Billington v. Crowder

• Decision Date: 25 February 1977
• Citation: 553 S.W.2d 590
• Parties: W. W. BILLINGTON d/b/a Billington and Company, Plaintiff-Appellee-Appellant, v. P. K. CROWDER and wife, Paula Davis Crowder and Bessie T. Davis, Defendants-Appellants. 553 S.W.2d 590 . Original Opinion
• Court: Tennessee Court of Appeals

Page 590

553 S.W.2d 590

W. W. BILLINGTON d/b/a Billington and Company, Plaintiff-Appellee-Appellant, v. P. K. CROWDER and wife, Paula Davis Crowder and Bessie T.

Davis, Defendants-Appellants.

553 S.W.2d 590

Court of Appeals of Tennessee, Middle Section.

Original Opinion Feb. 25, 1977.

Certiorari Denied May 31, 1977.

Abridged Opinion June 29, 1977.

McWilliams, Berry & Ogelsby, Franklin, for plaintiff-appellee-appellant.

Harwell, Bottoms & Plant, Lawrenceburg, for defendants-appellants.

OPINION

TODD, Judge.

The Chancellor awarded plaintiff a judgment against all defendants for $20,000.00 damages for alleged breach of real estate brokerage contract. Defendants have appealed from the award of judgment to the plaintiff, and plaintiff has appealed from the amount awarded.

The complaint alleges that plaintiff had an oral, nonexclusive listing of defendant's farm; that plaintiff produced a buyer ready, willing and able to buy on defendant's terms; that defendants refused to sell to said buyer and thereby deprived plaintiff of the commission which he would have been able to collect from the buyer if plaintiffs had sold to him. Plaintiff does not claim that defendants agreed to pay him a fee, but admits that, at all times, it was understood that all expenses, including broker's commission, were to be paid by the purchaser in addition to the announced sale price.

The answer denies any "listing agreement" or other contract with plaintiff, but admits that plaintiff and other real estate brokers were informed that the subject farm could be purchased on specific terms. The answer denies that plaintiff ever presented an offer on the terms stated by defendants.

The memorandum opinion of the Chancellor contains the following pertinent findings of fact:

"In the fall of 1972 plaintiff W. W. Billington had information that they (defendants) were interested in selling the farm. Plaintiff called Mr. P. K. Crowder and was informed by him that the farm was listed for sale and was available to any agent. . . .

"Plaintiff contacted a Mr. Stewart Campbell of Williamson County. Mr. Campbell made a counter proposal which was not accepted. Mr. Campbell then told plaintiff to meet whatever conditions that were necessary. The plaintiff then called Mr. Crowder and Mr. Crowder informed him that they had decided not to sell.

"On or about the 18th of April 1974, plaintiff again called Mr. P. K. Crowder and told him that he had heard that the property was back on the market. Mr. Crowder informed him that it was. The plaintiff then traveled to the Crowder's home in Lawrence County where Mr. Crowder gave him the terms of the sale. They were as follows: The 392.42 acres was for sale for $400,000.00 net, meaning that they would not pay any commission and further they would not furnish title insurance. They were to be paid twenty nine per cent down at closing with a balance in ten years at eight per cent interest. The plaintiff was also informed that the lease on the farm did not expire until January 1, 1975.

"A new contract was drawn which agreed to all the conditions imposed by the sellers. This contract was taken to the home of Mr. Crowder in Lawrence County by plaintiff on May 1, 1975 and the contract was gone over with Mr. Crowder. No objections were raised at that time to the contract.

"The contract was left with Crowder and some two weeks after that the plaintiff called him and was told that he decided not to sell.

Plaintiff then contacted his attorney who corresponded with Mr. Harwell, Crowder's attorney and plaintiff's attorneys were advised that one of the problems that might be standing in the way of the consummation of the sale was the estate tax clearance of Mr. Leroy Davis' estate.

"Plaintiff then contacted Mr. Stewart Campbell and determined that he would re-execute a contract which would contain a further provision that the sale would not be closed until after the estate tax clearance on the Davis estate was received and further, that they would lease the property upon the same terms of rental that was in effect at that time.

"This proposal was likewise declined by defendants and shortly thereafter plaintiff filed this suit.

"On 28 April 1975, a contract for the sale of the real estate in question was entered into between Hillsboro Enterprises Inc., and the defendants for the sale of the property for $400,000.00, twenty nine per cent down with interest at seven and one-half per annum, balance payable in ten years. This sale was handled by Whitfield Realty Company in Franklin, and it should be noted that Mr. Stewart Campbell was one of the principal stock holders of Hillsboro Enterprises Inc., and that he, individually, was contracted by the broker from Whitfield Realty Co.

"The terms and conditions under which the real estate was sold were the same as had been offered earlier by Mr. Campbell except it was $25,000.00 cash earnest money instead of $40,000.00 in municipal bonds."

There is no serious controversy as to the correctness of the foregoing findings which are adopted by this Court. A few minor additional facts will be mentioned in the discussion of the contentions of the parties.

The first issue for resolution is whether, under the facts stated above, the plaintiff actually had a contractual relationship with defendants. (The agency of Mr. Crowder to speak for the other defendants is stipulated.)

Plaintiff first insists that a broker is one who is engaged for others, on a commission, in negotiating contracts relative to property of which he has no concern. Krasner v. Moore, 32 Tenn.App. 306, 222 S.W.2d 623 (1949).

However, a broker may act on behalf of the seller, the buyer, or both. In 12 C.J.S. Brokers § 14, pp. 36 et seq. it is stated that the identity of the principal of a broker is generally a question of fact. Where the facts are undisputed, however, the determination is more legal than factual.

In Erwin Nat. Bank v. Riddle, 18 Tenn.App. 561, 79 S.W.2d 1032 (1934), it was held that where the compensation and expenses of a loan broker were paid by the borrower, the broker was the agent of the borrower.

In Hamilton v. Galbraith, 15 Tenn.App. 158 (1932), it was held that, where the owner of a farm employed a broker and he (owner) alone paid the commission, the broker was the agent of the seller alone and not that of the purchaser, even though the purchaser first consulted the broker about buying the farm.

Even though the identity of the party who is to pay the broker may not be conclusive of the identity of his principal, it is nevertheless a strong circumstance. In the present case, there is no evidence to show that the defendants specifically and expressly employed plaintiff as their broker. On the contrary, all of the evidence indicates that defendants merely stated orally that their farm was for sale on specified terms to whomsoever would purchase on such terms, through an agent or otherwise.

There is considerable difference in the legal effect of saying to a broker:

(1) You are authorized to try to sell my farm; and

(2) I will sell my farm on these terms to anyone. If you produce such a buyer, I will sell to him; but you will have to get your commission from him.

In the first instance, there is an informal employment as agent with implied agreement to pay a commission for producing a buyer, which may be enforceable, though oral. See Lowe v. Wright, 40 Tenn.App. 525, 292 S.W.2d 413 (1956) and authorities cited therein.

In the second instance, there is no agreement or expectation that the owner will pay any commission. This is merely an oral offer to sell land which is unenforceable. T.C.A. § 23-201(4).

Plaintiff insists that the obligation to pay a sales commission arises from acceptance of services with knowledge or reasonable ground to believe that such services are rendered with expectation of payment therefor. In the present case, such expectation is negated by the admitted understanding that plaintiff was to receive nothing from defendants. Moreover, the services were not accepted. Defendants chose to accept an offer presented by another broker who was paid by his principal, the buyer.

In 12 C.J.S. Brokers § 61a, p. 139, is found the following text:

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