Henry v. Nelms

This is an appeal from a judgment for broker’s commissions for the exchange of real properties.

The defendants were the owners of 2,100 acres of farm land near Walla Walla, Washington, and a dwelling-house in that same city. Both properties were free of encumbrance. While the defendants were visiting at Los Angeles in 1926, they advertised a desire to sell or exchange these properties. The plaintiff, who was a duly licensed real estate broker, residing at Los Angeles, answered this advertisement. The plaintiff and defendants conferred several times regarding a proposed exchange of properties. Mr. Nelms returned to his home at Walla Walla. Mrs. Nelms remained at Los Angeles. The plaintiff took her to inspect several apartment houses with a view of procuring an exchange of properties. The plaintiff then represented to Mrs. Nelms that he had a client by the name of Paul G. Moorhead who owned the Nadine apartments on Fedora Street in Los Angeles and an eight-room family flat situated on Grace Avenue in Hollywood, which might be procured in exchange for their Walla Walla properties. After several conferences between the plaintiff and Mrs. Nelms, together with some correspondence with her husband, two separate contracts of exchange of properties were executed by Mrs. Nelms and accepted by Paul G. Moorhead. These contracts were signed by neither the husband of Mrs. Nelms, nor the wife of Mr. Moorhead. There is no evidence that either of these contracting parties had the authority to bind their respective spouses to convey the property in which they were interested. These same contracts contained the written employment of the plaintiff as defendants’ agent with an agreement to pay him stipulated commissions provided he procured from the owner of the property last described therein “an acceptance of this offer [to exchange specifically described real properties] on the terms and conditions herein specified, and on no other terms and conditions”.

The appellants contend that the findings and judgment are not supported by the evidence. They assert that the contracts were mere offers without the authority of the husband to exchange specifically described properties for other definitely identified properties with an offer to pay broker’s commissions only when their agent had procured the written acceptance of the terms of these agreements signed by the owners of the properties ■ for which they agreed to exchange ; that the acceptance of each owner of these properties was not procured, and that the plaintiff failed to fulfill the terms of his employment, and therefore earned no commissions.

The record does not disclose the nature of the title of the respective defendants in the Walla Walla properties. It does appear they were husband and wife. There is no evidence that M.

The first contract for the proposed exchange of the 2,100-acre ranch at Walla Walla for the Nadine apartments at Los Angeles was apparently prepared by the plaintiff and signed by Mrs. Nelms during the latter part of January, 1926. This contract did not authorize the plaintiff to procure the acceptance of Paul G. Moorhead, or any other specific individual. The name of the owner of the apartments was not mentioned in the document. Apparently Mrs. Nelms had never met the owner of this prop

The meaning of this language is too apparent to be misunderstood. It may not reasonably be said that Mrs. Nelms was thereby accepting a particular individual as able and willing to exchange his property upon the terms of this contract. Clearly, she authorized her agent to obtain only the acceptance of the owner of the Nadine apartments. The construction is necessarily implied, that “Unless this offer shall be accepted [by the owner of the Nadine apartments] within three days of the date hereof”, this offer shall become void. There is no ambiguity in the language of this contract respecting the identity of the person whose acceptance was authorized. Testimony to the effect that Mrs. Nelms requested her agent to procure the acceptance of any person other than the owner of the Nadine apartments was incompetent and at variance with the terms of the instrument.

At the bottom of this offer to exchange properties there is indorsed an unqualified acceptance thereof by the plaintiff’s client Paul G. Moorhead. This document is not signed or accepted by any other person. According to the unambiguous terms of the contract the defendant, Mrs. Nelms, agreed to exchange the 2,100-acre ranch for the

The evidence is without contradiction that this Los Angeles property did not stand in the name of Paul G. Moor-head. There is no evidence in the record to the effect that he was then the owner of this property or that he had any title therein. In the course of the trial it was stipulated between respective counsel that, “The clear record title to the two pieces of property, was not in Paul G. Moorhead’s name, but one of them was in the name of a. Mr. Kraus, and the other in the name of Alice Moorhead, the wife of Paul G. Moorhead.”

A similar situation exists with respect to the second contract. What has been previously said regarding the failure to procure an acceptance of the first contract by the real owner of the Nadine apartments, also applies to the second contract. The second contract, which is signed by Mrs. Nelms only, offers to exchange the dwelling-house at Walla Walla for the dwelling-house at Hollywood. The following language appears in this second contract, after describing the Walla Walla property: “Which they [the defendants] desire to exchange for the following second piece of property owned by Paul. G. Moorhead and his wife ...” This second contract also contains an authorization for the plaintiff to act as an agent “in negotiating an exchange”. It is further stated that, “When he [the plaintiff] has secured an acceptance of the proposition to exchange the above described property on the above terms, I [will] then pay the sum of Fifteen Hundred Dollars as commission for such services.” This second contract was subsequently signed by Paul G. Moorhead. It was not signed by his wife. According to the preceding stipulation this property stood in the name of Mrs. Moorhead. In the absence of evidence to the contrary it must be presumed

Thus it appears .that the title to neither of these properties for which the defendants had agreed to exchange, was in the party who had signed the acceptance. If Moor-head had any title whatever to either of these properties, the evidence fails to disclose the nature of his claim. The burden was on the plaintiff in this case to prove that he procured an acceptance of the agreement to exchange properties signed by the owner of the properties for which the exchange was to be made. The contract to exchange specifically described properties, signed and accepted only by a stranger to the title, would be utterly valueless and unenforceable. One who held no title to the property could not he forced to convey title. The appellant relies upon the general rule that where the broker procures a contract for the sale or exchange of real property, he has earned his commissions. Commenting upon this principle in the case of Carrington v. Smithers, 26 Cal. App., at page 467 [ 147 Pac. 225 , 27], the court says: “The ground upon which the liability attaches in such instances is stated to be that, ‘by entering into a valid contract with the customer produced by the broker, the principal accepts the customer as able, ready and willing to buy the land and pay for it’.’’ But the authorities are uniform to the effect that it is only when the contract is valid and enforceable that it is binding upon the principal. (Contant v. Wallace, 62 Cal. App. 768 [ 217 Pac. 1081 ].) It may not be said that a contract to exchange specifically described properties is enforceable against a party who owns no title therein. The defendants had no opportunity in the present case to accept Moorhead. Their contract with the plaintiff was to pay broker’s commissions for procuring the acceptance of the owners of the Los Angeles and Hollywood properties. In 9 C. J. 587, section 85, it is said: “As a general rule a broker is not entitled to compensation until he has performed the undertaking assumed by him; and in the absence of any contrary provision in his contract, it matters not how great have been his efforts nor how meritorious his services; if he is

For the reasons that it appears the plaintiff failed to fulfill the terms of his employment or procure an enforceable acceptance of the contracts by the owners of the respective properties, and because the evidence is lacking of the wife’s authority to bind her husband to pay commissions by her written employment of a broker, the findings and judgment are not supported by the record.

The judgment is therefore reversed.