Close v. Browne

Mr. Justice Scott delivered the opinion of the court: The superior court held, in passing upon the instructions offered by the respective parties, that the transaction between the owners of the Kansas lands, the Amity Land and Irrigation Company and the appellants, set forth by the contract of February 18, 1895, constituted a sale of those lands, and so advised the jury by instructions, and submitted to the jury the question whether such sale was made through the assistance of Hinsley or under his advice. The action of the court in holding that transaction to be a sale is the principal ground upon which a reversal is sought. The contract between the appellants and Hinsley, upon which the appellee bases his right to recover, provided that Hinsley should act as the appellants’ agent for showing and selling the Kansas lands; that he should be authorized to negotiate sales and receive binding money,, and that as compensation for his services he should receive commissions upon “sales” of the lands, the rate of commission to depend upon the kind of services rendered by Hinsley in the particular sale. The word “sale” is ordinarily understood to mean a transfer of property for money. (2 Blackstone’s Com. 446; Schermerhorn v. Taiman, 14 N. Y. 117; Williamson v. Berry, 8 How. 495; Five per cent cases, no U. S. 471.) In the case last cited the Supreme Court of the United States construed the language hereinafter quoted from an act of Congress of March 3, 1845, supplemental to the act by which the State of Iowa was admitted into the Union, the language so construed being as follows, to-wit: “Fifth, that five per cent of the net proceeds of sales of all public lands lying within the said State which have been or shall be sold by Congress from and after the admission of said State, after deducting all the expenses incident to the same, shall be appropriated for making public roads and canals within the said State.” The question was whether the State was entitled to a percentage of the value of lands not sold for cash but disposed of by the United States in satisfaction of military land warrants. The court said: “A sale, in the ordinary sense of the word, is a transfer of property for a fixed price in money or its equivalent.” If the purchase price is paid by the transfer of other property, the transaction is more properly denominated an exchange or trade. “It is a familiar rule, of constant application, that courts give effect to all written instruments according to the ordinary, popular meaning' of the terms employed, when nothing appears to show they were used in a different sense and no unreasonable or absurd consequences will result from doing so.” Stettauer v. Hamlin, 97 Ill. 312. If this rule of construction is applied to the contract of December 10, 1888, it is apparent that Hinsley would not be entitled to commissions upon the transfer of the lands to the Amity Land Company, that transfer not having been made for a money consideration. There is, however, another well known rule of construction applied to written instruments, viz., that in construing a written contract the court will endeavor to place itself in the position of the contracting parties, and read the instrument in the light of the circumstances surrounding them at the time it was made and of the objects which they then evidently had in view, so that the court may understand the language used in the sense intended by the parties using it. Torrence v. Shedd, 156 Ill. 194; Street v. Chicago Wharfing Co. 157 id. 605; Matthews v. Kerfoot, 167 id. 313; Whalen v. Stephens, 193 id. 121. Applying the latter test to the contract of December 10, 1888, is there anything appearing, from the circumstances surrounding the parties at the time the contract was made, which shows an intention on their part to give to the word “sale” any other than its usual and ordinary meaning? An answer to this question involves a consideration of those circumstances as disclosed by the evidence. It appears from the stipulation and undisputed evidence in the case that during the years 1887 and 1888, and prior thereto, appellants were engaged in the business of colonizing large tracts of western lands; that they had numerous agents in their employ, some of whom were known as field agents and others as traveling agents; that the traveling agents were employed to interest persons in Illinois and eastern States in the western lands controlled by appellants and to induce prospective purchasers to visit the lands; that the field agents resided on or in the immediate vicinity of the lands offered for sale, and to them the traveling agents brought or sent the prospective purchasers; that the field agents were required to be familiar with each quarter section of land within their respective territories and the boundaries thereof, and it was their duty to show the lands to the prospective purchasers and to aid the traveling agents in making the sales. Hinsley had acted as field agent for appellants in Iowa prior to April 2, 1887. On the latter date he removed from Iowa to Hartland, Kansas, and entered the service of appellants as field agent for their lands in that vicinity under a contract, by the terms of which he was to receive a salary of $40 per month and five cents per acre on all lands sold by the appellants by or through his assistance. Hinsley worked under the latter contract until December 10, 1888, when the contract of that date was entered into. Bearing in mind these facts, the reason for fixing three different rates of commission becomes apparent, and the sense in which the parties intended to use the word “sale” may be clearly understood. According to the previous experience of appellants and Hinsley, in carrying on the business of appellants there might, and probably would, arise three classes of cases in which Hinsley would be required to render some service in effecting sales of the lands: First, cases in which Hinsley should find the purchaser and make the sale; second, cases in which prospective purchasers should be brought or sent by appellants or their traveling agents to Hinsley and the latter should show the lands to the prospective purchasers, and thereby, or by other means, assist appellants or their traveling agents in inducing the purchasers to buy; third, cases in which other field agents in that locality should send to appellants the applications of prospective purchasers, and appellants, not knowing whether it would be to their interest to make the sajes on the terms proposed, should seek the advice of Hinsley with reference thereto. Hence the parties provided by the contract of December 10, 1888, that on all sales falling within the first class Hinsley should receive twenty-five cents per acre, on all sales falling within the second class, ten cents per acre, and on all sales falling within the third class, five cents per acre. Considering this contract in the light of the circumstances surrounding the parties at the time the contract was made and of the objects which they then evidently had in view, it does not appear that they intended to use the word “sale” other than according to its ordinary acceptation. When the contract of February 18, 1895, is considered in connection with the facts leading up to its execution, it becomes apparent that the parties thereto adopted the means set forth by that contract to effect a consolidation of their respective interests. It appears from the evidence that the Amity Canal and Reservoir Company was originally the owner of the canal and of other Colorado- property subsequently owned by the Amity Land and Irrigation Company. The former company issued bonds secured by mortgage upon its property, and these bonds were taken by the Western National Bank of New York. The mortgage was foreclosed and the property of the company purchased by the bank at the foreclosure sale. The bank, early in 1894, through its officers and agents, organized the Amity Land and Irrigation Company and transferred the property to that company. The bank, however, remained the beneficial owner of the property. The appellants desired to sell the Kansas lands. Those lands could not well be sold without some means of irrigation. The canal of the Amity Land and Irrigation Company could be extended to the Kansas lands, but appellants did not desire to buy that canal and the bank did not wish to purchase the Kansas lands. Appellants, their principals, the owners of the Kansas lands, and the Amity Land and Irrigation Company, really acting for and under the direction of the bank, on February 18, 1895, entered into the contract of that date. No money was to pass. The bank had theretofore conveyed its canal and other Colorado property to the Amity Land and Irrigation Company. The value of that property was not as great as the value of the Kansas lands. The bank desired to retain the controlling interest in the corporation to which it had transferred the canal. It was therefore agreed that the owners of the Kansas lands should convey those lands to the Amity Land and Irrigation Company and should receive therefor forty-nine per cent of the stock of that company or of its successor or assignee, and in order to equalize the interests of the respective parties in the assets of the corporation, it was also provided that the owners of the Kansas lands should receive, in addition to their stock, bonds of the corporation of the face value of $600,000, secured by mortgage on the property of the company. • While it is true that the owners of the Kansas lands parted with the title to those lands, yet they did so for the purpose of placing those lands in such condition that they might be sold for money. Hinsley was urging appellants to either purchase the canal or secure the controlling interest therein. The services for which he now seeks to recover were performed with that end in view. Obviously, if the appellants, for their principals, had followed the advice of Hinsley and purchased the canal, Hinsley would not have been entitled to any commission under his contract. By the plan adopted in the contract of February 18, 1895, the. owners of the Kansas lands obtained the same benefit as they would had they purchased the canal, the only substantial difference being, that instead of receiving their money directly from purchasers of the lands, they would receive it, when the lands were sold, in the form of payments upon the bonds and dividends upon the stock issued to them by the Amity Land and Irrigation Company. We think that neither Hinsley nor the appellants had in contemplation any such transfer of property as that set forth in the last mentioned contract when they agreed that Hinsley should receive commissions upon all sales made by him alone, or made with his assistance, or made under his advice. Appellee seeks to sustain the judgment in this case upon the authority of Wilson v. Mason, 158 Ill. 304, and other like cases, which hold that a real estate broker is entitled to his commissions if the principal sells to a purchaser produced by him, even though the sale be made upon terms \ different from those stated in the brokerage contract. Such is the law applicable to cases where there is merely a departure from the terms of the contract, leaving the transaction substantially that provided for by the agreement, such as a reduction in the price asked Or an extension of the time of payment of all or part of the consideration; but where the transaction is wholly different from the one contemplated by the parties when the contract was made there can be no recovery upon the contract. In this class of contracts it may be fairly presumed that the parties contemplate some slight modification in the terms of sale, provided the principal assent to such modification; but it cannot be presumed that the parties intend that the contract shall apply to a transaction wholly different from the one which they have in view when they enter into the contract. In the latter instance, however, the broker or agent is not without remedy. If the principal receives the benefit of the agent’s services, rendered at the instance of the principal, he is liable upon a quantum meruit. From what we have said it follows that the superior court erred in instructing the jury that the transaction evidenced by the contract of February 18, 1895, constituted a sale within the meaning of the contract of December 10, 1888, and in refusing instructions offered by the appellants which would have advised the jury that such transaction was not a sale within the meaning of the last mentioned contract. Inasmuch as there was no sale within the meaning of the contract between appellants and Hinsley, appellee was not entitled to recover under any of the clauses of that contract. The verdict, however, plainly shows, and appellee states, that the jury awarded commissions under the second clause of the contract at the rate of ten cents per acre on the land transferred to the Amity Land Company, together with interest thereon at the rate of five percentum per annum from February 18, 1895, to the date of the verdict, the court having instructed the jury that they might allow such interest in case they found that appellee was entitled to recover under the contract of December io, 1888. It is therefore apparent that the error committed by the court in advising the jury that the transaction set forth in the contract of February 18, 1895, was a sale, affected the verdict in the case and was prejudicial to appellants. The motion for a peremptory instruction at the close of all the evidence was, however, properly denied. The undisputed evidence shows that Hinsley rendered valuable services at appellants’ request which led to the consolidation, and that appellants received the benefit of those services. The services so rendered by Hinsley which led to the consolidation are not covered by the contract of December 10, 1888, and were not performed under any express contract. Appellee is entitled to recover the reasonable value of those services. The declaration contained a quantum meruit count, and the evidence would have supported a verdict under that count. Under such circumstances it would have been error for the court to have directed a verdict for appellants. It is unnecessary to consider any of the other alleged errors discussed by appellants in their brief. They are such as will not probably arise upon another trial of this case. Because of the error of the court in instructing the jury that the transaction set forth by the contract of February 18, 1895, constituted a sale, and in refusing the instructions offered by appellants which would have advised the jury that such transaction was not a sale, the judgment of the superior court and the judgment of the Appellate Court will be reversed and the cause remanded to the superior court for further proceedings consistent with the views expressed in this opinion. Reversed and remanded.