Opinion
Decided November 23, 1931.
Real property — Contract one of agency and not sale — Brokers cannot recover damages for breach, upon owner's refusal to sell, when — Time for performance essence of contract, when — Time not extended by indorsement upon payment check — Owners, refusing to convey, cannot retain payments by brokers — Cross-petition by owners for damages to lot by building construction — Jury's finding not clearly against weight of evidence.
1. Contract to sell lot through realty company on commission held one of agency not of sale.
2. Owner's refusal to sell lot after time fixed by contract with brokers for payment of balance of price held not breach of contract entitling brokers to damages.
3. In action at law for breach of contract, time is of essence of contract.
4. Time, fixed by spouses' contract to sell lot through brokers, for payment of balance of price, held not extended by husband's indorsement of brokers' check stating later due date on back.
5. Owners refusing to sell lot through brokers because of failure to pay balance of price within time fixed by contract held not entitled to retain amount paid them by brokers, in absence of forfeiture provision.
6. Jury's finding against owners on their cross-petition for damage to lot by construction of building thereon held not clearly against weight of evidence.
ERROR: Court of Appeals for Hamilton county.
Mr. Clifford Brown and Mr. Charles K. Pulse, for plaintiffs in error.
Mr. Albert E. Savoy, for defendant in error.
The K. M. Realty Company, plaintiff below, in its second amended petition alleges that it is a partnership composed of Robert H. Klosterman and William B. Steube, partners licensed as real estate brokers under the laws of Ohio.
In the first cause of action it alleges that on December 20, 1928, it entered into a written contract of purchase of real estate with the defendants, Anthony Helmes and Carrie Helmes; that the contract was for the purchase from them of certain lots in the city of Cincinnati at the purchase price of $1,200; $500 payable at the time of the signing of the contract and the balance of $700 payable on or before 120 days after the acceptance of the contract.
It is further alleged in the second amended petition that $500 was paid upon acceptance of the contract, and tender was made of the balance of the purchase price; that the defendants were unable to and refused to deliver to the plaintiff a deed for the property, clear, free, and unincumbered. Plaintiff further alleges that acting on this contract it entered into a written contract with one Walter F. Gerow for the erection of a house on the lot, and that as a result of said contract it advanced $350 for the purpose of paying for labor on the construction of the building.
The second cause of action alleges that the defendants fraudulently entered into an agreement with the plaintiff to sell land in violation of the zoning laws of the city of Cincinnati, by reason of the dimensions of the lots sold, and that because thereof the zoning commission refused to permit the completion of the building under construction, and the petition charges that because of the failure of the defendants to deliver the deed as per the contract, and because of the fact that they fraudulently contracted to convey the land in violation of the Cincinnati zoning laws, the plaintiff has been damaged in the sum of $2,163.50, and prays judgment for that amount.
Anthony Helmes and Carrie Helmes filed an answer to the second amended petition, in which they denied generally the allegations of the second amended petition. By way of cross-petition, they state that they were on December 20, 1928, the owners as tenants in common of the real estate described in their answer and cross-petition; that on December 20, 1928, the plaintiff entered into an agreement in writing with defendants, whereby plaintiff, in consideration of a commission of $48 to be paid it, was to procure a purchaser for the westerly portion of the premises, at a purchase price of $1,200; that the entire amount of the purchase price was to be paid within 120 days next ensuing after December 20, 1928; that the premises to be sold were particularly described by metes and bounds; that plaintiff represented to defendants that it had a purchaser for the premises; that plaintiff paid to defendants $500, less $48 deducted for commission, but did not disclose the purchaser, and alleged further that the balance of the purchase price was never paid or tendered to the defendants.
There are some allegations of misrepresentation and lack of good faith, and defendants further claim in their answer that the plaintiff, on February 11, 1929, began the construction of a one-story dwelling house on that portion of defendants' premises in question, excavated therefor, and erected concrete foundation walls; that said construction was carelessly and negligently done, in violation of the Building Code of the city of Cincinnati; that the director of buildings of the city of Cincinnati revoked the building permit; and allege that it was impossible to complete the proposed structure so as to conform to the Building Code of the city of Cincinnati; that it would be necessary to remove the concrete walls and fill in said excavation in order to restore said premises to their former condition and place the property in a marketable condition. It is further alleged that mechanics' liens have been filed on the property, and attempts have been made to foreclose them. Defendants prayed for damages in their cross-petition in the sum of $10,000.
The case was tried to the court and jury, resulting in a verdict in favor of the K. M. Realty Company in the sum of $1,165.50.
Motion for a new trial was overruled, and judgment was entered on the verdict. Error is prosecuted to reverse that judgment.
Plaintiffs in error argue in the brief that the K. M. Realty Company breached its contract of agency with plaintiffs in error, and claim error in the charge of the court to the jury and error in the court's refusal to direct a verdict in their favor on motion made at the close of the plaintiff's case, and, again, at the close of all the evidence. Errors are claimed in the court's rulings on evidence offered by plaintiff, which was admitted, and evidence offered by the defendants, which was excluded, and that the verdict and judgment are against the weight of the evidence.
The contract between the plaintiff and defendants was in writing, and is in the record as Exhibit A, as follows:
"December 20, 1928.
"We hereby agree to sell through the K. M. Realty Co. a lot known as 260 and 261 of Cedar Grove Land and Bldg. Assn. No. 2, being 50 ft. front facing Dewey Ave., and extending eastward to a depth of 77.57 ft. on the south side and 73.94 ft. on the north side together with all improvements, as follows, Title to be clear, free and unincumbered except:
"Purchase price being $1,200.00
"Cash with offer $500.00
"Balance to be paid on or before 120 days of acceptance of this offer $700.00 to Mr. and Mrs. Helmes. The above mentioned Co. to receive 4% of purchase price as commission for services rendered, being $48.00 on acceptance of this offer by the undersigned.
"[Signed] Anthony Helmes,
"Carrie Helmes.
"This is subject to ability of sellers to convey the above mentioned lot due to a loan on the property on rear of lot."
It is difficult to understand why there should be any dispute or question as to the meaning of this contract. It is plain and unambiguous, and is one of principal and agent, in which Anthony Helmes and Carrie Helmes, the principals, agree to sell through the K. M. Realty Company the lot described in the contract, and agree to pay commission of 4 per cent. of the sale price.
The contract is dated December 20, 1928, and provides for the payment of $500 upon signing the contract; the balance to be paid on or before 120 days from the acceptance of the contract. The undisputed evidence is that the $500 was not paid when the contract was executed, but was paid by check on January 28, 1929. This check was made payable to the order of "A. Helmes." It is attached to the record, marked Exhibit 4. The balance of $700 was not paid or tendered within the 120-day limitation under the contract. The first indication of the desire to make payment by the K. M. Realty Company of the balance of $700, and the request for the conveyance of the lots, was made by telephone on May 2, 1929. In this telephone conversation the Helmes informed the parties that the time had expired and they would not make a deed.
On May 4, 1929, a letter was written by the K. M. Realty Company to the Helmes, demanding the deed, and asking them to meet at a building and loan association, at which time the realty company would pay the balance of $700, and receive the deed, but the Helmes refused to proceed further in the matter.
The 120-day limitation, provided for in the contract, expired about April 20, 1929, more than three weeks before tender of the balance of the money and demand for the deed were made. The Helmes had a right to refuse to sell after the expiration of the 120-day limitation. In an action at law, as this is, time is of the essence of the contract.
The amended petition alleges that the K. M. Realty Company was the purchaser. It failed to prove this allegation. As we have stated, the contract on which the action is based is a contract of principal and agent. If it were to be considered as a contract of purchase and sale, the realty company would be in no better position. We have shown that plaintiff would not be entitled to recover damages for breach, as there was no breach by the Helmes.
On the basis of a contract of sale between the parties, something is claimed by the K. M. Realty Company to the effect that the time limit was extended in writing, and this is claimed from the fact that on the back of the check, given January 28, 1929, appears the following: "I acknowledge as payment on lot 260 261, Dewey Ave., 50x77 ft. more or less. Balance due 4 months from date $700.00."
The check was indorsed by Anthony Helmes alone. He would necessarily have to indorse the check to get the money. The writing above his name is not proof of anything except receipt of the first payment in the amount of the check and its application. If it was to be considered as bearing on the question of alteration of the contract in extending the time, there was no consideration shown. The contract provided for the payment of $500 upon execution of the contract. The contract was executed December 20, 1928. The $500 payment, while not in accordance with the contract, was the payment required under the contract. Further, Mrs. Helmes, one of the principals, was not the payee, nor did she indorse the check. The contract being one of principal and agent, and no contract of sale having been effected, the Helmes were not entitled to retain the $452 paid them by the agent, the K. M. Realty Company. No forfeiture of payment is in the contract.
The trial court ought to have instructed the jury that under the second amended petition the plaintiff was entitled to recover the $452 paid and no more, and this sum it would be entitled to recover, unless the jury should find for the defendants upon their cross-petition for property damage. The jury found against the defendants on the question of damage to their property. This it could do on the proposition that under the circumstances of the case the Helmes had permitted the K. M. Realty Company to proceed with the construction of a building on the lot, although no deed had been acquired.
There is some evidence that the Helmes undertook to aid in resisting the cancellation of the permit by the building commission. If they did not directly consent to the realty company's proceeding with the construction work, they made no objection nor did they protest in any way. We must therefore conclude that the finding of the jury against the Helmes on their cross-petition is not clearly against the weight of the evidence.
Under the record, we are of opinion that the court erred in not limiting the recovery of the realty company to the return of the first payment made, in the sum of $452. The realty company is entitled to recover that sum and no more.
The judgment will be modified by eliminating therefrom all in excess of the sum of $452, and, as so modified, will be affirmed.
Judgment modified and affirmed.
ROSS, P.J., and CUSHING, J., concur.