Preston v. Postel
| Citation | 300 F. 134 |
| Decision Date | 28 June 1922 |
| Docket Number | 356. |
| Parties | PRESTON v. POSTEL et al. |
| Court | U.S. District Court — Southern District of Texas |
Baker Botts, Parker & Garwood and Cole, Cole & O'Connor, all of Houston, Tex. (Robert L. Cole and Rodman S. Cosby, both of Houston, Tex., of counsel), for plaintiff.
L. B Moody and Ed S. Phelps, both of Houston, Tex., for defendants.
The plaintiff in this case is a real estate agent or broker in Houston, and the defendants are the owners of a tract of land containing something more than 1,800 acres, located near that city, and referred to in the testimony as the 'Deer Park tract.' As early as 1915 the plaintiff had been in communication with the defendants respecting the sale of the said property. On August 1st of that year he obtained an option for a period of 30 days to buy or sell the land, but nothing appears to have been accomplished by him at that time. No further communications passed until February 12, 1919, when the defendants, in response to a request from the plaintiff for a price or an option, expressed a willingness to accept $400,000 for the property. 'The price above stated is net to us, and your commission would have to be added on to this selling price.'
When acknowledging this communication, the plaintiff requested the defendants to give him an exclusive right to sell, or something in the nature of an option, for a period of 90 days, in view of the expense incident to the advertisement and exploitation of the property and the necessity of disposing of the tract in parcels, or to more than one purchaser. No reply was made to this request, and no further negotiations or correspondence is shown until October 26 1919, when the plaintiff wired the defendant Julius Postel, who had in charge the property for both of the defendants, that he would show the tract to a prospective purchaser on the following day, and asked whether a lower price than that named in the letter of February 18th would be considered. This message was answered to the effect that the defendants were expecting to be in Houston during the early part of November, and would not fix a price before that time.
Prior to the receipt of this communication, the plaintiff had executed a written contract with a representative of an Oklahoma oil company for the sale of this property for $425,000 in cash, $400,000 of which, under the terms of the February letter, was to be paid to the defendants. To secure this trade, $10,000 was placed in escrow with a Houston bank by the prospective purchaser, pending the formalities incident to the consummation of the deal. The defendants were requested to confirm this arrangement, but they declined to do so, and at once repudiated the authority of the plaintiff to bind them in the premises. They stated, however, that they would be in Houston during the first week in November, and that that was 'the best can do under circumstances. ' The plaintiff thereafter saw the defendants at their home in Illinois, and personally undertook, but without success, to induce them to ratify the contract he had made. At that time he insisted that under the circumstances the defendants should pay him the amount of the commission, to wit, $25,000, and the defendants denied or disclaimed any obligation to him.
But they separated with the understanding that the defendants would go to Houston, and, after acquainting themselves with values, would determine what should be done. About November 1st they went to Houston, made some investigation, and met, through the plaintiff, the representative of the oil company with whom the plaintiff had previously contracted. On the 8th of November they concluded a contract with him, and also with the plaintiff, by the terms of which they agreed to sell, under the conditions set forth in the contract, to E. W. Marland, who was the president of the oil company and presumably acting for it, the property in question for $525,000, and to pay to the plaintiff herein, under certain conditions set out in the contract with him, a commission of $25,000.
The transactions or negotiations preceding the execution of these contracts are important only to the extent that they show the relationship between the parties, and that prior to the execution of them a controversy existed respecting the right of the plaintiff to a commission or fee. The trade with Marland was never consummated, but the plaintiff claims that, notwithstanding that fact, he is entitled to the commission under the provisions of the contract made with him, and referred to above, and this suit is for the recovery of same.
Before the acquisition of this property by the defendants, a portion of it had been subdivided into lots and blocks, with streets and alleys dedicated to the public use, and at least one of the blocks thus designated had been disposed of. This fact was known to the plaintiff at the time he conducted negotiations for the sale of the property. The evidence is that, before either of the contracts was executed, a representative of the prospective purchaser called attention to the designation on the map of a town site, and made it plain that the subdivision into lots and blocks of that portion of the tract where the town site was located would make the property unfit for the uses for which it was designed by him. At that time he was advised by a representative of the plaintiff that all difficulty in that regard could be removed.
The contract for the purchase of this property was made with E. W. Marland, acting through Chester H. Westfall as his agent. It is rather an elaborate document, which it is unnecessary to quote in full. The features of it that are of consequence here are an agreement (a) that the defendants would sell, and Marland would buy, the entire tract, deducting from same 'block 39 of Deer Park town site and the right of way of the G., H. & S.A. Railroad'; (b) that the consideration was to be $525,000 in cash; (c) that the defendants should have 10 days from the date of the contract within which to complete and present to the purchaser an abstract of the title, and that the purchaser would cause the abstract to be examined by his attorneys, and objections reported, within 30 days thereafter; (d) that, if the attorneys reported a good and merchantable title in fee simple in the defendants, the purchaser should have until January 25 within which to 'take and pay for said property as herein provided,' but that, if the abstract did not, in the opinion of the attorneys for the purchaser, show a good and merchantable title in fee simple in the defendants, the latter should have until January 15, 1920, within which to 'perfect said title, so as to make it a good and merchantable title in fee simple, and they bind themselves to use their best efforts to perfect said title to said property within said time'; (e) that a deposit of $10,000 would be placed in escrow by the purchaser with a Houston bank, with the stipulation that, in the event the sale was carried out, such deposit should be applied in part payment of the purchase money of the property, but if in the opinion of the attorneys a good and merchantable title was tendered by the defendants within the time specified, and the 'party of the second part, fails to take and pay for the property as herein provided,' the $10,000 should be forfeited and paid over to them by the bank as 'liquidated damages, and this contract shall be null and void, and all parties herein named released from any liability hereunder'; (f) that if, on the other hand, the abstracts of title showed that the defendants did not have a merchantable title, and were unable or failed to cure the defects within the time designated, 'then the money deposited in escrow shall be returned to the party of the second part, and this contract shall be null and void and all parties released.'
After this contract had been executed, the defendants made an agreement with the plaintiff, as follows:
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