Carney v. John Hancock Oil Co.

• Decision Date: 18 November 1932
• Docket Number: No. 28974.,28974.
• Citation: 187 Minn. 293,245 N.W. 367
• Parties: CARNEY v. JOHN HANCOCK OIL CO.
• Court: Minnesota Supreme Court

187 Minn. 293

245 N.W. 367

CARNEY

v.JOHN HANCOCK OIL CO.

No. 28974.

Supreme Court of Minnesota.

Nov. 18, 1932.

Appeal from District Court, Hennepin County; A. W. Selover, Judge.

Action by E. C. Carney against the John Hancock Oil Company. Defendant's motion for a directed verdict was granted, and the plaintiff appeals from an order denying his motion for a new trial.

Order affirmed.

Syllabus by the Court.

1. A broker who merely finds a purchaser, without producing him to his principal, without doing more to bring them together (the principal being guilty of no bad faith toward the broker), held, not the procuring cause of a sale.

2. To be the procuring cause of a sale, a broker must originate a course of events which, without break in continuity, make a cause of which the sale is the result. It is not enough that his services merely contribute to the result; they must be the producing and effective cause. Leonard, Street & Deinard and Benjamin Segal, all of Minneapolis, for appellant.

Fowler, Carlson, Furber & Johnson, of Minneapolis, for respondent.

STONE, J.

Suing for a broker's commission, plaintiff encountered at the close of his own evidence an adversary motion for directed verdict, which was granted. He appeals from the order denying him a new trial.

Then the owner of a line of automobile filling stations in Minnesota, defendant in the autumn of 1929 transferred the whole property to Phillips Petroleum Company, taking in exchange stock in the latter corporation. We assume the transaction to have been so far a sale that, if not otherwise barred, plaintiff was entitled to a commission. He avers his employment by one Dixon representing defendant. Question is made as to the adequacy of plaintiff's proof to establish the authority of Dixon to bind defendant. That question also we pass, assuming that it should be resolved for plaintiff.

Plaintiff's agency, if any, was not exclusive. His evidence went to the extent of showing that he found the Phillips Company as a possible purchaser. It did not show, or tend to show, that he produced that company to defendant. Plaintiff failed in his efforts to accomplish the latter rather essential object. Acting through associated brokers in Oklahoma, where the Phillips Company has its general offices, he did bring defendant's property, and the fact that it was for sale, to the notice of Mr. Sands, vice president of the Phillips Company, about April 1, 1929. To what extent, if at all, the latter was influenced by plaintiff's associates does not appear. There is nothing tangible to indicate that they made much of an impression. Plaintiff requested defendant to submit detailed information for the Phillips Company. Defendant was willing to comply if so requested by a respensible executive of the Phillips Company. The year before, 1928, defendant had attempted, but failed, to sell to the Phillips Company. The information desired was expensive in preparation, and defendant justified in desiring first-hand evidence of the Phillips Company's genuine interest. Plaintiff did not either procure or produce the desired evidence of his customer's interest. There, in effect, his evidence stops, except that defendant is said to have known that plaintiff was attempting to interest the Phillips Company.

1. Plaintiff failed to prove that he produced his purchaser to defendant. By the distance there is between Minnesota and Oklahoma, he failed to bring them together in the physical sense. He does not show that he or his associates induced correspondence between them. One Haterius, a Kansas City broker, in 1928 had conducted the negotiations which failed to sell defendant's property but did sell that of a competitor to the Phillips Company. In July, 1929, he opened with defendant the negotiations which in October resulted in the transfer of its whole business to the Phillips Company. His commission was paid by the Phillips Company, that being a condition imposed by defendant. There is in the record hearsay evidence that defendant got into touch with the Phillips Company in the early summer of 1929 before Haterius appeared on the scene. But by the testimony of L. B. Hancock, then general manager of defendant, who conducted all the negotiations, it is shown conclusively that a letter of inquiry written by Haterius July 30, 1929, was the opening of the negotiation which resulted successfully in October, and in which neither plaintiff nor associate of his had any part. There is no evidence that either defendant or Haterius was acting in bad faith, or that the purpose of either was to circumvent plaintiff. If the Phillips Company preferred to deal through Haterius, to the exclusion of plaintiff, it was legally at liberty to do so, and defendant may not be penalized in consequence. A broker does not earn his commission simply by telling one who afterwards purchases that a property is for sale. He does not thereby fence off the whole deal as a private preserve for himself. It remains open range to his competitors, and if another broker is chosen by the customer as the efficient conduit of successful negotiation, the first is simply out of the money. Of course, there must be good faith all around. But it is no evidence of bad faith that the customer, for some undisclosed reason personal to himself, rejects the tendered offers of broker No. 1 and employs those of No. 2. Neither is the owner subjected to any imputation of bad faith because it does not repulse the approach of broker No. 2, particularly where, as here, broker No. 1 has had ample opportunity to produce the purchaser.

Haterius, rather than plaintiff, seems to have been the procuring cause of the deal. But in the absence of evidence that plaintiff was, it matters not who else intervened. Under such a contract as plaintiff claims, he could not earn his commission without the production to defendant of a purchaser. It is not enough that a broker finds the customer. He must bring the parties together so that through him his principal ‘has also found the purchaser.’ He must at least bring buyer and seller together. Baars v. Hyland, 65 Minn. 150, 67 N. W. 1148; Armstrong v. Wann, 29 Minn. 126, 12 N. W. 345;Cullen v. Bell, 43 Minn. 226, 45 N. W. 428;Fosbroke v. Nat. Exch. Bk., 176 Minn. 357, 223 N. W. 603. In contrast, see Goldman v. Weisman, 123 Minn. 270,143 N. W. 983, 984, where the broker earned his commission, because he not only found the purchaser, but also produced him. In the language of the opinion, he had ‘advised defendants that his customers were ready to buy on defendants' terms.'

2. Naturally, there is a welter of decision law which, although in agreement on fundamentals, is hopelessly diverse in application. Annotations, 44 L. R. A. 321, 43 A. L. R. 1103. The result on business is frequently embarrassment and occasionally disaster, both for owners and brokers. The situation has come to such pass that owners, brokers, and counsel are frequently hard put to it so to conduct negotiation as to avoid spurious claims of brokers who simply thrust themselves into the transaction without invitation from any one. Many a sale has been known to fail, the onwer refusing to go on because in no other way could he make sure of avoiding litigation and the attempt to compel him to pay more than one...