Miller v. Lerdo Land Co.

This is an action to recover damages for the breach of a contract in writing dated October 2, 1912, wherein appellant, as party of the first part, gave and granted to respondent, as party of the second part, the exclusive right, subject to the conditions and limitations therein stated, to sell and dispose of, as agent for the first party, the lands known as the “Lerdo Tract,” situated in the county of Kern, state of California, and said to contain 6,481.03 acres of land. Judgment having been entered in favor of the plaintiff, the defendant appeals therefrom.

The lands of the Lerdo tract were so situated and of such character that without irrigation they were valueless for agricultural purposes. The parties to the contract believed, and they framed their contract upon that theory, that a supply of water could be developed on the land sufficient to furnish and supply 50 miner’s inches for each 160 acres thereof, and that this would be sufficient for the purposes intended. Generally speaking, respondent agreed to sell the land for appellant, and appellant agreed to make the subdivision and provide the water supply. The controversy between the parties herein, as to the actual facts, rests chiefly upon respondent’s claim that appellant agreed both to develop and to distribute a stipulated amount of water to each 20-acre tract, and that appellant failed to comply with this agreement and also repudiated the contract, and caused it to be understood in the vicinity where

There are two counts in the complaint. The first count contains demands for special damages and a demand for general damages. By the second count, respondent sought to recover the proportion which he claims became due to him out of moneys received by appellant, on deferred payments made to appellant by purchasers and for which appellant has not accounted to respondent. The judgment entered in favor of respondent awarded general damages in the sum of $107,928.93, and special damages in the aggregate sum of $53,479.10, under the first cause of action; and $1,890.87 under the second cause of action; making a total of $163,298.90, besides costs.

Appellant contends that the court erred, in overruling its demurrer to the complaint. The grounds of demurrer were that the complaint did not, nor did either count thereof, state a cause of action against the defendant; that in the first count several causes of action were joined but not separately stated; that upon the second count several causes of action were joined but not separately stated; that each count was uncertain in stated particulars, and that each count, for like reasons, was ambiguous and was unintelligible.

[1] In the argument upon the general demurrer to the first cause of action, counsel for appellant depended principally upon certain interpretations which they say should be given to the contract. These points are (a) that under the terms of the contract, appellant’s obligations to respondent were to bore wells with reasonable diligence, at reasonable cost, and when a well was bored, that well was to be tested, accepted in writing by respondent, and the lands to be irrigated therefrom declared, and that then, and not until then, was appellant under any obligation to respondent to sign any contracts of sale; (b) that the contract did not obligate appellant to construct any ditches or to deliver any water from the wells to any tract of

[2] Replying to the contention that in the first cause of action several causes of action were joined but not separately stated, respondent says that the so-called separate causes of action, other than that calling for damages for breach of the entire contract, were in the nature of special damages for- particular consequences, substantially growing out of the same breach of contract. This we believe to be a correct construction of the pleading.

[3] Concerning the questions raised by demurrer to the second count of the complaint, the only one which seems to require special attention relates to respondent’s demand for a share of the money received by the Lerdo Land Company as interest on deferred payments made by purchasers of some of these tracts of land. It was provided in the contract that (except as to the town site) the sales prices in the subdivision should be at least $150 per acre; that “the second party is to receive $50 of said purchase price of $150 per acre, in full compensation for all of his commission, labor, services and expenditures made under or in connection with this agreement, and $100 per acre is to belong to and be retained by the first party. If any of said land is sold for a price in excess of $150 per acre, then as to such excess, the same is to be equally divided between the parties of the first and second parts. Where the initial payment does not exceed 25 per cent of the purchase price, all of such amount received shall be retained by the second party, and as to all amounts received for initial payments in excess of 25 per cent, or payments thereafter received, such amounts shall be divided between the first and second parties pro rata, in proportion to their interests as herein agreed, until said second party is fully paid. The party of the second part is to receive such payments of commissions at the date of the execution and delivery of such contract of purchase, and at the date of the making of the initial payment, and the several succeeding payments as provided to be made in said contract of purchase, until such time as the party of the second part has received all amounts due under this agreement.” According to the terms of the contract, it seems to have been intended that respond

Very soon after the contract of October 2, 1912, was made, the Lerdo tract was subdivided and maps of the subdivisions were recorded. In addition to the principal subdivision, the contract included two smaller areas which were designated subdivision “B” and subdivision “C.” The transactions which touch the merits of the action were those having relation to subdivision “A.” Certain wells were on the land at the time when the contract was made. The work of putting these wells into good condition was commenced by appellant, who also entered upon the work of drilling other wells. Appellant employed engineers under whose supervision ditch lines were laid out and ditches were prepared to carry the water from some of these wells both to tracts which were sold by respondent and to other tracts the sale of which was intended. In pursuance of the terms of his agreement, respondent promptly entered upon its performance, inaugurated a vigorous selling campaign, and to that end employed a number of subagents; printed and circulated literature concerning the land, and advertised it extensively, and devoted his own time exclusively to the sale of the Lerdo tract in good faith and as required by the terms of the contract. In connection with these activities, respondent expended large sums of money which were necessary and proper in the fulfillment of his obligation to appellant. The court found that respondent duly performed the obligations imposed upon him by the contract until prevented from the performance thereof by appellant, and that from and including December, 1912, to and including April, 1913-, plaintiff sold to bona fide purchasers 1,198.91 acres of the said Lerdo lands Many of the purchasers entered into possession of the land covered by their contracts and attempted to raise crops thereon. In the spring of the year 1913, and especially during the month of May, the crops planted on some of these lands were seriously injured for want of irriga

Subdivision “A” extends in a northwesterly direction for a distance of several miles. The Southern Pacific Railroad runs in the same direction through the subdivision, so that about one-fourth thereof is on the northerly side of the railroad. The town site of Lerdo was laid out in section 15, one of the north line of sections of subdivision “A.” On October 2, 1912, there were eight wells on this subdivision, which are known in the record as wells 1 to 8, inclusive. The wells drilled by appellant subsequent to the date of this contract were numbered 9 to 15. Most of the land sold and for which irrigation was required in the spring of 1913 were in the central part and northerly half of the subdivision. In May, 1913, well No. 9 had been finished and equipped, and was producing 972 gallons per minute, which, according to appellant’s estimate of 9 gallons per minute as representing one miner’s inch of water, amounting to 108 inches. No. 10, when first put on the pump on April 19th, had “sanded up.” According to some of the testimony, this had been unnecessarily permitted by neglect on the part of appellant. On May 16th pumping was resumed and the well was then producing about 120 miner’s inches of water. Of the old wells, the only substantial results then being obtained were through wells 2, 5, and 7, with a combined product of 3,900 gallons per minute, or about 433 miner’s inches. These constituted the supply available at the wells to meet the demands for water to be used upon the lands sold by respondent. If this quantity of water, without excessive loss, had been delivered on those lands, it is improbable that there would have been any complaint of want of water for irrigation. Apparently the trouble consisted in the lack of sufficient means of distribution rather than in failure to develop an adequate amount of water for the then ex

The contract of October 2, 1912, provided for its continuance and termination as follows: “If, within one year from the date hereof, the second party shall have sold' 1,500 acres. or over, or obtained agreements for the sale of same in accordance with the terms hereof, this agreement shall continue for two years from the date hereof; and if within two years from the date hereof the second party shall have sold or obtained agreements for the sale of 4,000 acres of said lands, in accordance with the terms hereof, then this agreement shall be extended and be in force" for one year longer, during which third year the party of second part shall have the privilege of selling and disposing of all of the remainder of said lands upon the terms herein set forth. In the event sales are retarded or interfered with by failure of water developments, as herein agreed upon, then, if for that reason the sales made do not equal the acreage herein required, within the periods above specified, the time within which such acreage is to be sold shall be extended for a

[5] Without attempting to more minutely set forth the evidence tending to prove failure of appellant to perform the obligation which it had assumed with relation to the development and distribution of water in the early part of the year 1913, we state it as our conclusion that the evidence supports the finding that such failure did occur. That this condition, which continued to exist throughout the year 1913, was recognized by the officers of appellant is indicated by a letter dated November 24, 1913, addressed to respondent, in the name of appellant, by its president and secretary, purporting to extend respondent’s time for making sales. The letter said: “This is to advise you that in Anew of the fact that Lerdo land sales have been interfered with on account of water conditions and will necessarily be slow on that account in future, we hereby cancel your obligation to have sold 4,000 acres by October 2, 1914, and hereby extend the time in which you shall have sold that many acres to October 2, 1915, and you shall have until October 2, 1916, to sell out the entire Lerdo acreage.”

During the year 1913, and while the unsatisfactory conditions above mentioned existed with respect to water supply for sundry purchasers of land in the Lerdo tract, respondent co-operated with appellant in the efforts which they made to prevent those purchasers from abandoning their contracts, by granting to them concessions Avith respect to their interest and water charges, and by extending their time for making payments.

In finding XXIV, after setting out the notice of withdrawal of lands dated March 18, 1914, the court found that in fact it was practicable to develop and deliver water in adequate quantities and at reasonable cost upon all of the lands described in said notice, and it had not been ascertained, in the drilling of wells upon any portion of said lands described in said notice, that water could not have been, and could not be, discovered, produced, and developed for the irrigation of said land in adequate quantities and at reasonable cost. “That at the date of said notice, water had already been developed in that portion of subdivision ‘A’ lying north and east of the right of way of the Southern Pacific Railroad Company at a reasonable cost, and in such quantities as to demonstrate that an adequate supply could have been secured if defendant had diligently prosecuted its development work, and the work of distributing the water already developed, to the land sold

The court made the further finding (XXVI): “If the selling of said Lerdo tract of land had not been interfered with by the defendant,, and complete performance of plaintiff’s sales contract had not been prevented, as hereinbefore found, and if said defendant had performed' the terms and conditions of its said contract with plaintiff (Exhibit 1) for the development and distribution of water, the plaintiff would have been able to and would have sold the remainder of said tract of land, upon the terms and conditions mentioned in said sales contract, within the time prescribed in said contract and the extension thereof dated November 24, 1913, and by such performance he would have earned in excess of all expenses in making said sales the sum of $107,928.93, including the town site, and excluding the 1,390.8 acres withdrawn by mutual consent, and described in Exhibit 3 attached to the complaint. That plaintiff was thereby damaged by the defendant in the sum of $107,928.93, no part of which has been paid. And the court finds that fifteen (15%) per cent, of the gross selling price of said land would have been the reasonable cost and expense to plaintiff of selling said unsold land.”

[6] The right of appellant to withdraw from the terms of the contract any land of the Lerdo tract, as such right was defined in the contract, was limited to one condition

First two groups of special damages claimed. The first item of special damages allowed ($27,040.59) represents the unpaid commissions claimed to be due to respondent on certain sales made of parcels of land in the Lerdo tract, concerning which the court found “that solely because of the failure of defendant to perform its said contract with plaintiff and with each of the said purchasers, the contracts with the persons hereinafter named were canceled by the mutual consent of defendant and said purchasers, prior to the commencement of this action, but without the consent of plaintiff, and each of said purchasers was released by defendant from all further obligations of his said contract with defendant of every kind and description whatsoever.” The second item ($8,251.01) is identical with the first, except

[7] It is the general rule that unless there is a provision in the contract to the contrary, a real estate agent employed to negotiate a sale of land earns his commission and it is payable when he produces within the time allowed a purchaser who is ready, willing, and able to take the property on the terms prescribed or with whom the owner enters into a contract upon these or other terms satisfactory to him; and the agent cannot be deprived of the agreed compensation because deferred payments are not made by the purchaser, or because other terms of the contract are not carried out. (Stewart v. Bowie, 43 Cal. App. 751 , [ 185 Pac. 868 ].) [8] But the parties to an agency contract may make the payment of commission dependent upon any lawful condition. The contract may be so worded as to make it clear that the parties intended that the commissions, or some part thereof, were not to be paid except upon a completed sale, or (as in the case at bar) out of installments of the purchase money as the same shall be paid by the buyer. (Shepherd-Teague Co. v. Hermann, 12 Cal. App. 394 , [ 107 Pac. 622 ].) It therefore follows that to establish the liability of appellant for the payment of commissions to respondent (other than those paid at the time of making the initial payment), for any sale made by respondent, he must establish that the purchaser made some payment on the deferred purchase price, or that the purchaser did not make payment because of some fault of appellant. In other words, the right of respondent to recover the special damages claimed for nonpayment of commissions on the sales actually made cannot be sustained if the evidence is insufficient to prove that such nonpayment of installments by the purchaser resulted from the fault of appellant as set forth in the finding last above quoted. [9] When the vendor does not comply with the terms of his contract and as a result thereof the purchaser fails to complete his payments, the agent is, nevertheless, entitled to commissions which were to be paid out of the deferred purchase money of the land so bought. (Realty Bonds etc. Co. v. Point Richmond etc. Co., 171 Cal. 238 , [ 152 Pac. 433 ].) In Ratzlaff v. Trainor-Desmond Co., 41 Cal. App. 586 , [ 183 Pac. 269 ] (third district court of ap

Counsel for appellant contend that the evidence is insufficient to support the finding of the court that each of these purchasers would have complied with his contract if the conditions thereof with reference to the development and distribution of water had been performed; that, on the contrary, the evidence establishes without conflict that they forfeited their respective contracts without right and not by reason of any fault of appellant. Pursuant to this contention, they insist that according to the testimony of some of these purchasers, the reason they forfeited their respective contracts was that they were charged $8 per year for water, whereas, under the representations made to them, they should not have paid more than $4. Their contracts contained no agreement limiting the water rate, and there is no evidence that the charge made was excessive. Following the tabulation set out in the brief for appellant, we have examined this testimony.

The statements of some of these purchasers, but not of all, were clearly to the effect that on account of the high water rate alone they would have refused to make their payments, even if the water supply had been sufficient. By “sufficient” we think that it may fairly be inferred that they intend to refer to the agreed quantity, which was at the rate of 50 inches for each 160 acres of land. But under the contracts they were not entitled to refuse payment for that cause. The court, however, was not compelled to accept such testimony of purchasers as conclusive. Other evidence produced by respondent tends to show that, apart from the rates charged for water, the failure of appellant to

In the summer of 1913, after the failure to distribute water as provided by the contracts had occurred, and while the complaints on that score were under consideration by the parties, extension agreements were made whereby all of those purchasers, except Irene Darnall and Mrs. M. C. Fritcher, remained in possession of their lands without charge for water, taxes, or interest until the end of the year. It was after these extensions had expired, and after notice and demand, and after failure by those parties to make further payments on the contracts, that their contracts were declared forfeited. Appellant contends, and the evidence appears to support that contention, that none of these cancellations, except under the Darnall and Fritcher contracts, were made by mutual consent of the parties. After the contracts had been declared forfeited for nonperformance, then as to certain matters and as to certain claimed rights of possession, the defendant and some of the contract holders entered into special negotiations which resulted in the adjustment of those matters whereby, as a condition of such settlement, the purchasers surrendered their contracts. These being the facts, appellant contends that the evidence is insufficient to support the finding that these contracts were canceled by mutual consent of the parties because of the failure of the defendant to perform its obligations under those contracts. This contention is correct, to the extent that by accepting the concessions thus granted, the purchasers waived their right to abandon the contracts by reason of the then existing default of appellant in furnishing the water supply, but this waiver was conditioned upon the absence of any further failure of appellant to perform its contract obligations. It is not true, however, as to all of the purchasers, that the water supply continued to be insufficient. For example, J. S. Bird testified that in 1914 he had plenty of water, but for

Appellant calls attention to a special list of commissions allowed, amounting to $13,507.30 (being a part of the above-mentioned sums .of $27,040.59 and $8251.01), concerning which counsel for appellant say that there is no testimony from the purchasers, or any other person, giving any reason why they failed to make their deferred payments. Respondent has not contradicted this statement. The index of the transcript shows only three persons, out of the 23 contracts covered by this list, who were witnesses at the trial. These were Cloud, Meudell, and J. P. Seaton. Seaton is the only one whose testimony indicates that his failure to pay resulted from failure to get sufficient water to irrigate his land. In all these instances, where there is no evidence tending to prove the reason for failure of the purchaser to make his deferred payments, the court was not justified by the evidence in finding that the contracts were canceled by mutual consent of appellant and the purchasers, or because of appellant’s failure to perform its contract. Each one of the canceled contracts, about 58 in number, constitutes a separate item in the claim for commissions earned, and must be supported by evidence sufficient to en

Third group of special damage claims. Finding VIII reads as follows: “Plaintiff sold to J. C. Apple, Alfred Curtis, W. E. James, and W. E. Godfrey, seventy acres of said land at the contract price of One Hundred Fifty ($150.00) Dollars per acre, and the defendant executed to each of said purchasers a contract for the land for which he had made a written application, but each of said purchasers refused to accept the formal written contracts executed by defendant, and tendered to said purchasers for execution, solely because of defendant’s failure and refusal to develop and distribute water necessary for the irrigation of said Lerdo Tract and of said land so purchased, as it was required to do by the terms of its said contract with plaintiff. And if defendant had performed its said contract for the development and distribution of said water so that said land and other land in the Lerdo Tract could have been irrigated, the said last named purchasers would have executed said contracts tendered to them, and they were and each of them was ready, able and willing to have paid for said land in accordance with the terms of said contracts so tendered to them, if the water had been developed and distributed by defendant as required by the terms of said contract with plaintiff. That commissions earned by plaintiff by the sale of the last named seventy (70) acres of land amounted to the sum of $3,500.00, no part of which sum has been paid to him or to any one for him.” It is conceded to be the law that in construing such a contract as that of October 2, 1912, in order for an agent to earn his commission where the sale was not consummated, it is necessary to prove that he found a purchaser ready, willing, and able to buy the property on the terms fixed, and either that he procured from that person a valid contract binding him to purchase the property upon those terms, or that he brought the vendor and the proposed purchaser together so that the vendor might have secured such contract if he desired.

Appellant contends that the evidence is insufficient to support the finding, especially in this, that the evidence is insufficient to prove that said four persons, or either of

Apple visited the Lerdo tract and made a deposit of $100 on account of two lots. Subsequently he visited the land again. Seeing “that other people out there had not got their water, and so on and so forth,” he declined to complete his first payment or to accept a contract. “The fellow that sold me the land, he told me I was to get water from the well right adjoining the 20 acres, and then afterward I heard that I was to get water from the other two wells a mile and a half below there, something like that. ... I told him that I would get the water right there adjoining the land I had picked out, and I come to find out that I had to get it from way down below, and I seen the other crops out there wasn’t doing well, and everybody else wasn’t getting water, and I decided to let mine go.”

James did not testify. According to a letter of January 20, 1914, from appellant’s secretary to respondent, and respondent’s reply thereto, it appears that some kind of preliminary agreement to purchase had been made with James in March, 1913. Miller’s letter states that he instructed his agent at Bakersfield to have the James contract “returned immediately to this office or to have the same executed and the first payment made. . . . Our agent at Bakersfield advises that Mr. James has been away from Bakersfield, has never occupied the land and did not receive any rent from same.”

Godfrey did not testify. The only evidence concerning hirn was that of respondent’s witness Staneliff, who stated,

It is not claimed that there was any evidence concerning these four sales different from that to which we have referred. Full commissions, amounting in all to $3,500, were allowed for these so-called sales. As to each of them, the evidence is insufficient to sustain the finding that he refused to execute the proposed contract with him “solely because of defendant’s failure and refusal to develop and distribute water necessary for the irrigation of . . . said land so purchased.” Curtis would not take the contract without a guaranteed limit on the price of water. The evidence does not show why James did not sign the contract, and it affirmatively shows that Godfrey was neither willing nor able to buy. The only one1 of these four purported sales on which the evidence creates a shadow of right of the plaintiff to commissions is that relating to the sale to J. C. Apple.

Fourth group of special damage claims. On these claims commissions were allowed in the total sum of $14,687.50, being for sales to Burke, Killian, Paul, and Reiss. The court found that between April 10, 1914, and August 1, 1914, respondent procured tona fide offers from the persons named for the purchase of certain lots in the Lerdo tract; that each of said persons was ready, able, and willing to buy said land and to execute a written contract for the purchase of the land selected, and was ready, willing, and able to pay for the land at certain prices and on certain terms, which were in conformity with the agreement between appellant and respondent concerning such contracts; that plaintiff requested the defendant to execute a contract to each of said persons for said lands, and the defendant failed and refused to execute and deliver any contract to either of them; that if said contracts had been executed

In harmony with the disposition hereinbefore- made of the questions relating to the interpretation of the contract of October 2, 1912, and the obligations of appellant thereunder, we hold that respondent was entitled to make these alleged sales. At this point it is only necessary to consider the contention of appellant which attacks the good faith of these alleged sales. Respondent testified that on April 10, 1914, he made the sale of certain described lots to James A. Burke, and sent to appellant a written application requesting - that contract for that land be executed to Mr. Burke. The application described the lots, the price, the installment amounts; showed that no deposit had been made, and was unsigned. Similar transactions occurred respecting the sales to Killian, Paul, and Alma C. Reiss. None of these contracts ever was executed by appellant.

Killian, B.urke, and Paul testified that they were ready, able, and willing to make their first payments, and would have done so if the contracts had been executed. S. N. Reiss, husband of 'Alma C. Reiss, conducted the negotiations for the Reiss contract, but directed that it be made in her name. He testified that he was making the purchase for his wife, and that he was ready, able, and willing to purchase the land and pay for it according to the terms indicated by the receipt. At about the end of July, 1914, which was after appellant had refused to execute contracts for these sales, these parties, at the request of respondent, signed the agent’s receipt. In making this request by letter to Burke, respondent in that letter said: “I wish you would sign the inclosed agent’s receipt and return to me at the place provided for purchaser to sign, as an evidence that you were willing prior to April 20, 1914, to enter into an agreement to buy this land. By signing this agreement, you do not obligate yourself to purchase the land at all now, unless you see fit, as the agreement specifically provides that the Lerdo Land Company should have entered into an agreement with you ten days subsequent to April 10, 1914, which they refused to do.” "While the act of respondent in asking for a

[10] General damages. Besides the special damages awarded, we have seen that respondent was allowed damages in a sum specified as the net amount of compensation which he would have earned upon sale of all that part of the Lerdo tract which remained unsold at the time when performance of the contract by respondent was prevented by appellant. Appellant contends that such damages are speculative and uncertain in their nature and are incapable of proof; that, in fact, the evidence offered to prove that the plaintiff would have been able to sell, and would have sold, all of the lands of the Lerdo tract upon the prescribed terms and within the time agreed upon between appellant and respondent, if such performance by respondent had not been prevented by appellant, is insufficient to establish those facts; and that the court erred in overruling appellant’s objections to the evidence.

For the purpose of showing that he could have sold all of the land in question, respondent introduced testimony showing that large amounts of land had been sold in other subdivisions made in other localities of the San Joaquin Valley, and tending to prove that the Lerdo land was more desirable for selling purposes than were these other tracts. Basing their statements upon acquaintance with the real estate market in the vicinity where some of these other lands had been sold, witnesses testified favorably to respondent’s contention that he could have sold the land; such testimony being, in part, as follows: The witness Baldeschwieler testified that, “We could have sold a good deal of that land”; giving as the reason for this opinion, that “there was a good deal of land sold up in that part of the country.” Alexander, another subagent who had made some sales there, said that the failure of crops there in 1913, “caused by

The subject of damages by reason of loss of prospective profits, and evidence admissible to prove such losses, was considered and discussed by the supreme court of California in Pacific Steam Whaling Co. v. Alaska Packers’ Assn., 138 Cal. 632 , [ 72 Pac. 161 ]. During the fishing season of 1897, the defendant unlawfully and forcibly excluded plaintiff from fishing in the ocean along certain portions of the shore of Alaska. Overruling objections of the defendant, plaintiff was permitted to introduce evidence tending to show how many fish the plaintiff could, with rea-' sonable probability, have taken from the fishing grounds in question if it had not been excluded therefrom by the unlawful acts of defendant—the value of such fish, and the profits which would reasonably have accrued to plaintiff from the fish when canned. Plaintiff was also, in this connection, allowed to introduce evidence tending to show how many fish defendant actually did take in those fisheries during said season. The court instructed the jury that if it found that plaintiff suffered damage by reason of the alleged wrongful acts of the defendant, then in assessing the amount of damages caused to plaintiff by the alleged , wrongful acts, the jury might- consider the loss, if any, to the plaintiff of probable profits in its business. Defendant claimed that the evidence pointed to damages too much

Shoemaker v. Aker, 116 Cal. 239 , [ 48 Pac. 62 ] (supra), was an action to recover damages for breach of contract. The contract provided that defendant would purchase land and furnish capital for its improvement; that plaintiff would have charge of the improvement and cultivation of the land, and have an interest in the income and profits derived from the sale of the land or its products, and in the increase of value of the land. Plaintiff agreed to devote his whole time and attention to the management and improvement of the property and the sale of the land and the products thereof. After land had been purchased, and after plaintiff had devoted more than a year to its care and improvement, the defendant attempted to annul the contract, by acts which were held to constitute a breach thereof. Referring to the rule of damages stated in section 3300 of the Civil Code, and the subject of future profits, the court pointed out that the eases in which future profits had been rejected as speculative or too remote were eases where the asserted future profits were entirely collateral to

In Western Union Tel. Co. v. Commercial Pac. Cable Co., 177 Cal. 577 , [ 171 Pac. 317 ], the action was one for an injunction to prevent the imposing of a discriminatory regulation and the exaction of a discriminatory toll, and to recover damages for injuries sustained by the demand and exaction. In determining the question of damages for injuries sustained by the demand and exaction, the plaintiff was permitted to introduce evidence showing the injury which plaintiff would sustain through falling off of any business, with consequent loss of profits, as a direct result of such discrimination. This was held to be a proper subject for the admeasurement of damages where the evidence disclosed a reasonable probability of their approximate estimation. The court said: “It admits with no dispute that the plaintiff would have some falling off in business with its consequent loss of profits as a direct result of the discrimination of which it complains. The injury which it would thus suffer through the loss of such probable profits has heretofore been held by this court to be the proper subject of admeasurement of damages in cases where the evidence disclosed a reasonable possibility of their approximate estimation.” (Citing Shoemaker v. Acker, supra, Pacific Steam Whaling Co. v. Alaska Packers’ Assn., supra, and McQuilkin v. Postal Tel. Cable Co., 27 Cal. App. 698 , [ 151 Pac. 21 ].)

In Schumann v. Karrer, 184 Cal. 50 , [ 192 Pac. 849 ], the defendant had leased to the plaintiff a butcher-shop and slaughter-house for the term of two years, and entered into an agreement that during the term of the lease he would not carry on the butcher business in the described vicinity. The action was for an injunction and for damages for plaintiff’s breach of this stipulation. The court permitted the plaintiff to give testimony tending to show the value of his business and the loss which would probably ensue from appellant’s interference and rivalry; also the loss which he

In McConnell v. Corona City Water Co., 149 Cal. 60 , [ 8 L. R. A. (N. S.) 1171 , 85 Pac. 929 ], the award to plaintiff of damages consisting of profits which he would have made on a contract for the construction of a tunnel was sustained. Referring to the numerous cases wherein damages for loss of prospective profits have been denied upon the ground that they were too speculative and remote, the court said: “Such is the undoubted rule, but it is to be noted that this is not an objection to the inclusion of profits as a proper element of damages, but is a declaration merely that when they are too speculative and remote to be capable of anything like reasonable ascertainment, when they are collateral merely and do not arise directly or by natural consequence out of the tort complained of, they cease to become a proper element in the admeasurement of damages. No one may contest the soundness of this principle, but the converse of it is equally true, that where prospective profits are not too speculative and remote, where they do arise directly and as a natural consequence out of the injury, they are always allowed as an element of damage.”

[11] In the case at bar, the contract gave to respondent the exclusive right to sell the described land. Respondent on his part agreed to conduct a campaign for and the business of selling the land to the end that the same should be sold in the shortest possible time, and agreed not to engage in the sale of other land subdivisions during the life of the agreement. The distinction between such a contract and a nonexclusive contract of agency was pointed out in Friedman v. McKay Leather Co., 179 Cal. 566 , [ 178 Pac. 139 ]. It was held that in seeking compensation for breach by the principal of a contract wherein the agency was not exclusive and the agent did not contract to devote his time to the selling of the principal’s goods, and where the compensation of the agent was to be a commission on sales made

[12] The evidence to which we have referred, upon which finding XXVI must rest, falls into three classes: (a) evidence of sales in other subdivisions, (b) opinions of witnesses that sales could have been made, (c) the quantities of land actually sold by respondent. All of this evidence was admitted over objections urged thereto by appellant. The rulings overruling those objections are duly specified as errors on account of which it is claimed that the judgment should be reversed. The evidence of sales made of land in other places in the San Joaquin Valley at the period of time in question should have been rejected. In itself, it was irrelevant to the issue to be determined, which was whether or not the plaintiff could have sold the Lerdo lands. Conditions with respect to water supply, and other conditions, were different in various particulars in those several tracts from the conditions existing in the Lerdo tract, or which would have existed in the Lerdo tract even if appellant had complied with all of its obligations relating to the development and distribution of water thereon. The evidence of what one set of agents accomplished in the sale of a given subdivision of land is too remote and uncertain in its bearing to be receivable as evidence that another agent could have sold the lands of another subdivision. This evidence could have had no possible relation to the question at issue unless it had been used by witnesses as a basis and reason for their opinion that this particular land could have been sold. Even then, it would not be admissible

The judgment is reversed.

Shaw, J., and James, J., concurred.

A petition for a rehearing of this cause was denied by the district court of appeal on June 17, 1921, and a petition to have the cause heard in the supreme court, after judgment in the district court of appeal, was denied by the supreme court on July 18, 1921, and the following opinion then rendered thereon:

In the opinion of the district court of appeal herein it is said that, under the contract of October

The petition for rehearing is denied.

All the Justices concurred, except Wilbur, J., who was absent.