Case Name: Laws v. Schmidt et al.; Bradford v. Schmidt et al.
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1909-03-30
Citations: 80 Ohio St. 108
Docket Number: Nos. 10811-10812
Parties: Laws v. Schmidt et al. Bradford v. Schmidt et al.
Judges: Crew, C. J., Summers, Spear, Davis and Si-iauck, JJ., concur.
Reporter: Ohio State Reports, New Service
Volume: 80
Pages: 108–121

Head Matter:
Laws v. Schmidt et al. Bradford v. Schmidt et al.
Owner of real estate contracts with broker — For services in securing lessee — Written proposal to lease accepted by indorsement — But no lease executed — Owner not liable for commission, when.
On the 4th day of May, 1903, L. wrote and delivered to real estate brokers a proposition, the substance of which is, that she would lease perpetually property known as No. 512 Vine street, Cincinnati (describing it), at the rate of four thousand dollars per pear, payable quarterly, the owner to pay taxes due June 20, 1903, the lessee to pay all taxes and assessments thereafter; the lessee to have the privilege of purchase at the end of twenty years for the sum of one hundred thousand dollars, by giving notice in writing sixty days before that date, and the lessees to assume lease on first and second floors, expiring December 31, 1908, to guarantee to erect a new, modern, first-class, up-to-date building, and to make good such guarantee, the lessees should deposit cash or securities in the sum of twenty thousand dollars with the Third National Bank of Cincinnati; and in case of failure to erect such building within six years, the funds deposited to be delivered to L.; but on completion of said building, said fund to be returned to the lessees. The property to be delivered July 1, 1903, and lease to begin on that date — proposition to be binding upon the payment of one thousand dollars cash, to be credited on first quarterly payment of rent.
Besides the foregoing proposition and at the same time, L. signed and delivered to the brokers the following; “Gentlemen: In case you make a lease of the property known as No. 512 Vine street, as per written proposition made you this date, I agree to pay you a commission of two per cent, on the privilege of purchase price.” (Signature.)
On the 9th of May, 1903, as a result of the solicitations of the brokers, an acceptance of the proposition was endorsed thereon as follows: " “We accept the above proposition. The Heuck’s Opera House Co., per H. Heuck, Pres.” The company paid the $1,000, but without the fault of L., no lease was made or taken of the premises, and nothing further was done in relation thereto by either said company or said brokers.
Held: That L. is not liable to the brokers for any commission.
(Nos. 10811-10812
Decided March 30, 1909.)
Error to the Circuit Court of Hamilton county.
The action in the court of common pleas was commenced by Frederick A. Schmidt and Frank J. Wade against the plaintiff in error, Florence E. Laws and Harry L. Laws, to recover commission for negotiation of a lease on certain real estate in Cincinnati. For cause of action they averred in their petition, that “on the 4th day of May, 1903, they engaged, at request of defendants, to secure a lease of the property known as No. 512 Vine street, in the city of Cincinnati, belonging to the defendants, under and in pursuance to the following written proposition made to said plaintiffs by said defendants, to wit:
“Cincinnati, May 4, 1903.
“Mr. Frederick A. Schmidt,
“Mr. Frank J. Wade,
“Cincinnati.
“Gentlemen:
“I will lease perpetually the property -known as No. 512 Vine street, Cincinnati, Ohio, being 20 feet front by 100 feet deep, at the rate of four thousand ($4,000) dollars per year, payable quarterly.
“I will pay all taxes due and payable June 20th, 1903, the lessees to pay all taxes and assessments thereafter.
“The lessees to have the privilege of purchase at the end of 20 years, for the sum of one hundred thousand ($100,000) dollars, by giving notice in writing 60 days before that date.
“The lessees to assume the lease on the first and second floors, expiring Dec. 31st, 1908, and to guarantee to erect a new, modern, first-class, up-to-date building, and as a further guarantee that such a building will be erected, the lessees to deposit cash or securities in the sum of $20,000 with the Third National Bank, Cincinnati, Ohio,' and in case of failure to erect such a building within six years, the funds so deposited to be delivered to Florence E. Laws, but on completion of said modern building, said funds to be returned to the lessees.
“The property to be delivered July 1st, 1903, and the lease to begin on that date.
“The title guaranteed to be perfect.
“This proposition to be binding upon the payment of $1,000 in cash, which will be credited on the first quarterly payment of rent.
“This proposition to be good for ten days from date. “Florence E. Laws,
“By Harry L. Laws.”
It is alleged that on the 9th of May, 1903, they secured an acceptance of said proposition in writing from The Heuck’s Opera House Company, which acceptance was endorsed on the written proposition as follows: “We accept the above proposition. The Heuck’s Opera House Company, per H. Heuclc, Pres.” Thereupon there was paid to defendants by said company the sum of one thousand dollars in cash, as provided in the proposition, and that, for their services in securing the lease of said property, defendants promised to pay plaintiffs a sum equal to two per cent, on the privilege of purchase price, namely, two thousand dollars. They make the general allegation that they have performed on their part all the conditions of the contract to secure the lease for defendants, for which they have not been paid, and they pray judgment for $2,000.
The defendant, Florence E. Laws, now plaintiff in error, demurred to the petition, but the demurrer was overruled. The other defendant, Harry L. Laws, also demurred, and his demurrer was overruled. ,
The answer of Harry L. Laws admits the business occupation of the plaintiffs as real estate brokers, and denies all the other allegations of the petition.
Florence E. Laws makes the same admission in her answer, and that she executed the written proposition set out in the petition, and denies every other allegation. These answers were filed March 22, 1905.
In September, 1905, the death of Frank J. Wade was suggested in court and the action revived in the name of Ettie M. Wade, his administratrix. The case was tried to a jury, and to make out the case for the plaintiffs, together with other evidence, they introduced the written contract to pay compensation, which is:
“Cincinnati, May 4, 1903.
“Mr. Frederick A. Sci-imidt,
“Mr. Frank J. Wade,
“Cincinnati, Ohio.
“Gentlemen:
“In case you make a lease of the property known as No. 512 Vine street, as per written proposition made you this date, I agree to pay you a commission of two per cent, on the privilege of purchase price.
“Florence E. Laws,
“By Harry L. Laws.'”
At the close of plaintiffs’ evidence defendants moved for a verdict in their favor. The motion was overruled. The court excluded evidence offered by the defendants, to which they took exception. At the close of all the evidence, the court, without request, directed a verdict for plaintiffs against both defendants, overruled motion for new trial and rendered judgment.
The defendants prosecuted error in the circuit court, where the following disposition was made of the proceeding: “On consideration whereof, the court do find that there is error apparent upon the record in the proceedings of said court to the prejudice of the plaintiff in error, Harry L. Laws, and the said judgment is reversed. And the court further proceeding to- render such judgment as the court of common pleas of Hamilton county ought to have rendered, it is ordered, adjudged and de creed that the defendants in error recover from the plaintiff in error, Florence E. Laws, the sum of two thousand dollars with interest thereon at the rate of six per centum per annum from the third day of April, 1906, and their costs herein expended. * * * It is further ordered * * * that Harry L. Laws go hence without day and recover from'defendant in error his costs,” etc.
Florence E. Laws prosecutes error in this court ' to reverse the judgment against her.
Messrs. Maxwell & Ramsey and Mr. Joseph S. Graydon, for plaintiffs in error.
Defendants in error could not recover unless they proved that the lease which was proposed was actually executed, or that the execution failed by reason of the default of plaintiff in error. Keener v. Harrod, 2 Md., 70; Murray v. Currie, 32 Eng. Com. Law, 641, 7 Carr. & P., 584; Kimberly v. Henderson, 29 Md., 515; Richards, Exr., v. Jackson, 31 Md. 250; Melvin v. Aldridge, 81 Md., 65Ó; Hale v. Kumler, 84 Fed. Rep-., 161; Kost v. Reilly, 62 Conn., 57; Chapman v. Wins on, 91 L. T., N. S., 17.
Betz v. Land Co., 46 Kans., 45, lays down the rule that the burden of proving that the purchaser is ready, able and willing to perform is upon the broker to establish.
Messrs. Outcalt & ILickenlooper, for defendants in error.
A real estate broker is entitled to commissions upon presentation to the owner of a lessee whom the owner accepts and with whom he contracts. Rice v. Mayo, 107 Mass., 550.
The general proposition of law is that, under a contract to pay commissions, such as was here en tered into, whether express or implied, the broker has performed his full duty .and is entitled to his commissions when he presents to his principal a purchaser or lessee with whom the principal is satisfied and with whom he enters into a contract either upon the terms proposed or others then agreed upon. The fact that subsequently the contract entered into is not performed will not deprive the broker of his right to commissions, after acceptance of the purchaser or lessee by the owner and part performance of the contract. Green v. Lucas, 33 L. T., N. S., 584; Roche v. Smith, 176 Mass., 595; Wilson v. Mason, 158 111., 304; Keys v. Johnson, 68 Pa. St. 42; Coleman’s Exr. v. Meade, 13 Bush (Ky.), 358; Conklin v. Krakrauer, 70 Tex., 735; Burns v. Oliphant, 78 la., 456; Vinton v. Baldwin, 88 Ind., 104; Ward v. Cobh, 148 Mass., 518; Veazie v. Parker, 72 Me., 443; Francis v. Baker, 45 Minn., 83; Wittes v. Smith, 45 N. W. Rep., 666; Whitaker v. Engle, 111 Mich.,.205; Rothschild v. Burritt, 47 Minn., 28; Knapp v. Wallace, 41 N. Y., 477; JJeinrich v. Korn, 4 Daly (N. Y.), 74; Glentworth v. Luther, 21 Barb., 145; Mooney v. Elder, 56 N. Y., 238; Love v.' Miller, 53 Ind., 294; Potvin v. Curran, 13 Neb., 303; Leete v. Norton, 43 Conn., 219; Love v. Owens, 31 Mo. App., 501; Middleton v. Findla, 25 Cal., 76; Lane v. Albright, 49 Ind., 275; Buckingham v. Plarris, -15 Pac. Rep., 819; Goss v. Brown, 18 N. W. Rep., 290; Wray v. Carpenter, 16 Col., 271; Mechera on Agency, Section 612; 23 Am. & Eng. Ency. Law, 912, 922; Huffcutt on Agency, Section 78; Godley v. Haley, 3 O. L. R., 51.

Opinion:
Price, J.
The circuit court very properly reversed the judgment rendered against Harry L. Laws by the court of common pleas. There was nothing in the petition, nor in any of the written instruments put in evidence, to warrant a judgment against him. In those written instruments bearing his name, he disclosed the name of his principal, signed her name as such and his own name as her agent. There is no evidence otherwise introduced that fixed any liability as to this agent. And we find in the record sound reasons why the judgment against the other defendant, now plaintiff in error, should also have been reversed.
While the case was nominally tried to a jury, it was disposed of by the rulings of the court excluding valuable testimony, and then directing a verdict for the plaintiffs on that which had been admitted. It seems to us that the trial court labored under a misconception of the contract between the parties, and that we may ascertain its meaning, we look to the written proposition placed in the hands of the plaintiffs below to guide them in their negotiations for a lease of the premises and which should become the basis of their compensation. This proposition appears in the statement of this case. It was addressed to Schmidt and Wade, the plaintiffs below, and delivered to them.
The offer was, to lease perpetually the property known as No. 512 Vine street, Cincinnati, twenty feet front by one hundred feet deep, at the rate of four thousand dollars per year, payable quarterly, she to pay all taxes due and payable June 20, 1903, and the lessees to pay all taxes and assessments thereafter. The lessees should have the privilege of purchase at the end of twenty years, for the sum of one hundred thousand dollars, by giving notice in writing sixty days before that date; the lessees to assume the lease on the first and second floors expiring December 31, 1908, and to guarantee to erect a new, modern, first-class building, and as a further "guarantee" that such a building will be erected, the lessees were to deposit cash or securities in the sum of twenty thousand dollars with a certain bank in Cincinnati, and in case of a failure to erect such a building within six years, the funds so deposited should be delivered to Florence E. Laws, the owner; but on completion of said modern building, said funds should be returned to the lessees. The possession to be given July 1, 1903, and the lease to begin on that date. The proposition to be binding upon the payment of one thousand dollars in cash, to be credited on the first quarterly payment of .rent. This instrument bears date May 4, 1903.
Having thus defined her conditions of lease a.nd ultimate sale, and placed the same in the hands of Schmidt and Wade, real estate brokers, their right to commission or compensation was also put in writ'ing, addressed to them as follows: "Gentlemen: In case you make a léase of the property known as No: 512 Vine street, as per written proposition made you this date, I agree to pay you a commission of two per cent, on the privilege of purchase price. Florence E. Laws, by Harry L. Laws."
On the 9th of May, 1903, the efforts of Schmidt and Wade were so far successful as to obtain from The Fleuck's Opera House Company an acceptance of the foregoing proposition, which acceptance is as follows: "We accept the above proposition. The Heuck's Opera House Company, per H. Heuck, Pres." This company paid the thousand dollars required as the cash to be paid to make the proposi tion binding; and the record informs us that Mr. Harry L. Laws, who acted for his sister, delivered the deed for the property to Mr. Wade, one of the agents, who desired to hand it to a certain attorney for examination of title and preparation of the lease. This is the limit in the history of the transaction, for the trial court shut out what occurred after that point, except that it does appear distinctly that no lease, was ever made. A representative of one of #these agents and who acted for him in the negotiations, says no written lease was made, and that "they did not get as far as drawing a lease." The defendants below, on cross-examination of witnesses for the plaintiffs, endeavored to show why no lease was made. Mr. Heuck was asked on cross-examination: "Did The Heuck's Opera House Company ever execute a lease of this property?" The court sustained plaintiff's objection to the question, and the court said: "All the broker has to do is to bring the parties together, and if there is a failure, provided the broker did not contribute to the failure, he is entitled to his commission as a matter of law."
Harry L. Laws, agent for his sister, was a witness, and testified that he tendered deed for property to the Opera House Company, and was asked if it accepted the deed, but the court ruled that he should not answer for the reason given in sustaining objection to previous question. He was asked further if the Opera House Company refused to accept a deed, but objection to the question was sustained. The court announced that "in my view of the law, it does not make any difference what occurred; whenever a broker has a property for sale and procures a purchaser, no matter what happens after that, he has complied with the terms of his contract. I sustain the objection."
Entertaining such firm convictions as to the meaning of the contract for commission, the court instructed a verdict for the plaintiffs. We cannot agree with the trial court on its construction of the contract. What the owner offered as first in order stated in the written proposition, was to lease the described premises perpetually. The lessees to have the privilege of purchase at the end of twenty years for one hundred thousand dollars. They were to put up a new, modern, first-class building, and to secure the erection of such a building within six years, they were required to deposit in a certain bank twenty thousand dollars in cash or securities, and in case of failure, the funds so deposited should go to Miss Laws, but if building should be completed, funds to go to the lessees. The scheme of the owner was to obtain a tenant on the terms specified and it was not a proposition of direct sale, but of a privilege of purchase at the end of twenty years at a specified price; but until that event occurred the party accepting the offer would be a tenant under a lease to be executed in due form. The offer starts out with the statement: "I will lease perpetually the property known as No. 512 Vine street, Cincinnati at the rate of four thousand dollars per year, payable quarterly," et cet. When the Opera House Company made and endorsed its acceptance on the proposition, it accepted the offer of a perpetual lease, and not a direct and simple offer to sell. Hence many authorities cited in brief for defendants in error fail, to be authority in this case. The agents did not secure a purchaser of the premises ready to take them on terms offered by the owner, as instanced in many of the cases cited; nor were they commissioned to find a purchaser, but one who would take or enter into a lease on the terms defined in the written offer of the owner, and the acceptance covered the several things that were to be done during the running of the lease.
The petition filed in the* lower court sets out a copy of the written offer of a perpetual lease, and avers that the plaintiffs secured an afcceptance of the same on the 9th of May, 1903, and "that for their services in securing the lease of said property, defendants promised and agreed to pay to plaintiffs a sum of money equal to two per cent, upon the privilege of purchase price, namely, two thousand dollars." It seems that our construction of the instrument is the pne entertained by the plaintiffs in their petition; — that they were to secure a lease, and not make a sale. This view stands out plainly in the language of their contract for compensation, which is not set out in the petition, but which is: "In case you make a lease of the propert3^ known as No. 512 Vine street, as per written proposition made you this date, I agree to pay you a commission of two" per cent, on the privilege of purchase price." The name of the owner is signed by her agent.
Under such a contract, was it enough that the agents procure some one to endorse and sign an acceptance on the written offer, and neither do or offer to do anything further? Had they earned the commission according to this contract when they secured a party to merely accept the offer containing so many conditions ? In their petition they say they were to be paid the commission for securing a lease, and it is shown in the brief testimony which the court admitted that they never secured a lease or tenant for the owner. After the acceptance was made the deed held by the owner was delivered through her agent, Harry L. Laws, to an attorney, for some purpose, for examination óf title and drafting of a lease, some witness stated, and when inquiry was made of witnesses as to why the deal failed, the court held that was immaterial and refused to hear it. No lease was procured or made, and the record does not disclose a single step taken by the Opera House Company after signing the acceptance, except the payment of the thousand dollars to bind the acceptance. There is nothing- said in the record about a deposit of twenty thousand dollars as a guaranty that the accepting company would erect the modern building specified in the proposition. There is no evidence that such deposit was made or tendered. This was to be a condition ih the lease.
Now in the presence of these facts, did the plaintiffs "make a lease of the property known as No. 512 Vine street," et cetera? They did not, and yet that is the condition of the contract upon which they seek to recover. There is no claim that the plaintiff in error defaulted in any respect, and it is understood that she was anxious that the lease be obtained, but the court prevented the plaintiff in error from showing who was at fault for the failure to carry out the terms of the accepted proposition, on the ground that when the plaintiffs secured — not a lease, but an agreement to lease — they had done their whole duty under the contract of employment. Such a construction would enable agents to trifle with the rights and interests of their principal, and by procuring merely an acceptance of an offer to lease, collect commission and leave the owner to perform the labor and work out the details for which they have been paid. They might prevent a lease by their fraudulent concealment or false representations. We are unwilling to adopt the theory-followed by the trial court and sanctioned by the circuit court. The terms of employment should not be enlarged and made to create a liability not contemplated in the contract. The fate of the thousand dollars paid with the acceptance can be determined according to the rights of the parties.
In our judgment, the court erred in excluding evidence offered by defendants, and also erred in directing a verdict for the plaintiffs.
Judgment reversed.
Crew, C. J., Summers, Spear, Davis and Si-iauck, JJ., concur.