Court Opinion

ID: 3490827
Source: CourtListenerOpinion
Date Created: 2016-07-05 21:59:18.970658+00
Date Added: 2024-06-11T14:05:05.344677
License: Public Domain

This is a suit at law in which plaintiffs, a copartnership, seek to recover from defendants a substantial sum of money which plaintiffs claim is due them as commission earned incident to the sale of the stock of the American Broach 
Machine Company of Ann Arbor, Michigan, to the Sundstrand Machine Tool Company of Rockford, Illinois. The case was heard in the circuit court without a jury and judgment entered for defendants. Plaintiffs have appealed.
Herein we designate these companies as the American Company and the Sundstrand Company respectively. The partnership which originally started this litigation was doing business as Whitlock, Smith  Company, but during the course of the litigation the copartnership of Smith, Hague  Company was substituted as plaintiffs, this evidently being due to some change in the personnel. R. Harold *Page 283 
Hyde was a stockbroker employed by Whitlock, Smith  Company. He and defendant Francis J. Lapointe had been acquainted and had some business relations extending back as far as 1930. Mr. Lapointe was the controlling factor in the American Company, a Michigan corporation. The transaction out of which this litigation arises had its inception in August, 1935. At that time the American Company had outstanding 297 shares of stock of the par value of $100 each. Two hundred eighty-nine shares of this stock stood in the joint names of Francis J. Lapointe and his wife Ada Cox Lapointe. The remaining 8 shares were held by Mr. David A. DeLong, associated with Mr. Lapointe in the American Company.
It is plaintiffs' claim that in 1935 Mr. Lapointe, being desirous of disposing of the whole or a substantial part of his stockholdings in the American Company, arranged with Mr. Hyde, as an associate of Whitlock, Smith  Company, to find a buyer; and plaintiffs claim that the agreed commission to be paid in event of a sale was 10 per cent. of the proceeds of the American Company stock. Defendants deny that there was such an agreement. But in any event, the undisputed record is that Mr. Hyde actively sought a buyer for the American Company stock and contacted several prospects whom it was thought might meet the requirements of the contemplated transaction, which was that some concern in a kindred line of manufacturing might take over and continue the activities of the American Company which was engaged in the business of manufacturing broaching machines and tools. Early in September, 1935, Mr. Hyde contacted representatives of the Sundstrand Company, and from that time over a period of approximately three months he put forth almost continuous efforts to consummate a deal with *Page 284 
the Sundstrand Company; although in the meantime he was also endeavoring to determine whether other parties might be interested. The record is replete with evidence disclosing the vigor and persistency with which Mr. Hyde gave attention to this transaction. Such evidence is not only found in the oral testimony of Mr. Hyde, but also in the oral testimony of defendant Lapointe and of defendants' other witnesses, as well as in an abundance of documentary exhibits consisting of letters, telegrams, and records of long distance telephone communications. On November 8, 1935, the representatives of the Sundstrand Company came to Ann Arbor to inspect the American Company's plant and for a conference concerning details of the transaction then partially developed through negotiations with Mr. Hyde. It was on this occasion that Mr. Lapointe first met these representatives. Approximately a month later (December 7th), Mr. Lapointe and Mr. Hyde went to Chicago and there met and had further negotiations with the Sundstrand representatives. By this time it had become evident that the Sundstrand Company, which was engaged in the manufacture of milling and other machines, was much interested in going into this broaching business in which the American Company was engaged; but it also developed that the Sundstrand Company was not interested in purchasing certain assets held by the American Company, including its real-estate holdings in Ann Arbor, Michigan. Matters had now progressed to such a point that it was agreed there should be an audit and appraisal of the American Company's assets. Mr. Lapointe and Mr. Hyde returned from Chicago on the same train and en route discussed the matter of a deal being consummated which would not include the Ann Arbor real estate, and, as will be hereinafter noted, according to Mr. *Page 285 
Lapointe's testimony, the matter of the commission which would be payable in case the deal was consummated was also brought up. The record is conclusive that following the Chicago meeting Mr. Hyde continued his efforts by way of furnishing the representatives of the Sundstrand Company with further information concerning the subject matter of the transaction. With regard to the unwillingness of the Sundstrand Company to purchase the Ann Arbor real estate, which then seemed to be an important phase of the transaction, Mr. Hyde on December 10, 1935, wrote the president of the Sundstrand Company in part as follows:
"I am sure, however, that you will find Mr. Lapointe an exceptionally fair-minded man to deal with and I feel certain that some plan can be worked out which will prove satisfactory to both you and Mr. Lapointe."
On December 12, 1935, Mr. Lapointe went to Rockford, Illinois, to inspect the Sundstrand Company's plant and to contact persons active in its business. On this occasion he was not accompanied by Mr. Hyde, although the latter had expressed his willingness to make the trip. Mr. Lapointe testified:
"I think I told the Sundstrand people I would agree to take the real estate out if there was a deal around the 17th or 18th of December."
After Mr. Lapointe returned from Rockford to Ann Arbor and on December 14, 1935, he went to Detroit and had an interview with Mr. Hyde in the office of Whitlock, Smith  Company. He brought up the matter as to what commission should be paid in case the deal with the Sundstrand Company was consummated. There is dispute in the testimony as to just what occurred, but it is obvious that Mr. Lapointe was seeking to minimize or at least fix at *Page 286 
some definite figure the amount to be paid as commission, and on the other hand Mr. Hyde was of the opinion that since the deal had progressed to the point that its consummation seemed reasonably certain he should be permitted to complete the deal and he or his firm should receive a commission of 10 per cent. Hyde testified that on this occasion Mr. Lapointe proposed that he should pay a commission of 5 per cent. and an effort should be made to secure the payment of the other 5 per cent. from the Sundstrand Company. Mr. Lapointe denies making such a statement. Again on December 27th Mr. Lapointe went to the office of Whitlock, Smith  Company, interviewed both Mr. Hyde and Mr. Whitlock, and made an effort to agree upon the commission to be paid. No agreement was reached. According to the testimony of Mr. Hyde, Mr. Lapointe again took the matter up by telephone on December 31st in an effort to secure an agreement for a fee in a fixed amount which Mr. Hyde and his associates would be willing to accept. As to this Mr. Hyde testified: "I told him that I could not consider that." Mr. Lapointe was taking the position that he could not go ahead and close the deal with the Sundstrand Company on the terms which seemed obtainable if he was to be required to pay a 10 per cent. commission demanded by Mr. Hyde and his associates. While Mr. Hyde attempted to keep in touch and assist in the development of the transaction, he was not permitted to do so after the Detroit conferences concerning commission; and Mr. Lapointe, after an audit and an inventory of the American Company was completed and submitted to the representatives of the Sundstrand Company, closed the deal as of January 31, 1936; although as a matter of fact it was not actually consummated until February 4th. Mr. Lapointe has refused to pay the commission claimed by *Page 287 
plaintiffs on the ground that he never entered into an agreement with plaintiffs or their representative, Mr. Hyde, to pay a commission; and this suit has resulted.
Numerous defenses are urged by defendants; and in so far as they have a decisive bearing upon decision they will be noted and considered hereinafter. Separate consideration of the numerous questions presented will be helpful in reaching an ultimate determination.
1. Procuring Cause. The record leaves no room for doubt that plaintiffs' representative, Mr. Hyde, found the prospective purchaser in the Sundstrand Company, that he introduced the parties, that he carried on negotiations over an extended period, and very largely developed the transaction before he was supplanted by Mr. Lapointe who effected the final details which resulted in the agreement with the Sundstrand Company. Even the testimony of defendant Francis Lapointe abundantly justifies this conclusion.
2. Whom Did Hyde Represent? There is no testimony tending to establish an agency between Mr. Hyde and any of the parties defendant except Mr. Lapointe; nor is there testimony which as to the other defendants would justify recovery on quantummeruit. But it is established that Mr. Lapointe held himself out as able to represent in the contemplated transaction all the members of his family, and hence his liability, if any, must be gauged accordingly. In speaking of a substantial dividend declared from assets of the American Company December 23, 1935, Mr. Lapointe testified:
"It was a close corporation and it didn't make any difference to me whether it was held in this pocket or the other, it was still in the family." *Page 288 
Defendants' witness, O'Connor, testified:
"The first time I met Mr. Lapointe was in the meeting at Ann Arbor. Mr. Lapointe represented as the owners of the stock of the American Broach at that time he and his immediate family. * * * He said it was owned by himself and his immediate family (with the exception of a small amount of stock held by Mr. DeLong), so we decided there couldn't be any question about delivering it. He and his family owned and controlled the business."
Throughout the entire transaction with the Sundstrand Company, clearly Mr. Lapointe by word and act asserted his authority to represent the other members of his family; and he is bound by his own word and his own conduct. Mr. Hyde represented Mr. Lapointe as one who controlled the family stock in the American Company.
3. Was There an Express Contract? This is a much controverted issue. While plaintiffs have declared both on express contract and on implied contract, the claim is stressed by plaintiffs that there was an express oral agreement between Mr. Hyde and Mr. Lapointe. Mr. Hyde testified that previously he had sought to interest others in the purchase of stock of the American Company and that his activities in this particular were under an oral agreement with Mr. Lapointe that a commission of 10 per cent. was to be paid in event a transaction was consummated. In giving his direct testimony Mr. Lapointe denied that Mr. Hyde had acted for him in the manner just above noted prior to 1935; but on his cross examination he was confronted with documentary evidence which caused him to retract. We quote briefly from Mr. Lapointe's cross examination:
"Q. I'm showing you an agreement made May 12, 1930, and ask if that isn't an agreement between the *Page 289 
Foster Machine Company and Francis J. Lapointe and the American Broach  Machine Company?
"A. It is.
"Q. Signed by you?
"A. Yes.
"Q. You recall that agreement, don't you?
"A. Yes.
"Q. And under that agreement the Roney Company (with whom Mr. Hyde was then associated) had made a proposal to the Foster Machine Company for the purchase of an issue of stock and the proceeds were to be paid to the American Broach, and to you, for your stock in the American Broach?
"A. I believe it was that way.
"Q. And yet you never had any deal with Roney?
"A. Not as stockbrokers.
"Q. You had this deal, didn't you?
"A. Just what it tells."
Again in his direct testimony Mr. Lapointe was positive that he did not have knowledge until some weeks after the inception of this transaction that Mr. Hyde was associated with plaintiffs' predecessor, Whitlock, Smith  Company. As to this he was confronted on cross examination with two letters written by him early in 1934 in care of Whitlock, Smith  Company and he then testified:
"With these two letters I can see that Mr. Hyde must have been connected with Whitlock, Smith at that time. I wrote them.
"Q. So, so far as your testimony that you never knew he was connected with them, why, that's out now, isn't it?
"A. So far as he being connected, yes. I would say he was connected there, although my dealings were direct with him."
As to his having an express contract with Mr. Lapointe, plaintiffs' witness, Mr. Hyde, testified in part as follows: *Page 290 
"Mr. Lapointe told me that he and his family, outside of those few shares owned by Mr. DeLong, that he and his family still owned all the stock and he controlled and could deliver all the stock except a few shares owned by Mr. DeLong and that Mr. DeLong had agreed to go along on any deal that was worked out, any deal that Mr. Lapointe worked out for the sale of his holdings. * * *
"I told Mr. Lapointe at the time I agreed to go ahead that negotiations would be handled in the name of Whitlock, Smith 
Company, and that we would charge him a commission of 10 per cent. payable if, as and when, the same agreement that I had had with him on previous negotiations that I had attempted for him, to which Mr. Lapointe agreed and agreed to give me exclusive right to negotiate for him and all the time I would need. That was on August 29 (1935). That day I was in Mr. Lapointe's office and in the shop about three hours."
On the following day, August 30, 1935, according to Mr. Hyde's testimony, he wrote Mr. Lapointe a letter asking that he be furnished with a more detailed balance sheet than he had previously had, "separating the items under machinery and equipment account and the same with liabilities;" and also asking for a record of sales, unfilled orders, prospective business and a copy of the company's latest catalog. The letter continues as follows:
"I will immediately proceed to establish proper contacts with some of the concerns who should be interested (and) * * * will personally follow up any leads which appear at all promising.
"These negotiations will, of course, be handled in the name of Whitlock, Smith  Co., and in the event it should be possible for us to work out a deal for the sale of all or a portion of your business on terms and conditions satisfactory to you along the lines and basis discussed with you yesterday, we would want a *Page 291 
commission of 10 per cent. payable if, as and when payments are made to you."
By a decided preponderance of the evidence it is established that the letter above quoted was written and mailed to Mr. Lapointe at Ann Arbor, Michigan. In fact, the following admission was made in open court by one of defendants' counsel:
"We will admit that there was such a letter. We could not dispute but what he wrote such a letter and the exhibit which Mr. Smith holds in his hand is a copy. We do not admit that Mr. Lapointe received that letter."
Mr. Lapointe very definitely denied having entered into an oral agreement or understanding with Mr. Hyde as outlined in the latter's oral testimony above quoted; and Mr. Lapointe also denied that he ever received Hyde's letter of August 30th.
Notwithstanding this specific denial on the part of Mr. Lapointe, the circumstances of the record are very definitely against him, and the inaccuracies in certain portions of his testimony, some already herein noted, almost force the conclusion that he is wrong and Mr. Hyde is right as to the instant issue. Mr. Lapointe unquestionably attempted to take the position that he had not on previous occasions expressly agreed to pay a specified commission of 10 per cent. But the record shows that at one time Mr. Hyde cooperated with Mr. Apple of Apple-Cole Company in an effort to sell stock of the American Company. This was in 1930. Plaintiffs' counsel on cross examination asked Mr. Lapointe: "Did you have an agreement with Apple-Cole Company then at 10 per cent. commission?" Over the objection of defendants' counsel the witness was directed to answer and testified: *Page 292 
"There was an agreement with Apple-Cole, I think a commission stated at 10 per cent., I believe, but I terminated that shortly after because I knew it was prohibitive."
This and other circumstances in the record check much more favorably with plaintiffs' assertion of an express agreement to pay a 10 per cent. commission than with defendants' denial thereof. We note in particular another circumstance. As hereinbefore stated, in December, 1935, Mr. Lapointe made two trips to Detroit in an attempt to adjust the matter of payment of commissions between himself and Mr. Hyde and also made at least one effort over the telephone on December 31, 1935. Shortly after this and as soon as the audit and inventory of the American Company could be submitted to the Sundstrand Company, a final agreement was entered into between the Sundstrand Company and the stockholders of the American Company. Nothing was said in this agreement about payment of commissions; but there was simultaneously executed by the Sundstrand Company a separate instrument in which it is recited:
"The following is my (Mr. Olson, president of the Sundstrand Company) understanding of the agreement which was arrived at between us, namely: You and the other stockholders shall pay the first $5,000 of damages which may be established by Mr. Hyde or his firm; we or the American Broach  Machine Company will pay the next $10,000 of damages which may be so established; and you in turn shall pay any damages over $15,000, which may be so established."
The rather unusual circumstance of this instrument having been executed by the Sundstrand Company as an obvious partial protection to Mr. Lapointe *Page 293 
is quite persuasive that all parties concerned, especially Mr. Lapointe, knew the transaction was being closed under circumstances that might and probably would require the payment of a commission. When Mr. Olson, the president of the Sundstrand Company, was cross-examined about the rather unusual assumption of a contingent $10,000 liability, he testified:
"We made that arrangement in Chicago, the latter part of January at about the time the deal was closed.
"Q. Then Mr. Lapointe must have told you that he might be liable for a payment to Mr. Hyde? (No answer.)
"Q. What does that gesture mean? — I don't know.
"(Witness) Mr. Lapointe told us that he had offered to pay a flat fee, that there was no agreement in writing, no definite understanding. * * * There was no discussion as to how much we might have to pay. I don't know how we arrived at that figure of $10,000. It was taken out of the air, I guess."
As a further sidelight on the issue of whether Mr. Lapointe was obligated to pay commission, the following may be noted. It was brought out on Lapointe's cross examination that the approximate net worth of the American Company was $410,000, and that on the train when he and Hyde were returning from Chicago, December 7, 1935, the subject of Hyde's commission came up. Mr. Lapointe testified:
"I imagine those are the figures Mr. Hyde used on that train going back from that meeting, when he told me, after making some figures on a piece of paper, that if the deal went through on the basis talked, he would get about $40,000. The $40,000 *Page 294 
would be about 10 per cent. of the net worth as we discussed that day. * * * I don't know whether I told Mr. Hyde anything when he said his commission would run $40,000."
It surely is passing strange that so far as he could remember Mr. Lapointe in no definite manner challenged Mr. Hyde's assertion that "he would get about $40,000," if this came out of a clear sky without Mr. Lapointe having had any previous notion that he was obligated to pay any commission at all or that the commission would be on the basis of 10 per cent. The foregoing facts and circumstances together with others appearing in the record clearly indicate that at the inception of this transaction Mr. Hyde had an express oral agreement that in event a deal was completed Mr. Lapointe was to pay him a commission. Our review of the record satisfies us that this fact is established by a clear preponderance of the evidence; and we also think it is established by the clear preponderance of the evidence that the oral agreement included payment of the commission at the rate of 10 per cent. In any event, the facts and circumstances disclosed by the record are such as to establish an implied contract which, saving for the moment the questions hereinafter considered, would sustain recovery by plaintiffs.
4. Character of Hyde's Undertaking and Service. This topic presents one of the major controversies involved in this litigation. Plaintiffs contend and have alleged in their declaration that Mr. Hyde's agreement with Mr. Lapointe was that the former should proceed to interest or procure a responsible manufacturer of milling machines in the purchase of all of the capital stock of the American Company, preferably upon the basis of the net worth of the stock to be established by an audit and appraisal, plus 10 per cent. for good will and patents. *Page 295 
On the other hand defendants deny any such agreement or that this was the character or scope of Hyde's undertaking. Instead, defendants assert that Hyde's undertaking was to sell thebusiness of the American Company. If defendants' contention were correct, there could be no recovery because neither Hyde nor the partnership with which he was associated were licensed to engage in the business of selling business chances. See 2 Comp. Laws 1929, § 9806 (Stat. Ann. § 19.791). Mr. Hyde was licensed only to operate as a stockbroker. 2 Comp. Laws 1929, § 9789, as amended (Stat. Ann. § 19.761). If the transaction contemplated and as finally consummated was a sale of stock, as contradistinguished from the sale of a business, this claim of defendants would not bar recovery.
Our review of the record satisfies us that plaintiffs have established their contention that Mr. Hyde's undertaking was the sale of the capital stock of the American Company. In arriving at this conclusion we are mindful that while the trial judge specifically found plaintiffs had "an oral agreement with defendant Francis J. Lapointe to effect a sale," in this connection he also found that such sale was "of thebusiness of the American Broach  Machine Company."
Further, it may be noted that the trial judge found:
"5. The facts make it clear that it was an implied term of this contract that the plaintiffs were to be paid a reasonable commission for its performance.
"6. Plaintiffs procured the Sundstrand Machine  Tool Company as a prospective purchaser.
"7. The Sundstrand Company was not ready, able and willing to buy the business on the terms on which plaintiffs had a special contract to sell." *Page 296 
In the main it was because of the above findings that the trial court rendered judgment in favor of defendants. We are not in accord with the finding that the undertaking of Mr. Hyde was "a sale of the business" or that the Sundstrand Company was "not ready, able and willing to buy" on terms under which plaintiffs or their representative were authorized to sell.
It may be admitted that the Sundstrand Company was primarily interested in and desirous of buying a "business," particularly a broaching business such as that of the American Company, and that the Sundstrand Company was not at all interested in making an investment in capital stock, as such. But this circumstance is not at all conclusive, nor particularly persuasive as to plaintiffs' right to recover. The test is, what was the undertaking or agreement in this particular which Mr. Lapointe and Mr. Hyde had, before either knew of the Sundstrand Company as a prospective purchaser, and was the undertaking accomplished?
It is true that Mr. Lapointe wanted to dispose of the stockholdings of himself and his wife in the American Company; and automatically the sale of the stock would result in a transfer of the business, at least pro tanto. The undisputed record is that Mr. Lapointe desired to dispose of his stock in order that he might be relieved of the burden and responsibility of active personal management of the American Company and be permitted to devote his time and energies to other activities. Prior to his agreement with Mr. Hyde in August of 1935, Mr. Lapointe had made previous efforts of a like character. For example, as hereinbefore noted, on a previous occasion through the activities of Mr. Hyde an attempt was made to negotiate a transaction with the Foster *Page 297 
Machine Company. The plan was reduced to writing and signed by the parties, including Mr. Lapointe. Notwithstanding the latter's contention that the contemplated transaction was not one for the sale or disposal of the American Company stock, we think the written agreement signed by Mr. Lapointe conclusively discloses the contrary. The agreement recites:
"Whereas, it is the desire of the first party (Foster Machine Company) to purchase all the outstanding common capital stock
of the third party (American Company), now owned by the second party (Mr. Lapointe), * * *
"Now, therefore, * * * the first party agrees to purchase all of the outstanding common capital stock of the third party for and in consideration of the sum of $110,000 in cash (and other consideration)."
There can be little doubt, if any, that Mr. Lapointe knew of the character of Mr. Hyde's efforts to perform under his agreement of August, 1935, and of the type of the proposition he was submitting to various parties in an effort to find a purchaser. And surely Mr. Hyde's actions in this particular are something of an indication of the character and terms of his 1935 agreement with Mr. Lapointe. From time to time these two men discussed various prospective purchasers. Seven of Mr. Hyde's letters written to prospects are in evidence, and the record discloses that in substance these letters contain the statement that Mr. Hyde was offering for sale "all of thecapital stock of a corporation whose developments in the line of broaching machines and broaching tools for all kinds of broaching operations is outstanding."
Mr. James O'Connor, a director and member of the executive committee of the Sundstrand Company, *Page 298 
was a witness for defendants; and touching the phase of this litigation now under consideration he testified:
"Some time in that interval (before closing the deal) we reached the conclusion that we would take over the stock of the American Broach in exchange for the Sundstrand stock. * * *
"When the deal was closed, there was an exchange of Sundstrand stock for American Broach stock, but on this basis, that we had agreed to transfer Sundstrand stock to Mr. Lapointe and that immediately we would buy that stock, that McGowan, Cassidy and White would buy it, that he would get his cash money, and that's what occurred. * * *
"We have still got the two corporations. We didn't close out the American Broach. The Sundstrand Company owns the stock of the American Broach."
Even Mr. Lapointe gave testimony which is in accord with plaintiffs' claims that the transaction was a sale of stock, rather than a sale of a business. We quote briefly from Mr. Lapointe's testimony:
"The only difference between the original deal and the final deal was what Sundstrand wanted taken out, the real estate and those life insurance policies and other assets (of the American Company which were eliminated from the transaction by declaring a dividend out of its assets on December 23, 1935).
"Q. Now, in your direct examination, you talked a great deal about selling your business. Do you still make a distinction between the business and the total capital stock of the corporation which you finally sold?
"A. I make a distinction in what way?
"Q. Aren't they the same thing?
"A. Well, I'm not so sure. They may be and they may not. It depends. * * * The stock agreement *Page 299 
was arranged between Sundstrand Company and myself, the American Broach, whereby we were going to transfer the stock to them and take stock back from them, which I immediately cashed. * * * In order to consummate that deal, a stock transaction was put through whereby we transferred stock to them and took back stock from them."
We will note but one other of the numerous circumstances disclosed by this record which we think abundantly justifies the conclusion that Mr. Hyde's undertaking was the sale of the stock of the American Company rather than the sale of a business. There can be no question but that Mr. Hyde over a period of three months actively participated in the negotiations which led up to the transaction finally consummated by Mr. Lapointe and the Sundstrand Company. There is no claim that the character of this transaction changed so far as Mr. Lapointe is concerned pending the period of negotiations, aside from withdrawing certain assets of the American Company. It was finally consummated by a written agreement dated as of January 31, 1936. Surely this written agreement, in the framing of which Mr. Hyde had no part, should be persuasive of the nature of the transaction consummated. We quote the agreement in part:
"The stockholders (of the American Company) desire to exchange all the issued and outstanding capital stock of the American Company * * * for certain shares of the Sundstrand Company, and the Sundstrand Company desires that said exchange be accomplished, upon the terms and conditions hereinafter set forth. * * *
"Subject to the terms and conditions of this agreement, the stockholders and Sundstrand Company agree to effect an exchange whereby the stockholders shall acquire from the Sundstrand Company, *Page 300 
29,145 shares of its capital stock, no par value, and the Sundstrand Company shall acquire from the stockholders all theissued and outstanding capital stock of the American Company
and shall be given a lease and an option, as hereinafter mentioned."
With such a record it would be difficult to escape the conclusion that throughout the negotiations Mr. Hyde's undertaking was to effect a sale of the American Company's stock. This was accomplished by an exchange for stock in the Sundstrand Company, which with the exception of a limited number of shares retained by Mr. Lapointe, was immediately sold for cash, which was turned over to Mr. Lapointe in accordance with his agreement with the Sundstrand Company. This was the manner in which the transaction was finally consummated: All of the stock of the American Company was sold to the Sundstrand Company. The consideration was paid in cash, except for the shares of Sundstrand stock retained by Mr. Lapointe. And as to this stock, it may be noted that the record discloses its market value was then at least $14 per share but Mr. Lapointe obtained it at an agreed value of $10 per share. We must conclude that the sale was one of capital stock, not one of a business, and resulted in the performance of Mr. Hyde's undertaking.
We have considered other defenses urged, but in view of our conclusions above stated plaintiffs' right to recover is established and only brief notice herein of these other defenses is requisite. We are mindful of the defendants' contention and of the trial judge's holding that the transaction as finally closed with the Sundstrand Company was a different transaction than that which Mr. Hyde was commissioned to accomplish. In this particular it is noted that incident to closing the deal with the Sundstrand Company a contract was entered into with Mr. Lapointe *Page 301 
for his employment over a period of years; that rights under patents were involved, such rights being indispensable to conducting a broaching business; that after title to the American Company's real estate had vested in Mr. and Mrs. Lapointe as a result of a dividend declared by that company from its assets, a lease for a period of years was given to the American Company, and that this inured to the benefit of the Sundstrand Company when it purchased the stock of the American Company; and also, in closing the deal, the Sundstrand Company obtained an option to purchase the Ann Arbor real estate formerly owned and occupied by the American Company. But each of these transactions was complete in itself. With the possible exception of the option, each had its own consideration. Each was involved in the contemplated transaction while Mr. Hyde was still active in his negotiations in behalf of Mr. Lapointe. The mere fact that incidental to selling the stock of the American Company to the Sundstrand Company Mr. Lapointe saw fit also to consummate some other transactions does not bar the right of plaintiffs to recover a commission upon completion of the transaction undertaken by Mr. Hyde, i. e., the sale of the stock of the American Company on terms agreeable to Mr. Lapointe. McKinnon v. Gates, 102 Mich. 618; McGovern v.Bennett, 146 Mich. 558; Obenauer v. Solomon, 151 Mich. 570;West v. Newton, 229 Mich. 68; MacMillan v. C.  G. Cooper Co.,249 Mich. 594.
Concerning the contention that at the inception of this transaction it was contemplated that the sale should include the real estate of the American Company but that this result was not accomplished, it may be noted that Mr. Lapointe not only acquiesced in this change in the scope of this transaction but that he caused a dividend from the assets of the *Page 302 
American Company to be declared on December 23, 1935, while negotiations through Mr. Hyde with the Sundstrand Company were pending, and by so doing he took out of the assets of the American Company the fee title of its real estate and caused it to be vested in himself and his wife. Surely such a course of conduct on the part of Mr. Lapointe could not deprive his agent of a right to commissions because Mr. Lapointe's own conduct rendered impossible the completion of the transaction as originally contemplated. Nor is plaintiffs' right to recover affected by the fact that pending negotiations in the Sundstrand deal Mr. and Mrs. Lapointe created a trust whereby a portion of their stockholdings in the American Company was transferred in trust to their children, for whom Mr. and Mrs. Lapointe hold as trustees.
Appellees contend that since plaintiffs had no written agreement with or memorandum for payment of commission signed by Mr. Lapointe, they cannot recover because the transaction involved a sale of an interest in real estate. 3 Comp. Laws 1929, § 13417 (Stat. Ann. § 26.922). This contention is not tenable. There was no sale of an interest in real estate to the Sundstrand Company. Hague v. DeLong, 282 Mich. 330. An option to purchase before its acceptance is not an interest in real estate. Windiate v. Leland, 246 Mich. 659. The lease of the Ann Arbor real estate was between Mr. and Mrs. Lapointe as lessors and the American Company as lessee. The American Company still holds this lease. The only interest the Sundstrand Company has in the lease is as the holder of the stock of the American Company.
The remaining question for determination is the amount plaintiffs are entitled to recover. In so far as consideration for the Sundstrand sale went to Mr. *Page 303 
DeLong who held 8 of the 297 issued shares of the American Company's stock, plaintiffs are not entitled to recover commission. They had no contract with Mr. DeLong nor did Mr. Lapointe assume to represent Mr. DeLong in this transaction. Instead there was simply a tacit understanding that Mr. DeLong would turn his stock in on any deal satisfactory to Mr. Lapointe. But at the inception of this transaction the remaining 289 shares stood in the names of Mr. and Mrs. Lapointe, and his agreement with Mr. Hyde was for the sale of all of this stock for a commission of 10 per cent. of the amount received.
We note again that if there were any occasion for doing so, under the record in this case, we might well hold plaintiffs are entitled to recover against Mr. Lapointe on the basis of an implied contract to pay the reasonable value of the services rendered; and on this phase of the case plaintiffs offered uncontradicted testimony that reasonable compensation under the circumstances here disclosed would be 10 per cent. of the amount received. Schurr v. Savigny, 85 Mich. 144; Nolan v.Swift, 111 Mich. 56; Middlebrook v. Slocum, 152 Mich. 286;Miller v. Stevens, 224 Mich. 626.
This transaction with the Sundstrand Company was closed on the basis of an agreement between the parties that the net worth of the American Company's assets was $291,450, and the total issued stock of the American Company was purchased by the Sundstrand Company for that amount. In exchange for the issued stock of the American Company, the Sundstrand Company gave 29,145 shares of its capital stock, of no par value. But obviously the assumed or agreed value of the Sundstrand stock for the purpose of this transaction was $10 per share. In accordance with a provision constituting *Page 304 
a part of a final agreement between these parties, 25,945 shares of the Sundstrand stock were sold at $10 per share and the $259,450 received was paid to Mr. Lapointe and he received the remaining 3,200 shares of Sundstrand stock. There is testimony that the value of the Sundstrand stock at this time was considerably in excess of $10 per share. For this reason plaintiffs assert that their commission should be computed on the market value of the 3,200 shares. We are not in accord with this contention, because our conclusion from the record is that the agreement finally reached between Mr. Lapointe and the Sundstrand Company was for a sale of the American Company's stock on the basis of the amount of its assets as determined by an audit and appraisal, and that in this way the sale of the American Company's stock was fixed at the flat price of $291,450. The total number of outstanding shares of American stock was 297. At the inception of the transaction with plaintiffs, Mr. and Mrs. Lapointe owned 289 of these shares. Hence Mr. Lapointe's liability for commission is 289/297 of 10 per cent. of $291,450. The result is $28,359.95.
The judgment entered in the circuit court should be reversed and the case remanded with directions to enter judgment in favor of plaintiffs and against defendant Francis J. Lapointe for $28,359.95 with interest thereon to be computed at the rate of 5 per cent. per annum from February 4, 1936. Plaintiffs should have costs of both courts against Francis J. Lapointe.
BUSHNELL, C.J., and WIEST and BUTZEL, JJ., concurred with NORTH, J. *Page 305