Case ID: sw_221/html/0936-01.html
Source: Caselaw Access Project
Author: {"author": "GREENWOOD, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

BAUER et al. v. CROW.
    (No. 2740.)
    (Supreme Court of Texas.
    May 12, 1920.)
    I.Brokers &wkey;>88(l4) — Findings held not to indicate that plaintiff performed no services toward effecting the sale.
    In an action on a contract to share the profits resulting from a sale of land, findings by the jury that plaintiff did nothing toward effecting the sale subsequent to a given date, and that defendants alone made the sale, indicate that the term “sale” was restricted to negotiations subsequent to the named date and do not show that plaintiff performed no services under the contract.
    2. Brokers <&wkey;>66 — Failure to participate in final negotiations does not defeat right under contract to divide commissions.
    Where plaintiff and one defendant had a contract for sharing profits from a sale of land and plaintiff had done all that was required of him under the contract, his failure to participate in the final negotiations by which the sale was effected does not defeat his rights under the contract.
    3. Brokers <&wkey;66 — Partnership &wkey;>!39 — Neither a firm assuming contract of one partner nor the other partner is, an innocent purchaser.
    Where a partnership was formed between a broker and a stranger to a contract between broker and another to share commissions, neither the firm nor the partners occupied the status of innocent purchaser as regards the rights of the other party to the contract, but must accept the burdens of the contract as well as its benefits.
    Certified Question from Court of Civil Appeals of Eighth Supreme Judicial District.
    Action by J. W. Crow against Paul Bauer and another. A judgment for the plaintiff was affirmed by the Court of Civil Appeals with dissenting opinion (171 S. W. 296) and a question certified to the Supreme Court.
    Question answered favorably to plaintiff.
    Maco & Minor Stewart, of Galveston, and R. W. Hauk and S. H. Brashear, all of Houston, for plaintiff.
    Jno. B. Warren, Norman G. Kittrell, Jr., and Moody & Boyles, all of Houston, for defendants.
   GREENWOOD, J.

The uncontradicted evidence disclosed the following facts, according to the certificate of the Court of Civil Appeals, to wit:

On May 7, 1909, an agreement was made between appellee Crow and appellant Bauer for the equal division between them of profits to be earned on a sale of lands they were to endeavor to make to P. A. Ogden. Crow appears to have known something of the lands, and Bauer appears to have known Ogden. The lands belonged to Milton H. Smith, whose agent was one Moling. On the day Crow and Bauer entered into their agreement, Crow brought Moling and Bauer together, and it was arranged that the profits on any sale of Smith’s lands to Ogden were to go half to Moling and half to Crow and Bauer.' On May 25, 1909, a written agreement was made, fixing a different division of the profits to be made on a sale ‘to Ogden, between Moling, Crow, Bauer, and one A. B. Mayes. Molin'g had some sort of option contract with Smith, which he took to enable him to close the deal with Ogden, and for which he paid $1,000. On June 9, 1909, the offer made by Ogden for the lands was found to be unacceptable to tlie owner, since it involved the owner taking over certain securities which he did not approve, and thereafter, on that day, a meeting was held at which Ogden, Crow, and Bauer were present, and in which Ogden was informed that if he would pay all cash a reduction would be made in the price of the lands, and Ogden agreed to consider a purchase at a reduced price. It was thereupon understood by Crow and Bauer that Bauer would proceed with an effort to close the deal, on the basis of paying Moling less of the profits, and dividing the balance of the profits equally between Crow and Bauer. On June 10, 1909, Bauer formed a partnership with appellant Barbee in the real estate business under the name of Paul Bauer & Co. On June 21, 1909, Moling assigned his option contract to Bauer, under an agreement whereby Moling was to accept a certain sum out of the proceeds of any sale made to Ogden; such sum being less than Moling was entitled to receive under the written agreement of May 25th. On June 23, 1909, a sale of the lands from Smith to Ogden was concluded, at a profit of $9,-000 cash and Ogden’s note for $2,000. After paying Moling his portion, there remained a net profit on the sale of $5,625 and the $2,-000 note. Bauer and Barbee collected and appropriated the $5,625, and the $2,000 note was placed in the hands of a receiver to abide the result of this suit, which was brought by Crow against Bauer, Barbee, and the receiver to recover the sum of $3,812.50, of Bauer and Barbee, and to have the note applied to the payment of said sum.

The case was submitted on special issues. The answers of the jury were in substance:

“(1) That the plaintiff Crow and defendant Paul Bauer, on June 9, 1909, agreed between themselves that they would work together and close the deal and divide equally whatever profit or commission was made by them on the trade with Ogden.
“(2) That the plaintiff Crow, after the execution of the written contract of May 29, 1909, between Milton H. Smith and C. B. Moling, did not have or obtain any authority to sell or to offer for sale the Milton H. Smith lands.
“(3) That defendants Barbee and Bauer formed a partnership in the real estate business on June 10, 1909.
“(4) That the plaintiff Crow knew of the existence of the partnership in the real estate business of Bauer and Barbee at and prior to the execution of the contract between Moling and Bauer on June 21, 1909.
“(5) That the defendant Barbee did not know at the time of the making of the ‘contract of June 21, 1909, between Bauer and Moling, of any agreement between Crow and Bauer to divide the profits of that deal.
“(6) That Barbee did not know on June 21, 1909, or prior thereto, of any right of Crow to participate in the profits on the sale made to Ogden from the Smith lands other than as set out in the written contract of May 25, 1909, between the Charles B. Moling Company', party of the first part, and Paul Bauer, party of the second part.
“(7) That Barbee did not know of the agreement, if any, between Crow and Bauer to divide the profits on the sale of the Smith lands to Ogden at the time he (Barbee) divided with Bauer the cash received on the deal.
“(8) That Crow did nothing personally towards effecting the actual sale made to Ogden of the Smith lands subsequent to June 9 and prior to June 21, 1909.
“(9) That Barbee and Bauer, acting together and alone, made the sale of the Smith lands to Ogden.”

The question certified is whether the answers of the jury constitute a verdict for the plaintiff or for the defendant.

We do not think that the jury’s findings numbered 8 and 9 defeat the right of the plaintiff to recover, which was the dissenting view of Chief Justice Harper.

In our opinion, while the questions eliciting these answers were not admirably framed, the jury could not, in the light of this record, have meant anything by the answers save that Crow did not take part in the work of concluding the sale to Ogden after June 9, 1909. While the' last finding, standing alone, is broad enough to deny that Crow had anything to do with the sale from its inception, yet we think it fairly apparent that in using the word “sale” both the court and jury restricted its meaning to the negotiations between the parties subsequent to the 9th day of June, 1909.

Neither the failure of Crow to take part in the negotiations, after June 9, 1909, nor the acts of Bauer .and Barbee, after that date, in carrying them to a successful conclusion, can defeat Crow’s right to share in the profits of the sale to Ogden. There was nothing in the agreement between Crow and Bauer which called for any act on Crow’s part, which he, at any time, failed to perform.

The sale to Odgen was clearly in consummation of the contract between Crow and Bauer, and the firm of Paul Bauer & Co. took that contract, with its burdens as well as its benefits. Neither the firm nor Barbee could occupy the status of an innocent purchaser as regards the rights of Crow when the true nature of the firm’s participation in the deal was merely to take up and conclude a transaction which Crow and Bauer at the time had on the way to fruition. It is to disregard vitally important facts out of which the profits arose to consider the sale to Ogden without relation to what had transpired before Barbee became Bauer’s partner.

When the firm of Paul Bauer & Co. was formed, there was in existence a mere inchoate right to share profits to arise from a joint enterprise of Crow and Bauer. That enterprise was the one actually continued and closed by tbe efforts of Bauer and Bar-bee.: It was not a new or distinct or independent undertaking. Under tbe circumstances, tbe firm of Paul Bauer & Co., wben it took its option on Smith’s lands, acting by Paul Bauer, took same charged with tbe contingent liability to Crow, and there is nothing in tbe findings sufficient to prevent tbe enforcement of that liability.

. We conclude, that the answers of tbe jury constituted a verdict for tbe plaintiff. 
      <&wkey;For other eases see same topic and KBY-NTJMBER in all Key-Numbered Digests and Indexes