Court Opinion

ID: 9711355
Source: CourtListenerOpinion
Date Created: 2023-08-26 04:30:01.117313+00
Date Added: 2024-06-11T18:23:04.054928
License: Public Domain

Kehoe, District Judge.
This is an action to recover a broker’s commission on account of a sale of real estate. The case was tried to a jury in the District Court. The jury returned a verdict in favor of the plaintiff. The defendant moved for judgment notwithstanding the verdict or for a new trial on the grounds that the evidence was insufficient to justify the verdict. The motion was denied and judgment was entered on the verdict. The defendant has appealed from the judgment and the Order denying the motion.
*600On July 16, 1947, the defendant signed, acknowledged and delivered to the plaintiff a listing contract under the terms of which he appointed the plaintiff as his exclusive agent to make a sale of Section 29, Township 148, Range 67, in Eddy County, North Dakota, for the price of $19,200.00, and agreed to pay the plaintiff $1920.00 for his services. The listing contract was to continue until September 1st, 1947, and thereafter until the expiration of 30 days after the date of the service of notice by the defendant upon the plaintiff revoking the latter’s authority. Such notice was served on.the 4th day of November, 1947, thus terminating the listing contract on the 4th day of the following December. The listing contract will be later considered more in detail.
On September the 1st, 1947, the defendant desiring to seed rye on some of the land and to plow and prepare the balance for the 1948 cropping season, it was then verbally agreed between him and the plaintiff that he might do such work and that if the land should be sold, the purchaser would be required to pay him therefor in addition to such $19,200.00 sale price. In the latter part of that month one Walter Krueger became interested in the purchase of the land and enlisted the help of one George Aljets to aid him in making contact with the defendant. On October 2nd following, the defendant and Krueger entered into a verbal agreement for the.sale of the land to Krueger. At that time the defendant had the rye seeding partially done, and under such verbal agreement the defendant was to continue until he had seeded 200 acres of rye and was to plow the balance of the land and remove the rocks therefrom, and Krueger was to pay him, and did pay him at that time the sum of $2130.00 therefor. Under such agreement Krueger agreed to purchase the land and to pay $19,200.00-as the purchase price, paying $4600.00 thereof at the time and agreed to pay $5000.00 after January 1st, 1948, and the balance of the purchase price in deferred payments. No written contract was entered into at that time. The parties agreed that they would later execute one. The rye seeding, plowing and rock removal were completed by March 1948, but the record is silent as to the date of such completion. Immediately after entering into such verbal agreement the de*601fendant notified the plaintiff thereof and on the 8th day of October, 1947, the plaintiff caused such listing contract- to be recorded in the office of the Register of Deeds of Eddy County. On the 8th of November, 1947, the plaintiff interviewed Krueger, showing him the- listing contract, and advising him that he still had thirty days in which to sell the land. Krueger replied that he did not know whether his deal with the defendant was going-through,- that he did not care whether he got the land, and that the plaintiff might go' ahead and sell it. On the 12th day of November, 1947, the plaintiff entered into a written contract with John J. Nelson and Lyman Moberg- wherein the latter agreed to purchase the land. Such written contract was executed by the plaintiff as agent for the defendant. Notice of such sale was thereupon recorded in the said office of the Register of Deeds. The defendant then commenced an action in the District Court of Eddy County to quiet title to the land in himself against Walter Krueger, John J. Nelson, Lyman Moberg and the plaintiff herein as defendants. The Henry S. Grinde Corporation, as such defendant, and Nelson and Moberg interposed their joint answer praying that Klindworth be directed to convey the property to Nelson and Moberg and that The Grinde Corporation have judgment against Klindworth for the $1920.00 commission and interest. The issue therein was between Klindworth on the one side and The Grinde Corporation and Nelson and Moberg on the other. Krueger interposed his separate answer asking for the specific performance of his October 2, 1947 verbal contract for sale. The issue therein was between Klindworth on the one side and Krueger on the other. The action was tried in the District Court of Eddy County in March 1948, the Hon. George Thom, Jr., presiding. That action will be hereinafter known as the “prior action.” Findings of Fact, Conclusions of Law and Order for Judgment were made therein on the 21st day of April, 1948, and judgment was entered thereon on the 6th day of May, 1948. In such judgment, the Court decreed that it in no way passed upon the rights claimed by such corporation for said commission, that such claim was not properly at issue and dismissed the same without prejudice to further action. The Court therein further found that *602the written contract of sale made by said corporation, as agent, with Nelson and Moberg on November 12, 1947, was not binding upon Klindworth for the reason, among others, that it did not comply with the listing contract and decreed that said corporation, Nelson and Moberg, and each of them, had no estate or interest in, or lien or encumbrance upon or right or title to or against such land. The Court therein further found that Klindworth and Krueger raised no question as to the validity of the October 2nd verbal agreement of sale, waived all legal objections to its enforcement and expressed their willingness to perform it if permitted or ordered so to do by the Court and decreed that Krueger had an enforceable agreement for the purchase of such land and that he-was entitled to have such agreement- specifically performed on the terms mentioned in the decree by Klindworth executing a formal contract for the sale to Krueger.
The substance of the material parts of the listing contract is: I, (the defendant) hereby appoint you (the plaintiff) my exclusive agent to make a sale of (the above land) for the sum of $19,200.00, and you are hereby authorized to accept a deposit to - be applied on the purchase price and to execute a binding contract for sale on my behalf. In case said property is sold or disposed of within the time specified, it is further agreed that you shall have and may retain from the proceeds arising from the sale, $1000.00 when the deal is made, $920.00 commission on the above price; and all of the consideration for which said property is sold over and above the price herein specified. In case said property is sold within said time, either through you or any other person, then in that case, I promise to pay you the hereinbefore described commission. This contract to continue until September 1st, 1947, and thereafter, but said agent’s authority hereunder may be revoked’ by the owner upon thirty days notice in writing to that effect given to the agent.
The phrase “make a. sale”, coupled with the express authorization to the plaintiff to execute a binding contract of sale on behalf of the defendant, collect a down payment, and have and retain the major portion of the commission from the proceeds arising from the sale, and all received over $19,200.00, is incon*603sistent with the theory that- the parties intended the imposition of an obligation on the defendant to pay in the absence of a binding contract of sale. Such phrase excluded liability on the part of the defendant until a binding contract of sale had first been effected during the life of the listing contract and inaecordance with the terms thereof, as a result of the efforts of the plaintiff, or some other person. The plaintiff’s attempt to execute such a contract on behalf of the defendant with its customers, Nelson and Moberg, evidenced the fact of its understanding as to the character of the contract of sale demanded and essential to enable it to recover.
In Cunningham v. Friendly, 70 Ore 222, 139 Pac 928, Cunningham sued upon a listing contract, the terms of which are substantially the same as those of the one here involved, reading:
“To Cunningham & Gray: For and in consideration of one dollar ($1.00), the receipt of which is hereby acknowledged, we hereby appoint you exclusive agent to make sale of the real property herein described . . . for the price of $25,000, upon the following terms: $12,500 cash, $12,500 secured by mortgage thereon for two years at 6 per cent. And you are hereby authorized to accept a deposit to be applied on the purchase price, and to execute a binding contract for sale on our behalf. In ease the above-described property is sold or disposed of within the time specified, we agree to make the purchaser a good and sufficient warranty deed to same, etc. . . . ; and it is further •agreed that you shall have and may retain from the proceeds •arising from such sale $675.00 commission on the above price.”
The broker produced one Rocky, who, it was alleged, was willing and able to buy the property and introduced him to Friendly, to whom Rocky paid $1000.00 and verbally agreed to buy the property and complete his part of the agreement. Rocky later declined to go through with the deal. The Court held, “If there h.ad been a contract in writing made with Rocky as was authorized by the contract with the plaintiff, so that defendant could have enforced specific performance on establishing his compliance, plaintiff might have been entitled to his commission; but .as between the defendant and Rocky the latter was not bound *604to purchase, and defendant had. no remedy. Therefore the plaintiff did not make a sale of the lands.”
In Gulart v. Azevedo, 62 Cal App 108, 216 Pac 405, the broker, Gulart, under a listing contract was given the exclusive agency to sell certain property and was authorized to contract with the purchaser, the Court held: “The listing contract was not a mere authorization to procure a purchaser ready, able, and willing to buy, but the plaintiff was employed to ‘contract with the purchaser for the sale and conveyance’ of the land. The plaintiff was appointed defendant’s agent to execute a binding-contract for the sale of the property rather than to find a purchaser with whom the defendant might so contract. . . . , and the fact that plaintiff attempted to make a binding contract of sale, throws light upon the intention of the parties.”
Gilliland v. Jaynce, 36 Okla 563, 129 Pac 8, 46 LRA NS 129, following the same rule, the Court held: “We are inclined to believe that the weight of authority, as well as the better reason, supports the rule that, in order to recover his commission, the real estate agent must produce a purchaser who is ready, willing, and able to buy, and that the evidence of this fact must be such as would be recognized in a court of justice. The sale of real estate is an important step, Avhich the law requires to be taken in writing, and it is explicitly provided that no contract or agreement for the sale of real estate shall be valid unless it is in writing-.”
In Sammons v. Paterson, 127 Ore 11, 270 Pac 499, the Court announced: “It is settled law that, to enable a broker to commission upon procuring a sale or exchange of real property, he must secure the execution of a valid, binding, enforceable contract.” Quoting Cunningham v. Friendly, supra. Also see approving- and applying the same rule: Lewis v. Dahl, supra; Ormsby v. Graham, 123 Iowa 202, 98 NW 724; Munroe v. Taylor, 191 Mass 483, 78 NE 106; Pfanz v. Humburg, 82 Ohio St 1, 91 NE 863; Patterson & Co. v. Temple, 94 Ind App 135, 180 NE 21; Cobb v. Warren, 64 Mont 10, 208 Pac 928; Jacobson v. Rotzien, 111 Minn 527, 127 NW 419, s.c. 127 NW 856; Bolton v. Coburn, 78 Neb 731, 111 NW 780; 12 CJSP 204, Sec 89.
The verbal agreement of October 2nd, 1947, betAveen the de*605fenclant and Krneger was not understood by them as constituting a binding contract. It was intended as the basis of a written contract of sale to be later executed by them. On being questioned as a witness in the trial Court in the present case whether a written agreement was at the time entered into, the defendant replied: “No, except that I jotted down the terms on which we were dealing; and it was understood between Krueger and Aljets and I that as soon as we had a little more time we would draw up the papers but the time never came until Mr. Grinde got into the picture and that, of course, held it up further.”
The plaintiff in no manner aided in’bringing about the meeting of the defendant and Krueger. It makes no claim that it did. It, however, contended, and in its complaint, alleged, that the defendant sold the land to Krueger on the 2nd day of October, 1947, and that it was, therefore, under the listing contract, entitled to recover the $1920.00 commission. That contention cannot be sustained. “The following .contracts are invalid, unless the same or some note or memorandum thereof is in writing and subscribed by the party to be charged, or by his agent:
4. An agreement . . . for the sale of real property, or of an interest therein.” Section 9-0604 NDBC of 1943.
Any right the plaintiff might have had to recover necessitated such verbal agreement having theretofore and during the life of the listing contract, become a binding contract either by having been executed in writing, or under the provisions of the second sentence of Section 47-1001 of the NDBC of 1943, which, after declaring invalid agreements for the sale of real property unless the same or some note or memorandum thereof is in writing and subscribed by the party to be charged, provides: “This does not abridge the power of any court to compel the specific performance of any agreement for the sale of real property in case of part performance.” .
Such verbal agreement was not executed in writing until after the trial of the prior action.
The only factors appearing in the record as bearing on .the question of part performance, are part payment of the purchase price, possession and improvements. In the Findings of Fact in the prior action it was found that Krueger had paid $2130.00 *606for the rye planting, plowing and rock removal and had thereby acquired possession of the land and placed valuable improvements thereon, and had paid $4600.00 on the purchase price. There is nothing more present giving any indication as to the nature of the possession thus stated to have been acquired. Klindworth at the time of entering into the verbal agreement with Krueger was engaged in seeding the rye pursuant to the oral understanding had between him and the broker on September 1, 1947, that he might so do and prepare the land for the 1948 cropping season, and that any purchaser would be required to pay him therefor in addition, to paying the purchase price of the land.
“The overwhelming weight of authority is to the effect that part payment of the purchase price is not in itself sufficient part performance to take a contract out of the statute of frauds and warrant the court in compelling specific performance thereof.” Fried v. Lonski, 48 ND 1023, 188 NW 582; Brey v. Tvedt, 74 ND 192, 21 NW2d 49; Russell v. Briggs, 165 NY 500, 59 NE 303.
There is no evidence of any change of actual possession. Such Finding of Fact had, for reasons hereinafter stated, to be bottomed on the premise that Krueger acquired actual possession under his invalid verbal contract of sale, by the isolated act of paying Klindworth $2130.00 for. the latter’s completion of the farm work then in progress. The conclusion is erroneous. Actual possession may not be thus acquired. Not even may constructive possession.
“Constructive possession ... is that possession which the' law annexes to the legal title or ownership of property,.when there is a right to the immediate actual possession of such property,” 12 CJ 1304; 51 CJ 192; Playa de Flor Land & Improvement Co. v. U. S., 70 Fed Supplement 281, 340; Lofstad v. Murasky, 152 Cal 64, 91 Pac 1008.
Nor is constructive possession recognized as a factor of any force in determining whether acts of part performance, in any case, are sufficient to take it out of the statute of frauds. “Possession must be actual, open and notorious to serve as an act of part performance, and with such publicity as attends an open transfer of possession and in such a way that the fact itself *607attests that parties have bargained.” Muir v. Chandler, 16 ND 551, 113 NW 1038. The evidence must be clear and convincing. A mere constructive or technical possession is insufficient. Boese v. Childress, 83 Okla 60, 200 Pac 997.
There is nothing in the record to show what part of the $2130.00 may have been for the rye seeding, what part for the-plowing, or what part for the rock removal, except as might be-indicated in the contract of sale with Nelson and Moberg. A tract of land consisting of 640 acres was involved. That contract-provided $1300.00 for 200 acres of rye seeding and $2.00 per acre-for plowing. Under the verbal agreement with Krueger, Klindwortli was to complete the rye seeding and was to plow the balance of the land and remove the rocks, thus leaving over 400-acres to plow. The cost thereof at $2.00 per acre exceeded. $800.00, totaling more than $2100.00 for the rye seeding and plowing alone, and leaving a very insignificant sum, if any, for the rock removal.
Improvements made on land, in order to constitute part performance of an oral contract for its sale, have to be valuable,, substantial and permanent. Improvements to take an oral contract out of the statute of frauds must be something more than' a tenant at will who expects to occupy the premises for a number of years, would make for his own comfort and convenience. Adkins v. Adkins, 332 Ill 422, 163 NE 822; Flannery v. Woolverton, 329 Ill 424, 160 NE 762. Improvements made in the ordinary course of husbandry are insufficient as part performance. Emmel v. Hayes, 102 Mo 186, 14 SW 209, 11 LRA 323, 22 Am St Rep 769.
Improvements, such as papering of a residence, inside painting, doing fencing and erecting chicken coops on the land, were-held not such improvements as have a substantial and pennanént character, or as are beneficial to the freeholder; but such as are-merely for the ordinary convenience and comfort in the use and occupation of the premises, and not more than might ordinarily-have been made by the tenant at will. Price v. Lloyd, 31 Utah 86, 86 Pac 767, 8 LRA NS 870.
There is an additional reason for the improvements being insufficient as a part performance. “The right of a party who has. *608done acts in part execution of a verbal contract; to call upon a court of equity to enforce it against the other, is subject to the same general restrictions as that of any other plaintiff in equity. . . . It must . . . appear that his position is such that an action at law for damages will not afford him adequate relief.” French v. Mitchell, 92 Colo 532, 22 Pac2d 644. “Under the general rule that an act, in order to be sufficient as part performance of an oral contract, must work such change in the status or position of the party (complaining party) that it would be a fraud upon him not to enforce the contract, it has been held that» improvements on land for which the promisee may reasonably be compensated in damages are not sufficient; and where the promisee himself has put a valuation on improvements they are thereby shown to be compensable and so insufficient as part performance within this rule.” 58 CJ 1017, Sec 220. Pomeroy, Specific Performance of Contracts, 3d Ed Sec 129.
In Sullivan v. O’Neal, 66 Tex 433, 1 SW 185, the Court said, “There is, however, this difference to be noticed between advancing to the vendor money to be used by him in erecting an improvement on the land he has agreed to sell, and which he afterwards refuses to convey, and the use of the same money by the parol purchaser in erecting improvements on the land, which the vendor then refuses to convey. In the first case no equity arises from the advancement. The remedy at law is ample, and there is no occasion for the interposition of equity, while in the other case there is no remedy at law. Equity must interpose, or the statute to prevent frauds is used to perpetrate one.”
Nor was Klindworth in a position to compel specific performance. The intervention of any special circumstances are not shown in the Findings of Fact by the Court in the prior action to have been present. There were no alterations in the physical features of the land. The rye seeding and plowing were in harmony with his pre-arranged plan. No interest in or to the land had passed to Krueger. Klindworth had $6730.00 of Krueger’s money in his possession, more .than adequate to cover any possible damage. His damages, if any, were ascertainable. His remedy at law was adequate. Peterson v. Nichols, 110 Wash 288, *609188 Pac 498. As bearing on the same question see Haffner v. Dobrinski, U. S. 54 Law Ed 277.
At the time of tbe trial of the prior action the fee simple title to the land was. vested in Klindworth. “An estate in fee simple is the greatest estate or interest which one can possess in lands.” Bowen v. John, 201 Ill 292, 66 NE 357; Coleman v. Shoemaker, 147 Kans 689, 78 Pac2d 905. It embraces all the estates that may be carved from land. 31 CJS 18, Sec 8; Watson v. Dalton, 146 Neb 86, 20 NW2d 610; United States v. Sunset Cemetery Co., 132 Fed2d 163.
Had there been a binding contract, of sale at that time between Klindworth and Krueger, its execution would have worked an equitable conversion, vesting the equitable title in Krueger and leaving the legal, title in Klindworth as security for the payment of the balance of the purchase price. Clapp v. Tower, 11 ND 556, 93 NW 862.
The judgment in the prior action, in its first paragraph, decreed that Klindworth was the owner of the land in fee simple. That judgment by so decreeing, by implication at least, declared that there was no binding contract between Klindworth and Krueger as well as that no equitable conversion had been effectuated, and affirmed the conclusiveness, of the inference that those parts of said judgment, decreeing that the defendant, Walter Krueger, had an enforcible agreement for the purchase of the land upon the terms named in the decree and that the defendant was entitled to have such agreement specifically performed by Klindworth executing a formal contract for the sale of the land to Krueger, were based on Klindworth and Krueger raising no question as to the validity of the verbal agreement of sale, their waiving all legal objections to its enforcement and expressing their willingness to perform it if permitted or ordered so to do by the Court.
“It is allowable to reason back from a judgment to the' basis on which it stands, upon the obvious principle that, where a conclusion is indisputable, and. could have been drawn only from certain premises, the premises are equally conclusive and indisputable with, the conclusion. But. such an inference *610must be inevitable, or it cannot be drawn.” Freeman on Judgments, Sec. 257.
The judgment could have well been rendered on a view taken by the trial judge' that the factors of part performance were insufficient to take the-verbal agreement out of the statute of frauds, as has been above observed, and based on Klindworth and Krueger raising no question as to the validity of the verbal •agreement, their waiving all legal objections to its enforcement, and their willingness to perform it if permitted and ordered so to do by the Court.
The burden of proof was on the plaintiff to establish a binding contract of sale between the defendant and Krueger during the life of, and in accordance with the terms of the listing contract, either as the result of their execution of a written binding contract of sale, or their part performance of the verbal agreement sufficient to make it binding, thereby taking the verbal agreement out of the statute of frauds. 8 Am Jur P 1117, Section 222.
In conclusion the pivotal question herein involved is as to whether there was a binding contract of sale .in force before the ■expiration of the listing contract. The inference is clear that the defendant and Krueger were ready and willing to consummate such contract. The inference is equally clear that the recording of the listing contract and notice of sale to Nelson and Moberg, circumstances which resulted in the action to quiet title, caused the delay of such consummation until the •disposition of the prior action. But the fact, however, remains, that- there' was no binding contract until they executed one on the order so to do by the Court in the prior action, made after they had expressed their willingness to raise no question to the validity of the verbal agreement, waive all legal objections .and to consummate a binding contract of sale if permitted and so ordered by the Court.
The Court, therefore, holds that neither • Klindworth nor Krueger was at any time before the trial of the prior action in a position to compel specific performance of their verbal agreement of sale for the following reasons: ■ 1. that there was *611no binding contract of sale between them during the life of the listing contract; 2. that payment of part of the purchase price was not, in and of itself, sufficient part performance to take the contract out of the statute of frauds; 3. that there was no evidence of any change of actual possession; 4. that the rye seeding and plowing were not substantial and permanent improvements, that the rock removal was of very minor significance, that the seeding, plowing and rock removal were the result of work such as is done in the course of ordinary husbandry and as a tenant at will would do for his own convenience; 5. that evidence was insufficient to justify the verdict; and 6. that the remedy at law was adequate fully to compensate the defendant and Krueger and each of them.
The order and judgment appealed from are reversed and the cause remanded with directions that judgment be entered dismissing the action.
Nuessle, C. J., and Burke, Morris and Christianson, JJ., concur.
Crimson, J., being disqualified, did not participate.