APRIL TERM, 1913.*

KINSEY v. DICKINSON.

1. BROKERS-CONTRACTS-PHRASES-NET RENTALS.

Under terms of a broker's contract to secure tenants for real property for $500 and 10 per cent. of the net rentals, the phrase "net rentals" included the entire sum received for rent of the property less expense of maintenance, plaintiffs conceding that taxes and insurance should be first deducted.

2. SAME.

Defendant was not entitled to deduct the cost of certain partitions and improvements to the building and premises required to make the same fit for the purposes of the tenant, although such cost was added to the annual rent in sums sufficient to reimburse the landlord for the outlay.

Error to superior court of Grand Rapids; McDonald, J., presiding. Submitted January 8, 1913. (Docket No. 21.) Decided April 8, 1913.

Assumpsit by William H. Kinsey and another against Albert G. Dickinson for broker's commissions. Judgment for plaintiffs. Defendant brings error. Affirmed.

Travis, Merrick & Warner, for appellant.

Smedley, Linsey & Lillie (Sheridan F. Master, of counsel), for appellees.

OSTRANDER, J. Plaintiffs produced testimony tending to prove the facts now to be stated. As one of

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them testified, they are in the real estate business. They learned in the year 1906 that defendant was contemplating the purchase of land and the erection thereon of a building for his own business, to be occupied when his term in other premises, a period of three or four years, had expired. They learned also that temporarily, but for a probable period of three or more years, the Federal government desired to lease premises in Grand Rapids for a post office, for the holding of court, and for other purposes. They suggested to defendant that he buy real estate, erect his building, and lease the premises to the Federal authorities for the aforesaid purposes. They procured, with his approval, an option on suitable ground and were active in securing from the government a contract for a lease of a building to be erected thereon at an annual rental of $12,500, payable quarterly. For their services, if no lease was made, plaintiffs were to receive no pay, and defendant was to pay the necessary expenses of the effort. If the lease was secured, plaintiffs were to be paid $500 and 10 per cent. of the net annual rent as it was received from the government; defendant paying necessary expenses of securing the contract. Defendant paid the expenses, purchased the land and built the building, paid plaintiffs $500, and later $250. The building was occupied by the government, and, when this suit was begun, defendant had received upon his lease the sum of $34,375. Because he declined to make further payments, plaintiffs sued defendant, claiming there was due to them $3,206.89. A jury returned a verdict in their favor for $2,775, for which sum a judgment was entered.

The testimony offered by defendant tended to prove the facts already stated, except the fact of an existing agreement to pay plaintiffs a percentage of the net annual rental; his theory being that the sum of $500, which he paid to them, discharged all obligation on his part. It is a part of his contention, supported by his

testimony, that it was understood, when negotiations were opened with the government, that he would be required to furnish heat, light, water, and janitor service for the building, and that, feeling unable to attend to such matters personally, it was contemplated that plaintiffs would attend to them, act as custodians of the building, supervise its construction, and receive for their services, including the securing of the option on the land, $500 and 10 per cent. of the net rent, but that it was learned later that such maintenance would not be, and it was not, required, and plaintiffs were not required to supervise construction. In consequence, plaintiffs had not earned, and were not entitled to receive, a percentage of the rents. Whether there was an existing agreement and the terms thereof were questions submitted to the jury after a trial, in the course of which various exceptions were taken by defendant, which will be later on referred to. Beyond this it is contended by defendant that, if an agreement to pay a percentage of the net rentals was established, the amount of the net rent received by defendant was a question of fact, and that the court erred in declining to submit that question to the jury.

Defendant moved for a new trial; one ground of the motion being that the court erred in not instructing the jury, as requested by defendant's counsel, that, if they found for the plaintiffs, they were to determine the amount of net rentals within the meaning of the contract, and that, in arriving at the amount, it was within their province to deduct an item of $9,500 for the cost of certain partitions, wiring, etc. In denying the motion, the court said the refusal of such requested instruction was proper be

cause

"The cost of the partitions was no part of the maintenance, and, in determining the net rentals, there would be no more reason for deducting the cost of

partitions than for deducting any other item for the cost of the construction of the building."

The testimony disclosed the fact that, for the use of the Federal authorities, certain partitions were required and certain fixtures and wiring had to be provided, not useful to other tenants, and not of value to the building after the termination of the lease. It had been suggested by some one that the cost of these specially designed and constructed fixtures be added to the rent demanded. In the first propositions made by defendant, one for rental with maintenance and one for rental without maintenance, the sum of $9,500 was included in the first year's rent. That is to say, in the proposition submitted January 23, 1907, for rental without maintenance, is the following:

"Including cost of necessary partitions specified, $19,000.00 (nineteen thousand dollars) for the first year; $9,500 (nine thousand five hundred dollars) for each year thereafter."

Concerning this matter, one of the plaintiffs testified in part as follows:

"We made a difference of $9,500 per year in the first year on account of that item of partitions, etc. The same thing was true with reference to the second proposition. We made the same difference of $9,500 the first year for the same reason.

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"On the proposition for rental without maintenance, we had the same net figure (that is, $9,500 per year for rental proper); the additional amount of $9,500, which goes to make up the $19,000 of the first year, being to cover these items of partitions, wiring, etc. The contract, as finally made, was for $12,500 per year at a uniform rental; the government not to pay any more for the first year than they did for the second or third or any subsequent year. The cost of the items included in the $9,500 were scattered along through the three years, although that was not an arbitrary figure in making the price at $12,500 instead of getting $9,500 a year net rental after we got the $9,500 back the first year, according to our