Atlas Realty Co. v. Galt

• Decision Date: 02 November 1927
• Docket Number: 3.
• Parties: ATLAS REALTY CO. v. GALT.
• Court: Maryland Court of Appeals

139 A. 285

153 Md. 586

ATLAS REALTY CO. v. GALT.

No. 3.

Court of Appeals of Maryland

November 2, 1927

Appeal from Baltimore City Court; Albert S. J. Owens, Judge.

"To be officially reported."

Action by Robert G. Galt against the Atlas Realty Company and another. From a judgment in favor of plaintiff, the named defendant appeals. Affirmed.

Argued before BOND, C.J., and PATTISON, URNER, ADKINS, OFFUTT DIGGES, and SLOAN, JJ.

J Britain Winter, of Baltimore (Edward A. Strauff, of Baltimore, on the brief), for appellant.

Henry H. Dinneen, of Baltimore (Harry M. Benzinger, of Baltimore on the brief), for appellee.

OFFUTT J.

The Atlas Realty Company is a Maryland corporation engaged in buying, selling, renting, and developing real estate. James W. Miller is a builder who occasionally speculates in real estate. Robert G. Galt is a licensed real estate broker. The Atlas Realty Company, hereafter referred to as the Atlas Company, induced by Miller, bought through him a tract of land, improved it by the erection of a number of garages thereon, employed Miller to sell the garages, and agreed to pay him for his services in selling them one-half the net profit realized from the transaction. He in turn employed Galt, and through Galt's efforts they were sold to the Linthicum Realty Company, for $16,650, and approximately $1,600 was paid to Miller, in commissions, that being about one-half the net profits of the transaction. Galt as soon as the sale was made demanded that Miller pay him his commission for effecting it, and upon his failure to make such payment he sued him and the Atlas Realty Company jointly in assumpsit in the Baltimore city court, on the theory that he had been employed jointly by them to make the sale. The case was tried in ordinary course, a verdict returned, and a judgment entered against both defendants. From that judgment the Atlas Realty Company appealed.

The plaintiff's contention is that he was employed by the Atlas Realty Company and Miller to sell the property, while the company's defense is that Miller alone was its agent, that it never employed Galt, and that Miller had no authority to bind it by any contract of employment he may have made with Galt, and that it never ratified any contract of employment which Miller may have made with him.

The record contains four exceptions, two relating to questions of evidence, and two to the court's rulings on the prayers.

The first and most important question presented by the record is whether there is in the case any evidence legally sufficient to support the plaintiff's contention. He apparently relies to some extent upon the theory that Miller and the company were engaged in a joint adventure, but there is no evidence in the case legally sufficient to support that contention. In a sense they were engaged in a joint adventure, because each of them expected to profit through the sale of the same property, but in that sense nearly every principal and agent where a sale of real estate is sold by the agent are engaged in a joint adventure. But something more than mere profit sharing is required to establish the fact that both were engaged in a joint adventure, in the technical legal sense of that phrase. Nat. Surety Co. v. Winslow, 143 Minn. 66, 173 N.W. 183, 33 C.J. 847. While a joint adventure may be distinguished from a partnership, nevertheless they are both so much alike that it is often very difficult to differentiate them. And to establish either it is necessary to do more than show that the persons said to be so associated are to share in the profits of a transaction. Clark v. Muir, 298 Ill. 548, 132 N.E. 193; Manker v. Tough, 79 Kan. 46, 98 P. 792, 19 L. R. A. (N. S.) 675, 17 Ann. Cas. 208; 33 C.J. 844. But it is essential to show that they have a joint proprietary interest, or that they are to share losses as well as profits, or that they have a joint control over the subject-matter of the adventure or of the manner in which it is to be carried out. In fine, there seems to be no "real distinction between a joint adventure and what is termed a partnership for a single transaction." Rowley on Partnership, par. 975.

Applying these principles to the established facts of this case, nothing can be found to support the proposition that the Atlas Realty Company and Miller were engaged in a joint adventure in the sale of the garage property to which we have referred. The Atlas Company bought and owned the land in severalty, it built and paid for the garages, and Miller had no interest of any kind either in the land or the garages. He was employed to sell them, but he had no authority to fix the selling price or the terms of sale; he was liable for no losses, and he ran no risk, and so far as he was concerned there was neither venture nor risk. If a profit was realized, he was to share in it. If a loss resulted, the Atlas Company alone was to bear it.

But, even though Miller and the Atlas Realty Company were not engaged in a joint adventure, it was still possible for them to act jointly in employing Galt to sell the garages, and jointly or severally to undertake to pay him for his services. And as has been said, the main question in the case is whether the evidence is legally sufficient to support the hypothesis that they did, and that question is presented by the first prayer of the Atlas Realty Company which was offered at the close of the plaintiff's case, and again at the close of the whole case, and is the subject of the second and forth exceptions. That prayer necessarily conceded the truth of all evidence offered in the case which tended to support the plaintiff's contention, as well as all inferences of fact naturally and legitimately deducible therefrom. Kelly v. Huber Baking Co., 145 Md. 333, 125 A. 782.

Certain facts in the case not disputed by either side we will treat as established. They are: (1) That the Atlas Realty Company owned the garages and the ground on which they stand, and that Miller had no legal interest in them or in the stock or securities of the company. (2) That the garage property was sold to the Linthicum Realty Company for $16,650, of which $2,655.79 was taken care of by the conveyance of two houses, $970 by a mortgage, and the balance in cash. (3) That the Atlas Realty Company employed Miller to sell the garage property, and agreed to pay him one-half the net profit arising from the sale. (4) That Edward A. Strauff is the vice president of the Atlas Realty Company and represented it in negotiating the sale and fixing the terms thereof. (5) That the Atlas Realty Company actually paid Miller one-half of the profits of the sale, which was the amount remaining after deducting from the selling price the price paid by the Atlas Company for the land and the cost of the garages, with certain minor adjustments for interest, taxes, and incidental expenses. (6) That Miller is not a licensed real estate broker. (7) That Galt was a licensed real estate broker.

In addition to these facts, there is some evidence of others, which, while disputed, must also for the purposes of the prayer under consideration be taken as true. Stated in narrative form, they are as follows:

Miller, who is a builder and contractor, who also deals in real estate, as agent, offered the Atlas Company a lot of ground on Taylor street, in Baltimore city, and suggested to it that, if it would buy the lot, it could be improved by the erection of garages thereon and sold at a profit. The company bought the land, Miller procured bids for the construction of the garages, procured a permit for their erection, and superintended their construction, and although he was paid nothing directly for that work, was told by the company that if he sold the garages he would be paid one-half the profits of the entire transaction. In pursuance of that authority he prepared, with the approval of Strauff, a letter to a number of brokers in which he stated that he had the garages for sale, at $550 each, and he approached Robert G. Galt, the appellee, told him of the garages, and offered to pay him the usual commissions if he sold them. At that time Galt says, he knew nothing of the Atlas Company at all, but assumed that Miller owned the property, and did not know that the Atlas Company owned it until he was sent to Strauff by Miller, a short time before the contract with the Linthicum Company was closed. Miller, on the other hand, says that Galt knew from the beginning that the Atlas Company owned the property, and he further said that he told Galt that the Atlas Company would pay the commissions, and he also testified that:

"The Atlas Company was going to pay the commission" and that "Strauff spoke to Galt in his own office. I was along with Galt when these matters were discussed, the different propositions from Linthicum and the other people; I took him up to Strauff, and, if I did not go along, sometimes he would go himself. When I first went down with this contract, Strauff knew about Galt having acted for them. I showed these copies to Strauff before they were sent out. He thought it was a wonderful idea. I knew what the regular commissions were, and I should imagine

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