Court Opinion

ID: 5247083
Source: CourtListenerOpinion
Date Created: 2022-01-06 18:02:36.188464+00
Date Added: 2024-06-11T08:27:53.101670
License: Public Domain

Smith, J.:
Richmond Levering and Richmond Levering & Company were the owners of certain oil properties in Mexico. They made a contract with the plaintiffs and one Jewell, .acting as copartners, to procure the sale of these properties, and agreed to give to the plaintiffs five per cent as commissions. In this contract no mention was made of “ cash ” sale or commission. The plaintiffs engaged the defendant, who had strong financial connections, to assist them, and agreed to pay the defendant three-fourths of the five per cent commissions, they to retain one-fourth thereof. In this contract, also, the commissions were not limited to cash received. The defendant proceeded to investigate the properties, and become acquainted with the facts relating thereto, and in one of the negotiations it was contemplated that $500,000 was to be paid for the properties. This negotiation, however, fell through. A corporation was finally formed called the Port Lobos Petroleum Company, Ltd., which corporation took the property, and to Levering and the Levering Company was given certain stock in that corporation, and moneys were apparently advanced to them in addition to the stock received. While such negotiations were pending, Levering and the *771Levering Company made a contract with the defendant to give to the defendant a commission “ equivalent to 10% of the amounts of cash when and as received,” and “ as additional commission stocks in the several companies or properties to the extent of 15% in kind of the amount in each company or property which is sold said parties.” A further commission and bonus “ pro rata in kind of said stock and /or properties that will make the par value of stock and /or property received by you at any time up to the time that $1,000,000 has been received by us or our companies or properties, equal to the aggregate of the sums received by us or our companies or properties.” This contract between Levering and Levering & Co. and the defendant was concealed from the plaintiffs, and, furthermore, the plaintiffs had no knowledge of the nature of the transactions by which the properties of the Leverings were transferred to the new corporation. Without disclosing that the defendant was to receive any stock as part of his commission the defendant procured the plaintiffs to write him a letter, of which the following is a copy:
“ New York, September 26, 1914.
“ Mr. W. E. Goldsborough,
“ 30 Church Street,
“ New York:
“ Dear Sir.— Referring to the matter of commissions payable on account of moneys secured through your efforts and paid to Richmond Levering & Co., or Richmond Levering or any of their Mexican oil corporations, we hereby authorize Richmond Levering & Co., Inc., and Richmond Levering to recognize your demand upon them for your commission, and to pay your commission directly to you, and authorize and request you to look to them and not to us for your commission, and hereby acknowledge that you have no obligation to us or we to you in the matter of the payment of the commission.”
What the defendant has received is unknown to the plaintiffs, and this action is brought to compel the defendant to account for one-fourth of the commissions or compensation received by him for negotiating the purchase of these, companies by this new corporation.
It is apparent that it was at first contemplated that these *772oil properties should be sold in bulk for cash and that the plaintiffs were to receive five per cent of the cash purchase price, which five per cent was to be divided according to the arrangement afterwards made with the defendant, the plaintiffs retaining one-fourth thereof and the defendant becoming entitled to three-fourths thereof. Under this arrangement it would seem clear that if the properties were sold for anything other than cash and the defendant received his commission in stocks as well as cash, the plaintiffs would as well be entitled to one-fourth of those commissions up to the five per cent which was stipulated for in the contract between the Leverings and the plaintiffs and in the contract between the plaintiffs and the defendant. I am unable to find any partnership or any joint venture as that term is usually employed. The defendant was not bound to use his best endeavors to make a sale; he did not so stipulate. If he made a sale he was entitled to three-fourths of the five per cent commission that the plaintiffs would receive. Nor can I see any breach of duty to the plaintiffs in the defendant making a further contract for further commissions from Levering & Co. If he were not bound to use his best endeavors in his contract With the plaintiffs, then clearly Levering & Co. might stimulate him to more active endeavor by offering him extra commission and extra compensation. The receipt of extra commission would in no way work against the plaintiffs’ interest, but rather stimulate defendant to extra endeavor to complete the sale and earn for the plaintiffs the one-fourth of the five per cent for which the plaintiffs had contracted. There is, therefore, no breach of trust and no reason that I can discover why the defendant cannot stipulate for an extra commission. The defendant did so stipulate, and procured a contract for ten per cent cash, receiving fifteen per cent stock and a certain bonus besides. Of this amount so stipulated five per cent of the cash received and five per cent of the stock received would be received under the contract originally made between the Leverings and the plaintiffs, and the plaintiffs would be entitled to one-fourth of the five per cent both of the cash and of the stock received by the defendant. If this be the correct interpretation of the rights of the parties, then the plaintiffs’ complaint was improperly dismissed, and the *773defendant should be compelled to account for one-fourth of the moneys and the stock received up to five per cent thereof.
Some confusion has been brought into the case by plaintiffs’ attempt to have canceled and delivered up this letter of September twenty-sixth as having been fraudulently obtained, and the trial court seems to have found that the defendant was guilty of no fraud in obtaining the letter. This to my mind presented an immaterial issue. If the letter be deemed to have been intended to alter the original contract, it was without consideration and failed to effect such alteration. As far as it gives an authority to Richmond Levering & Company to pay to the defendant, it could only operate as an estoppel in an action against Richmond Levering & Company in case the plaintiffs were seeking to recover from that company property which had been delivered to Goldsborough upon the faith of this letter. It could not alter the legal effect of the original contract because, first, it is without consideration, and second, without knowledge of the fact that stocks were in fact to be paid to the defendant as part of the commissions. It is inconceivable that the plaintiffs, without any consideration whatever, should give to the defend-, ant their rights to stocks received as part of the commission and confine themselves to a claim for one-fourth of the five per cent of the moneys received, if the plaintiffs had any knowledge of the fact that the commission was payable partly in moneys and partly in stocks. The gift, if intended, would be ineffectual, but no such intention can be gleaned from the papers, and the plaintiffs are left with their original rights of one-fourth of the commission of five per cent stipulated for in their contracts.
The judgment should, therefore, be reversed and a new trial granted, with costs to appellants to abide the event.
Findings of fact numbers 3, 6, 7 and 16 are reversed as far as they find that the agreement was limited to a percentage of the “ cash ” received.
Clarke, P. J., Scott and Davis, JJ., concurred..
Judgment reversed and new trial ordered, with costs to appellants to abide event. Order to be settled on notice.