Court Opinion

ID: 6748008
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:01:50.268417+00
Date Added: 2024-06-11T16:02:09.545559
License: Public Domain

MORGAN, P. J.
(dissenting):
The plaintiff is in the real estate brokerage business and it brought this action to recover a real estate commission from the defendant on the purchase by the defendant of a parcel of real estate for $180,000.00. The plaintiff sued for $5400.00 claiming that *289this amount would be the commission as fixed by the rules of the-Cleveland Real Estate Board in such a transaction.
P. J. Spitz, the president of the plaintiff company, was the only witness in the case. At the conclusion of the plaintiff’s evidence, the trial court granted the defendant’s motion for a judgment in its. favor.
The facts are given in the majority opinion and it is not necessary to repeat them here. As the record now stands there is no denial of plaintiff’s claim that in a conversation between Spitz and McDonald, vice-president of the defendant, Spitz said to McDonald that if the defendant purchased the property involved in this case, plaintiff’s commission would have to be paid by the defendant “as the deal would have to be a net deal.” To this statement McDonald replied, “Well, if we agree to buythis property, we certainly will buy through you and gladly pay you your Real Estate Board commission.” It is conceded that the defendant afterwards purchased this property for $180,000.00.
The plaintiff, as a part of its case, offered in evidence the rules of the Cleveland Real Estate Board fixing the commission to be paid on sales of real estate. The trial judge excluded this evidence on the ground that the rules of the Board fixed the commission only when such commission is to be paid by the seller and as stated by the court: “There is no provision made in the rules exhibited to the court for collecting a commission” when the commission is to be paid by the purchaser. With this evidence excluded, the plaintiff’s case lacked any proof as to the amount the defendant had agreed to pay plaintiff by way of commission and the opinion of the trial court shows that for this reason alone he granted defendant’s motion for judgment at the conclusion of plaintiff’s case.
That the trial court erred in excluding the rules of the Cleveland Real Estate Board fixing commissions, is conceded in the majority opinion in this case. It states that McDonald’s statement to Spitz is susceptible of the interpretation “that the buyer should pay the commission that the broker would otherwise be entitled to recover from the seller.”
In my opinion, this is the only possible interpretation of McDonald’s statement. When McDonald told Spitz that if the defendant should buy this property “we certainly will buy through you and gladly pay you your Real Etate Board commission” he meant and both parties understood him to mean that as purchaser the defendant would pay plaintiff the regular real estate commission fixed by the Real Estate Board, usually, (but not always) paid by the seller.
If the rules of the Real Estate Board had been admitted in evidence there would have been evidence to go to the jury as to-plaintiff’s damages. As the trial court erred in excluding this evidence, as is conceded in the majority opinion, it follows that the *290only reason assigned by the trial court for granting defendant’s motion for judgment is without merit or validity.
The defendant, however, maintains that the trial court was right in granting defendant’s motion for judgment on other grounds. It contends, first, that “the conversation between Spitz and McDonald contained only statements of promissory intention which were quite insufficient to create a contract.” The defendant in its brief cites cases and text books to the effect that statements of promissory intention are not sufficient to create a contract.
It is my opinion that these authorities are not applicable to the facts in the present case. None of them deal with the creation of the relation of principal and agent and their reciprocal obligations to each other. “As between principal and agent the creation of the agency relationship arises from the consent of the parties.” 2 American Jurisprudence 25. “Relationship of principal and agent can be created although neither party received consideration.” 1 Restatement of Law of Agency, page 53, Sec. 16.
Whether or not the conversation between defendant’s vice-president McDonald, and Spitz, was sufficient to create the relation of principal and agent between plaintiff and defendant can be tested. After this understanding was reached' between McDonald and Spitz, the latter would have violated his obligation to defendant if he had attempted to purchase the property involved, upon his own account and for his own benefit, 2 Amer. Juris, pages 202. 203, .210. Clearly, Spitz as agent owed the defendant the duty of loyalty. Defendant’s reciprocal obligation, if it decided to buy the property, was, according to the undisputed record, “to buy it through you (that is, the plaintiff)” and “to gladly pay you your Real Estate Board Commission.”
In an early conversation between Spitz and a representative of the Cleveland Builders Supply Company, which had a long-term lease on the property, with an option to buy, this representative had put a price of $225,000.00 on the property. The question whether if Spitz had found a purchaser at that figure he would have been entitled to a commission from the seller does not arise in this case. On cross-examination, Spitz testified that it was his understanding that prior to his conversation with McDonald he was representing the owners of the property. It is clear, however, that Spitz made no attempt to find a purchaser at the price fixed by the seller of $225,000.00 and did not at any time attempt to represent the seller.
It is not claimed that Spitz violated any duty owing to the seller when he agreed to represent the defendant on the understanding that the commission would be paid by defendant if it purchased the property. The record discloses nothing ambiguous either in Spitz’ relation to the parties or in his conduct.
' It is my opinion, therefore, that decisions to the effect that “statements of promissory intention are insufficient to create a *291contract are wholly beside the point, and do not apply to the relationship of principal and agent in this case.
The defendant maintains as its second additional ground for affirmance of this case that there is no evidence in the record that. McDonald, as vice-president of the defendant had any authority to. employ Spitz as an agent. Cases cited by the defendant which hold, that it will not be presumed that the vice-president of a company has authority to bind the company by a contract for the purchase of: land, are not in point in this case.
McDonald in this case did not attempt to buy the land in question.. He availed himself of the services of an agent and retained, for the defendant complete freedom to decide later whether it would, purchase the property. If it decided not to purchase no compensation would be due the agent.
Plaintiff’s office first called the office of the president of the defendant and informed the president’s secretary that Spitz wished to confer with him as to property which the defendant might be interested in purchasing. Later the secretary to the president of defendant company instructed Spitz to call on McDonald, a company-vice-president on this matter.
Whether Spitz’ request was ever brought to the attention of the-defendant’s president does not affirmatively appear. The secretary-of the president of such a company as the defendant is an important, person. No one was in a better position to know the allocation of' functions in the large and rapidly growing business of the defendant, among its principal officers than the secretary to the president. The-fact that after inquiry the president’s office, through the president’s secretary, instructed Spitz to see McDonald about this property is-some evidence as to the authority of McDonald in the matter.
McDonald himself seems to have had no doubt as to his authority. The record shows that on McDonald’s request Spitz furnished him with a tracing of the property to make blue-prints so-that defendant’s engineers could lay out the plant. He even suggested to Spitz that the latter get a 30-day option on the property-but Spitz convinced him that such action would be unwise and unnecessary until the defendant had determined to proceed with the-purchase.
All this is some evidence that McDonald, during the period of' some months, was handling for the defendant the securing of additional property made necessary by its rapidly increasing business. Warner & Swasey Company is one of the principal manufacturers-in this country of machine tools. The war caused a great multiplication of the demand for defendant’s products and made expansion-necessary.
There is no evidence that McDonald’s activities in handling this-matter were ever disowned by the defendant. When later Morris was emploved by the defendant to negotiate the purchase of the property, the reason assigned was not that McDonald had exceeded' *292.his authority, but rather that Morris was a school friend of the president and for that reason the. president wished Morris to handle the negotiations.
It is also true that, the old idea that a vice-president of a corporation is an official whose only power is to take the place of the president when the latter is absent, ill or otherwise disqualified, no longer holds in the case of a vice-president of a large company today. The vice-president is usually an official of broad powers to whom is allocated definite responsibilities for some part of the company’s business and problems.
It is my opinion, therefore, that there was evidence to go to the jury that McDonald,' as vice-president of the defendant company had authority to appoint Spitz as an agent to assist the defendant in its negotiations for the property in question.
The third and final additional reason urged by the defendant for affirmance is that the plaintiff “by refusing to perform” cannot recover in this case.
This claim is without merit. It is based on evidence that after the defendant had decided to supplant Spitz and to employ Morris to handle the negotiations for this property, Morris, without con.sulting Spitz, and without his knowledge, got in touch with the owners and informed them that he represented The Warner & •Swasey Company as a possible purchaser for the property in question. Later Morris told Spitz that if the latter could still buy the property for $175,000.00 he would be paid his commission and the defendant contends that by failing to act on this suggestion, Spitz lost any right to a commission that he otherwise might have had
There is nothing in the record to indicate that defendant found •any fault with anything that Spitz did or failed to do. Nevertheless, when Morris said to Spitz (it does not appear by what authority) that if the latter could buy the property for $175,000.00 he would be paid his commission, the matter had already been taken out of ’Spitz’ hands and when the owners were advised that The Warner & Swasey Company was negotiating for the property, Spitz’ advice as to how the matter should be handled had been disregarded When Spitz told McDonald that he believed the property could be bought for $175,000.00 it was on the basis that the owners should not be informed that The Warner & Swasey Company was in the market fof the property.
Clearly, it cannot be said on this state of the facts that the plaintiff, as a matter of law, lost its right to a commission by reason •of the refusal of Spitz to perform. At best, it was a question for the jury.
Inasmuch as the reason assigned by the trial court for granting defendant’s motion for judgment at the conclusion of plaintiff’s case was without merit and the other reasons advanced by defendant’s counsel are equally so, I dissent from the judgment of affirmance in this case.