Wilson v. Frederick R. Ross Inv. Co.

• Decision Date: 14 April 1947
• Docket Number: 15501.
• Citation: 116 Colo. 249,180 P.2d 226
• Parties: WILSON v. FREDERICK R. ROSS INV. CO. et al.
• Court: Colorado Supreme Court

180 P.2d 226

116 Colo. 249

WILSON v. FREDERICK R. ROSS INV. CO. et al.

No. 15501.

Supreme Court of Colorado, En Banc.

April 14, 1947

Error to District Court, City and County of Denver; G. A. Luxford Judge.

Action by the Frederick R. Ross Investment Company and another against St. Claire Okie Hayden Wilson to recover commission for sale of real estate. To review a judgment for plaintiffs defendant brings error.

Reversed.

HAYS J., dissenting.

The unexpected condemnation by federal government of some of property which had been the subject of negotiation between brokers and landowners for alleged sale to the government did not operate as a "sale" so as to entitle brokers to commission notwithstanding landowner in condemnation signed statement that she was receiving fair value for premises taken, where signing was obligatory, and land taken in condemnation varied in price and acreage from provisions of written option contracts previously executed by landowner at instance of brokers. U.S. C.A.Const. Art. 1, § 10; 50 U.S C.A. § 171.

Horace N. Hawkins, F. E. Dickerson, and A. F. Zarlengo, all of Denver, for plaintiff in error.

Bancroft, Blood & Laws and Harold D. Torgan, all of Denver, for defendants in error.

JACKSON Justice.

This case involves a commission for the sale of real estate. We will refer to the parties as they appeared in the trial court, where plaintiff in error was defendant, and defendants in error were plaintiffs.

The two real estate firms, as plaintiffs, recovered judgment against defendant in a trial to a jury in the amount of $7,575 as real estate commission on a transfer from defendant to the United States government of 1430 acres, more or less, of land west of the City and County of Denver. This site, immediately upon being taken over by the government, because the location of an ordance plant for the duration of the war.

The case differs from the ordinary suit for broker's or agent's commission, in that Before a sale had been consummated the federal government brought condemnation proceedings in respect to a portion of the acreage that previously had been optioned, and the landowner, after personally conducting negotiations with officials of the government for about a year and a half, finally agreed to settle in the condemnation suit for less per acre than the amount for which she had originally agreed to sell. The amount of commission awarded to plaintiffs, $7,575, represented five per cent of $151,500, the amount defendant received from the federal government in settlement under the condemnation proceedings.

In their original complaint, plaintiff sought recovery on quantum meruit for the value of their services performed at the instance of the defendant. In an amendment to the complaint they added the alternative cause of action for recovery under express contract of a real estate commission for procuring a purchaser for defendant's property. Just Before the case was submitted to the jury, upon motion of defendant the plaintiffs were required to elect upon which of their two causes of action they would stand. They elected to stand upon that of quantum meruit.

The evidence showed that Cyrus A. Hackstaff, of the Frederick R. Ross Investment Co., was called to a meeting at the Brown Palace Hotel on the evening of December 12, 1940, at which quite a large number of officials--army officers, railroad men, and others, including J. L. Warner of the real estate division of E. I. duPont deNemours & Company--were present. He testified, 'I was shown a map and told that I could not be told that evening what the purpose--what purpose I was to try to procure a site for, but I was shown a map which set out about fourteen hundred acres that they thought they might need. I was instructed to obtain an option that night by the men at the Brown Palace Hotel.' He was told that his commission or remuneration would have to be from the landowner and not from any possible purchasers who might exercise the option. Thereupon he got in touch with Mr. Conway, of the Conway-Bogue Realty Investment Company, who had a 'for sale' sign on defendant's property, and the two of them immediately interviewed defendant and her son, resulting in the execution of an option by defendant, under date of December 13, 1940, running to J. L. Warner covering 1440 acres of land for $175,000.

This option was subsequently cancelled, and a new one, dated December 16, 1940, was signed by defendant giving J. L. Warner, or his assigns, an option to buy '3068 acres more or less.' This second option contained a provision that it 'shall include 75 inches of water in the Agricultural Ditch and Reservoir Company, and 135 inches of water in the Welch ditch. All mineral and oil rights to be included.' The option price was $207,450. By its terms Warner and his associates were permitted to go upon the land for the purpose of making surveys and water tests, and an acceptance was required on or Before February 1, 1941. This option also contained a schedule describing nine separate parcels of land containing in all 1,648 acres of the total acreage of 3,068 acres. The schedule showed the number of acres in each parcel, and a separate valuation per acre was placed on each parcel, as well as a total dollar valuation, and contained a provision that, 'After a survey of the land above described reveals that certain portions thereof are not required by J. L. Warner or his assigns at his option, all or any of the following described parcels of land may be dropped from the terms of this option and the total consideration hereinBefore designated shall be reduced by the sum of the amounts hereunder set forth opposite the respective parcels not required, other terms and conditions to remain the same.'

A third option, executed on the printed form of The Frederick R. Ross Investment Company, was executed by the landowner under date of December 20, 1940, whereby she agreed to sell and convey to that company on or Before March 1, 1941, approximately 68 acres additional land, not included in the second option. This option included 45 inches of water in the Agricultural Ditch and Reservoir Company. The option price was $27,200, less the $100 paid down upon the giving of same. In the option there was recited an agreement to pay five per cent commission for making the sale. December 21, 1940, this option was assigned to J. L. Warner, excepting commission.

A fourth option, dated January 16, 1941, in consideration of $100, granted to J. L. Warner, or his assigns, the right until March 1, 1941, to purchase an additional 160 acres, together with 110 inches of water in the Agricultural Ditch and Reservoir Company, for the sum of $44,000. This option also extended the second option, Exhibit A, until March 1, 1941, and contains the following condition: 'It is specifically understood and agreed that this option cannot be exercised unless the minimum requirements under the terms of those options previously given by St. Claire Okie Hayden are exercised, one of which is dated December 16, 1940 * * * and the other dated December 20, 1940 * * *.'

February 16, 1941, contractors, under directions from the federal government, went into possession of defendant's property. Ten days later, February 26, condemnation proceedings were instituted in the Federal District Court in Denver by the United States Government. The property taken under the condemnation proceedings did not conform either in amount of acreage, water rights, or in respect to price, with the minimum requirements described under the options--the principal deviation being that the condemnation proceedings, although including a reservoir site on the land condemned, did not include the water rights, and neither was the land in a certain section 17 included in the property condemned.

The testimony of both Messrs. Conway and Hackstaff went to the effect that they were instrumental in interesting the federal government in the property of defendant; that the government was considering other sites, such as one near Littleton which had the advantage of propinquity to a railroad, another nearer Golden, and a third east of Denver, but that through their efforts the interest of the government was finally directed toward defendant's property for the location of a small arms plant. Both gentlemen disclaimed any knowledge of the plans leading to the bringing of condemnation proceedings, although Hackstaff testified that he had been informed in February that the government was interested in assembling lands for condemnation.

When the land was first occupied under the condemnation proceedings, defendant was in Florida. Her son, on his own accord, consulted a Denver attorney and had a conference with him and Mr. Hackstaff in which, the latter testified, they urged him to continue to assist defendant in the condemnation proceedings. Plaintiffs at about this time offered to work for defendant on a sliding scale, beginning at three per cent and proceeding up to twenty per cent, the rate depending upon the amount that defendant should ultimately receive in the condemnation suit. Defendant subsequently rejected this offer, and, as already noted, after a year and a half of negotiations, settled with the government on the terms already stated. Defendant claims that the government by its condemnation proceedings 'took the cream and left the scum' of the property. Plaintiffs, although minimizing this expression as an exaggeration, do not claim that they fulfilled any or all of the option contracts.

Mr Hackstaff's testimony covered the details surrounding the execution of the four option contracts signed by the landowner and described his endeavors to convince the landowner that she would not be able to sell the property unless she...