Wells v. Hocking Valley Coal Co.

• Decision Date: 19 February 1908
• Citation: 114 N.W. 1076,137 Iowa 526
• Parties: W. A. WELLS, Appellee, v. THE HOCKING VALLEY COAL COMPANY and E. H. GIBBS, Appellants
• Court: Iowa Supreme Court

114 N.W. 1076

137 Iowa 526

W. A. WELLS, Appellee, v. THE HOCKING VALLEY COAL COMPANY and E. H. GIBBS, Appellants

Supreme Court of Iowa, Des Moines

February 19, 1908

Appeal from Washington District Court.-- HON. B. W. PRESTON, Judge.

ACTION at law to recover compensation for services alleged to have been rendered in procuring the sale of property. Verdict and judgment for plaintiff, and defendants appeal.

Affirmed.

Geo. W Seevers, L. C. Blanchard, William McNett, and C. J. Wilson for appellants.

N. T Guernsey, J. F. Lacy, H. W. Gleason, and S.W. Brookhart, for appellee.

WEAVER C. J. SHERWIN, J. (dissenting).

OPINION

WEAVER, C. J.

The petition alleges that the Hocking Coal Company, a coal mining corporation, entered into an agreement with plaintiff, whereby the latter undertook the effort to find a purchaser for all of the property of every kind and character owned by said corporation, and, if successful, was to receive for the services so rendered a margin of the selling price in excess of a stated minimum or net sum to be paid to the company. This agreement, it is alleged, was in part written and in part oral. The written portion of said alleged contract is to be found in two instruments known in the record as "Exhibit A" and "Exhibit B," which will be hereinafter set out in full. As a part of or as collateral to said contract, it is alleged that the parties orally agreed that if plaintiff should procure a purchaser to whom such sale could be made by an assignment to him of the entire capital stock of said corporation, then the plaintiff should be entitled to compensation on the same basis as if the deal had been consummated by a direct conveyance of the property, under the terms of the written option hereinafter set out. It is also alleged that in pursuance of said contract plaintiff, with assistance rendered by defendant Gibbs in pursuance of the written agreement referred to, procured or brought about a sale to George W. Seevers for a sum largely in excess of the net price reserved by said corporation, but that defendants neglect and refuse to pay the agreed commission. It should also be said that, according to plaintiff's claim, and as a further consideration for the commission or margin to be paid to him in case he found a purchaser on the agreed terms, he undertook and agreed to convey to defendants a certain tract of land in the State of Texas, which conveyance he avers his readiness to make, and tenders the same to the defendants. Defendants deny the petition generally, and aver fraud and misrepresentation by plaintiff with respect to the location and quality of the Texas land, and further say that, prior to the date of the writings sued upon, defendants began negotiations for the sale to Seevers, and had authorized Seevers to sell the property, and that the sale to him was not made until after June 2, 1902, when all rights which the plaintiff may have had under the contracts on which the suit is brought had wholly expired. By an amendment to the answer, filed long after the suit was brought and after the case had once been tried, defendants pleaded the statute of frauds as a bar to the plaintiff's claim, also want of consideration for the alleged parol agreement set up in the petition.

It will serve to make clear some of the matters hereinafter referred to, to state that the defendant E. H. Gibbs was president and principal stockholder in the Hocking Coal Company, and that the other officers and stockholders appear to have acquiesced in his leadership, and in his management of the effort to make a sale of the corporate property. The mine owned by the company was located in Monroe county and had no railroad outlet except over the Iowa Central Railway Company's track, and, for a time at least, the rules and regulations imposed by that company upon the transportation of the products of the mine had an unfavorable effect upon its profitable operation, and because of this, and perhaps other influences, the coal company had for some time been anxious to dispose of its entire property. Prior to the date of the writings in suit, Gibbs, acting for the coal company, had given to the plaintiff two successive written options for the sale of the property, both of which had expired without anything being accomplished. During the same time it would appear that the Iowa Central Railway Company was desirous of purchasing the mine, and more or less negotiations looking to that end had taken place between the defendants and Mr. George W. Seevers, who was attorney and representative of said railway company. These negotiations had not progressed satisfactorily to the defendants, and Gibbs began looking elsewhere for a purchaser. The plaintiff was at this time engaged in the service of another coal company controlled by or operated in connection with the Northwestern Railway Company, and it is not an unreasonable inference from the situation that Gibbs hoped plaintiff could enlist the interest of the latter coal or railway company in the purchase of the mine, and perhaps he also saw in such negotiations a legitimate method by which to enhance the value and desirability of the property in the eyes of Mr. Seevers' client. Whatever may be the truth in this respect, it appears that in April, 1902, Gibbs had so far despaired of bringing about the sale to the Iowa Central Company that on the 8th day of said month he gave to plaintiff another written option, which is the first of the two writings entering into the alleged contract upon which this suit is brought, and is in words and figures as follows:

(Exhibit A.) Oskaloosa, Iowa April 8, 1902. In consideration of ($ 1.00), paid in hand, the receipt of which is hereby acknowledged, and other valuable considerations, hereinafter stated, the Hocking Coal Company (a corporation doing business under the laws of Iowa), situated in Monroe county, near Albia, Iowa hereby agrees to sell, transfer and deliver, free of every and all incumbrances, to W. A. Wells, of Mahaska county, Iowa his heirs or assigns, all their rights, titles and interests of every kind whatsoever, owned, leased or operated by the said Hocking Coal Company, including all lands owned, leased or optioned, all coal owned, leased or optioned, all buildings, machinery, live stock and merchandise, in fact everything pertaining to or forming a part thereof, of the said Hocking Coal Company. Providing, however, that the said W. A. Wells, his heirs or assigns, on or before June 1, 1902, pay or cause to be paid to the said Hocking Coal Company, the sum of four hundred and fifty thousand dollars ($ 450,000), and a deed in fee simple to four hundred and forty-three (443) acres of land owned by the said W. A. Wells, situated in Dallas county, Texas, near the city of Dallas, Texas, known as the King tract, and part of the McDowell survey. It is further understood that E. H. Gibbs of Oskaloosa, Iowa (president of the Hocking Coal Company of Monroe county, Iowa), personally agrees to assist the said W. A. Wells in every possible manner, to consummate the above deal, as set forth in the above contract, and that he personally guarantees the specific performance of the Hocking Coal Company's part of the above contract. Hocking Coal Company, By E. H. Gibbs, Pres. E. H. Gibbs.

The price named in this option is materially less than the figure which had been placed upon the property in the prior options given to the plaintiff. At the date of this writing or soon thereafter plaintiff opened negotiations in Chicago with one Blackmar for the sale of the property. A day or two later plaintiff called Gibbs to Chicago, and while there, on April 12, 1902, the latter received a telegram from Seevers stating that he had sold the Hocking property under authority received from Gibbs. This dispatch Gibbs handed over to plaintiff, who telegraphed to Seevers saying: "Mr. Gibbs refers your message to me as the property is in my hands. Make me your best cash offer at once, care Grand Pacific." To this Seevers responded with message to Gibbs saying that he held the Hocking property with authority to sell, and had sold, and would expect an immediate transfer, and had no offer to make otherwise. Plaintiff thereafter, continuing his negotiations with Blackmar applied to Gibbs for a letter to be used in forwarding the deal, and thereupon Gibbs addressed a letter to him under date of April 15, 1902, stating that if taken at once he would sell the Hocking Coal Company's property of all kinds, with guaranty of title, and placing the price at $ 1,000,000; closing the communication with this language: "If this sum is paid on or before June 1st, 1902, I hereby agree to personally guarantee the delivery of the Hocking Coal Company property in fee simple, and authorize W. A. Wells of Oskaloosa, Iowa to enter into a contract to sell and deliver said property according to the above-mentioned terms." That the price here named was exaggerated for trading purposes, and with the expectation that the letter would be exhibited to Blackmar, is made evident from the situation as well as from the terms of the option then held by plaintiff and the supplement thereto which we are about to mention. On the following day, April 16, 1902, plaintiff and Blackmar, trustee, entered into a contract by which the latter obtained an option to purchase the property in question for the sum of $ 500,000, of which the sum of $ 5,000 was then and there paid. By the terms of the said contract the balance of the purchase price was to be paid, and the sale to be completed on or before June 1, 1902, and upon failure of Blackmar to appear and perform his agreement within that time the advance payment of $ 5,000 was to be forfeited to the plaintiff. On the same day Gibbs for himself and the...