Appeal
from Circuit Court, Multnomah County; Walter H. Evans, Judge.
Action
by Charles Richanbach, doing business as the Charles
Richanbach Company, against A. C. Ruby. Judgment for
plaintiff, and defendant appeals. Reversed, and new trial
ordered.
This is
an action by Charles Richanbach, plaintiff, who was doing
business under the assumed name of Charles Richanbach
Company, to recover commissions upon the alleged employment
by the defendant, A. C. Ruby, to negotiate a lease of certain
property in Portland. The complaint, after setting forth the
qualifications of Richanbach as a real estate broker and the
fact that he is duly licensed as such, continues as follows:
"That
heretofore, to wit, in the month of February, 1925, the
defendant employed the plaintiff as a real estate broker
for the purpose of procuring a lessee to lot six and the
north thirty feet of lot seven, block thirty-one, Couch
Addition to the city of Portland, Multnomah County, Oregon
for a period of thirty years beginning March 1, 1925; that
the defendant agreed to pay the plaintiff a reasonable
commission for services as real estate broker in the event
a lessee ready, willing and able to lease said real estate
upon the terms hereinafter set forth should be procured
that the terms fixed by the defendant required the payment
of a monthly rental of $1,000 for the first 10-year period
eleven hundred dollars for the second 10-year period, and
$1,200 for the last 10-year period, all of said amounts net
to the owner; defendant further demanded as a condition of
the lease that the lessee should agree therein to pay all
taxes and insurance and one-half of all assessments levied
subsequent to the date of lease and that the lessee should
take over several existing leases to portions of the
premises; that the said existing leases and the returns
therefrom were described in detail to the plaintiff by the
defendant as follows:
"Hotel
situated at 286 1/2 Burnside St.--Lease for about 2 years
$450.00 per month.
"Hotel
containing 67 rooms.
"Restaurant
at 286 Burnside Sts.--Lease for 1 year, $110.00 per month.
"Barber
shop situated at 288 1/2 Burnside St.--No lease--paying
$65.00 per month.
"Tailor
shop situated at 290 1/2-292 Burnside St.--No lease--paying
$110.00 per mo.
"Theatre
situated at 290 Burnside St.--Lease for 6 years--$450.00
per month.
"Fruit
stand on the corner--no lease--paying $150.00 per month.
"The
defendant further insisted upon the procuring of an
agreement on the part of the lessee to deposit with the
owners the sum of $10,000 in cash as security for
compliance by the lessee with the covenants of the lease
such deposit to bear interest at the rate of six per cent.
per annum, and the lease to contain a provision for the
forfeiture of such deposit as liquidated damages in the
event the terms of the lease should be broken.
"That
thereafter, to wit, on February 24, 1925, the plaintiff in
pursuance of his employment as real estate broker as
hereinbefore set out procured a lessee in the person of
Morris Taylor, a person ready, willing and able to execute
as lessee a lease of said premises on the terms demanded by
the defendant; that the defendant thereupon communicated to
the plaintiff his willingness to accept the said Morris
Taylor as the lessee upon the conditions named with the
exception of a limitation as to option to purchase said
property and as to the reservation of a right on the part
of the defendant to sell real estate during the term of the
lease in the event the lessee failed after a ninety-day
notice, to purchase same; that thereupon the plaintiff
communicated to the said Morris Taylor the terms of the
said exception and reservation and procured the consent of
the said Morris Taylor to the incorporation of said
additional provision; that thereupon the plaintiff
communicated to the defendant the fact that the said Morris
Taylor had so accepted said exception and reservation and
was prepared to enter into the said lease and plaintiff
then and there delivered to the defendant for and on behalf
of the said lessee the sum of $1,000 as earnest money and
said sum for deposit was received and retained by the said
defendant.
"That
thereafter it developed that the facts stated by defendant
to the plaintiff with reference to the periods of time for
which portions of the said premises are under lease at
present and the rental returns therefrom were untrue and
known by the defendant to be untrue at the time such
representations were made notwithstanding that the
defendant communicated them to the plaintiff for the
purpose and with the intent of having the plaintiff in turn
communicate same to the prospective lessee as
representations and warranties in said regard; that the
said lessee ascertained that the said representations were
untrue in material particulars in that portions of said
premises were under lease for periods several times as long
as those stated by the defendant and that the rents
reserved in the existing leases to portions of said
premises were and are considerably less than the amounts
stated by the defendant as hereinbefore set forth; that
accordingly said lessee declined to proceed with the
execution of said lease and repudiated liability so to do
because of said misrepresentation of fact and that but for
said misrepresentations said lease would have been
consummated and that this plaintiff duly did perform each
and every act required on his part as agent and broker in
said regard and that the failure to execute said lease was
not caused by any act, neglect or default on the part of
the plaintiff."
At all
the times mentioned in the answer, there was a building upon
said property which was rented for business purposes, to wit:
"That
part known as 286 1/2 Burnside Street, containing 68 rooms
then and now leased for hotel purposes, under a lease which
provided for the payment of $450.00 a month rental, said
lease having about two years to run.
"A
room known as 288 Burnside Street, rented for a restaurant
under a lease which provided for $110.00 per month rental
which said lease had about one year to run.
"A
room known at 288 1/2 Burnside Street, rented for the
purpose of a barber shop and returning a rental of $65.00
per month, which said room was leased until December 31,
1925.
"Rooms
known at 291 1/2 and 292 Burnside Street, rented for a
tailor shop and returning a rental of $110.00 per month,
which said rooms were rented from month to month.
"Theatre
at 290 Burnside Street, leased for theatrical purposes
under leases extending for a period of approximately eleven
years and returning a rental of $400.00 a month for about
one year and $450.00 a month thereafter.
"A
fruit stand on the corner, which returned a rental of
$150.00 a month and was rented from month to month."
The
answer then continues as follows:
"The
defendant then advised the plaintiff that he had said
premises rented as aforesaid, and advised the plaintiff of
the leases upon said premises, the time in which said leases
had to run, and the rental received therefor, and defendant
then told the plaintiff that he was not desirous of leasing
the said property to said client of plaintiff.
"That
thereafter on or about the 24th day of February, 1925, the
plaintiff again approached the defendant and represented to
him that his said client was a man by the name of Morris
Taylor and that he was authorized by his said client to offer
to defendant a contract between the said Morris Taylor and
the defendant, substantially as follows: That the defendant
should lease said premises to the said Morris Taylor for a
period of thirty (30) years, beginning on March 1, 1925, at a
monthly rental of one thousand ($1,000.00) dollars per month
for the first ten-year period; eleven hundred ($1,100.00)
dollars per month for the next ten-year period; and twelve
hundred ($1,200.00) dollars per month for the last ten-year
period, said amounts being net to the defendant and that he
the said Morris Taylor, would pay the taxes, insurance and
one-half of the assessments levied after the date of said
proposed lease and would take over the then existing leases
on certain parts of said premises and would deposit with the
defendant the sum of ten thousand ($10,000) dollars in cash
for the security of the payment of the rental and the several
covenants and conditions of the lease, it being part of said
proposal that the said Taylor should receive interest at the
rate of six per cent. per annum payable quarterly, and that
provisions should be made for a return to the said Taylor of
the ten thousand ($10,000.00) dollars upon the termination of
the said lease, or upon failure of the said Taylor to carry
out the terms of said lease that deposit should be retained
by the defendant as liquidated damages; that said lease
should contain a further provision that the said Taylor could
at any time within the life of the said lease purchase the
said premises for the sum of two hundred thousand ($200,000)
dollars, of which said sum fifty thousand ($50,000) dollars
was to be paid in cash and the balance in terms to be
thereafter agreed upon.
"The
plaintiff further advised the defendant that said offer of
said Taylor if not accepted by defendant before the hour of
noon on Thursday, the 26th day of February, 1925, would be
automatically withdrawn and that the same was not subject to
acceptance thereafter, whereupon the defendant advised the
plaintiff that the offer of the said Morris Taylor was not
acceptable to him, but at the urgent request of the plaintiff
the defendant agreed to submit a counter proposal to the
plaintiff.
"That
the defendant, after noon of the said 26th day of ...
