Edwards v. Cragg

• Decision Date: 22 November 1948
• Citation: 50 S.E.2d 281,188 Va. 564
• Court: Virginia Supreme Court
• Parties: EDWARDS et al. v. CRAGG.

50 S.E.2d 281

188 Va. 564

EDWARDS et al.

v.CRAGG.

Supreme Court of Appeals of Virginia.

Nov. 22, 1948.

Error to Circuit Court, Arlington County; Walter T. McCarthy, Judge.

Suit by Robert M. Cragg against Nellie M. Edwards, trading and doing business as Edwards Realty Company, and Thomas E. Edwards, individually and as agent of the Edwards Realty Company, to recover sum which plaintiff alleged that defendants had improperly retained as commission on sale of realty belonging to plaintiff. To review a judgment for the plaintiff, the defendants bring error.

Judgment affirmed.

Before HUDGINS, C. J., and GREGORY, EGGLESTON, SPRATLEY, BUCHANAN and MILLER, JJ.

Samuel B. Brown, of Alexandria, for plaintiffs in error.

Oren R. Lewis, of Arlington, and J. Randall Caton, Jr., of Alexandria, for defendant in error.

BUCHANAN, Justice.

Robert M. Cragg brought this suit against the defendants below, who are plaintiffs in error here, to recover $1,000 which he claimed they had improperly retained as commission on the sale of real estate belonging to the plaintiff. On agreed facts the court tried the case without a jury and rendered a judgment for the plaintiff, which the defendants now seek to reverse.

The stipulated facts were in substance these: Prior to April 24, 1946, Cragg authorized the defendants, real estate brokers, to sell for him certain property in Alexandria at the specified price of $21,000, with the express understanding that the entire sum be paid in cash. For doing so the defendants were to have a commission of five per cent.

On April 24, 1946, the defendants presented to Cragg a contract of sale to Richard G. and Martha W. Waugh on terms other than cash. Cragg rejected this contract, and thereupon the defendants agreed to finance the transaction so that Craggwould in fact receive the $21,000 in cash. Cragg accepted this contract and the Waughs deposited with the defendants $1,-000 and agreed to comply with the terms of sale in twenty days.

Shortly after the execution of the contract the defendants requested Cragg to give the Waughs immediate possession of the property and Cragg consented to do this on the assurance of the defendants that the financing which they had undertaken had been arranged so that Cragg would receive the full purchase price in cash on the agreed settlement date.

However, on the designated settlement date the defendants admitted they were not then able to perform their obligation under the contract and requested a few additional days to complete the arrangements.

On June 14, 1946, the defendants not having then performed, Cragg notified them by letter that he would terminate the contract unless they performed within five days.

On July 16, 1946, Cragg's attorney wrote the defendants that the settlement had been hanging fire for over three months, and that unless they fulfilled their agreement within five days from July 17, Cragg and the purchasers would work out an agreement between themselves and then Cragg would bring suit to recover "$1,000 commission you withheld for services not performed."

Finally, on August 7, 1946 (Wednesday), Cragg gave defendants notice that unless they complied with their contract on or before the following Saturday he would consider the contract rescinded. The stipulation of facts continues: "On receipt of each of the aforesaid notices, defendants gave new promises and assurances that performance on their part would be shortly forthcoming. However, they failed to perform in compliance with each of the above notices, and the vendor terminated the said contract. Thereafter the complainant and the vendees negotiated a new contract on different terms whereby the complainant gave the vendees credit for the $1,000.00 paid to the defendants, took, as part of the purchase price, a promissory note secured by a second purchase money trust in the sum of $4,500.00, and the balance in cash with the understanding that the vendor was-subrogated to the rights of the vendees in the return of the $1,000.00 paid to the defendants. The defendant realty firm, having failed and refused to return the $1,000.-00 deposit, this action was brought to recover the same."

On October 1, 1946, after the suit was brought, and again at the beginning of the trial, defendants tendered to the plaintiff $4,500 in payment of the said purchase money trust, which was refused.

In support of their claim for commissions, the defendants say they were procuring cause of the sale and that by going ahead and selling the property to the Waughs, the plaintiff waived performance of their financing agreement and should be estopped to assert their default.

Defendants thus seek to bring themselves within a well-established general rule to the effect that when the owner of property who has placed it with a broker for sale at a certain price, sells the property to the broker's customer at a reduced price, he is liable to the broker for his commissions.

This rule was applied and the broker allowed to recover in Wilson v. Schmidt & Wilson, Inc., 184 Va. 642, 651, 35 S.E.2d 737, 741, where the Virginia cases are cited' in support of the rule thus quoted from 8 Am.Jur., Brokers, § 190, pp. 1101, 1102: " 'The rule is well established that if property is placed in the hands of a real-estate broker for sale at a certain price or upon certain terms, and a sale is brought about through the broker as a procuring cause, he is entitled to commissions on the sale even though the final negotiations are conducted through the owner, who in order to make a sale accepts a price less than that stipulated to the broker or terms more liberal than those the latter was authorized to accept.'"

But the agreed facts of this case prevent the application of that rule and bring this case within an exception to the rule that is as well established as the rule itself. That exception is that if the broker makes a special contract, such as expressly making the payment of commissions depend upon obtaining a certain price for theproperty, or upon securing certain terms of sale, he...