Opinion
No. 2122
December 12, 1939
BROKERS — TRUSTS — POWERS AND DUTIES OF TRUSTEES — COMMISSIONS ON SALE — CONTRACTS — TRUSTEE IS NOT AN INSURER — RECONVEYANCE BY VENDOR — MODIFICATION OR CANCELLATION OF CONTRACT — JUDICIAL NOTICE — EXECUTORS AND ADMINISTRATORS — SET-OFF AND COUNTERCLAIM.
1. Where parties make a special contract limiting the duty to pay commission to certain event, the contract will govern. 2. An agreement that broker should be paid commissions on sale of oil properties only when installments of purchase price were paid, constituted vendor merely a debtor when the sums due on the purchase price were paid as against contention that it constituted an express trust which would have given broker an interest in the notes given to the vendor or the proceeds thereof. 3. Generally no trust is created where the transaction is as consistent with another type of transaction as with that of a trust. 4. An "express trust" in its simplest elements is the confidence reposed in one person, who is termed a trustee, for the benefit of another who is called the cestui que trust, or beneficiary, respecting property which is held by the trustee for the benefit of the cestui que trust, and it is essential that there be a trust estate which is property in which the beneficiary has an interest. 5. The liability which devolves on a trustee by reason of his accepting a trust may be limited by the terms of the trust instrument, and where the liability of the trustee is so limited, the general rules of law are not applicable. 6. By accepting a trust, the trustee becomes bound to execute it in accordance with the provisions of the trust instrument whcih constitutes the charter of the trustee's powers and duties. 7. An agreement that broker should be paid commissions on sale of oil properties only when installments on purchase price were paid, if construed as an express trust, was controlled by its terms and did not enlarge rights of broker beyond what was granted and contemplated therein and did not diminish the rights of vendor which were reserved to it, or which were contemplated or granted to it by instrument. 8. Under agreement that broker should be paid commissions on sale of oil properties only when installments of purchase price were paid, if construed as an "express trust" it was vendor's duty to pay over money belonging to the broker as equitable owner, to act in good faith and to do nothing contrary to the terms of the agreement to deprive the broker of his commission. 9. Generally, a party to a contract cannot take advantage of his own act or omission to escape liability. 10. Generally a broker, the same as a trustee, must act in good faith though the trustee's duties may be greater than those of the broker. 11. Where agreement provided that broker should be paid commission on sale of oil properties only when installments of purchase price were paid, and contract of sale prevented vendor from bringing suit for collection of installments but gave vendor right to recapture property on purchaser's default, if agreement was construed as express trust, vendor was not an insurer that installments would be paid, and could not be held liable for commissions on unpaid installments, where vendor used reasonable diligence to procure payment of installments before recapturing property. 12. Generally, a trustee who exercises reasonable prudence and diligence within the limits of the trust cannot be held liable for any loss resulting from mere errors of judgment. 13. Generally, the measure of care required of a trustee is such as would be pursued by a man of ordinary prudence and skill in the management of his own estate, and a trustee is not an insurer. 14. Where agreement provided that broker should be paid commissions on sale of oil properties only when installments of purchase price were paid, and contract of sale prevented vendor from bringing suit for collection of installments, but gave vendor right to recapture property on purchaser's default, if vendor was a trustee for broker, vendor had right to do any and all reasonable things in its discretion to collect the installments without the consent of the broker and broker's administrator could not complain that extensions were granted without consent of broker. 15. Where agreement provided that broker should be paid commissions on sale of oil properties only when installments of purchase price were paid, and contract of sale prevented vendor from bringing suit for collection of installments, but gave vendor right to recapture property on purchaser's default, and vendor granted purchaser extension of time to meet installments, if commission agreement was treated as an express trust, extensions granted by vendor could not be complained of by broker's administrator where commissions accruing in favor of broker were collected under the extensions. 16. Under agreement that broker should be paid commission by vendor on sale of oil properties only when installments on "purchase price" were paid, and wherein last clause of agreement stated that commissions were payable when the several installments on account of "purchase considerations" were received by vendor, and oil properties pursuant to contract of sale were reconveyed to vendor by purchaser who was unable to pay the installments, broker was not entitled to commissions on the full purchase price on ground that "purchase considerations" consisted of the full price on the properties satisfied either by the payment of installments due, or by the vendor taking his properties by default. 17. Where agreement provided that broker should be paid commissions on sale of oil properties only when installments of purchase price were paid, and sale agreement authorized vendor to recapture the properties in event of default in payment of principal or interest of any of installments, reconveyance of properties by purchaser to vendor did not entitle broker to commissions on full purchase price of property on ground that by reconveyance, full purchase money was paid. 18. After a contract between principal and customer produced by broker has been concluded, and broker is entitled to his commission, subsequent modification or cancellation does not affect the right of broker to commission unless it is done at his request or with his consent, but such rule does not apply where the commission is conditional, as upon payment of the purchase price. 19. Where broker's commission is conditioned upon payment of purchase price, "cancellation" of contract by reason of default of purchaser is not equivalent to "payment" so as to entitle broker to commissions. 20. The Supreme Court would take judicial notice that a severe economic and financial depression commenced in the latter part of 1929 and lasted up to December, 1935. 21. Where it was agreed that broker should be paid commissions by vendor on sale of oil properties only when installments on purchase price were paid, and owing to economic conditions purchaser defaulted in payment of installments and reconveyed property to vendor, and vendor in good faith before accepting reconveyance tried to collect purchase price in full, broker and his successors in interest were entitled to a commission only on the amount actually paid in cash, excepting value of stock turned over to the vendor by the purchaser. 22. Under statute providing that all claims against decedent's estate shall be filed within time limited in notice, and any claim not so filed is "barred forever," term "barred" is a technical term applied to actions or suits and refers to same things as statute providing that no action shall be maintained on a claim against an estate unless claim is first presented to executor or administrator (Rev. St. 1931, §§ 88-3103, 88-3109). 23. Cross-demands should compensate each other by deducting the less sum from the greater and the difference is the only sum that can be justly due. 24. The statute providing that when cross-demands have existed between persons under such circumstances that if one had brought an action against the other, a counterclaim could have been set up, neither could be deprived of the benefit thereof by assignment by the other, or by his death, but the two demands must be compensated so far as they equal each other, embodies a principle of natural equity that cross-demands should compensate each other by deducting the less sum from the greater and that the difference is the only sum which can be justly due, and makes such principle a rule of law (Rev. St. 1931, § 89-1022). 25. Under statute providing that when cross-demands have existed between persons under such circumstances that if one had brought an action against the other a counterclaim or set-off could have been set up, neither could be deprived of the benefit thereof, but the two demands must be deemed "compensated" so far as they equal each other, the term "compensated" means extinguished or satisfied (Rev. St. 1931, § 89-1022). 26. Under statutes providing for filing of claims against deceased's estate, and barring claims not filed as required, and providing for filing of action on rejected claims, vendor who did not present to administrator of deceased broker claim for debt acknowledged by broker in his lifetime to be due vendor, was not precluded by failure to file claim against estate from filing counterclaim in administrator's action to recover broker's commissions from vendor, since under principle of natural equity, embodied in statute, cross-demands should compensate each other by deducting the less sum from the greater and the difference is the only sum which can be justly due (Rev. St. 1931, §§ 88-3103, 88-3107, 88-3109, 89-1022). 27. Under agreement that broker should be paid commissions on sale of oil properties only when installments of purchase price were paid, where liability of vendor after giving broker credit for commissions on cash payments and par value of shares of stock received from purchaser was less than debt acknowledged by broker in his lifetime to be due the vendor, nothing remained due the broker, or his estate.
APPEAL from the District Court, Fremont County; C.D. MURANE, Judge.
For the plaintiff in error, there was a brief by A.H. Maxwell of Lander, E.E. Enterline and Madge Enterline of Casper; Chas. J. Mackenzie of counsel, and oral argument by Messrs. Maxwell and Enterline.
There can be no departure in reply from cause of action in the petition. When the allegations of the reply in this case are considered, a departure from the cause of action declared upon in plaintiff's petition will be noted. Section 89-1024, R.S. 1931; 49 C.J. 342; Union St. Ry. Co. v. First Nat. Bank (Ore.) 72 P. 586; Doornbos v. Thomas (Mont.) 147 P. 277; Hartman v. Selling (Ore.) 192 P. 408; Durbin v. Fisk, 16 Ohio State 539; Thornton v. Kaufman (Mont.) 88 P. 797; Moss v. Fitch (Mo.) 111 S.W. 475. The defendant had a clear right of set-off in the case. Section 89-1015, R.S. 1931; § 89-2606, R.S. 1931; § 89-1022, R.S. 1931. Where an executor or administrator brings suit against a debtor of the estate, it is unnecessary to plead or prove presentation of a claim in the nature of a set-off to such legal representative. 1 Church Probate Law 1064; McDonald v. McDonald (Wash.) 206 P. 23; 24 R.C.L. 837; First Nat. Bank v. Jackson (Okla.) 283 P. 242. Rules governing payment of commission by seller in cases of special agreement, or in default of buyer, or in cancellation between buyer and seller, are clearly established by the authorities. Murphy v. Livestock Company (Wyo.) 187 P. 187; Owens v. Mountain States Telephone Telegraph Company, 50 Wyo. 331; Amies v. Wesnofske, 255 N.Y. 156; Hartman v. Selling, 189 P. 887; Bader v. Moore Bldg. Co., 162 P. 8. In this case, Brooder was to receive his commission as and when the several installments on account of the purchase consideration were received by the company. The evidence shows that he did not receive his commission. Edwards v. Baker, 180 P. 33; 73 A.L.R. 829; Dunne v. Calomb (Cal.) 221 P. 912; Cannon v. Selmser, 260 P. 332; Mitchell v. Green, 293 P. 879. An extension of time granted by the owner does not affect broker's right to commission. Seymour v. St. Luke's Hospital, 50 N.Y.S. 989; Prince v. Selby Smelting Lead Company, 170 P. 1075; Weltner v. Thurmond, 17 Wyo. 268; Tibbals v. Keyes, 40 Wyo. 524. Commissions are not recoverable where commissions are to be paid out of installments, upon default of the purchaser, even though the property is recaptured by seller or conveyed by seller to another person. McPhail v. Buell (Cal.) 25 P. 266; Cannon v. Selmser (Cal.) 260 P. 322; Roach v. McDonald (Ala.) 65 So. 823; Murray v. Richard (Va.) 48 S.E. 871. A careful review of the facts and legal principles applicable thereto, we believe, will justify a reversal of the judgment in this case, with directions to enter judgment for defendant.
For the defendant in error, there was a brief by C.J. Christie and L.A. Crofts of Lander, and oral argument by Messrs. Christie and Crofts.
The bill of exceptions is incomplete in that it omits the amendment authorized to paragraph 5 of the petition and exhibit D, attached to plaintiff's petition, from the abstract. Errors assigned as grounds for a new trial, not presented in the brief of plaintiff in error, are deemed to be waived. Boswell v. Bliler, 9 Wyo. 280; Riordan v. Horton, 16 Wyo. 363; C.B. Q.R.R. Co. v. Lampman (Wyo.) 25 L.R.A. (N.S.) 217; Automobile Insurance Company v. Lloyd, 40 Wyo. 49. We therefore assume that errors not discussed in the brief of plaintiff in error have been waived. Nothing was alleged in the reply which might be considered as a departure. 49 C.J. 420. Payments need not be in money. Finley v. Pew, 28 Wyo. 342; Church v. Brown, 272 P. 511. Defendant had a clear right to a set-off in this case. Delfelder v. Bank, 38 Wyo. 481; Sec. 89-1022, R.S. 1931; 24 R.C.L. 837; 3 Bancroft's Probate Practice, 1377. Rules governing payment of commission by seller in case of special agreement, on the default of buyer, or a cancellation between buyer and seller, are established by the authorities. The commission in this case was payable on $500,000, according to the agreement of May 23, 1930, as and when installments were received by the company. When this memorandum agreement is considered, it will be noted that the authorities cited by plaintiff in error are not in point. It is shown by the evidence that defendant below was the owner of the mortgages mentioned herein, and papers secured by the mortgages, and there can be no question but what it was the duty of the defendant below to collect this money for the benefit of plaintiff below, and pay it to him. The agreement made in this case constituted an express trust. 65 C.J. 212, 476 and notes; 26 R.C.L. 1167, 1171; Tibbals v. Keyes, 40 Wyo. 535; 26 R.C.L. 1179; Weltner v. Thurmond, 17 Wyo. 306; Perry on Trusts, Sec. 82. The judgment below should be affirmed.
STATEMENT OF FACTS:
The defendant was the owner of certain oil properties, consisting of real and personal property and oil leases, situated in Fremont County, Wyoming. On June 14, 1929, it granted an option to purchase the property to John Gallois and Harris Hammond. The option was assigned to the Atlantic-Pacific Oil Exploration Company. That company, on May 23, 1930, wrote a letter to the defendant stating that it would exercise the option to purchase the property above mentioned upon certain terms and conditions, which in the main were as follows: The purchase price was to be the sum of $500,000; $75,000 to be paid at once; the remaining sum of $475,000 payable as follows: $75,000 on November 1, 1930, and four installments of $100,000 each were to be payable in periods of six months apart, commencing with May 1, 1931, the last installment of $100,000 being due on November 1, 1932; the title was to be transferred and a purchase-money mortgage was to be given back. It was further provided: "You (the defendant) agree that the purchase-money mortgage shall provide that in the event of any default on our part in the payment of any of the principal or interest on any of the aforesaid installments you shall look solely to the mortgaged property for the satisfaction of the $475,000 herein mentioned indebtedness and will not bring any suit at law, bill in equity or other proceeding against the undersigned, its assignors or their successors or assigns for the recovery or payment of the aforesaid $475,000 indebtedness * * *. Under no circumstances shall Dallas Dome Wyoming Oil Fields Company be precluded from instituting such proceedings at law or in equity as may be necessary to re-vest the title to the within described properties in the Dallas Dome Wyoming Oil Fields Company in the event of a default in the terms as herein stated. We agree that in the event of a default on our part in the payment of any of the above installments, which default shall continue for thirty days, or our failure to operate the strings of tools as hereinafter provided, we will release and quit-claim to you all our interest in the aforesaid properties and in the improvements, additions, and betterments made by us during our occupancy thereof."
On July 1, 1930, a warranty deed was accordingly executed to the Atlantic-Pacific Oil Exploration Company and a purchase-money mortgage was given back to the defendant by the purchaser, containing the terms and conditions of the aforesaid letter. Notes were executed for the various installments. Later a correction deed and a correction mortgage were given on account of some misdescriptions. That matter is of no importance herein. The correction deed was executed to and the correction mortgage was made by the Atlantic-Pacific Gas Oil Company, formerly the Atlantic-Pacific Oil Exploration Company. On July 14, 1930, a few days after the execution of the first deed and mortgage above mentioned, the following written contract was entered into for the payment of a commission to the deceased, upon which suit was brought herein and which in words and figures is as follows, to-wit:
"Lander, Wyoming, July 14, 1930.
Mr. Frank M. Brooder, Lander, Wyoming.
RE: Dallas Dome Wyoming Sir: Oilfields Company.
In my capacity as President of the above Company, I hereby undertake to submit to, and recommend for the approval of my Directors and the Stockholders of this Company, that you shall be paid a commission of five per cent on the agreed sale price, of Five Hundred Thousand Dollars ($500,000) payable by Atlantic-Pacific Oil Exploration Company, to Dallas Dome Wyoming Oilfields Company, on the terms and conditions set forth in the letter, dated May 23, 1930, of the Atlantic-Pacific Oil Exploration Company, to Dallas Dome Wyoming Oilfields Company, in which the former notifies the exercise of the option, granted by this Company, to Messrs John Gallois and Harris Hammond, by Agreement dated June 14, 1929 and agreements supplementary thereto, and in extension thereof, such commission to be payable to you by this Company, as and when the several instalments on account of the purchase consideration are received by this Company.
Yours truly, Campbell M. Hunter President. Dallas Dome Wyoming Oilfields Co.
Read, approved and accepted by, Frank M. Brooder Dated — July 14th, 1930."
This contract was subsequently confirmed by the Board of Directors of the defendant company. On December 15, 1930, the Atlantic-Pacific Gas Oil Company assigned its interest in the properties hereinbefore mentioned to the Atlantic-Pacific Oil Company, subject to the mortgage thereon, and both of these companies together will hereinafter be referred to as the purchaser or purchasers.
These purchasers were unable to meet the instalment due on November 1, 1930, and after negotiations an extension thereon was granted, by agreement of March 27, 1931, the particular conditions of which need not be set out, except that the sum of $10,000 was paid in cash and 25,000 shares of the capital stock of the Atlantic-Pacific Gas Oil Company, with a par value of $1.00 each, were issued to the defendant as part consideration for the extension of payments. All of the notes were extended for one year and the balance due on the $75,000 instalment was made payable out of the proceeds of the oil produced from the properties above mentioned. Further extensions were granted on May 24, 1932, November, 1932, and November, 1933. The total amount paid out of oil was the sum of $103,751.08. The only amount paid on the notes otherwise was the sum of $50,000, making the total paid up to the time of the re-conveyance hereinafter mentioned, the sum of $153,751.08. The payments made out of oil produced from the premises were mostly upon the basis of 50% of the earnings, some of them upon the basis of 75% of the earnings. Finally, on December 14, 1935, the defendant demanded a re-conveyance of the property in accordance with the letter of May 23, 1930. An agreement between the parties was entered into on that date. This will be referred to in more detail hereafter. On the same day the property was re-conveyed to the defendant herein.
The defendant set up a counterclaim against the claim of the plaintiff in the sum of $12,161.09, as due and owing from the deceased to the defendant. The deceased during his lifetime had admitted in writing that of this sum he owed $9,424.80, and, as already mentioned above, the court allowed the counterclaim to that extent.
There is little, if any, dispute in the evidence submitted herein. Testimony on the point of the extensions and the ultimate recapture of the property by the defendant was given by the witnesses Hunter and Pratt. Campbell M. Hunter, president of the defendant corporation, and a man with large experience in oil and gas matters, testified that when the note of $75,000 due November 29, 1930, remained unpaid, he went to New York to take the matter up with the purchasers; that he tried to secure payment of the money then due; that he was unable to do so; that he could see no other way of getting any payments from the purchasers except by giving them a moratorium; that he thought that "there was some chance of getting payments by giving them facilities to meet the notes," and at the same time keep the property intact; that, accordingly, the extension of March 27, 1931 was granted; that the extension of May 24, 1932, was given, because the purchasers were unable to pay the indebtedness due at that time; that the extension of November 1, 1932, was given "so as to enable the Atlantic-Pacific to pay on these notes; to give them the opportunity of paying on these notes"; that the payments had not been able to be secured; that the situation was the same when a further extension was made in November, 1933; that the property was recaptured "because the purchasers had been unable to comply with the purchase undertakings of their original agreement of 1930, in spite of the extensions of agreements"; that the only alternative was to recapture the property, "so as to be in position to shut down operations, if necessary, in view of the falling price of oil and the shortage of market for production, and to be in a position to enter into other negotiations for the disposal of the property, should such be received"; that he made several trips to New York to secure the payments due, but was assured that they could not be met; that the Atlantic-Pacific Company took out about 1,100,000 barrels of oil, depleting the property to that extent; that in 1930, the ratio of oil to water was 40 barrels of oil to 60 barrels of water; that when the property was recaptured, and at the time of the trial, the ratio was 13 barrels of water to one of oil.
The witness Pratt, vice-president, secretary and treasurer of both the Atlantic-Pacific Oil Company and the Atlantic-Pacific Gas Oil Company, testified, among other things, as follows:
"Q. Do you know why the Atlantic-Pacific Oil Company of Wyoming did not perform its agreement and the extensions thereof with the Dallas Dome Wyoming Oil Fields Company?
A. There were several reasons, most important of which, in my opinion, was the fact that the price of oil decreased after the time the property was purchased. At the time of the exercise of the option in the middle of 1930, Dallas crude oil was selling for 80 cents a barrel. Immediately thereafter, in keeping with the general business depression, prices declined to such a point that it was practically impossible to sell the oil at a reasonable profit, allowing for depletion and depreciation. By the end of 1931 it had been practically impossible to sell any additional oil should the field have been able to produce it. Another reason is the fact that our drillings on the property failed to discover formations that would produce oil free of water as in practically all of the wells it was necessary to pump far more water than oil to maintain the production. A third reason is the fact that the Company did not have sufficient funds to make payments when they became due and it is my belief that this inability to raise the necessary finances was as a result of the decline in prices and general business recession. We were, therefore, unable to proceed with the contract and were forced to default in carrying the same out. * * *
At the time the properties were purchased we were of the opinion that they were worth the price included in the contract because with 80-cent oil and additional production a substantial part of the purchase price could have been paid out of proceeds from production. During the period which we had the properties under purchase agreement we produced roughly a million barrels and depleted the properties to that extent. In addition, we had drilled wells at locations which seemed very favorable for additional production in 1930 but which turned out unsatisfactorily. In view of these factors and the decrease in price of oil, et cetera, I believe the properties were not, at the time Dallas Dome Wyoming Oilfields Company demanded their return, worth more than about fifty per cent of the purchase price. In fact, any reasonable purchaser paying even fifty per cent would demand long-term payments in the hope that part of that price might be obtained from oil sales."
He stated that when the first installment became due, he notified the defendant that it could not be met; he told of the meetings with Mr. Hunter, tried to show him that extensions of the indebtedness would be of advantage to both parties. He graphically described the meetings and the conversations as follows:
"I told Mr. Hunter that my company could not carry out its contract for the reasons stated by me at the last hearing. I also told him that when we entered into the agreement to purchase the Dallas Dome properties we expected that we would be able to market our securities and thus provide us with the necessary capital to enable us to complete payment of the purchase price of said property, but because of the depression which had started in September, 1929, and which continued to grow worse and worse, as the months wore on, we had been unable to make arrangements for financing our company as we had planned and we were therefore unable to make the payments due to Dallas Dome Wyoming Oilfields Company of $65,000 at that time. I also told Mr. Hunter that I thought if his company would agree to extend our time to make that payment and the subsequent payments due under the contract of purchase, we hoped to be able to market the securities of our company and provide the necessary funds to complete the payments due to Dallas Dome as and when they became due. * * *
Mr. Hunter stated that his company had hoped that the payments would all be met when due and that they were very anxious to have the purchase completed but that if we could not meet the payments he would take under advisement the requested extension of the contract of purchase and would discuss with his associates the terms under which his company might agree to grant the extension. * * * Mr. Hunter appeared most anxious that my company should complete its payments as called for in the original contract of sale and repeatedly urged me to find some way that would enable my company to do so and he appeared greatly upset when I told him we could not do it. * * * I had several conferences, the number of which I do not recall. * * *
Mr. Hunter was trying to induce us to raise funds to meet the payments due on the contract, and we, that is, my company and I, pointed out repeatedly that we had exhausted our efforts in that regard and could not do so and furthermore we pointed out to him that the oil market had undergone a slump and that the market for Dallas Dome oil was very limited, it being a heavy oil used primarily for road dressing and as a fuel oil and that we thought that with our connections in the oil trade we would be able to market the oil coming from the Dallas Dome oil properties to far better advantage than anybody else and that if Dallas Dome Wyoming Oilfields Company cancelled our contract of purchase and recaptured the property, we doubted if it would be able to find a market for the oil produced or to profitably operate the properties."
He testified that the suggestions made to Mr. Hunter were taken by him under advisement; that he subsequently stated that in view of the conditions of the market for oil properties and for securities, which he had found to be very bad due to the depression, he would grant extensions subject to some amount to be paid by the purchasers and that this finally resulted in the agreement of March 27, 1931. He further testified that during all of the conversations with reference to the extensions nothing whatever was mentioned about the commission which was payable to the deceased; that the agreement of the last mentioned date was not fully carried out and that subsequent extensions were granted under quite similar circumstances as those already stated.
"Q. Finally, what happened to the property in December, 1935?
A. My companies were unable to make the payments required under the terms of the original contract of purchase as extended from time to time as I hereinbefore testified and Dallas Dome Wyoming Oilfields Company elected to recapture the property and in order to save the cost of foreclosure of the mortgage, my company deeded back to Dallas Dome Wyoming Oilfields Company all of the properties it had contracted to purchase together with all the improvements thereon. This was under date of December 14, 1935."
He further testified that the ruling market price for its oil in 1930 was 80 cents; that the price dropped to 37 cents a barrel in May and June of 1933. In 1931 the price varied from 55 to 70 cents a barrel. In 1932 the price varied from 50 cents to 65 cents, most of the production being sold for 65. In 1933 the price varied from 37 cents to 52 cents, most of the production being sold for 47 cents a barrel; that in 1934 and 1935, the price varied from 45 cents to 52 cents. He stated that the operation of the properties was not profitable since March, 1931; that while a number of wells were drilled by the purchasers, due to the intrusion of water in the wells they were not as productive as had been anticipated; that each of the extensions of the contract were made because the purchasers were unable to meet the terms of the agreement.
1. Defendant contends that the various extensions of the indebtedness were necessary, and were beneficial to the deceased; that it had the right to take the property back when the purchaser defaulted, without being responsible to the deceased therefor; that the agreement to pay a commission is a limited one, and it is liable only for the commission on the amount actually collected, namely, for five per cent of $153,751.08, resulting in a liability of $7,687.55 and nothing more. There can, of course, be no doubt that where parties make a special contract, limiting the duty to pay a commission to certain events, the contract will govern. Owens v. Tel. Tel. Co., 50 Wyo. 331, 343, 68 P.2d 1006; Murphy v. Livestock Co., 26 Wyo. 455, 474, 187 P. 187, 189 P. 857, 20 A.L.R. 290; 12 C.J.S. 228-230; note 51 A.L.R. 1399 et seq. In Larson v. Burroughs, 131 App. Div. 877, 116 N.Y.S. 358, it is held that "to entitle a real estate broker to commissions under an agreement to pay the same when the balance of the cash amount was paid, and the deed delivered, he must show either that the balance has been paid and the deed delivered, or that non-performance was the fault of the owner." The agreement in the case at bar provides that the commission shall be due only as and when the installments on the purchase price are paid. The only amount paid on the installments is $153,751.08 (aside from 25,000 shares of stock), and the liability of defendant is limited to the payment of a commission on the amount paid unless special circumstances herein make a different rule applicable. The plaintiff contends that the agreement to pay a commission constitutes an express trust, and "that it was the duty of the defendant to collect the money for the benefit of the plaintiff and to hold it and pay it back to him." Tibbals v. Keys, 40 Wyo. 535, 281 P. 190, and Weltner v. Thurmond, 17 Wyo. 306, 99 P. 1128, are cited, but these cases do not seem to have any bearing herein. The agreement herein constitutes either a broker's contract for commission or a trust. In the former case, the defendant became merely a debtor when sums were collected; in the latter, the deceased had an interest in the notes given to the defendant or the proceeds thereof. While the owner of property may constitute himself as trustee (65 C.J. 277-278, 311), it is said that "in general at least, no trust is created where the transaction is as consistent with another type of transaction as with that of a trust." 65 C.J. 280; see also 65 C.J. 305, 306. It is stated in 26 R.C.L. 1168 that an express trust "in its simplest elements, is a confidence reposed in one person who is termed trustee, for the benefit of another who is called the cestui que trust (or beneficiary) respecting property which is held by the trustee for the benefit of the cestui que trust." See also 65 C.J. 212, 218. It is essential, then, that there be a trust estate — property in which the beneficiary has an interest. 26 R.C.L. 1179, 1183; 65 C.J. 218. Hence, if the agreement in the case at bar may be said to constitute a trust, we must be able to gather from its terms that the deceased had an interest in the notes or the proceeds thereof. The agreement states that the deceased "shall be paid a commission of five per cent of the agreed sale price * * * such commission to be payable * * * by this company as and when the several instalments * * * are received by this company." It fails to state that the deceased had an interest in the notes given or the proceeds or even that the five per cent should be paid out of the sums received by the company, but that it should be paid by the company. The agreement seems, accordingly, to constitute the company merely a debtor when the sums due on the purchase price were paid. The point, however, whether that is true or whether the deceased had an interest in the notes or the proceeds therefrom is, in view of the facts, of no importance herein. The only point which is important, if a trust was created, is as to what were the duties of the defendant. It is stated in 65 C.J. 663, that "the liability which devolves on a trustee by reason of his accepting the trust may be limited by the terms of the trust instrument, and where the liability of the trustee is (so) limited * * * the general rules of law are not applicable." And in 65 C.J. 647, it is stated that "by accepting the trust, a trustee becomes bound to execute it in accordance with the provisions of the trust instrument." Pomeroy on Equity (4th ed.) Sec. 1062 states that "the trust itself whatever it may be, constitutes the charter of the trustee's powers and duties; from it he derives the rule of his conduct; it prescribes the extent and limits of his authority; it furnishes the measure of his obligations. If the trust is express, created by deed or will, then the provisions of the instrument must be followed and obeyed." Hence the agreement for the payment of commission involved herein, even if construed as an express trust, is, like any other agreement, controlled and limited by its terms; it did not enlarge the rights of the beneficiary beyond what was granted and contemplated therein, and it did not destroy or diminish the rights of the defendant which were reserved to it therein or which were contemplated or granted to it thereby. What, then, under the agreement involved herein, were the duties of the defendant, if it is to be considered as a trustee? We should say, that it was its duty to pay over the money belonging to the deceased as equitable owner; to act in good faith, and do nothing contrary to the terms of the agreement to deprive the deceased of his commission. That does not amount to much more than what is indicated in Larson v. Burroughs, supra, that the non-fulfillment of the contract of purchase must not be due to the fault of the owner. It is a general rule, applicable universally, and not in trusts alone, that "a party to a contract cannot take advantage of his own act or omission to escape liability thereon." 13 C.J. 647. And a broker, too, the same as a trustee, must act in good faith (8 Am. Jur. 1066) though, of course, the latter's duty may be greater than that of the former. If there was any other duty upon the defendant, considered as trustee, than that above indicated, it was to collect, if possible, the installments due under the contract of purchase. That contract, however, referred to in the agreement for commission, prevented the defendant from bringing any suit for collection. Hence there was little which the defendant could do, or could be forced to do, in that connection. Moreover, the contract of purchase gave the defendant the right to recapture the property at any time upon default in the indebtedness. That seems to be inconsistent with the duty of the defendant to take any steps to enforce the payment of the installments due. Counsel for the plaintiff seem to take the position that the defendant, as trustee, was bound to collect the money; that it was an insurer in that respect. Not only is that wholly inconsistent with the agreement, as already stated, but we find no rule or principle of law which enforces any such drastic duty. It is stated in 65 C.J. 819 that as a "general rule, so long as trustees * * * exercise reasonable prudence, care and diligence, they cannot be made responsible for any loss * * * and they are not liable for mere errors of judgment, when acting honestly with ordinary prudence within the limits of the trust." In 26 R.C.L. 1280, it is stated that "the duty of a trustee is to perform the trust he has undertaken according to the provisions of, and in the manner directed by the deed of trust, and as a general rule the measure of care and diligence required of a trustee is such as would be pursued by a man of ordinary prudence and skill in the management of his own estate. A trustee is not an insurer." In Pomeroy's Equity, supra, Sec. 1070, it is stated that "the law does not cast upon the trustee an extraordinary duty, nor demand an extraordinary care, nor hold him liable for mere error of judgment, much less does it make him an insurer of the property." That the defendant did not fail in its duty to make all reasonable efforts to collect the installments due on the purchase price, if there was any such duty, becomes apparent from an examination of the evidence submitted in this case. It tried to collect; it made every effort possible; the purchaser was unable to pay; the only thing that the defendant could do was to grant extensions from time to time. Counsel for the plaintiff argue that the extensions were granted without the consent of the deceased, and that hence the payments due the latter were accelerated, and all became due. There are two answers to this. In the first place, if the defendant was a trustee, it held the legal title to the purchase-money notes. It, as trustee, had a perfect right to do any and all reasonable things in its discretion to collect the money without the consent of the deceased. 65 C.J. 645, 678. In the second place, the extensions were not a detriment to the deceased. On the contrary, they were a distinct benefit, since most of the commissions which accrued in his favor were collected under the extensions. It would seem to be clear that plaintiff cannot, under these facts, complain, and it has been so held. Price v. Selby Smelting and Land Co., 35 Cal.App. 684, 170 P. 1075; Seymour v. St. Luke's Hospital, 28 App. Div. 125, 50 N.Y.S. 989; appeal dismissed 159 N.Y. 524, 53 N.E. 1132.
2. Counsel for plaintiff contend that the purchase price of $500,000 was fully paid by reason of the fact that the property was finally re-conveyed to the defendant. Two different lines of argument are advanced in that connection. (a) In the first place, attention is called to the fact that while the agreement for commission states that Brooder should have a commission of five per cent on the purchase price of $500,000, payable according to the letter of May 23rd, 1930, notifying the defendant of the exercise of the option to purchase the property, the last clause of the contract provides for "such commission to be payable to you by this company as and when the several installments on account of the purchase consideration are received by this company." Counsel argue that here a distinction has been made between the "purchase price" and the "purchase consideration," the first clause above mentioned using the former term, the last clause the latter. They contend, if we understand them correctly, that inasmuch as the letter of notification above referred to contained the provision that in the event of any default in the payment of any of the principal or interest of any of the installments, the defendant would look to the mortgaged property in satisfaction of the amount due, the "purchase consideration" consisted of $500,000, satisfied either by the payment of the installments due, or by the defendant taking the property back, in default thereof. We are unable to find any merit in this contention. If the commission was to be paid in either event, it was useless to give the deceased any paper writing other than an absolute agreement to pay him $25,000. The terms "purchase price" and "purchase consideration" refer, we think, to the same thing and were used synonymously.
(b) The testimony in this case shows that the defendant recaptured the property on December 14, 1935, pursuant to its right to do so by reason of the default of the purchaser, and in order to save the cost of foreclosure. Counsel for the plaintiff contend that the testimony does not present the true state of facts, but that on the contrary, the property was reconveyed to the defendant pursuant to a written contract of December 14, 1930, between the defendant and the purchaser, and that this agreement shows that the defendant desired to repurchase it, and the whole of the purchase money of $500,000 heretofore mentioned must be considered to have been paid. The contract just mentioned recites the various agreements and modifications entered into prior to that date, and then recites that "whereas the parties hereto are desirous to enter into a new agreement in place and stead of said terminated agreement of May 23, 1930, as amended and extended as aforesaid, now therefore" the purchaser is released from all liability on the agreements theretofore made; the property shall be reconveyed to the defendant; the purchaser shall have to Dec. 1, 1936, to operate the property as theretofore, and during that time shall have the right to repurchase the property for $460,000. The conveyance to the defendant was made, and the right to repurchase the property was cancelled by mutual agreement on December 1, 1936.
The release from personal liability above mentioned is of no significance herein, since it was merely in accordance with the letter of May 23rd, 1930, under which the deceased was entitled to a commission. The agreement to reconvey, too, merely confirms that letter, in which it was provided that the purchaser would reconvey the property upon default. Default had long existed. There was in fact nothing new in the agreement of December 14, 1935, except the right given to continue operating the property till December 1st, 1936, and the option to repurchase it during that time. The deceased was entitled to a commission only under the contract of May 23rd, 1930. The payment thereof was conditional upon the fulfillment of that contract, and subject to the terms giving the right to terminate the contract and take a reconveyance. These conditions were, as already stated, binding upon the deceased. There is nothing in the contract of Dec. 14, 1935, so far as we can see which is in any way in conflict with the testimony in the case. The contract merely states that the parties desire to enter into a new contract. The reasons for that are not stated. To find it, we must resort to the testimony and to the surrounding circumstances. By doing so, we find that the purchaser was unable to comply with the terms of purchase, and that the parties desired to avoid the expense of foreclosure — to go into court to enforce re-conveyance. It has been held that for a former owner to bid in the property at a foreclosure or other judicial sale is not equivalent to payment of the purchase price thereof by the vendee. Margolis v. Trust Sav. Bank, 122 Cal.App. 186, 9 P.2d 526; Cannon v. Selsmer, 85 Cal.App. 783, 260 P. 332; Roach v. McDonald, 187 Ala. 64, 65 So. 823; North Sea Development Co. v. Burnett, 254 N.Y. 374, 173 N.E. 628; Stockton v. Lenois, 198 N.C. 148, 150 S.E. 886; Denny v. Hogue, 265 Ky. 30, 95 S.W.2d 1124. The same is true if the vendor merely cancels, or consents to the cancellation of a contract of sale, after, and because of the purchaser's default. It is stated in 12 C.J.S. 200 that "after a contract between the principal and a customer produced by the broker has been concluded its subsequent modification or cancellation does not defeat or affect the right of the broker to a commission, unless it is done at his request or with his consent." That statement might be misleading, if not read in connection with other portions of the text. It applies only if the broker is already entitled to his commission at the time or previous to the time when a contract of sale is entered into between the vendor and vendee. It does not apply when the commission is conditional, as, for instance, upon the payment of the purchase price. In such case cancellation by reason of the default of the purchaser is not equivalent to payment. That is abundantly attested by the authorities, some of which we cite: 12 C.J.S. 230; 8 Am. Jur. 1096, 1097; Murray v. Rickard, 103 Va. 132, 48 S.E. 871; Trimue v. McCaleb, 172 Ark. 137, 287 S.W. 740; Boysen v. Frink, 80 Ark. 254, 96 S.W. 1056; McPhail v. Buell, 87 Cal. 115, 25 P. 266; Seymour v. St. Luke's Hospital, supra; Dunne v. Colomb, 192 Cal. 740, 221 P. 912; Ash v. Oppman, 199 Ill. App. 578; Baker v. Brewer's Estate, 78 Ind. App. 573, 133 N.E. 397; Van Norman v. Fitchette, 100 Minn. 145, 110 N.W. 851; Seagal v. Highs, Inc., 96 F.2d 208. If that is true, it must be equally true when a contract is cancelled and reconveyance is made in order to save the cost of foreclosure. In fact, as already stated, the reconveyance was specifically provided for in the agreement of May 23rd, 1930. The contention, accordingly, now under consideration, must be overruled.
(c) We cannot, then, conceive of any theory upon which the judgment of the trial court can be upheld. The court perhaps thought that, despite the fact that the defendant was entitled to a reconveyance, it did not act in good faith, for that such good faith is required has already been mentioned. Of course, if there had been a collusion between the defendant and the purchaser to reconvey for the purpose of defeating the commission, or, perhaps, if the defendant had recklessly and wilfully insisted upon a technical default, whereas by a little indulgence the installment due from the purchaser would have been paid, a different situation would be before us. But no such claim can be, or is made. The defendant was patient, extended the time for payment of the installments a number of times, and in every way indicated that it meant to live up to its part of the contract. How much longer than five years' time (for it was nearly that) was the defendant required to wait before demanding a reconveyance? We think it was patient enough. We have been unable to find anything in the record before us which reeks of bad faith. The contention that the defendant wanted to repurchase the property, and that the reconveyance was made for that reason, is not very plausible. The fact that an option was given to resell it seems alone to contradict it. True, some improvements had been made on the property by the purchaser. The value thereof does not appear in the record. But it may be pointed out that the annual interest on the purchase price of $500,000 was $30,000, and even when reduced to approximately $350,000 was about $21,000, so that the total accumulated interest up to December 14, 1935, must have been over $75,000. Furthermore, the oil was being continually depleted. Most of the money paid on the purchase price was paid out of the property, and we have no reason to doubt the testimony that on the last mentioned date, the property was not worth over fifty per cent of the value on May 23, 1930. The testimony bearing on the good faith of the parties was all introduced by the defendant herein. It shows that the failure to pay the purchase price in full, was not in any way due to fault of the defendant, but was due to the economic depression. The testimony is undisputed. There is nothing in the record to indicate that it should be disregarded. It is fully corroborated by facts of which we take judicial notice and by facts shown in public and semi-public documents. We take judicial notice that a severe economic and financial depression commenced in the latter part of 1929 which lasted up to the time when the reconveyance herein, in December, 1935, was made. Martin v. Louisville Motors, 276 Ky. 696, 125 S.W.2d 241; Weaver v. Greenbaum, (Cal.App.) 87 P.2d 406; In re Bose's Estate, (Nebr.) 285 N.W. 319; In re West's Estate, 285 N.W. 565; Federal Land Bank v. Garrison, (S.C.) 193 S.E. 394; Ohio Bell Tel. Co. v. Public Ut. Comm., 57 Sup. Ct. 724. Many other authorities could be added. The financial and economic debacle is portrayed by dry but eloquent figures. As illustration, we may mention the course of prices per share of the common stock of a few of the leading industrial companies, stating, in order not to give too many figures, the highest price in 1929 and the lowest in each of the years of 1931, 1932 and 1935. They are as follows: General Motors, 91, 21, 8, 27; Dupont, 231, 50, 22, 86; General Foods, 81, 28, 19, 30; United States Steel, 261, 36, 21, 27; United States Rubber, 65, 4, 1 1/2, 9 1/2; General Electric, 168, 22, 8, 20; Westinghouse, 292, 22, 15, 32; Ford Motors of Canada B, 172, 13, 8, 25; National Dairy Products, 86, 20, 14, 12; Anaconda Copper, 174, 9, 3, 8. (Moody's Manual, 1936.) The average prices in comparative percentages of industrial stocks was, in the years mentioned, 381, 76, 41, 100; of utility stocks, 144, 16, 20, 14; of railroad stocks, 189, 32, 13, 28. (Poor's, Dec. 11, 1937.) A great many, if not the great majority of real estate bonds in cities defaulted, commencing with 1931, or as early as the latter part of 1930. According to a document issued by the Department of Public Relations of the American Petroleum Institute in 1937, p. 96, the average price per barrel of oil produced in Wyoming was $1.28 in 1929, and in the following years up to and including 1935 respectively as follows: $1.25, .75, .82, .59, .84, .85. If we may credit the leading trade journal relating to oil in this state, on file in the Library of the State, namely, the Inland Oil Index, the prices per barrel, posted in the field, of oil in Fremont County was as follows (the different prices given at any one date being the prices of different companies): January, 1929, 80 cents; March 5, 1931, 40 cents; July, 1931, 65 and 35 cents; November, 1931, 65 and 45.5 cents; December, 1932, 65, 45 and 35 cents; January, 1933, 45, 45 and 30 cents; September, 1933, 45 cents; December 27, 1935, 45 and 57 cents. It is hardly necessary to call attention to the fact, commonly known, that from 10 to 12 million men or more were out of employment in the United States during the years here mentioned. In view of the painful facts here related, it is altogether unlikely that the purchaser was exempt from the depression, and they make it highly probable that the testimony of good faith related by the witnesses is true. The deceased and his successors in interest must, accordingly, be held to be entitled to a commission only on the amounts actually paid in cash, excepting the value of stock turned over to the defendant, which we shall consider later.
3. The deceased during his lifetime acknowledged in writing that he owed the defendant the sum of $9,424.80. That is not disputed herein. No claim for this was ever presented to the administrator of the deceased, and counsel for the plaintiff contend that this was necessary, in order that an allowance to the defendant can be made for that amount. We are cited to Vol. 3, p. 1377, Bancroft's Probate Practice, where it appears that the authorities on the point are in hopeless conflict. See also 24 C.J. 760; American Digest, Executors and Administrators 434(5). In some states, as for example in Nebraska and Vermont, special statutes provide that no counterclaim can be set up in a suit by the executor or administrator of an estate, unless such counterclaim has been presented. Section 88-3109, Rev. St. 1931, provides that "no holder of any claim against an estate shall maintain an action thereon unless the claim is first presented to the executor or administrator." Section 88-3103 provides that "all claims whether the same be due, not due, or contingent, must be filed or exhibited within the time limited in the notice and any claim not so filed or exhibited is barred forever." In commenting on that section in Delfelder v. Land Co., 46 Wyo. 142, 168, 24 P.2d 702, we stated that the term "barred" is a technical term and is applied to actions or suits; in other words, refers to the same things as section 88-3109, supra. Section 88-3107 provides that if a claim is rejected, suit must be brought thereon within three months, or otherwise be forever barred. If the claim, then, is presented and rejected, the defendant is required to bring suit. The administrator would not be required to set up his claim, and thus two suits might result.
There is good authority holding that these special statutes of limitation do not apply to a counterclaim filed in an action brought by an executor or administrator. Church on Probate Law and Practice, vol. 2, p. 174, states that "in a suit by an administrator a defendant having a set-off may plead and prove the same without showing that it has been presented as a claim against the estate, and this notwithstanding the amount of the set-off exceeds the sum sued for, though in such case no judgment for the surplus should be rendered against the estate." Wood on Limitations (4th ed.) Sec. 188, seems to take the same view, and that author's statement was expressly approved in the case of Ware v. Howley, 68 Iowa 633, 27 N.W. 789. In Stiles v. Smith, 55 Mo. 363, the court, in speaking of statutes like those above mentioned stated:
"The statute applies to and contemplates cases where the creditor is the actor, and himself moves in the matter of getting the allowance. There he must proceed within a certain time or be forever barred. But a person may well have a demand against an estate, and knowing that he is also indebted to the estate, neglects to prove up the same supposing that the amounts are about equal, and that when he is proceeded against, he can plead his demand as a set-off and thus determine the whole matter in one suit."
In other words, in a case of that kind, the person really makes no claim, at least an affirmative claim, against the estate, and so has nothing to present; he merely takes the position that, if sued, he will show that, on a balance, he owes nothing to the estate, or only a remainder. It has been held, even under a statute expressly forbidding counterclaim to be set up in an action by an executor or administrator unless previously presented to him, that the claim of payment need not be presented in the estate. Parker v. Wells, 68 Nebr. 647, 94 N.W. 717. See also Printy v. Fahill, 235 Ill. 534. The practical situation in the case of a payment and in the case of a set-off or counterclaim is very much the same. In both cases the executor or administrator may not know the amount thereof, until he sues. In both cases the burden of proof rests upon the party relying thereon. So that the query obtrudes itself upon the mind as to whether the slight difference which may exist between the two situations justifies the application of a different rule in the one case from that applied in the other. The case at bar presents a good illustration. The acknowledgment of the debt by the deceased states that "I authorize the amount charged against my balance as per Mr. Campbell M. Hunter's letter of July 14, 1930." It would seem, accordingly, that the amount so acknowledged may just as well be treated as a payment as a counterclaim. However that may be, it was stated long ago, in 1768, by Lord Mansfield, that "natural equity says that cross-demands should compensate each other, by deducting the less sum from the greater, and that the difference is the only sum which can be justly due." Green v. Farmer, 4 Burr. 2214, 98 Engl. Repr. 154. See also Berrigan v. Pearsoll, 46 Conn. 274. It would seem that this principle of natural equity has been embodied in our statute, making it a rule of law as well. Section 89-1022, Rev. St. 1931, provides:
"When cross-demands have existed between persons under such circumstances that if one had brought an action against the other, a counterclaim or set-off could have been set up, neither can be deprived of the benefit thereof by assignment by the other, or by his death, but the two demands must be deemed compensated so far as they equal each other."
According to Webster's International Dictionary, the term "compensated" means "extinguished" or "satisfied" according to the civil law, and it was so understood by Lord Mansfield, supra. That is evidently the meaning here. If a debt is deemed extinguished when one of the parties dies — in this case the debt of the defendant to the extent of $9,424.80 — the principle of contradiction in logic tells us that it cannot at the same time be considered existing. No debt, to that extent, remains. It is paid. An identical statute was construed in the case of Murphy v. Colton, 4 Okla. 181, 44 P. 208, and that, too, in the light of the same provisions of the Probate Code as are found in our statute, and the court stated:
"It is true the Coltons did, in this case, claim a balance in their favor, but they did not recover any balance. They have therefore maintained no action upon any claim against the estate, but have simply presented proof that they did not owe the estate the amount claimed, because they had a just set-off to the claim of the estate. Suppose McKennon had never furnished for the Coltons' benefit any money beyond the $250, and that the Coltons had a just account against McKennon to the full amount of this $250 and accruing interest, and they had never had any settlement. In such case, of course, their claims would be evenly balanced, and neither would be a debtor. Suppose the Coltons, considering the accounts were even, should have let the matter rest in that way, as the parties no doubt would have done had McKennon lived, and the time for presenting claims against the estate had expired, and the estate had then sued the Coltons on the note. Could it be claimed that under these statutes they could not show that the note was in fact settled by the account of McKennon due to them, and that it in fact had been settled long before McKennon's death? Such a position would be absurd, as well as absolutely untenable, not only in the face of these statutes, which would protect rather than injure the Coltons, but without them."
A statute identical with ours was also construed in Huffman v. Wyrick, 5 Ind. App. 183. The Probate Code of Indiana provides, like ours, that unless a claim is presented in the estate it shall be barred. The court stated:
"This statute gives the right to the holder of any such claim to treat it as having liquidated an equal amount of the other claim upon the death of the holder of the latter. No one would question the right of the appellee, if he had actually paid the notes to the decedent during her life-time, to plead such payment in this action; and the statute above quoted gave him the right to treat the notes as paid by his claim upon the death of the decedent. We think there is no question about his right to plead and prove such constructive payment after the settlement of the estate. He was not entitled to judgment for the excess of his claim, and the court did not give him such judgment."
Section 440 of the Code of Civil Procedure of California is like our section 89-1022, supra. In a number of decisions in that state it was held, without considering that section, that a counterclaim can not be set up in an action by an executor or administrator, unless previously presented to him. Later, Sec. 440, supra, was called to the court's attention, namely, in Reveal v. Stell, 56 Cal.App. 463, 205 P. 875, where the court stated:
"While under Section 440, Code of Civil Procedure, the right to plead a cross-demand against the estate of the deceased person is not affected by his death, nevertheless such right, we think, under our Code, is subject to a compliance with the law requiring the presentation of such claim to the executor or administrator of the estate of the deceased."
The court doubtless was influenced by previous decisions in that state. Section 440 deserved a somewhat more careful consideration than was given it.
If a counterclaim must be presented at all events, the provisions of section 89-1022, supra, would seem to be of little, if any, value. If such claim is filed and proved, either by allowance by the executor or administrator, or by the court, then by that fact alone the benefit of the claim is preserved to the claimant, and there would be little use for a special statute providing therefor. Several states have a special statute providing that a defendant may set off a debt in an action brought by an executor or administrator, without stating whether the claim must be presented or not. The effect of such statutes seems to be substantially the same as the effect of section 89-1022, supra. It has been uniformly held under such statutes that the claim need not be first presented. Fishburne v. Bank, 42 Wn. 473, 85 P. 38, 7 Ann. Cas. 848; McDonald v. McDonald, 119 Wn. 396, 206 P. 23; Browning v. Eiken, 189 Minn. 375, 249 N.W. 573 and cases cited; Jester v. Knotts, (Del.) 57 A. 1094. We think, accordingly, that the court was right in allowing the set-off, to the extent of offsetting the claim of plaintiff. Defendant claimed a set-off of an additional amount, but it is unnecessary to consider it.
4. We find, then, that the defendant is liable for five per cent commission on $153,751.08, or a total of $7,687.55. It also received 25,000 shares of the stock of the purchaser, which has a par value of $1.00 each. The plaintiff did not introduce any evidence of its value, and in fact objected to evidence introduced by the defendant. It is held in some cases that in the absence of evidence, the par value of the stock will be considered its value. Appeal of Harris, 9 Pa. Cas. 233, 12 A. 743; Tevis v. Ryan, 13 Ariz. 120, 108 P. 461, 465; Uncle Sam Oil Co. v. Forrester, 79 Kans. 610, 100 P. 512; Walker v. Bement, 50 Ind. App. 645, 94 N.E. 339, and a number of Missouri cases, including Williams v. Everett, (Mo.) 200 S.W. 1049; Brinkerhoff Sav. Co. v. Lumber Co., 1118 Mo. 447, 24 S.W. 129. The contrary is held in Virginia v. West Virginia, 238 U.S. 202, 219, 35 Sup. Ct. 795, 802, 803; Beatty v. Johnson, 66 Ark. 529, 52 S.W. 129; Warren v. Stineman, 84 App. Div. 610, 82 N.Y.S. 1003; see also Brandt v. Buckly, 27 Ga. 515, 109 S.E. 692; Barnes v. Brown, 130 N.Y. 372, 29 N.E. 760; 14 C.J. 718; Castle v. Ice Cream Co., 101 Cal.App. 94, 279 P. 1011, 281 P. 396. The defendant apparently contended in the court below and contends here that the stock was of no value. Its allegation in its answer filed herein seems, however, inconsistent therewith, for therein it is stated that "said stock as a matter of fact had no market value or real value at that time in excess of its par value." That seems to be an admission that the stock had a value to that extent, namely a value of $25,000. The point seems to be of no importance herein. If five per cent commission be allowed on $25,000, namely, the sum of $1250, and added to the sum of $7,687,55 above mentioned, it would make only a total sum of $8,937.55. Plaintiff has a set-off of $9,424.80, so that nothing remains due to the plaintiff. It follows, accordingly, that the judgment of the trial court must be reversed, with direction to dismiss plaintiff's petition herein. It is so ordered.
Reversed, with direction.
RINER, Ch. J., and KIMBALL, J., concur.