American Trust Co. v. Goode, 164 N.C. 19 (1913)

Nov. 26, 1913 · Supreme Court of North Carolina
164 N.C. 19


(Filed 26 November, 1913.)

Principal and Agent — Realty Broker — Sale by Owner — Commissions —Trials—Evidence—Nonsuit.

While real property remains in the hands of a broker for the purpose of sale, the owner may not consummate the sale with one who had become interested as a proposed purchaser through the efforts of the broker, and escape liability to the latter for the payment of the commissions agreed upon; and where in an action by the broker to recover his commissions, there is conflicting evidence, but the evidence viewed in the light most favorable to the plaintiff’s contentions tends to establish a transaction of this character, a judgment as of ■ nonsuit upon the evidence should not be granted.

Appeal by plaintiff from Webb, J., at January Term, 1913, of MeCKLENBuRG.

Civil action, brought by a broker to recover Ms commissions for tbe sale of lands.

At tbe conclusion of tbe evidence tbe court rendered a judgment of nonsuit. Plaintiff excepted and appealed.

*20 J. W. Hutchison, Pharr & Bell for plaintiff.

Gamier & Gamier for defendants.

Brown, J.

The plaintiff sues to recover commissions upon a sale of real estate alleged to bave been made by it on bebalf of tte defendants. Tbe plaintiff is a corporation doing business in Charlotte, and has a department for the sale and purchase of real estate, of which E. 0. Griffith is manager.

The evidence must, in passing upon the motion to nonsuit, be taken in the light most favorable to the plaintiff, and all reasonable inferences must be drawn for the plaintiff’s benefit.

The evidence tends to- prove that the defendant owned certain,, property occupied by one Lummus as tenant; -that defendant requested Griffith to sell this property to Lummus; that Griffith was trying to sell Lummus the Draper property. When Lummps refused to buy the Draper property, Lummus asked for a price.

Griffith testifies: “I went to Mr. Goode and asked him for the price, and he told me he wanted to submit the property on the basis of $35,000, and not to fail to get a proposition to submit to him. This was the day preceding the consummation of the deal. I then went to see Lummus again, and he was still very much interested in the proposition, and asked me to come back the next afternoon at 5 o’clock.

“Before the appointed hour came, Goode came into the office, and said he was about to close the trade with Lummus for this property, which was located at 203 South Church Street,, and wanted me to help him. I had had a number of previous transactions with Goode, having sold him the lot upon which the building was subsequently located.

“In the first conversation, Goode stated that anywhere between $30,000 , and $35,000 would be interesting to him, and asked me to submit it at $35,000; said he wanted $35,000-for it; that anywhere between $30,000 and $3.5,000 would buy the property. I tried to get this offer, and made an appointment with Lummus for 5 o’clock the next afternoon.

“When Goode told me he had closed the deal, he came .into the office and said that he had incidentally seen Lummus, they *21bad started talking about tbe purchase of tbe property, and that be bad gotten down to tbe point of a bargain — they wanted to trade.

“He said be wanted me to remain in tbe office until be and Lummus came there; wanted me to draw up tbe papers. In ten minutes be returned with Lummus; said they bad decided to trade, but was depending upon a loan proposition, which I undertook to negotiate, and did.”

Tbe plaintiff’s evidence tends further to prove that tíre defendant was thinking of buying tbe Draper property which tbe plaintiff bad for sale, and that tbe agreement was that if be did so, be was to pay only a nominal commission for tbe sale of bis own property. • •

About two weeks after tbe sale of bis property, defendant came to see Griffith and told him be was unable to purchase tbe Draper property, and asked Griffith what tbe charges were for selling bis property to Lummus.

There is no evidence in tbe record that defendant, after placing tbe property in tbe plaintiff’s bands for sale, ever took it out.

On tbe contrary, tbe plaintiff’s evidence tends to prove that in this case Griffith took up tbe matter of sale with Lummus at defendant’s request, and was tbe efficient means by which tbe sale was made, and that be continued in tbe transaction, managed and conducted it, to a successful conclusion.

It is a fair inference, to b'e drawn from tbe defendant’s conduct in going to Griffith after be decided not to buy tbe Draper property and inquiring bow much be owed him for bis services, that the defendant recognized bis liability to pay a reasonable commission.

He bad received tbe full benefit of Griffith’s services in selling bis property, negotiating tbe loan, and in preparing and executing tbe necessary papers. At that time tbe plaintiff evidently thought tbe laborer was worthy of bis hire, and, therefore, be inquired tbe amount of bis indebtedness.

It seems to be well settled that if tbe owner authorizes tbe broker to effect tbe sale of bis property at a stipulated price, *22be cannot make a sale direct to a person witb wborn be knows tbe broker to be negotiating, or wbo bas been sent to bim by tbe broker, at a less price, and thus defeat tbe- broker’s claim for compensation. 9 American and English Ann. Cases, page 435, note, and cases cited in notes.

In Schelgal v. Allerton, 32 Atl., 363, tbe owner of real estate, after bis efforts to sell to W. bad failed and bad been abandoned, put it in tbe bands of a real estate agent to sell at a certain price. He tben commenced negotiations witb W., and while it still remained in bis (agent’s) bands, without notice to bim tbe owner sold tbe property to W. for a less price than that at which tbe agent bad been authorized to sell. Tbe Court held tbe agent was entitled to bis commissions on tbe amount for which tbe property sold.

In Byrd v. Frost, 29 S. W., 46, tbe Court held that where an owner of land places it in tbe bands of a broker to be sold for $4,000, and at tbe instance of tbe broker a proposed purchaser looks at tbe land, and afterwards buys it from tbe owner for $3,750, tbe latter is liable for tbe broker’s commissions.

In Williams v. Bishop, 53 Pac., 239, tbe Court held that one wh'o sells directly at a reduced price, property listed witb a real estate broker to- a purchaser tbe broker bad found, and witb whom be was negotiating a sale, without baying introduced bim to bis principal, is liable for commissions on tbe price received.

Hoadley v. Banle of Danbury, 71 Conn., 599, 44 L. R. A., 321, is a case in point. Here property was placed in tbe plaintiff’s bands for sale^ and they told tbe plaintiff that X. might be a possible purchaser, and asked bim to see X. and induce bim to buy, stating that X. bad some months before offered $38,000 for tbe property. Plaintiff saw bim a number of times, and X. looked over tbe property, Tbe defendants tben sold to X. for $25,000. No agreement for any special rate of commission was made. Tbe court found that plaintiff was tbe procuring cause of tbe sale, and entitled to- recover. Tbe Court said: “When an owner places land witb a real estate broker for sale, be agrees, in tbe absence of any special contract, to pay tbe customary commission or brokerage, in case a sale is consummated witb a *23purchaser, who was led to begin the negotiation through the intervention of the broker. It is immaterial that the owner, after the broker has interested the purchaser, secretly pursues the negotiations and himself completes the sale, 'or that the owner of his own accord effects a sale at a less price than that he gave the broker.

' “If any act of the broker in pursuance of his authority to find a purchaser is the initiatory step that leads to the sale consummated, the owner must pay the commission. The procuring cause of sale is such intervention of the broker for that purpose as constitutes the foundation on which the negotiation is begun.

“The law is clear that a broker does not forfeit his commission because the owner avails himself of the services rendered to sell at a price less than that limited, and the owner’s position is not improved if he seeks to fortify his evasion of liability by telling the broker after the rendition of the services he will pay no commission, if he (the owner) sells at such price.”

Our own Court has said: “Where a broker authorized to sell at private sale has commenced negotiations, the owner cannot, pending the negotiations, take it into his own hands and complete it, either at or below the price limited, and then refuse to pay the commissions.” Martin v. Holly, 104 N. C., 36.

In the case at bar, if Griffith’s evidence is to be Relieved, the sale was made within the limits fixed by the defendant when he placed his property in Griffith’s hands for sale, that is, between $30,000 and $35,000.

Upon Griffith’s version of the facts, the plaintiff is entitled to recover reasonable commissions. The decisions cited by the defendant (Mallonee v. Young, 119 N. C., 549; Abbott v. Hunt, 129 N. C., 403; Trust Co. v. Adams, 145 N. C., 161; Clark v. Lumber Co., 158 N. C., 139), are based upon a different state of facts, and are easily distinguishable from this case as made out upon the plaintiff’s evidence. '

The judgment of the Superior Court nonsuiting the plaintiff is