Diggins called him but says he told Diggins he did not understand the deal would be net to Anderson and that Anderson had said he would take care of him (plaintiff).

I. Plaintiff first contends he was entitled to recover as a matter of law and his motion for directed verdict should have been sustained. In this connection of course the evidence must be considered in the light most favorable to defendants. Davis v. Knight, 239 Iowa 1338, 1342, 35 N.W.2d 23, 25, and citations.

Our decisions, cited by plaintiff, hold that the duty of a real estate broker is performed when he finds and introduces to his principal a person who is ready, able and willing to buy on terms proposed by or acceptable to his principal. (The jury was so instructed here.) If the contract is to find a purchaser ready, willing and able to buy on terms satisfactory to the seller, the commission is earned when such a purchaser is produced. In such case it is necessary for the broker to prove: (1) The contract upon which he bases his right to a commission; (2) he produced a purchaser ready, willing and able to buy on terms satisfactory to the seller; (3) the purchaser was induced to make the purchase through the efforts of plaintiff--in other words that plaintiff was the efficient, moving cause of the sale; and (4) there was an implied contract to pay a commission for plaintiff's services.

In support of the above see Wareham v. Atkinson, 215 Iowa 1096, 1100, 247 N.W. 534; Tilden v. Zanias, 228 Iowa 708, 292 N.W. 835; Moore v. Griffith, 234 Iowa 1024, 1027, 14 N.W.2d 644, 645; Nickelsen v. Morehead, 238 Iowa 970, 29 N.W.2d 195, holding the broker's right to a commission is not defeated by mutual rescission of the sale contract by the parties thereto--see on this question Annotation 51 A.L.R. 1390, 1392.

Plaintiff was not entitled to a directed verdict if the affirmative defense of waiver was properly for the jury. In this connection plaintiff contends here such defense is of no avail to defendants because the claimed waiver was without consideration and the elements of estoppel do not appear.

We do not find this contention was presented to the trial court in plaintiff's motion for directed verdict, requested instructions (except perhaps indirectly in one request), motion for judgment notwithstanding verdict or for new trial, nor otherwise. The most that can be said is that plaintiff contended, without asserting a waiver must be accompanied by consideration, the defense of waiver was not established. Four of seven instructions requested by plaintiff deal with the defense of waiver but none clearly states consideration therefor is required. We would therefore be justified in ignoring the contention now made. However, plaintiff has argued it so earnestly we are disposed to consider it.

'Waiver' is usually defined as the voluntary relinquishment of a known right. Lamb v. City of Boone, 237 Iowa 273, 278, 21 N.W.2d 462, 464, 162 A.L.R. 1465, 1467, 1468, and citations; Wisdom v. Board, 236 Iowa 669, 684, 19 N.W.2d 602, 609; 56 Am.Jur., Waiver, section 2; 44 Words and Phrases, Perm.Ed., page 516 et seq.

While 'waiver' and 'estoppel' are closely akin, they are not the same. Waiver does not necessarily imply that the other party has been misled to his prejudice while estoppel involves this element. See Wandell v. Mystic Toilers, 130 Iowa 639, 645, 105 N.W. 448, 450; Schuetz v. International Harvester Co., 167 Iowa 634, 639, 149 N.W. 855, 857; Collins v. Iowa Mfrs. Ins. Co., 184 Iowa 747, 751, 169 N.W. 199, 200; Wisdom v. Board, supra, 236 Iowa 669, 684, 19 N.W.2d 602, 610; 56 Am.Jur., Waiver, section 3.

Here there is no direct testimony that defendants relied on the statements claimed to have been made by plaintiff which infer he would claim no commission, nor that defendants would not have made the contract with the purchasers except in the belief plaintiff would not claim a commission. And defendants do not argue there was consideration for the claimed waiver on which they rely.

The authorities are in conflict as to whether a waiver must be accompanied by consideration where the elements of estoppel are not shown. It is sometimes said that where substantial, as distinguished from formal, rights are involved a waiver must be supported by consideration. See Pacific States Corp. v. Hall, 9 Cir., 166 F.2d 668, 671; 56 Am.Jur., Waiver, section 16; 12 Am.Jur., Contracts, section 354; 67 C.J., Waiver, section 2; 17 C.J.S., Contracts, § 492a, page 995; 44 Words and Phrases, Perm.Ed., page 536 et seq.

However, we have held and there is much authority that waiver is not a contract and that consideration such as is necessary to support a contract is not essential to a waiver. Mahaska County State Bank v. Crist, 87 Iowa 415, 425, 54 N.W. 450; Schuetz v. International Harvester Co., supra, 167 Iowa 634, 639, 149 N.W. 855, 857; Smith v. Coutant, 232 Iowa 887, 894, 6 N.W.2d 421, 426; Swihart v. Missouri Farmers, etc., Ins. Co., 234 Mo.App. 998, 138 S.W.2d 9, 16, 17; Clark v. Dye, 158 Minn. 217, 197 N.W. 209, 212; Order of Ry. Conductors v. Quigley, Tex.Civ.App., 83 S.W.2d 701, 704; Schwartz v. Wilmer, 90 Md. 136, 44 A. 1059, 1061. And see citations to the texts last above.

The opinion in Schillinger Brothers & Co. v. Bosch-Ryan Grain Co., Iowa, 116 N.W....