Grace v. McDowell

Mr. Justice Bean delivered the opinion of the court. It will be noticed from the pleadings that the plaintiff and defendant allege different contracts; one agreement differing from the other mainly as to the sale of the tract of land for cash only. [582] 1. Counsel for defendant contend that the price agreed upon between defendant and Mr. Fitz as the basis of the exchange of the property is not conclusive upon the question of the amount received by the defendant for the property in fixing the compensation plaintiff should recover for his services in obtaining a purchaser. The court was requested to instruct the jury to determine, from all the evidence in the case, the actual value of the real estate received by defendant, and to give plaintiff the excess over $9,000. The court refused to give such instruction and defendant duly saved an exception. The court instructed the jury as follows: “If you should find for the plaintiff under the original contract and find that it was agreed upon between the defendant and the parties who were negotiating the property that this property that was taken in exchange for his property was taken for the sum of thirteen thousand two hundred dollars, if you should find that that was the agreement between the parties at that time, then the plaintiff would be entitled to recover the difference between the nine thousand and thirteen thousand two hundred.” In the different instructions given by the court, the jury were charged that they should take into consideration the reasonable value of the Los Angeles property, only in the event that they should find that the subsequent contract was made as claimed by defendant. To all of these instructions an exception was duly saved by defendant. Testimony as to the value of the California property was introduced by both parties without objection, and defendant strongly contends that this feature of the case should have been submitted to the jury. This is the main question in the case. Plaintiff’s counsel relies principally upon the case of Thornton v. Moody (Tex. Civ. App.) 24 S. W. 331. A careful examination of the latter case discloses that it differs from the case at bar, mainly [583] in the fact that the defendant therein did not testify, and that no issue appears to have been raised as to the value of the property received by the seller; but that the value placed thereon was sanctioned as between the broker and the seller, and that the amount' of the compensation claimed by the former was a fixed sum. In Fagan v. Hook, 134 Iowa 381 (111 N. W. 981), an action to rescind a contract of exchange wherein it was claimed that an agreement had been made fixing the value of the properties exchanged, and that' this agreement was binding upon the parties, the court makes use of the following language: “Ordinarily, where the action is for the recovery of property, and its value has been agreed upon by the parties, the measure of damages is the quantum thus fixed. * * If, on the other hand, the agreement is a mere trading contract, by the terms of which one party is to exchange certain property belonging to him for that of the other upon or by the payment of the difference, and to this end and for the purpose solely of accomplishing this result, but not to ascertain their actual values, estimates are placed on the respective properties, then neither party is bound by the values so estimated, and the measure of damages to be applied is that of quantum meruit. In other words, the values designated in the agreement to be binding on the parties must appear to have been specified as such, and not as merely incidental to some other purpose not involving the intention of deciding the true worth.” 2. In determining whether there has been a sale or exchange of property, the criterion is whether there is a fixed price at which the things are to be exchanged. If there is a fixed price, then the transaction is a sale; but if there is not the transaction is an exchange. Tiedeman, Sales, § 12. [584] Boyd v. Watson, 101 Iowa 214 (70 N. W. 120), was an action by a real estate dealer for his commission of five per cent on the purchase price of real property sold by him. Part of the purchase price was paid in town lots. It was held that the 'commission should be based upon the actual value of the lots shown by the evidence, and not upon the “nominal consideration” or “inflated trade value,” and that this is the true rule. In the case at bar, the question of the value of the property conveyed to defendant McDowell by Messrs, and Mrs. Fitz, arises between one of these parties and a third, plaintiff Grace, who was not a party to the original contract and who was concerned therein only as a broker. The pleadings raise the issue as to the value of this property and testimony upon this point was introduced at the trial. There was also evidence tending to show that the value of the respective properties was fixed solely for the purpose of facilitating the exchange, as a mere incident to the trade, and not with the intent to determine the real worth thereof. The actual value of the Los Angeles property is the correct basis for ascertaining the amount received by defendant in excess of $9,000. 3. As between the parties thereto, the amount expressed in the deed is only prima facie evidence of the value of the property, and may be rebutted. Negus v. Simpson, 99 Mass. 388. In such transactions it is but natural that each party should endeavor to slightly inflate the value of his property. If, in making the transfer referred to, McDowell and Mrs. Fitz had named the price of the real estate in Los Angeles at $8,000, we do not think that the plaintiff would have been bound thereby. Therefore we think that, under these circumstances, the defendant was entitled to have the question of the value of the California property received by him, submitted to the jury, and we think that there was error in this regard, [585] and that the substance of the instruction requested should have been given. As somewhat in point, see the case of Caumisar v. Conley (Ky.) 60 S. W. 375. The trial court in their instructions to the jury, in several instances, limited this inquiry by them to the price agreed to in making the exchange. Other errors are assigned; one among them being to the effect that the evidence of offers received by Mrs. Fitz for her property was not admissible to prove value, but as such are not likely to occur again after the case has been thoroughly examined by counsel, we do not deem a discussion thereof necessary. For the reason above stated, it follows that the judgment of the lower court must be reversed and the cause remanded for a new trial, and it is so ordered. Reversed.