Columbia Realty Investment Co. v. Alameda Land Co.

Me. Justice McCamant delivered the opinion of the court. 1. Plaintiff contends that when it produced a purchaser with whom defendant made a binding contract of sale, it earned its commission of 20 per cent of the purchase price and its right to this commission was not lost by the default of the purchaser or the cancellation of his contract. This is the general rule: Stewart v. Will, 65 Or. 138, 140, 141 (131 Pac. 1027). But it is subject to modification by the contract of the parties. The material question here is whether the contract on which plaintiff relies contains a promise to pay commissions at all events or only out of a specified fund, to wit, the amounts paid by the purchasers. It is provided in paragraph 1 that in default of the extension tentatively provided for the agency should terminate “except that they (the selling agents) shall be entitled to their commission theretofore earned by them * # , the same to be paid when collected by said company.” In the second paragraph the contract specifies the commissions of the agents and provides: “Said commissions shall be paid as follows: said agents shall be entitled to take and receive a sum equal to twenty per cent of the selling price aforesaid, out of the first moneys collected from the sale of each and every lot sold under this agreement.” The foregoing language plainly suggests an intent of the parties to pay commissions out of the' moneys collected from the purchasers of the property. This intent is emphasized by the absence from the contract of an express promise of defendant to pay the commissions. Further light is thrown on the intent of the parties by the following language, found in paragraph 3: — 287 — “Said Agents may retain ont of each payment collected by them such amount, as herein provided, as may be then due and payable to them as commission aforesaid, but not otherwise.” The language means that the agents are entitled to retain out of the moneys collected on each sale, such sum as shall suffice to pay the commission earned on that sale. They are not entitled to charge to defendant all commissions earned by all sales effected and retain out of their collections all moneys standing to their credit in such account. It affirmatively appears from the form of agreement attached to the sales contract that the parties contemplated that some of the purchasers would fail to make the monthly payments called for and that some of these agreements of purchase would have to be canceled. The sales contract makes provision for the apportionment between the parties of the expense incident to such cancellations. In paragraph 8 there is provision for raising the prices of the lots and it is provided that: “The amount over and above the present selling price # * shall, on all property sold, be divided equally, share and share alike, between said Agents and said Company as a further commission to said Agents, provided that said additional commission shall not be paid until said Company has received fifty per cent (50%) of the purchase price of the lot or lots so sold, when it shall be paid upon demand to said Agents. ’ ’ 2, 3. It may be conceded that the language of this contract is not well chosen to effect the purpose in view, but we think the intent of the parties sufficiently appears that plaihtiff was to be paid commissions not at all events, but only out of a specific fund. Such a promise to pay is enforceable only on allegations and — 288 — proof that the fund named is adequate for the payment demanded: Owen v. Lavine, 14 Ark. 389, 396; Waters v. Carleton, 4 Port. (Ala.), 205; National Sav. Bank v. Cable, 73 Conn. 568, 572 (48 Atl. 428); Fulton v. Varney, 117 N. Y. App. Div. 572, 576 (102 N. Y. Supp. 608); Morrison v. Austin State Bank, 213 Ill. 472, 487 (72 N. E. 1109, 104 Am. St. Rep. 225, 233); Kelly v. Bronson, 26 Minn. 359, 360 (4 N. W. 607); Welch v. Mayer, 4 Colo. App. 440, 443 (36 Pac. 613, 614.) It is held specifically that a real estate broker cannot recover commissions payable out of the purchase price without proof that enough of the purchase price has been paid to cover the commissions claimed: McPhail v. Buell, 87 Cal. 115 (25 Pac. 266); Lindley v. Fay, 119 Cal. 239, 243 (51 Pac. 333); Boysen v. Frink, 80 Ark. 254, 258 (96 S. W. 1056). Plaintiff cites Hugill v. Weekley, 64 W. Va. 210 (61 S. E. 360, 15 L. R. A. (N. S.) 1262), and Cheatham v. Yarbrough, 90 Term. 77, 80 (15 S. W. 1076). These were cases in which the brokers had produced purchasers able, ready and willing to buy and the sales were defeated through the fault of the owners. In the West Virginia case the purchaser refused to buy because the representations of the owner were not borne out by an examination of the property, and in the Tennessee case there was a substantial defect in the title. The question involved in the case at.bar was not determinative of either of these controversies. 4. Plaintiff claims that as the assignment to it of a part of the sales contract left the collections wholly in the hands of Ferguson and Ilamblet, plaintiff’s rights are unaffected by the failure to collect the installments due from purchasers. A stream cannot rise higher than its source. We have seen that the contract pro — 289 — vides only for a conditional payment of these commissions. Such being its effect as between the original parties, the stipulation for payment could not become absolute by the assignment to plaintiff. 5. Plaintiff’s complaint contains no allegation that the fund to which plaintiff was to look for payment of the commissions claimed was adequate for such purpose and the finding of the lower court was that there was no fund applicable to such payment except $65.16. The testimony has not been attached to the bill of exceptions and we are therefore bound to assume that this finding is supported by competent proofs. 6. Plaintiff complains that the lower court refused to receive a number of specifications of evidence offered in plaintiff’s case in chief. This testimony all went to support the plea of estoppel set up in the reply. The complaint failed to state facts sufficient to constitute a cause of action for the reasons above stated. The affirmative matter in the reply was material, therefore, only as tending to rebut the counterclaim pleaded in the answer. The testimony in support of these allegations of the reply could be received only in rebuttal and the court did not err in rejecting the proof as a part of plaintiff’s case in chief. 7. In rebuttal plaintiff made the following offer: “The plaintiff at this time offers to produce witnesses and prove that the cancellation of the contract —that all the cancellations of contracts which have been referred to in the case are the result of an interference by the Alameda Land Company in the way of dividing lots up among the stockholders prior to the expiration of the contract, throwing the same upon the market at prices away below the prices at which the Columbia Realty Company was authorized to sell the same; so that it was profitable for the purchasers to surrender the contracts and forfeit the moneys which they had paid upon the same, whereupon they — 290 — could repurchase the lots and still save money by doing so; and by the actual presence of stockholders upon the tract offering the lots at these reduced prices, some of the same lots which the Columbia Realty Company was trying to sell, and at a time prior to the expiration of their contract; that is, during the month of November, 1912.” Defendant contends that an offer of proof cannot be made without calling a witness and asking an appropriate question. In support of this contention we are cited to: Ralston v. Moore, 105 Ind. 243 (4 N. E. 673, 675); Smith v. Gorham, 119 Ind. 436 (21 N. E. 1096, 1097); Tobin v. Young, 124 Ind. 507 (24 N. E. 121, 123); Darnell v. Sallee, 7 Ind. App. 581 (34 N. E. 1020, 1021); Gray v. Elzroth, 10 Ind. App. 587 (37 N. E. 551, 552, 53 Am. St. Rep. 400). These authorities are. in point and they are supported by the opinion of Mr. Justice Moore in First National Bank v. Oregon Paper Co., 42 Or. 398, 402 (71 Pac. 144, 971). In this opinion it is said: . “If the appellants were not allowed to prove their claim, they should have called witnesses, and stated to the court the testimony which it was expected would be elicited from them. ’ ’ Plaintiff relies on this branch of the case on Scotland County v. Hill, 112 U. S. 183, 186 (28 L. Ed. 692, 5 Sup. Ct. Rep. 93). This case undoubtedly tends to support plaintiff’s contention, but the offer of proof in that case was much more specific than in this. The name of the witness relied on was given and the precise testimony relied on was stated in the offer. In the case at bar no witness was named and the offer of proof was couched in the most general terms. We IhiuTr that plaintiff should have named its witnesses and specified the acts of interference relied on. The — 291 — offer should have named the contracts of purchase which were canceled because of each act of interference by the defendant. Unless the calling of witnesses is waived by the court or by the adverse party, we think the better practice is to call the witnesses relied on and ask appropriate questions. If objections are sustained to these questions the time is ripe for an offer of proof. The court did not err in declining the offer in question. 8. Plaintiff’s objection was not well taken to defendant’s testimony showing that purchasers had failed to make their payments. It was competent for the defendant to prove by the witness Bosworth the practice of the defendant in canceling contracts held by purchasers who were unable to meet their obligations. We cannot say as a matter of law that these cancellations required formal action by the board of directors of the defendant. 9. It is finally contended that the lower court erred in refusing to make findings on some of the material issues raised by the pleadings. The court found that plaintiff had received all the commissions to which it was entitled except $65.16; that all the cancellations of contracts had been made as alleged; that the expense of such cancellations was $351.55, of which $309.26 was chargeable to plaintiff, and that all of these cancellations were necessary. These findings support a judgment in defendant’s favor for $244.10. The finding that the cancellations were necessary negatives plaintiff’s claim that the cancellations were due to defendant’s unwarranted interference with the purchasers secured through plaintiff’s efforts. The findings therefore determined the controversy and support the judgment. In such case the failure to make additional findings is not error: Lewis v. First Nat. Bank, — 292 — 46 Or. 182, 188 (78 Pac. 990); Freeman v. Trummer, 50 Or. 287, 290 (91 Pac. 1077); Naylor v. McColloch, 54 Or. 305, 315, 316 (103 Pac. 68); Wells v. Great Northern Ry. Co., 59 Or. 165, 175 (114 Pac. 92, 116 Pac. 1070, 34 L. R. A. (N. S.) 818). (168 Pac. 440.) The judgment is affirmed. Affirmed. Mr. Chief Justice McBride, Mr. Justice Moore and Mr. Justice Bean concur.