Smith v. Farrell, 4660
| Decision Date | 26 April 1957 |
| Docket Number | No. 4660,4660 |
| Citation | 199 Va. 121,98 S.E.2d 3 |
| Court | Virginia Supreme Court |
| Parties | MAYER SMITH v. EDWARD J. FARRELL. Record |
Lipman Redman (Thomas G. Mays, Jr. and Adams, Porter & Radigan, on brief), for the plaintiff in error.
Anna F. Hedrick (Ewell G. Moore, Jr. and Hedrick, Fletcher, Moore & Leigh, on brief), for the defendant in error.
Edward J. Farrell, a real estate broker, filed motion for judgment against Mayer Smith for $371,679.03 as damages resulting from a breach of an oral contract entered into between the parties on June 15, 1954.
He averred in his motion that Smith agreed to construct 1500 houses in a subdivision known as Ada Valley, Anne Arundel County, Maryland, beginning 'on or near September 18, 1954, and to be completed within a reasonable time thereafter.' He further alleged that he (Farrell) was to expend funds to promote and advertise the subdivision not to exceed ten per cent of commissions earned, which commissions were to be between $250 and $350 for each house sold; that he, pursuant to the agreement, devoted much time and spent $3,320.97 in promoting and advertising the project; that Smith failed to begin construction as agreed, the first house having been completed in January 1955; that Smith completed only three houses; that on January 6, 1955, Smith notified Farrell, without legal justification, that he did not intend to pay him any commission and that his services were terminated, which prevented him from fulfilling his obligations under the contract.
In Smith's answer to the motion for judgment he denied, inter alia, the existence of the contract as alleged, and stated that there was no duty imposed upon him by contract or otherwise to construct the houses in question that the agreement was as set forth in his letter to Farrell, dated November 22, 1954, and that the only contractual relationship was one of agency, uncoupled with an interest, between Wilton Woods Building Corporation, owner of Ada Valley, and Farrell, wherein Farrell could offer for sale houses which might be built and receive commissions in event of sale.
The case proceeded to trial before a jury, and resulted in a verdict of $110,000, which the court refused to set aside and judgment was entered accordingly. An appeal was granted Smith.
The parties will be hereinafter referred to at times as plaintiff and defendant in accordance with their positions in the trial court.
Defendant contends, in his assignments of error, that the verdict is contrary to the law and the evidence; that the trial court erred in refusing to set aside the verdict in that plaintiff had failed to carry the burden of proof and establish the alleged contract, and that plaintiff failed to carry the burden of proof relative to his damages in that the damages shown are too remote, speculative and contingent.
The chief assignment of error requires that the evidence be stated in some detail.
Plaintiff having prevailed in the trial court, we are required to view the evidence in the light most favorable to him.
Plaintiff, a realtor licensed in Virginia, Maryland and District of Columbia, caused to be published in the Washington Post on April 17, 1954, an advertisement addressed to builders and developers, offering for sale several hundred acres of land in Maryland. As a result of the publication defendant contacted plaintiff in reference to purchasing the property. Defendant, through Wilton Woods Building Corporation (hereinafter referred to as corporation) of which he was president, made an agreeable offer for the purchase of land known as the Bussey tract, containing approximately 94 acres, and the agreement was reduced to writing dated May 26, 1954. Later the corporation purchased several other tracts through plaintiff and he received full commissions from the vendors for all properties sold the corporation.
On June 15, 1954, a meeting was held in Farrell's office, at which the oral contract was alleged to have been made that is the basis for this action. Those present, other than the parties to this action, were Joseph E. Monaco, Smith's superintendent, and Jesse Bryant Bettis, Farrell's engineer and salesman.
Plaintiff testified that at this meeting it was agreed that he was to prepare brochures and newspaper advertisements in regard to the proposed development; that he would be in complete charge of sales and the hiring of sales representatives; that his commissions would be $250 for sale of a two bedroom house, $300 for a three bedroom house and $350 for a four bedroom house; that he was to have exclusive sales rights for the first 1500 houses to be built; that he was to expend for promotion sums not to exceed 10% of commissions earned. In support of his contention that defendant agreed at this meeting to build 1500 houses and pay commissions for their sale as stated above, plaintiff when asked on direct examination 'What was said, if anything, at that meeting concerning whether or not Mr. Smith was obligated to build the houses, and, if so, how many, and, if so, how many were you to have an exclusive right to sell?', replied as follows: 'Mr. Smith explained that as the operation graduated in size that outside investors would be involved and that he could only commit himself to us for 1500 houses that we could sell; that after that point, should our services prove satisfactory, he would then naturally recommend us for further sales but that he couldn't commit himself for over 1500 in Area 1.'
He further testified that on June 17, 1954, two days after the meeting, he wrote defendant a letter which is filed as an exhibit, setting forth the commissions agreed upon. It is stated in the first paragraph thereof: 'This will confirm our discussion in my office on June 15, 1954 regarding sale commissions payable under an exclusive for all houses constructed in your development projects in ANNE ARUNDEL COUNTY, MARYLAND.' Nowhere in the letter is mention made of any promise on defendant's part to build the houses.
He also testified that pursuant to the agreement he employed George J. Nilles for the purpose of promoting sale of the houses to be constructed, who remained in his employ for several months and that his total expenditures in connection with the project amounted to approximately $3,300.
On cross examination plaintiff stated:
'
* * *
'That scale of commission was to be as part of the agreement for the sale of the houses.
He also stated that at the time he sold the property to the corporation, he knew that sewer and water facilities were not available and that the county commissioners could not fix a time when they would be available; that only three sample houses had been built at the time of trial of this case; that defendant had indicated to him that his net worth was $35,000 and he could not finance the project alone, but with his brothers and connections he could show a financial statement of one million dollars; that to finance 1500 houses at $10,000 each would require approximately fifteen million dollars; that he was not familiar with F.H.A.'s attitude toward making a determination as to the need for housing in the area where construction was contemplated at the time the alleged agreement was made and was unable to say what its attitude was at the time of trial; that he had 'never actually been a part of a development', and that he got started on the project in October or November 1954.
Defendant, as president of the corporation, wrote plaintiff on November 22, 1954, advising that since ground had been recently broken for the subdivision, they should have an understanding as to what part plaintiff was 'supposed to play in this undertaking.' He related therein that he had a verbal agreement with plaintiff that he was to sell some of the houses about to be...
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