Case ID: sd_43/html/0054-01.html
Source: Caselaw Access Project
Author: {"author": "GATES, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

STABLEIN, Appellant, v. HUTTERISCHE GEMEINDE, Respondent.
    (177 N. W. 810.)
    (File No. 4652.
    Opinion field May 24, 1920.)
    1. Brokers — Employment as Broker, Whether “Contract in Relation to Land” — Statute of Frauds, Whether Within.
    A contract of employment of plaintiff by defendant corporation, to find a purchaser for cartain realty at specified price per acre, he to receive $1 per acre commission, was a contract for plaintiff’s services, and not one, “in relation to land” within the meaning of one of the articles of incorporation of defendant corporation providing that certain specified corporate officers are authorized to sign and execute written contracts except deeds and conveyances, and “contracts in relation to land.” Nor was it a contract. within the statute of frauds.
    
      2. Contracts — Corporate Employment of Broker to Sell Land— President’s Statement, “We Have Voted to Sell the Colony,” . Hearsay Without Objection, Sufficiency of Re Corporate Vote Eor Land Sale — Secretary’s Authority — Conversation With “Householder Head,” Competency.
    In a suit to recover a broker’s commission for sale of land for a corporation defendant, plaintiff’s testimony that defendant’s president told him, “We have voted to sell the colony,” while hearsay, yet, having been received without objection, and in- absence of contrary evidence, it was ample- to support finding that members of the corporation had voted to sell the land; and while such vote did not authorize consummation of sale, in absence of written consent required by its articles of incorporation, it authorized the corporate officers to contract with broker to find a purchaser. Held, further, that the secretary of the corporation, being one of the principal officers and trustees in management of the corporation, was -authorized to bind it in empldying plaintiff as its agent. Held further, that a conversation between plaintiff and the House Holder or Head of the Household” of defendant corporation, concerning the agency, was improperly excluded by trial court.
    '3. Corporations — Corporate President’s Authority, Lack of Authority, Burden of Proof Re-Express Authority, Directors’ Resolution, Or Conduct and Acquiescence Re Authority.
    Where the authority of the president to bind a corporation is in controversy, burden is on party asserting lack of authority to sustain his position by evidence. Express authority may be shown by resolution, or by parol evidence of conduct and acquiescence which would imply express authority.
    4. Corporations — Assumption of Officer or Agent to Execute Corporate Contracts, Etc., Presumption Re Authorization.
    Where an officer or agent assumes as such, to execute corporate contracts, or do- any act of a particular kind in behalf of the corporation, the law presumes a precedent authorization, regularly and rightfully made.
    5. Estoppel — Land Broker’s Trips and Money Expenditures, Corporate Owners’ Knowledge of Agency, Whether Benefit to Owner Necessary to Create Estoppel — Rule Re Corporations— Hutterische Gemeinde, Non-stockholding Membership, A Family Members’ Knowledge of Agency, Evidence, Admissibility.
    In a suit to recover a broker’s commission on land sold for a corporation, it is not necessary to proper application of principle of estoppel that the corporation should have received a benefit from the contract, but it is sufficient that the other party has acted on the faith of it to his disadvantage, as where he has expended money on the faith of it; the reason of the rule being that honesty and fair dealing are highest public policies, and that a private corporation, a mere collection of individuals, is no more privileged to repudiate its engagements, and act dishonestly than a single individual is. So held, where plaintiff broker made many trips to the land and expended time and money in so doing, his employment being known to corporation owner’s principal officers as well as to many of its members. Held, further, that any evidence tending to show knowledge of - employment of plaintiff on the part of 'any of the male members of said corporation was admissable; this being a peculiar corporation, having members, not stockholders, that constitute a colony, in reality a big family.
    6. Agency — Religious Society — Band Sale, Members of Hutterische Gemeinde, As Directors, Knowledge by of Agency, Effect re Estoppel.
    Where the right to sell realty, which would ordinarily vest in corporate directors-, depends, as here, upon the written consent cf a majority of the male members of a Hutterische Gemeinde held, that if such majority members knew plaintiff had been employed by the organization to find a purchaser and that he was expending time and money under such employment, the corporation is estopped from asserting the employment was unauthorized.
    7. Agency — Corporate Employment of Band Broker — Sufficiency of Evidence, Question for Jury.
    Where plaintiff, seeking an agency for sale of defendant corporation’s land, applied to the “Kirehe Altester” or “Older Preacher ’ of defendant colony corporation, who gave him the price per acre and referred him to E, Secretary of the corporation, to make arrangements for the sale, and who conferred with E and the “House Holder or Head of the household” of ■the corporation concerning the agency and sale, plaintiff to have $1 per acre-as commission; he having produced a purchaser on the agreed terms, and who to knowledge of the principal officers and to many of the male members made several trips and expended certain moneys in performance of his service; held, that the evidence tended to show the authorized employment; and the question of such authority was one for the jury.
    8. Brokers — Band Sale Through — Ability, Willingness-, To Pay Purchase Money, Sufficiency of Evidence Re-Refusal to Close Sale Because Changing Mind, Futility Of — Taking Case From July, Error.
    Where, in a suit for a broker’s commission on a land sale, the purchaser who was procured by the agent testified he told defendant corporation secretary:. “I came out here to close the deal for the land,” and in answer to question as to whether he was able to close the deal and pay for the property at that time, he answered: “Yes, sir, according to the terms of the previous arrangement, I was;” he not having had with him the whole purchase money and tendered no more than $1; that upon seeking to close the deal he was informed that defendant corporation refused to sell because of a telegram received from some of defendant’s members then, in Canada; held, defendant is not in a position to question ability of purchaser to close the deal; record showing that when asked whether he had made arrangements to raise the money to take the land defendant objected, objection being sustained. Held, further that if a realty agent fully performs a contract with land owner, he cannot be prevented from recovering his commission because owner subsequently changed his mind' about making a sale of the property. Held, further that trial court therefore erred in taking case from jury.
    Appeal from Circuit 'Court, Hutchinson 'County. Hon. Robbrt B. Tripp, Judge.
    Action by O. K. Stablein, against Hutterische Gemeinde, a corporation, to recover a broker’s commission on sale of realty. From a judgment for defendant, and from an order denying a new trial, plaintiff appeals.
    Reversed.
    
      W. H. Seacat, W. R. Danforth, and G. J. Danforth, for Appellant.
    
      N. J. Cramer, and Coe I. Crazvford, for Respondent.
    (1) To point one of the opinion, Appellant cited: Tyler v. Anglo-American 'Savings and Loan Association, 52 N. Y. Supplement 77.
    (2) To point-two,-'Respondent cited: Thompson on Corp. Secs. 4697, 3905-6; Chicago v. Stein, 1912 D. Ann. 294.
    (3) To point three, Appellant cited: Thompson on Corp. Sec. 1493. .
    (4) To point four, Appellant cited: Thompson on Corp. Sec. 2147.
    (5) To point five, Appellant cited: Thompson on Corp. Sec. 1946.
    Respondent cited, re incompetency of admission of corjporate member: 4 Thompson oh Corp. Secs. 4919, 4920.
    
      (6) To point six, Respondent cited: Advance Rumely Thresher <Co. v. Evans-Metcalf Implement Co., 175 Pa. 392.
    (8) To point eight, Appellant cited: Neiderlander v. Starr, 50 Kansas, 770.
    Respondent cited: Walters v. Damsey, 23 S. D. 481.
   GATES, J.

Action to recover commission as real estate broker. The plaintiff appeals from a judgment entered upon a directed verdict and from an order denying a new trial.

The evidence on the part of plaintiff tended to show that he was employed by defendant, a .corporation, to find a purchaser for its property known as “O'ld Elmsprings Colony” consisting of about 5,300 acres at the price of $65 per acre, of which one-fourth was to be paid down and the balance in cash on or before January 1, 1919; that plaintiff’s commission for his services was agreed to in the sum of $1 per acre; that he produced a purchaser, to wit, one E. 'C. Whitehouse of Sioux Falls, who was ready, able, andl willing to conclude the purchase upon the agreed terms, and that defendant refused to sell. In support of the judgment it is urged that the employment was .without authority. It is first urged that such employment, 'being oral, was contrary to article 9 of the articles of incorporation of defendant which provides:

“The Kirche Altester or Older Preacher, the Kirche Gehulfe or Church Assistant and the Housholder, or any other member duly authorized by a majority of the association, shall have authority to sign and execute all written contracts except deeds and conveyances and contracts in relation to land which shall not be executed without the written consent of the majority of the male members of said association and upon such written consent they or either of them shall have the right to sign same.”

' This contract of employment was a contract for plaintiff’s services, and was not a “contract in relation to land” within the meaning of that article. It was no more a contract in relation to land than would have been a contract of employment to plow the land or to cut hay on the land. Tyler v. Anglo-American S. & L. Ass’n, 30 App. Div. 404, 52 N. Y. Supp. 77; Rathbun v. McLay, 76 Conn. 308, 56 Atl. 511.

Nor, as claimed by respondent, was this a contract within the statute of frauds. Rev. Code 1919, § 1249.; McLaughlin v. Wheeler, 1 S. D. 497, 508, 47 N. W. 816.

It is next urged that the contract of employment, if any was made, was made by John Entz, the secretary of the corporation, and that Entz was not authorized to bind the corporation even if the contract was not one in relation to land. Plaintiff testified that he went to David Hofer, the president of the corporation, and who was the “Kirche Altester,” in regard to the matter. He further testified:

“I greeted him in a friendly way, and said that I had been informed from newspapers and other talk that the Mennonite colonies had decided to leave for Canada, and he said: ‘Yes, that is true.” I then said; “If you are going to leave for Canada, I understand you have offered your lands for sale?’ He said ‘Yes, we have; the Rockport and the Old Elmsprings Colonies.’ And I said: ‘What are you asking for the Rockport Colony?’ He said: ‘We are asking $70 per acre.’ ‘And what about the Old Elmsprings Colony?’ He said ‘We have decided, we have voted to sell the colony.’ I said: ‘If you are going to sell the land, I would like an opportunity to sell it.’ He said: ‘That was all. right.’ I said: ‘Now, the Old Elmsprings Colony, who is authorized to sell the colony or to negotiate for the selling of the colony? David Hofer said that John Entz — I should go to John Entz and make. arrangements for the sale, for the finding of a purchaser of the colony with John Entz, and I proceeded to.”

Plaintiff testified that Hofer told him, “We have voted to sell the colony.” While this evidence was hearsay, yet it was received without objection, and, in the absence of any evidence to the contrary, was ample to support a finding that the members of this corporation had voted to sell this land'. While such a vote would not authorize the consummation of a sale in the absence of the written consent required by the articles of incorporation, it certainly gave to the officers of this corporation authority, to contract with brokers to find a purchaser.

In Thompson on Corporations, we find the following rules stated:

“Where the authority of the president to bind the corporation is in controversy, the burden is on the party asserting lack of authority to sustain his position by evidence. Express authority may be shown by a resolution of the board of directors or by parol evidence of conduct and acquiescence which could imply express authority.” Section 1493, vol. 8.
“Where an officer or agent assumes, as the proper officer or agent, to execute the contracts of the corporation, or to do any act of a particular kind in behalf of the corporation, the law presumes a precedent authorization, regularly and' rightfully made.” Section 2147, vol. 3.

See also, Tyler v. Anglo-American S. & L. Ass’n, 30 App. Div. 404, 52 N. Y. Supp. 77. Appellant’s testimony shows that he made many trips to the colony, and expended time and money in so doing, and that his employment was known to the principal officers of the corporation as Well as to many, if not all, of the male members thereof. In that regard, Thompson on Corporations thus states the rule:

“It is not strictly necessary to the proper application of the principle of estoppel that the corporation should have received a benefit from the contract, but it is. sufficient that the other party has acted on the faith of it to his disadvantage — as where he has expended money on the faith of it. The reason of the rule is that honesty and fair dealing' are the highest public policy, and that a private corporation which is a mere collection of individuals is no more priviliged to repudiate its engagements and act dishonestly than a single individual is.” .Section 1964, vol. 2.

David Hofer, the president, and John Entz, the secretary, were two of the three principal officers and trustees having the management of the corporation, and as we understand the record George Gross occupied the position of Householder or Head of the Household under the articles of incorporation, yet the court excluded evidence of his conversations with appellant. These conversations were especially ■ pertinent if he were such Householder. Upon the question of estoppel any evidence tending to show knowledge of the employment of appellant on the part of any of the male members of the corporation was admissible. This is a peculiar corporation. It has members, not stockholders. They constitute a colony, in reality a big family. Where the right to sell real estate, which would ordinarily vest in the directors of a corporation, depends, as in this case, upon the written consent of a majority of the male members it is clear to us that if a majority of the male members knew that appellant had been employed to find a purchaser, and that he was expending time and money under such employment, common honesty should estop the .corporation from! asserting that such employment was unauthorized.

We are of the opinion that the evidence offered on behalf of the plaintiff did tend to show an authorized employment, and that the question as to such authority was a question to be passed upon 'by the jury.

Lastly, it is urged by respondent that it was not shown that the purchaser was able to conclude the deal. Mr. Whitehouse testified;

“I told him (Entz) : T came out here to close the deal for the land.’

“Q. Were you able to close that deal and pay for the property the last time you were down there? A. Yes, sir; according to the terms of the previous arrangement, I was.”

Upon cross-examination he testified that he did not carry the money with him '(some $344,000), nor did he make a tender of more than $1. The evidence tends to show that when he went to the colony to close the deal he was informed that defendant refused to sell because of a telegram received from some of defendant’s members, then in Canada. Respondent is not in a position upon this appeal to question the ability of Mr. Whitehouse to close the deal. He testified that he was able, and, when asked, whether he had made arrangements to raise the money to take the land, respondent objected to the testimony, and the objection was sustained. Respondent may not now be permitted to say that the evidence was not sufficient to show such ability.

In Neiderlander v. Starr, 50 Kan. 770, 33 Pac. 592, the court said:

“If a real estate agent fully performs his contract with a landowner, he cannot be prevented from recovering his commission because the owner subsequently changes his mind about making a sale or trade of his property.”

See, also, Huntemer v. Arent, 16 S. D. 465, 93 N. W. 653.

The trial court, therefore, erred in taking the case from the jury.

The judgment and order appealed from are reversed, and the cause is remanded for a new trial.