Overstreet v. Rother

Dibell, J. Action to recover an agreed commission for procuring a purchaser for defendant’s bank stock. The court excluded certain evi: dence offered by the defendant as a defense and in support of his [378] counterclaim, and directed a verdict for the plaintiff. The defendant appeals from the order denying his motion for a new trial. In Francis v. Baker, 45 Minn. 83, 47 N. W. 452, Justice Mitchell said: “Where a person agrees with a real estate broker to pay him a commission if he procures a purchaser for his property on specified terms, the broker, in order to entitle him to his commission, is bound to present a purchaser who is ready, able, and willing to buy on the proposed terms; and the principal is not bound to accept a proposed purchaser unless he is able to perform the contract on his part according to the proposed terms. But it is for the principal then to decide whether the person presented is acceptable; and if, without any fraud, concealment, or other improper practice on part of the broker, the principal accepts the person presented, either on the terms previously proposed or upon modified terms then agreed upon, and enters into a binding and enforceable contract with him for the purchase of the property, the commission is fully earned. The party presented is then a purchaser, within the meaning of the contract between the principal and the broker, although the sale is not completed or executed by payment of the consideration to the vendor.” This holding has been consistently followed.' Gransbury v. Saterbak, 116 Minn. 339, 133 N. W. 851; Meyer v. Keating B. & M. Co. 126 Minn. 409, 148 N. W. 452; Huntley v. Smith, supra, page 297, and cases cited. The defendant owned the controlling stock in the Towner County Bank, of Perth, North Dakota, and agreed to pay the plaintiff 5 per cent of a certain valuation if he procured a purchaser. The plaintiff presented a purchaser to the defendant and the defendant and the purchaser entered into an enforceable contract on terms mutually satisfactory. Within the rule stated the plaintiff was entitled to his commission. But error is claimed in the ruling of the court that certain portions of the answer stated no defense and the counterclaim no cause" of action. The contract of sale was executed on September 8, 1920, and the defendant made a part [379] payment of $500 oil tbe commission on September 14, 1920. Tbe counterclaim seeks a recovery of tbis $500. Tbe ruling excluding testimony is understood if we go at once to tbe following allegation of tbe counterclaim: “That on or about tbe 14th day of September, 1920, tbe plaintiff represented to tbe defendant that plaintiff bad procured one C. H. Alcock, ready, willing and able to purchase and pay for tbe said stock; that tbe defendant, relying upon tbe representations of tbe plaintiff witb reference thereto, and the plaintiff having there and then guaranteed and warranted that tbe said C. H. Alcock was ready, willing and able to purchase and pay for said stock and that tbe said C. H. Alcock would pay therefor, tbe defendant thereupon paid to tbe plaintiff tbe sum of $500.00 to apply upon plaintiff’s commission on said transaction.” It is conceded that tbe contract between tbe defendant and Alcock, tbe purchaser, was executed on September 8, 1920. Tbe allegation of tbe counterclaim is that tbe guaranty of tbe plaintiff was made on or about a date 6 days after tbe contract between tbe defendant and tbe purchaser. Tbe plaintiff insists that a warranty made later than tbe contract of sale is without consideration. Tbis is so. Tbe commission was earned on September 8. Tbe later guaranty, to induce tbe partial payment of tbe $500, was without consideration. Tbe views stated upon tbis point are those of all tbe members of tbe court except tbe writer. His view is that tbe allegations of tbe quoted paragraph of tbe counterclaim, taken in connection witb its other allegations and those of tbe answer, under our liberal rule in tbe construction of pleadings, should be held to admit the defense of a guaranty of performance by tbe purchaser or of his ability to perform as a part of tbe brokerage contract and as a condition to tbe earning of a commission, and that tbe pleading, first attacked at tbe trial, though very bad, should permit proof in support of tbe defense claimed. Order affirmed.