Smith-Schultz-Hodo Realty Co. v. Henley-Spurgeon Realty Co.

• Decision Date: 10 March 1932
• Docket Number: 6 Div. 882.
• Citation: 140 So. 443,224 Ala. 331
• Parties: SMITH-SCHULTZ-HODO REALTY CO. v. HENLEY-SPURGEON REALTY CO.
• Court: Alabama Supreme Court

140 So. 443

224 Ala. 331

SMITH-SCHULTZ-HODO REALTY CO. v. HENLEY-SPURGEON REALTY CO.

6 Div. 882.

Supreme Court of Alabama

March 10, 1932

Appeal from Circuit Court, Jefferson County; Joe C. Hail, Judge.

Action by the Smith-Schultz-Hodo Realty Company against the Henley-Spurgeon Realty Company. From a judgment for defendant, plaintiff appeals.

Reversed and remanded.

Harsh &amp Harsh and Francis Hare, all of Birmingham, for appellant.

Benners Burr, McKamy & Forman, of Birmingham, for appellee.

FOSTER J.

The counts claiming upon an award of arbitrators (Nos. 5 and 7) aver the existence of a controversy between plaintiff and defendant as to whether or not defendant was due plaintiff anything on account of a commission received by defendant in the sale of some property in Birmingham. There is nothing in them which could reflect upon the bona fides of such controversy, though appellee thus argues. The counts allege a submission to certain named arbitrators.

A submission to arbitration of a controversy, when followed by an award, has a distinct legal import and contains the essential features of a binding contract. It need not ordinarily be in writing, and it is not then necessary to allege that it was in writing. After an award the proceedings import a legal obligation to abide by it as in the nature of a judgment, if such award is in proper form, and conforms to the submission, and in the absence of some matter impeaching its effect, pursuant to well known principles. Gardner v Newman, 135 Ala. 522, 33 So. 179; Roundtree v. Turner, 36 Ala. 555; Payne v. Crawford, 97 Ala. 604, 11 So. 725; Callier v. Watley, 120 Ala. 38, 23 So. 796; 5 Corpus Juris, 43, 139, § 333, 163, § 397; Reynolds v. Reynolds, 15 Ala. 398; Tuskaloosa B. Co. v. Jemison, 33 Ala. 476; Brewer v. Bain, 60 Ala. 153; Fuerst v. Eichberger (Ala. Sup.) 138 So. 409.

The chief claim of defendant relates to the alleged uncertainty in the award. It was that defendant "is to see to it" that plaintiff receives one-half of the regular real estate commission in the sale of the property. It is averred in the complaint what in dollars was such regular real estate commission. The argument is chiefly that the words "is to see to it" that plaintiff receives such commission has no legal fixed effect, and does not create a definite duty.

The meaning of the words must be interpreted in the light of the surroundings and context in which they are used. The words above quoted from the award are not uncommon in ordinary parlance as expressive of an obligation to a definite extent, and have been discussed in some of the American reports. In the case of Greene v. Burton, 59 Vt. 423, 10 A. 575, 576, it is said: "The expression, 'would see that they had their pay,' implies a collateral promise; but if this form of expression was intended and understood as a promise to pay directly, and not conditionally, it would be so treated. The substance, and not the form, should control." Under the circumstances there shown it was held to import an unconditional promise. In Brannin v. Henderson, 12 B. Mon. (Ky.) 61, an acceptance by one of an order drawn on him, in which he uses this language, "I will see the within paid, eventually," it was held to import an unconditional promise presently to pay the amount. In Desmond v. Schenck, 36 A.D. 317, 55 N.Y.S. 251, the words used were "would see" that a plumber was paid. It was held to be a direct and not a conditional undertaking, owing to the circumstances of the parties. Likewise is the case of Maddox v. Pierce, 74 Ga. 838.

A collateral undertaking means a contract of ordinary guaranty or suretyship. The former is conditioned upon the inability to collect from a third person; the latter is a promise to pay if the other does not (this also sometimes called an absolute guaranty). Watkins v. Lovelady, 186 Ala. 414, 65 So. 52; Ehl v. Watkins, 216 Ala. 69, 112 So. 426; Leftkovitz v. First National Bank, 152 Ala. 521, 44 So. 613; Craft v. Standard Acc. Ins. Co., 220 Ala. 8, 123 So. 271.

While the quoted words seem prima facie to indicate a collateral obligation, they do not, without more, show that it was not an absolute duty; that is, that it was conditional upon any other event. Such an undertaking not so conditioned is sometimes called an absolute guaranty and effective as a suretyship. Ehl v. Watkins, supra; Leftkovitz v. Bank, supra.

If the defendant had expressed an obligation to plaintiff in the language of the award, it would have been an unqualified agreement or an unconditional promise, presently to pay an ascertainable sum. And if such an agreement resulted from a dispute or controversy between them as to a liability from the promisor to the promisee for commissions earned in the sale of property, there would not be lacking any element of a binding contract. While the amount is not specified, it is ascertainable from what is specified. While the due date is not mentioned, the law supplies that as being instanter. Ehrman v. Stanfield, 80 Ala. 118. If the award furnishes the rule by which its amount may be ascertained, it is sufficient in that respect also. Roundtree v. Turner, 36 Ala. 555; Payne v. Crawford, 97 Ala. 604, 607, 11 So. 725;...