Caldwell Et Ux v. Tannehill

• Decision Date: 12 January 1915
• Citation: Caldwell Et Ux v. Tannehill, 84 S.E. 6, 117 Va. 11 (1915)
• Court: Virginia Supreme Court
• Parties: CALDWELL et ux. v. TANNEHILL.

84 S.E. 6

117 Va. 11

CALDWELL et ux.

v.TANNEHILL.

Supreme Court of Appeals of Virginia.

Jan. 12, 1915.

Error to Corporation Court of Staunton.

Action by J. F. Tannehill, Jr., against C. R. Caldwell and wife. There was a judgment for plaintiff, and defendants bring error. Reversed and remanded.

Fitzhugh Elder and J. M. Perry, both of Staunton, for plaintiffs in error.

Timberlake & Nelson, of Staunton, for defendant in error.

BUCHANAN, J. This is a writ of error to a judgment rendered in favor of the defendant in error, Tannehill, against the plain-tiffs in error, Caldwell and wife, in an action of assumpsit to recover compensation for services as a real estate broker.

The claim sued for is based upon the contention by Mr. Tannehill:

"That he had produced to his principal a customer who was ready, willing, and able to purchase the farm upon the terms fixed by the principal, and that the sale was prevented by the wrongful and arbitrary refusal of the principal to close it on his part."

There is no controversy between the parties as to the amount of compensation, nor as to the customer's ability to purchase the farm. The whole controversy here is, and in the trial court was, whether or not the broker had done all that it was his duty as such broker to do to entitle him to compensation.

By a letter dated November 18, 1913, written by Mr. Caldwell, Mr. Tannehill was authorized to make sale of the farm. That letter, and an indorsement upon it extending the time within which the broker was authorized to sell, is as follows:

"Referring to our conversation of this morning with reference to sale of 'Caldwallen.' This place is not now and has not been on the market, as you know. Some little while ago I gave you a price, however, of $50,000 on the farm, and as a result of some negotiations between you and your customer, I agreed to shade that price to $40,000. We are not anxious to sell it by any means at that figure, but in view of the fact that you have evidently interested yourself in finding a purchaser for the property, and in order to be perfectly fair with you, I will allow that price iff remain for the next ten (10) days; that is to say, until you have had the opportunity to complete your negotiations with your present customer, provided, however, that even that shall not carry the date beyond November 28, 1913. Please, however, do not construe this as a general option on the place. I do not care to have it under option, and it is only in a spirit of friendliness that I give you the time above mentioned to conclude, if possible, your present negotiations. You will understand, of course, that unless the place is sold or contracted to be sold in writing on or before November 28, 1913, the whole proposition is withdrawn, and if it comes up again it must come up as new business. In this connection 1 would be glad if you would not allow the impression to get abroad that this place is upon the market. Such is not the case, and 1 really do not care to part with the property. While the terms mentioned in this letter are understood to be cash, I would be disposed to make some reasonable concession along that line, if necessary. The above price includes the loose straw and the fodder raised on the place this last year, but does not include the ensilage or any other farm product, or personal property of any description.

"Yours very truly, C. R. Caldwell.

"November 20, 1913.

"I hereby agree to extend the option as stated above until noon, December 3, 1913.

"C. R. Caldwell."

The customer, whom the broker claims to have found as ready, willing, and able to purchase the property upon the terms upon which he was authorized to sell, did not enter into a written agreement to purchase, either with the broker or the owner, and no sale was made.

The general rule is that a real estate broker, to be entitled to compensation, must show that he has completed his undertaking according to its terms, or that its completion was prevented without his fault by his principal at a time or under circumstances when the latter had no right to interfere. 2 Mechem on Agency, § 2427; 2 Skyles & Clark on Agency, § 1770.

That rule is stated as follows in Crockett v. Grayson, 98 Va. 354, 357, 36 S. E. 477, 478:

"A real estate broker, to be entitled to compensation, must complete the sale. He must find a purchaser in a situation ready and willing to complete the purchase upon terms agreed upon before he is entitled to his commissions. When he has found such purchaser, who has entered into a valid contract, his right to compensation cannot be defeated by the fault of the seller, by his misrepresentation, or by his whimsical or unreasonable refusal to comply with his contract."

The rule as thus laid down has been reiterated and approved in other cases, among them in Vaughan v. Pleasonton, 112 Va. 508, 71 S. E. 529, and in Middle Atlantic Co. v. Ardan, 115 Va. 148, 155, 78 S. E. 588.

In the case under consideration the letter quoted, which was the broker's authority to sell, contained special stipulations. It expressly provided, among other things:

"That unless the place is sold or contracted to be sold in writing on or before November 28. 1913, the whole proposition is withdrawn, and if it comes up again it must come up as new business."

The time within which the authority given could be exercised was extended until December 3d following. The letter was not a mere authority to find a purchaser, but in order to comply with his undertaking the farm must be sold or contracted to be sold in writing within the time named. Under such authority the broker does not become entitled to his commissions by merely producing a customer who is ready, willing, and able to purchase unless a sale or contract to sell is actually entered into by the owner of the land.

"A broker, " says Mechem on Agency, § 2428. "employed to sell real estate, may be authorized and required by the terms of his undertaking not only to find a purchaser, but even to conclude an actual transfer, or at least to procure from the purchaser a valid written agreement binding him to purchase upon the terms specified; and where this is the undertaking the broker has not earned his commission until he has performed it, or the principal has accepted a less complete performance."

In 2 Clark & Skyles on Agency, § 772, it is said:

"If the broker is specially employed to negotiate for his principal the purchase, sale, or exchange of real estate, at a fixed sum. his services will not be complete until a valid written contract binding on both vendor and purchaser has been entered into to purchase, sell, or exchange on the terms specified, unless this condition is waived by the principal; but until such contract has been made, or waived, the broker has not earned his commissions. Or if it be agreed between the broker and the owner thatsuch contract of sale shall be in writing, then no...