Vandenbergh & Hitch Inc v. Buckingham Apartment Corp.

• Decision Date: 11 June 1925
• Citation: 128 S.E. 561
• Court: Virginia Supreme Court
• Parties: VANDENBERGH & HITCH, Inc., et al. v. BUCKINGHAM APARTMENT CORPORATION.

128 S.E. 561

VANDENBERGH & HITCH, Inc., et al.

v.BUCKINGHAM APARTMENT CORPORATION.

Supreme Court of Appeals of Virginia.

June 11, 1925.

Error to Circuit Court of City of Norfolk.

Action by Vandenbergh & Hitch, Inc., and others, against the Buckingham Apartment Corporation. Verdict for plaintiffs was set aside, and judgment entered for defendant, and plaintiffs bring error. Affirmed.

Jas. G. Martin & Bro., of Norfolk, for plaintiffs in error.

E. R, F. Wells, of Norfolk, for defendant in error.

BURKS, J. The plaintiffs in error were real estate brokers, and brought this action to recover commissions for the sale of the Buckingham Apartments. There was a verdict for the plaintiffs for $4,300, which the trial court set aside, and entered judgment for the defendant. The sole ground on which the trial judge set aside the verdict was because he was "unable to find evidence sufficient to support the verdict."

The subject of sale was an apartment house, then recently constructed and largely occupied by tenants. At the time of the sale the rental contracts called for $1,660 per month or approximately $20,000 per year. The house when full had a rental value of $24,000 per year. These facts were so represented to the purchaser. There was a mortgage on the house for $95,000. carrying interest at 7 per cent., payable semiannually, and certain portions of the principal were payable annually beginning July 1, 1924. Of this fact the purchaser was also informed. But the rental contracts were subject to certain rebates amounting, in the aggregate, to about $1,500 per annum, and the mortgage contained the following clause:

"And as a further security and provision for the payment of said bonds, the said Buckingham Apartment Corporation covenants to assign to the said trustees, to be applied to the payment of interest on all of said bonds, and to the principal of such of said bonds as fall due during the respective years ending July 1st, so much of the rents derived from the said property to be paid to said trustees on the 15th day of each month in equal monthly installments as may be necessary to pay the said interest and the said principal falling due during each respective year ending July 1st as aforesaid."

The purchaser had not been informed of the rebate in the rents, or of the clause in the mortgage above quoted, at the time he entered into his contract of purchase. The contract of purchase was in the form of an offer by the purchaser, and acceptance by the owner, in the following words and figures:

"Norfolk, Va. Dec. 11, 1922.

"Messrs. Vandenbergh & Hitch, Inc., Dickson Bldg., Norfolk, Va.—Gentlemen: I hereby agree to purchase the Buckingham Apartment at the southwest corner of Brandon avenue and West Ghent boulevard for the sum of $140,000. I agree to stand one-half of the excess above 6 per cent. interest on the $95,000 mortgage from January 1, 1923, to July 1, 1932. The said property to be turned over tome in the present condition with all material that is now on the site. All rentals to be turned over to me on January 1, 1923. Said property to be free of all liens.

"The said $140,000 is to be paid as follows: Assume the first deed of trust of $95,000, give a deed to my property No. 232 W. Thirtieth street free of liens, which is valued at $18,000, and pay in cash $27,000, less the difference in interest above mentioned.

"This offer must be accepted by 11 a. m. December 12, 1922.

"Very truly yours,

"[Signed] J. Johnson."

"Norfolk, Va., Dec. 12th, 10:30 a. m.

"I hereby agree to accept the above offer Buckingham Apartment Co.

"By [Signed] R. C. Hogue, Pres."

R. C. Hogue was president and treasurer of the Buckingham Apartment Corporation, and owned 98 per cent. of its capital stock. Jesse Johnson, the purchaser, was ready, able, and willing to buy the property at the price mentioned, if the facts in relation thereto had been as represented to him by the brokers. There were several meetings of the parties and their counsel and the brokers to close the sale on December 12, 13, and 14. The details of these meetings need not be given further than to say that all negotiations were broken off, and Johnson definitely refused to take the property on December 14 because he would not "stand for" the rebates in the rents which would cause him a loss of about $1,500, and the monthly payment of interest and curtails, which would cause him a loss of about $3,500. Dr. Hogue refused to "stand for" or make good either of these losses, and insisted upon the performance of the contract as written. Johnson insisted on performance as represented. At this stage, the parties being unable to agree, negotiations were broken off.

If this were all, the plaintiffs were clearly not entitled to recover. But the plaintiffs insist that Dr. Hogue agreed to take care of the rebates, and that Johnson "agreed to accept it with the interest and curtail payable monthly." If these facts were shown, then the differences between the parties were adjusted, and the plaintiffs were entitled to recover.

There was also some evidence tending to show that Dr. Hogue agreed to make up the difference between monthly and semiannual payment, but it is too vague and indefinite to be of value.

On the subject of the rebates of rents, Vandenbergh, one of the plaintiffs, who conducted most of the negotiations, admits that he did not inform Johnson of the rebates, but gives, as his reason for not so doing, that "Dr. Hogue had agreed to take care of these rebates." Again, "I left Dr. Hogue with the understanding and positive statement by him that he was going to take care of those rebates out of the cash when the deal was settled. That was our understanding in the matter." Further on this subject, he was interrogated and answered as follows:

"Q. That he, Dr. Hogue, or the Buckingham Apartment Corporation, which?

"A. That the Buckingham Apartment Corporation was going to take care of the rebates out of it. I told him he could not expect anybody to buy any building with a lot of leases and rebates on it, and after the man bought it he would wake up and find out that he was getting less rent than the leases called for.

"Q. Did you communicate that to Mr. Jesse Johnson?

"A. I told Mr. Johnson that when he told me that Dr. Hogue had said he had told me what those rebates amounted to, I didn't tell him that when we were making those negotiations.

"Q. Did Mr. Johnson agree to that disposition of the matter?

"A. Nothing was said to him about it, because there was no question about it. Dr. Hogue was going to take care of them, therefore, Mr. Johnson would have been satisfied.

"Q. How do you know he would have been satisfied?

"A. He would have been satisfied to get his $1,600 a month rent out of it.

"Q. And he would have been satisfied with Dr. Hogue's verbal promise that he would pay back the rebates?

"A. There was not going to be any verbal promises. They were going to be paid when they settled. He led me to think it was a very small amount."

Mears, another of the plaintiffs who was present with Vandenbergh, testified as follows:

"Q. What transpired then?

"A. We went into the thing in detail, and Dr. Hogue told us—took his leases out—that there was some little difference in the rental, which matter he wanted to adjust himself. That was brought up by his stating that he wanted the rentals to stay in the hands of Mr. Hecht, who was then the rental agent for the building. We told him that Mr. Johnson's son wanted to handle the rentals, or that Mr. Johnson wanted his son to, and asked him to turn them over, and he insisted that they remain in Mr. Hecht's hands for that reason, so that he could better take care of these little differences in the leases he refers to. Shortly after that conversation that morning he signed the contract, and we hustled down to Mr. Johnson's office, because we had very little time to make our delivery and still be in the limit.

"Q. Before you left Dr. Hogue that morning, did he, or not, consent to stand the difference in the rent?

"A. He did."

Dr. Hogue, the only other person present at this conversation, positively denied any such undertaking or agreement. This constituted a conflict to be decided by the jury. On this question, the jury found for the plaintiffs, and the trial court had no power or right to interfere with its findings.

On the subject of the monthly payment of interest and sinking fund to meet the annual payment of principal, Vandenberghadmits that he represented to Johnson that the interest was payable semiannually, and he thought such was the fact. This is admitted by him to have been a misrepresentation, and Johnson was under no obligation to go to the record to verify his statement. He testified positively, however, that Johnson agreed to take the property with the monthly payments. His testimony on the subject was as follows:

"Q. Did Mr. Johnson state in your presence that he would not take the property on account of this interest and sinking fund being payable in monthly installments instead of semiannually?

"A. He agreed to accept it with the interest and curtail payable monthly.

"Q. He did?

"A. Yes.

"Q. When?

"A. At a meeting we had perhaps the—we had a meeting on the 12th; it was perhaps the day after, or the second day after this contract was signed by Dr. Hogue.'

"Q. And Mr. Johnson, Mr. Jesse Johnson, then agreed to waive that?

"A. Yes, sir.

"Q. Who was present when he agreed to that?

"A. I don't know whether anybody except Mr. Johnson and myself, and maybe Mr. Mears, was there. I don't recall whether he was or not. Maybe Mr. Johnson's son was there.

"Q. Then, you mean to say that, in the presence of Dr. Hogue, two days after this acceptance of this offer, Mr. Johnson, in your presence, and in the presence of your friend, Mr. Mears, said he would take the property notwithstanding the fact that interest and sinking fund were payable in monthly installments?

"A. Yes; we had some little talk about that. It was the first I found out...