Opinion
Decided March 7, 1932.
Brokers — Real estate commission — Owner sold property pending purchaser's examining title — Evidence — Local custom as to time for examining title, admissible — Reasonable time allowed to examine title, when — Two weeks time not unreasonable — Recovery of commission dependent upon reasonableness of time for examining title — Legal holidays — Monday observed where holiday falls on Sunday.
1. January 2 was "legal holiday" when New Year's Day fell on Sunday.
2. Realty owner for whom broker obtained purchaser ready and able to buy could not escape paying commission on ground that purchase money was never paid, where owner sold property pending purchaser's examining title.
3. Local custom as to what constituted reasonable time for prospective purchaser to pass upon title held admissible; weight being for judge trying facts.
4. Where contract to purchase specified no time for examining title, reasonable time is allowed.
5. Whether broker obtaining purchaser could recover commission where owner sold property to another pending purchaser's examining title held dependent upon reasonableness of time purchaser used examining title.
6. Two weeks held not unreasonable time for purchaser's examining title, so that broker who obtained purchaser could recover commission from owner who sold property to another pending purchaser's examining title.
ERROR: Court of Appeals for Hamilton county.
Messrs. Pogue, Hoffheimer Pogue and Mr. O.S. Bryant, for plaintiff in error.
Mr. Frank H. Kunkel, Mr. P.S. Phillips and Mr. Oliver G. Bailey, for defendant in error.
This action was brought in the court below by Newman Samuel against the Puritan Choclate Company to recover real estate commission. The jury was waived, and the case was tried to the court. The trial court found in favor of Samuel, and gave judgment for him in the sum of $15,400 and interest. From that judgment the Choclate Company prosecutes error to this court.
It appears that on the 14th day of December, 1927, Samuel presented to the Puritan Choclate Company an offer to purchase the property, in form, words, and figures as follows:
"Cincinnati, Ohio, December 14, 1927.
"Puritan Choclate Company, Cincinnati, Ohio.
"Gentlemen: I, Newman Samuel, acting for a client, am authorized hereby to offer Three Hundred and Eighty-five Thousand Dollars ($385,000) for your leasehold and equity covering #24 East Fourth Street, Cincinnati, Ohio, known as the Herschede Building.
"Terms Fifty Thousand Dollars ($50,000) cash, Ten Thousand Dollars ($10,000) per year for six (6) years at five per cent (5%) per annum, assuming the underlying ground lease of Two Hundred and Seventy-five Thousand Dollars ($275,000) at five per cent (5%), and sub-lease with the Sweet Clover Lunch Room.
"Title to be merchantable and satisfactory to client's attorneys.
"This offer to remain open until noon Thursday, December 15th, 1927.
"Yours very truly, "Newman Samuel. "Harry S. Leyman.
"This offer is accepted and we hereby acknowledge receipt of Five Hundred Dollars ($500.00) from Mr. Samuel as earnest money, to be refunded should title not be acceptable.
"The Puritan Choclate Co., "C.L. Fowler, President."
At the time the offer was presented it was not signed by Harry S. Leyman, Samuel's client, although Samuel informed the Choclate Company that Leyman was his client. Later in the day, Samuel returned with the same offer, signed by Leyman. The offer was accepted by the Choclate Company, and $500 as earnest money was paid to the Choclate Company. Coincident with the execution of the contract of sale, a commission contract was executed, which was in words and figures as follows:
"December 14th, 1927.
"Mr. Newman Samuel, City.
"Dear Sir: In connection with the proposition which you have this day submitted to The Puritan Choclate Company, relative to the purchase of the premises known as No. 24 East Fourth Street, Cincinnati, also known as the Herschede Building, we the undersigned do hereby bind ourselves and our successors in the event said offer is accepted to pay to you the usual real estate brokerage of four (4%) percent on three hundred and eighty-five thousand ($385,000.00) dollars, said sum to be paid in cash coincident with the closing of the transaction.
"Respectfully, "The Puritan Choclate Company, "By C.L. Fowler, President."
Thereupon Leyman submitted the matter to his attorneys, Ernest, Cassatt Cottle, on the question of title to the property. The following day the Puritan Choclate Company furnished Leyman's attorneys the Title Guarantee Trust Company's record of the title.
It appears from the record that Mr. Cottle of the firm representing Leyman found some difficulty with the title, particularly a pending suit to cancel the lease in question. The pending action was based on the claim that the lease held by the Puritan Choclate Company was void, for the reason that the lease under its terms was not assignable.
The matter there rested until the 30th day of December. In the meantime the real estate commission firm of Cleneay Nourse were negotiating for the purchase and sale of the same property for their client.
By the latter part of December, Mr. Cottle had not reached a conclusion as to whether or not he would approve the title, and the matter was turned over to Mr. Cassatt, another member of the firm, for further consideration. This was the situation on December 30, when Mr. Helmholz, counsel for the Puritan Choclate Company, notified Samuel, Leyman, and Leyman's counsel, that, unless advices were received by 11 o'clock a.m., Saturday, December 31, 1927, they would "assume that title is unsatisfactory to your counsel and check for earnest money will be returned."
The evidence is that this letter was mailed about 10 o'clock a.m., December 30, which was on Friday, and was delivered about 10 o'clock a.m., the following day, Saturday, December 31st. Leyman testified he did not receive the letter direct, as he had changed offices, and it had been sent to the office which he had vacated. Saturday afternoon was a legal holiday, and the following day, Sunday, was the first day of January, 1928, New Year's Day. Therefore Monday was also a legal holiday.
On January 3, 1928, the Puritan Choclate Company, through Cleneay Nourse, contracted to sell the property under contract to another purchaser, and later executed deeds therefor to the Cleneay Nourse purchaser.
The claim of the plaintiff in error is that the two contracts in question in this action, read together, show that the intention of the parties was that the plaintiff should be paid a commission only if and when the title to the Puritan Choclate Company's property was acceptable to Mr. Leyman's attorneys and Mr. Leyman actually accepted and paid for the property.
That Leyman, the purchaser, was ready, willing, and able to take the property was unquestioned, and the evidence is uncontradicted that he was willing, ready, and able to take the property, if marketable in the opinion of his counsel.
It is urged that under the terms of the contract Samuel was only entitled to his commission in the event that the transaction was actually closed and money paid by Leyman; that he could only have commission out of the money actually paid. This is not the law of real estate commissions. To so hold would be to establish a rule that a party might breach its own contract of sale, and by its own breach absolve itself from liability for commission; that by refusing to perform under the contract of sale it was not liable for the commission, because it did not receive the money.
It is clearly shown by the evidence that, had the Puritan Choclate Company carried out its contract, the transaction would have been closed, and it would have received the money.
In the last analysis the question turns on whether or not a reasonable time had elapsed for the examination of the title by counsel for Leyman and approval by counsel.
It must be borne in mind the contract provided for the conveyance of a merchantable title by the Puritan Choclate Company. If the title was not merchantable, it would be required to make it so, which the evidence disclosed it afterwards did on its sale to the Cleneay Nourse client, by procuring a dismissal of the suit pending to cancel the lease.
But two weeks had elapsed from the time of entering into the Leyman contract until the notice was sent by counsel for the Choclate Company demanding immediate action within twenty-four hours. There is undisputed evidence in the record that the custom in Cincinnati was that thirty days was a reasonable time in which to examine and pass on a title, where time is not mentioned in the contract. Some objection was made to this evidence, but we are of opinion that it was pertinent and competent, the weight thereof to be given by the judge, the trier of the facts. Further, the Cleneay Nourse contract of sale did provide thirty days time in which to examine the title, and, as above stated, to clear the title for the new purchaser, the Choclate Company did procure the dismissal of the suit to set aside the assignment of the lease. It did nothing to clear the title for Leyman.
The claim of the plaintiff in error may be summed up as follows: That the Puritan Choclate Company agreed to sell to Leyman only such title as it had. This is not the language of the contract. The contract specifically provides that the Puritan Choclate Company agreed to sell to Leyman a merchantable title; Leyman's attorneys to be the judges of its merchantability.
Further, the second claim is that, although Leyman was able to take the property, he was not ready and willing to take it. This again raises the question of reasonable time in which to examine the title and act. It must be borne in mind at all times that no time was stated in the contract. All these questions, therefore, as heretofore stated, turn upon the reasonableness of the time for examination of title and action thereunder.
In many of the cases cited by counsel for the plaintiff in error the time is definite, and it is the law that, where definite time is stated in the contract, and the party is not ready and willing at the time provided, the purchaser loses his rights under the contract.
The third proposition of the plaintiff in error is the claim that it made the closing of the transaction by Leyman precedent to Samuel's right to recovery. This proposition is covered by what has been stated — that this would mean the release from obligation under one contract by a breach of the other.
The case of Carey, Admr., v. Conn, 107 Ohio St. 113, 140 N.E. 643, is determinative of all the issues in this case in favor of Samuel's right to recover the commission, except the one proposition of whether or not Leyman's counsel took an unreasonable length of time to examine the title and report. If an unreasonable time was taken, the Choclate Company would have the right to assume the rejection of the title by counsel, and withdraw from the contract, and no liability for commission would follow. If, however, the time which elapsed between the signing of the contract and the entering into the new contract of sale with other parties was not an unreasonable time for the purposes suggested, then and in that event the Choclate Company breached the contract of sale. This breach would not relieve the company from its obligation for commission.
The trial court must have found that no unreasonable time had elapsed and that by the sale of the property to other parties the Puritan Choclate Company made it impossible to perform the contract with Leyman, and we do not find that finding to be against the weight of the evidence on that question.
This brings us to the proposition pronounced in the case of Carey, Admr., v. Conn, supra, in the first paragraph of the syllabus: "Where a real estate agent or broker makes a contract with the owner of property `to find a buyer for his real estate at a commission of two per cent. for his services,' and pursuant thereto performs such services by producing the buyer, and the owner enters into a written contract of sale with such buyer, the real estate agent or broker, in the absence of fraud, is entitled to his commission for his services." See, also, J.A. Wigmore Co. v. Chapman, 113 Ohio St. 682, 150 N.E. 752.
The conclusion is that the trial court did not commit reversible error, and the judgment is affirmed.
Judgment affirmed.
ROSS, P.J., and CUSHING, J., concur.