Summary
affirming dismissal of claim for breach of orally modified contract subject to statute
Summary of this case from Zusy v. International Medical Group, Inc.Opinion
No. 28,661.
Filed April 18, 1950.
1. BROKERS — Compensation and Lien — Statute of Frauds — Necessity of Contract in Writing — Construction and Operation. — The statute providing that no contract for the payment of any sum of money or a thing of value as a commission of a reward for the finding by one person of a purchaser for the real estate of another shall be valid unless in writing and signed by the owner or his representative, applies to all contracts by which one person agrees to find or procure a purchaser for the real estate of another in consideration of a commission or reward. Burns' 1949 Replacement, § 33-104. p. 232.
2. STATUTE OF FRAUDS — Contracts for Sale of Real Property — Alteration of Contract — Change in Consideration Is Material Alteration — Must Be in Writing To Support Action. — The consideration for which land is to be sold is a material part of the contract and a change in the terms of the contract, by which the parties agree to sell for a different consideration, is such a material variance from the contract as written that no action will lie upon such altered contract, unless the alteration is evidenced by a writing signed by the parties sought to be charged. p. 233.
3. BROKERS — Action for Compensation — Pleading — Complaint — No Allegation of Performance — Demurrer Properly Sustained. — In an action by a broker on a non-exclusive contract to recover his commission for sale of real estate, where he alleged the procurement of a purchaser willing to pay $31,000 for such real estate, but the price stated in the broker's contract was $32,800, such allegations were not sufficient to show a performance by the plaintiff, because the contract was not exclusive and specifically fixed the sale price, and demurrers to his complaint were properly sustained. p. 233.
4. BROKERS — Action for Compensation — Contract of Employment — Construction and Operation — Courts May Not Alter Contract. — In an action by a broker on a non-exclusive contract to recover his commission for sale of real estate which specifically fixed the price at which such land was to be sold, the court may not by any process of interpretation or construction modify or change its clear and unambiguous terms, because to do so necessarily results in the remaking of the contract for the parties, which the courts may not do. p. 233.
5. STATUTE OF FRAUDS — Requisites and Sufficiency of Writing — Contract Partly Parol Is Parol Contract — Statute Not Satisfied. — A contract required by law to be in writing must be wholly so in order to be enforceable as a written contract, and a contract partly in writing and partly in parol is a parol contract, and does not satisfy a statute requiring a written contract. p. 234.
6. STATUTE OF FRAUDS — Operation and Effect of Statute — Modification of Contract — Modification Is Within Statute. — Where a contract affected by the statute of frauds has been put in writing, and afterwards orally modified, such modified agreement is also within the statute. Burns' 1949 Replacement, § 33-104. p. 234.
7. BROKERS — Employment and Authority — Contract of Employment — Provision for Price of Real Estate — Action for Compensation — Broker Must Procure Buyer at Specified Price. — While a broker's contract for a commission for the sale of real estate may be enforceable even though it does not fix the price at which the real estate shall be sold, when the price is fixed by the contract, the broker may not recover upon it until he has produced a buyer at or above the fixed price, because until such time he has not performed his part of the contract. p. 235.
8. BROKERS — Action for Compensation — Pleading — Complaint — Reliance on Written Contract Modified Orally — Contract Is Oral — Contract Within Statute of Frauds — Demurrer Properly Sustained. — In an action by a broker to recover his commission for sale of real estate, where plaintiff in his complaint relied on a written contract modified orally, demurrers to the complaint were properly sustained, because such a contract is required by statute to be in writing, and when it is modified orally it becomes an oral contract which is specifically made invalid by the statute. Burns' 1949 Replacement, § 33-104. p. 235.
From the Boone Circuit Court, Howard A. Sommer, Special Judge.
Action by Jesse S. Ward against C. Earl Potts to recover a broker's commission for selling a portion of appellee's farm lands. From a judgment for defendant, plaintiff appeals. (Transferred from the Appellate Court pursuant to § 4-215, Burns' 1946 Replacement.)
Affirmed.
(Superseding the opinion of Appellate Court reported in 89 N.E.2d 920.)
Raymond O. Evans, of Crawfordsville, and Scifres Hollingsworth, of Lebanon, for appellant.
Parr, Parr Parr, of Lebanon, for appellee.
By an amended complaint in three paragraphs appellant seeks to recover from appellee a commission of 3% for selling a portion of appellee's farm lands. The alleged contract consisted of appellee's written offer as follows:
"Lebanon, Ind. Jan. 10, 1946 Ward's Agency Crawfordsville, Ind.
Dear Mr. Ward:
I have your letter of December 19th, re selling my farm in Madison Township. This farm will be offered on the basis listed below.
The property is in three tracts: 212 acres, full set of buildings, plus small tenant house; 160 acres full set of buildings: 100 acres, no buildings. Electricity at both farms.
The prices on various combinations are as follows:
212 acres for $40,280 160 acres for 32,800 100 acres for 17,000 312 acres for $56,160 260 acres for 49,400 472 acres for 85,000
This may be sold in any one of the following combinations, except, that in no case will the 212 and 160 be sold leaving the 100 acres alone. The 100 acres may be sold first alone, in which case the others could be sold the same way.
Commission at three per cent will be paid.
This is not exclusive.
Very truly yours, C.R. Potts 303 South East Street Lebanon, Ind.
P.S. This sale is subject to tenants rights for 1946."
There is no averment that this offer was accepted in writing.
Paragraph I of the amended complaint avers appellant's employment by the above written offer. That on October 22, 1946, appellant found a purchaser, Julian Whitaker, for the 160 acre tract mentioned in the written offer for $31,000. That appellee on that date sold the 160 acre tract to the person so procured by appellant, for the sum of $31,000. That upon demand appellee refused to pay appellant commission upon said sale in the sum of $960. Prayer for judgment, and all proper relief.
Paragraph II of the amended complaint is substantially similar to paragraph I, except it alleges the purchaser to be one L.E. Barclay.
Paragraph III of the amended complaint is similar to paragraphs I and II, except it avers that prior to October 22, 1946, appellee orally authorized appellant to sell the 160 acres mentioned in the written offer for $31,000 instead of $32,800 as provided in the written offer. That on October 22, 1946, appellee sold the 160 acre tract for $31,000, but upon demand refused to pay appellant 3% commission. Prayer for judgment for $930 and all proper relief.
Appellee's separate and several general demurrer to each paragraph of the amended complaint was sustained. Appellant refusing to plead further, judgment was rendered against him, from which this appeal is taken.
The sole question presented by this appeal is whether or not appellant is prevented from collecting the agreed 3% commission on the sale made, by reason of § 33-104, Burns' 1949 Replacement, providing as follows:
"No contract for the payment of any sum of money or thing of value, as and for a commission or reward for the finding or procuring by one [1] person of a purchaser for the real estate of another, shall be valid unless the same shall be in writing, signed by the owner of such real estate or his legally appointed and duly qualified representative: Provided, That any general reference to such real estate sufficient to identify the same shall be deemed to be a sufficient description thereof."
Indulging the presumption in favor of appellant as against the demurrer, that he found a purchaser for the 160 acre tract, not for the sum of $32,800 as provided in the written contract but for the sum of $31,000 dollars, is he entitled to recover the agreed 3% commission on the latter sum?
Our courts have consistently held that § 33-104, Burns' 1949 Replacement, supra, applies to all contracts by which one person agrees to find or procure a purchaser for the real 1. estate of another in consideration of a commission or reward. Bryan v. Mayo (1919), 188 Ind. 548, 552, 553, 124 N.E. 873; Belleville Lumber Supply Co. v. Chamberlin (1950), 120 Ind. App. 12, 84 N.E.2d 60, 63.
Few cases with a factual situation like this one have come before our courts of appeal. In one such case our Appellate 2. Court properly stated the applicable law thus:
". . . The consideration for which the land was to be sold was a material part of the contract, and a change in the terms of the contract, by which the parties agreed to sell for a different consideration, was such a material variance from the contract as written that no action would lie upon such altered contract, unless the alteration was evidenced by a writing signed by the parties sought to be charged." (authorities). Wellinger v. Crawford (1911), 48 Ind. App. 173, 175, 177, 89 N.E. 892.
In Bryan v. Mayo, supra, this court, on page 553, by Lairy, C.J. said:
"Before appellee could assert any right to receive payment of the sum stipulated in the contract, even though it were in writing, it would have been incumbent on him to find purchasers and close sales for real estate of appellant amounting in the aggregate to the sum stipulated . . . The payment of his compensation or reward depended upon the attainment of the result stated, and it could not be earned in any other way . . ." Annotation XVI, 44 L.R.A. 629.
Since neither paragraph I nor II of the amended complaint avers facts sufficient to show a performance by appellant of the alleged written contract sued upon, the general demurrer 3, 4. was properly sustained to each. Finding a purchaser for the 160 acre tract for the sum of $31,000 is not a performance of the contract to find a purchaser to pay $32,800. Since the contract sued upon is not exclusive, and specifically fixes the price at which the 160 acre must be sold, the courts may not by any process of interpretation or construction modify or change its clear and unambiguous terms. To do so necessarily results in the remaking of the contract for the parties. This the courts may not do. Jenkins v. King (1946), 224 Ind. 164, 174, 65 N.E.2d 121; Fishers Grain Co. v. Sparks (1945), 223 Ind. 133, 139, 58 N.E.2d 932, 934; International Shoe Co. v. Lacy (1944), 114 Ind. App. 641, 647, 53 N.E.2d 636; Miles v. Indiana Service Corp. (1933), 97 Ind. App. 400, 405, 185 N.E. 460.
A contract required by law to be in writing must be wholly so in order to be enforceable as a written contract. A contract partly in writing and partly in parol is a parol contract, 5. and does not satisfy a statute requiring a written contract. Board of Commissioners of Marion County v. Shipley (1881), 77 Ind. 553; Luther v. Bash (1916), 61 Ind. App. 535, 539, 112 N.E. 110; Peters v. Martin (1919), 69 Ind. App. 436, 442, 122 N.E. 16; Gordon v. Gordon (1884), 96 Ind. 134, 135; Weaver v. Shipley et al. (1891), 127 Ind. 526, 533, 27 N.E. 148; Zimmerman v. Zehendner (1905), 164 Ind. 466, 469, 73 N.E. 920; Neal v. Baker (1926), 198 Ind. 393, 403, 404, 153 N.E. 768; Sheldmyer v. Bias (1942), 112 Ind. App. 522, 529, 45 N.E.2d 347; Wertheimer v. Klinger Mills, Inc. (1940), 216 Ind. 481, 485, 25 N.E.2d 246.
Where a contract affected by the statute of frauds has been put in writing, and afterwards orally modified, such modified agreement is also within the statute. Wellinger v. 6. Crawford (1911), 48 Ind. App. 173, 175, 89 N.E. 892, 93 N.E. 1051, supra; Carpenter v. Galloway (1881), 73 Ind. 418, 422; Lowe v. Turpie et al. (1896), 147 Ind. 652, 683, 689, 44 N.E. 25, 47 N.E. 150; Bradley v. Harter (1901), 156 Ind. 499, 505, 60 N.E. 139; Nagdeman v. Cawley (1928), 89 Ind. App. 196, 202, 203, 162 N.E. 68; Maglaris v. Claude Neon Federal Co., Inc. (1935), 101 Ind. App. 156, 160, 198 N.E. 462; Miller Jewelry Co. v. Dickson (1942), 111 Ind. App. 676, 684, 42 N.E.2d 398.
Appellant cites and discusses a number of cases within and without this jurisdiction, to the effect that a broker's contract for a commission for the sale of real estate may be 7. enforceable even though it does not fix the price at which the real estate shall be sold. We agree with this proposition. However, it has no application to the alleged contract before us in this case. It is lawful and proper to fix in the contract the price at which the real estate shall be sold. When this is done, the broker has not performed his part of the contract until he has produced a buyer at or above the price fixed in the contract.
Since paragraph III of the amended complaint relies upon the alleged written contract as later modified orally, the agreement sued upon therein becomes and is an oral agreement that is 8. specifically made invalid by the statute before quoted, § 33-104, Burns' 1949 Replacement. The demurrer was properly sustained to this paragraph of the amended complaint.
Finding no error in the record the opinion of the Appellate Court is vacated and the judgment of the trial court is affirmed.
Young, J., absent.
NOTE. — Reported in 91 N.E.2d 643.