Supreme Court of Canada
Katzman v. Ownahome Realty Co., [1924] S.C.R. 18
Date: 1923-12-04
Morris Katzman (Defendant)
Appellant;
and
Ownahome Realty (Plaintiff)
Respondent.
1923: October 31; 1923: December 4.
Present: Sir Louis Davies C.J. and Idington,
Duff, Anglin and Mignault JJ.
ON APPEAL FROM THE APPELLATE DIVISION OF THE
SUPREME COURT OF ONTARIO.
Statute of Frauds—Memo, in writing—Signature
as owner—Evidence of agency—Admissibility.
Property was listed with a broker for sale
the listing card stating that “the owner’s name is Mrs. B. Katzman.” Mrs. K.
who signed had no interest in the property but her husband had. A sale was
effected and in an action by the broker for his commission:—
Held, that
parol evidence was not admissible to contradict the statement in the document
as to ownership by showing that Mrs. K. in signing it was acting as agent of
her husband.
APPEAL from a decision of the Appellate
Division of the Supreme Court of Ontario affirming the judgment at the trial in
favour of the respondent.
The only question for decision on this appeal is
whether or not there was a memo in writing signed by the party to be charged or
his agent sufficient to satisfy the addition made in 1916 to the Ontario
Statute of Frauds. The trial judge allowed evidence to be admitted to show that
Mrs. Katzman who signed the memo did so as agent of her husband the appellant,
which would be sufficient if established. The appellant contends that such
evidence should not have been received.
[Page 19]
F. Davis for the appellant referred to Keighley
v. Durant; Barry v. Stoney Point Canning Co.
Zeron for the respondent cited Toulmin v.
Millar;
Stratton v. Vachon.
THE CHIEF JUSTICE.—I am of the opinion that this
appeal should be allowed. I concur in the reasons for so doing stated by my
brothers Anglin and Mignault JJ.
IDINGTON J.—This is an action to recover a
commission claimed by the respondent by way of remuneration for the sale of
real estate.
The action falls within section 13 of the
Ontario Statute of Frauds, as amended by the addition of said section in 6 Geo.
V, [1916], c. 24, sec. 19, which reads as follows:—
No action shall be brought to charge any
person for the payment of a commission or other remuneration for the sale of
real property unless the agreement upon which such action shall be brought
shall be in writing and signed by the party to be charged therewith, or some
person thereunto by him lawfully authorized.
The only writing presented herein and claimed by
the respondent to comply with said provision is a listing of the property in
question, which reads as follows:—
Description of property to be sold by
Ownahome Realty Construction, King George Hotel.
Price,
$125.000.
Cash,
$25,000.
$3,000
every 6 months.
40 Rooms.
Size of Lot, 60 by 130.
2 Stores on Sandwich, Bar on corner, 1 on Goyeau.
Rents now at $12,000.
(On back of card).
Owner’s name, Mrs. B. Katzman.
Property for sale at Sandwich St. at Goyeau.
Address, 24 Hall
Ave. Border Cities, 7th June, 1921.
In the event of the Ownahome Realty finding
a purchaser for the property described herein, I agree to pay them a commission
of 3 per cent. on the selling price.
B.
Katzman.
The signature is that of the wife of appellant
whose full name is “Morris Katzman” and her’s is “Becky Katzman.”
This was given without any authority from the
husband who is sued herein along with one Orechkin and the said wife of appellant.
[Page 20]
It is to be observed that she therein professes
to be owner and in fact contracts in no other sense.
She is clearly proven not to have been the owner
of any interest therein, and her husband to have only owned an equity therein
along with said Orechkin. Some expressions used in the evidence might lead one
to believe that he and Orechkin were equally interested and others indicate
that they were not equally interested.
It is quite clear that they had only an equity
altogether of about sixty thousand dollars in said property, and that she had
no interest whatever in the property.
From the fact that this action was brought, as
the result of a search in the Registry Office, after the property had been
conveyed to one Davis, it seems that the respondent was rather puzzled to know
who had become under any such obligation as it sets up in regard to it.
I assume that, as has been held under the
Statute of Frauds, a principal may, under immediately attendant or preceding
circumstances leading up to the signature of such a contract as falls within
the meaning of the statute as amended by the new section, be held to have
signed by an agent.
But I can find, after diligent search, no
decision which converts a contract made by any one pretending to sell as his or
her own, as this contract clearly does, into a contract by the actual owners.
The pretence that this contract was so converted
by the acts of the husband, or of him and the other joint owner, seems to me to
be without any foundation in law.
And still more remote from giving any legal
operation under said statute as against the appellant is the reliance by
respondent upon what transpired between the respondent, the appellant and one
Molley leading ultimately, respondent alleges, to a sale to one Davis.
The respondent had, some weeks after the signing
of the above quoted contract with it by the appellant’s wife, discovered that
the said Molley lived in and owned an apartment house in Detroit, on the opposite side of the river,
which he was disposed to exchange for the hotel now in question.
Respondent’s managing agent, Pyne, induced the appellant
and Orechkin, his joint owner, to accompany him to
[Page 21]
look at said apartment house, and consider it on
an exchange basis. Having done so they at once decided against the said
proposal and all connected therewith. Some weeks or a month later Molley, who
it is alleged, besides being engaged in looking after his said apartment house,
ran a theatre or something of that kind, mentioned this incident to one Davis,
a large real estate owner on both sides of the river who had employed Molley to
assist him in his affairs.
The mention of it to Davis seems to have set him
thinking that he might by trading some of his properties acquire from appellant
and Orechkin their King George hotel now in question. Ultimately Davis made such a deal with them, and some
months later the respondent’s managing agent heard of it and conceived the idea
that as result thereof he could rest an action thereon.
The said Davis had died we are told before this
action came to trial and Molley was not called as a witness, and the evidence
of Molley’s proposal and the resultant report thereof is relied upon for the
conclusions sought to bring this case within the principles acted upon in the
cases of Toulmin v. Millar, and Burchell
v. Gowrie and Blockhouse Collieries.
I cannot see any resemblance between the meagre
facts presented herein and those respectively acted upon in said cases cited to
us.
I cannot see how or why, as held by the learned
trial judge herein, the agent’s act in each case was, by what he did, the
efficient cause of the sale, or more correctly on the facts, the mere use by
Davis of the knowledge of what was going on, can be said to have been an
efficient cause produced by the respondent, upon the facts presented as
bringing about the exchange and entitling it to claim compensation.
Moreover I am not prepared to hold, in face of
the requirements of the statute above quoted, such remote and far from being
necessary results of the respondent’s acts as within the meaning of the said
Act’s requirements, even if the above quoted contract of the appellant’s wife
could have been looked at otherwise than I have set forth above. Independently
of a written contract by the seller with the
[Page 22]
agent there is nothing in all that is relied
upon to render appellant liable.
I therefore am of the opinion that this appeal
should be allowed with costs throughout and the respondent’s action be dismissed
with costs.
DUFF J.—I think Mr. Davis’ point is well taken
that the memorandum of the 22nd February, 1922, cannot avail the respondent in
answer to the objection based upon the statute (6 Geo. V, c. 24, sec. 19). Mrs.
Katzman in the memorandum describes herself as the proprietor because the
property which was the subject of the arrangement is described as “my
property.” The respondent cannot allege that Mrs. Katzman was signing as the
agent of her husband without contradicting the statement implied in this
description, that she is the owner of the property for which the agent is to
find a purchaser. Formby Bros. v. Formby.
The objection having been raised for the first
time at this stage, I think there should be no costs of the appeal to the
Appellate Division.
ANGLIN J.—The plaintiff (respondent) seeks to
recover from the defendant (appellant), Morris Katzman, a commission on the
sale for $115,000 of an hotel property in the city of Windsor to one John Davis, a resident of the city of Detroit. The property in question belonged
to the appellant and one Jake Orechkin. In addition to asserting that action by
the plaintiff was not the efficient cause of the sale being brought about, the
defendant invokes the protection of the statute 6 Geo. V (1916), c. 24, sec.
19, as amended by 8 Geo. V (1918), c. 20, s. 58, whereby there was added to
section 13 of the R.S.O. 1914, c. 102, the following clause:
No action shall be brought to charge any
person for the payment of commission or other remuneration for the sale of real
property unless the agreement upon which said action shall be brought shall be
in writing separate from the sale agreement, and signed by the party to be
charged therewith or some person thereunto by him lawfully authorized.
To meet the requirements of this section the
appellant produces the following contract:
[Page 23]
Description of property to be sold by
Ownahome Realty Construction, King George Hotel.
Price,
$125.000.
Cash,
$25,000.
$3,000
every 6 months.
40 Rooms.
Size of Lot, 60 by 130.
Two stores on Sandwich, Bar on corner, 1 on
Goyeau.
Rents now at $12,000.
(On back of card).
Owner’s name, Mrs. B. Katzman.
Property for sale at Sandwich St. at
Goyeau.
Address, 24 Hall Ave.
Border
Cities, 7th June, 1921.
In the event of the Ownahome Realty finding
a purchaser for the property described hereon, I agree to pay them a commission
of 3 per cent. on the selling price.
B.
Katzman.
The learned trial judge held that Morris Katzman
had authorized his wife, Becky Katzman, to sign the document which I have
quoted, that she did in fact sign it and that her doing so was subsequently
ratified by her husband. Subject to a question of law as to the possibility of
ratification by an undisclosed principal of an act which his agent has
purported to do not as agent but as principal, these findings of fact appear to
be sufficiently supported by evidence; but in any event, in the view I take of
the appeal, they need not be questioned.
It will be noted that in the contract produced
and sued upon Mrs. Becky Katzman describes herself as the owner of the
property—“Owner’s name, Mrs. Becky Katzman.” In addition to signing the
document in her own name without any indication that in doing so she was acting
as agent for her husband, she expressly purported to contract for payment of
the commission as owner of the property to be sold, thus distinctly negativing
such agency. Under these circumstances I am of the opinion that parol evidence
was not admissible to shew that she was in fact contracting as agent for her
husband; Humble v. Hunter; Formby
Bros. v. Formby. Such
evidence would necessarily tend to contradict a material statement in the
writing in which the contract is embodied and upon which the plaintiff must
rely to satisfy the statute. I am therefore of the opinion
[Page 24]
that the contract produced does not satisfy the
requirements of the statute so as to enable the plaintiff to maintain this
action as against the present appellant, Morris Katzman.
The action was originally brought against Morris
Katzman, Jake Orechkin and Mrs. Morris Katzman. It was properly dismissed at
the trial as against Orechkin, no attempt having been made to shew agency for
him on the part of Mrs. Katzman. Judgment was given against the two Katzmans.
In the Divisional Court the
plaintiff was put to its election whether it would treat Mrs. Katzman as a
principal or as an agent for her husband in making the contract for commission.
Desiring to hold Morris Katzman it determined to treat his wife as agent in the
transaction. The appeal of the defendant, Mrs. Morris (Becky) Katzman, was
accordingly allowed and the action against her dismissed, the judgment against
her husband being maintained. This may have been a misfortune for the
respondent as its present failure to succeed as against Morris Katzman may
leave it without redress in respect of a commission for which it might possibly
otherwise have been entitled to hold Mrs. Katzman personally liable.
MIGNAULT J.—The respondent could not bring its
action against the appellant claiming a commission for the sale of real
property, unless there was an agreement in writing to pay it, separate from the
sale agreement, and signed by the party to be charged therewith or some person
thereunto by him lawfully authorized. 6 Geo. V (Ont.) c. 24, sec. 19, as amended
by 8 Geo. V, c. 20, sec. 58.
The agreement on which the respondent’s right to
bring this action is based is however signed not by the appellant but by the
latter’s wife who describes herself and signs as owner of the property to be
sold.
The learned trial judge nevertheless found on
parol evidence that the appellant authorized his wife to sign the agreement as
his agent and subsequently expressly ratified her act. He gave judgment for the
respondent and his judgment was unanimously affirmed by the Second Appellate
Divisional Court of Ontario.
The appellant, for the first time, raised the
objection in this court that the respondent cannot by parol evidence
[Page 25]
contradict the agreement in writing produced by
it in support of its action and shew that the appellant’s wife made this
contract on the appellant’s behalf.
To my regret, because this objection should have
been made earlier, I find myself constrained to hold that it is well taken. In
other words, where a plaintiff produces and relies upon an agreement which was
entered into by a third person as principal, parol evidence is not admissible
to shew that such person contracted merely as the defendant’s agent. Humble
v. Hunter; Formby
Brothers v. Formby.
There is no possible doubt that the appellant’s
wife signed the agreement as principal, and only by contradicting it could the
respondent establish its right of action against the appellant. This it cannot
do.
The appeal should be allowed with costs and the
respondent’s action dismissed with costs. No costs to either party in the Appellate Divisional Court.
Appeal allowed with costs.
Solicitors for the appellant: Davis &
Healy.
Solicitors for the respondent: Zeron
& McPhee.
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