Holton v. Job Iron & Steel Co.

KNAPPEN, Circuit Judge (after stating the facts as above). We pass by all questions except the single one whether, as matter of law, the evidence tended to show that plaintiff had “put through” a deal between defendant and the Land Company within the meaning of the contract, assuming, for the purposes of this opinion (but not deciding), that the defendant 'corporation was, in the negotiation of the contract, effectively represented by Job and his associates. Plaintiff relies upon the letter of July 10th as containing the contract sued upon. The promise contained in that letter is to pay the commission only in case the “deal is put through.” The District Judge was of opinion that, as matter of law, the required condition had not been performed. We think this the correct view. The Century Dictionary defines the term “put through” as “to carry or conduct to a successful termination.” The question thus is: Did the evidence tend to show that the proposed deal was carried to, a successful termination? An affirmative answer to this question requires, first, the existence of a “deal” or contract between defendant and the Land Company; and, second, the carrying into effect of such deal. It is readily apparent that defendant did not promise to pay plaintiff a commission for merely obtaining a party able and willing to enter into a given contract. The agreement does not so provide. On the contrary, it provides only for payment if the deal is “put through.” The rule applicable to ordinary cases of brokerage contract to furnish a purchaser (as recognized in cases such as Kock v. Emmerling, 22 How. 69, 16 L. Ed. 292) has thus no application. Moreover, not only does the contract relied upon fail to state the terms of a deal which would be satisfactory to defendant, but reference to the letter of July 6th (which it is claimed formed the basis for the alleged contract of July 10th) shows that the deal'then in mind was never carried out, for that contemplated deal embraced the entire furnishing of a building, while the performance relied upon, so far as the building is concerned, embraces only a contribution of $25,000 toward the erection of a building and installation of a plant, estimated to cost $180,000. It is also evident that, until the parties met at the time the draft of contract was prepared, the details of a deal between them had never been agreed upon, for there remained open for negotiation and agreement the making of a “satisfactory contract,” the terms of which (and of the proposed bond), as well (it would appear) as the selection of the acreage site and the lots, were still left- “to the committee appointed and your representatives.” Nor was there in existence any prior contract between plaintiff and defendant for the payment of commission on the procuring, or even on the putting through, of a deal embodying all the terms contained in such draft of contract. It follows that no generosity of proposal made by the Land Company would entitle plaintiff to a commission, unless, at least, such proposal ripened into an actually accomplished deal. Hale v. Kumler, 85 Fed. 161, 29 C. C. A. 67. The question then is: Did what took place in connection with the preparation of draft -of contract amount to a “putting through” of [951] a deal? It seems clear it did not. We think the District Judge correctly interpreted the contract as meaning: “If you make a deal between us and the Kenova-Huntington Land Company, and the deal is put through, and the buildings are erected, or the cash given, then wo will pay you this commission.” It would seem true that if the parties had executed the contract as drafted, and defendant had thereafter, to prevent its performance, refused to carry it out (whether in respect to giving of bond, or otherwise), plaintiff would be entitled to commission by virtue of an implied agreement not to prevent performance. But the contract was never executed, and we think the “deaf' was never effectively made. It cannot be maintained that the effect of the approval by defendant’s representatives of the various terms of the proposed contract, as the same was being dictated, was tantamount, in legal effect, to an actual execution of the contract; for the parties plainly understood and intended that tlie contract was not effective until actually executed and delivered, and such was the legal situation. And until so executed and delivered we think it was subject to withdrawal by either party. Surely the expression of approval of the completed draft by two of defendant’s representatives, in the absence of the third, in connection with the postponement of the time of execution, did not amount to a contract. Moreover, the contract as drafted was, at the most, merely executory. No bonus was to be paid or conveyance, made under it until the execution by defendant of a bond for $36,000, with surety approved by the Rand Company, the actual form and language of which bond were not agreed upon, except in general terms. Still further, the bonus was not to be paid on the signing of the contract, or even on the execution of the bond, but only as the erection and installation progressed, and in connection with defendant’s contributions toward the same. Were it to be conceded, for the purposes of argument, that an arbitrary and capricious refusal on the part of the defendant to execute the draft of contract would entitle plaintiff to commission, such concession would be of no value, for the evidence does not indicate that defendant’s refusal (so far as concerns the objection of financial inability) was arbitrary or capricious. On the other hand, there is no attempt to show the falsity of the representations of financial inability; and it might well be that the requirement of surety bond in the amount provided, to continue in effect at least until April 1, 1911 (a period of one year and eight months), and perhaps ionger, securing not only the repayment of the bonus paid, but a substantial amount in addition (on account of the price of the site and lots), as liquidated damages for defendant’s failure to carry out the conditions of the contract (including the practically continuous operation of the plant), might well prove so onerous as to be impracticable, and even prohibitive. It results from these views that the judgment of the Circuit Court should be affirmed, with costs.