Elliott v. Kazajian

• Decision Date: 27 May 1926
• Citation: 152 N.E. 351,255 Mass. 459
• Parties: ELLIOTT v. KAZAJIAN et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

255 Mass. 459

152 N.E. 351

ELLIOTT

v.KAZAJIAN et al.

Supreme Judicial Court of Massachusetts, Middlesex.

May 27, 1926.

Exceptions from Superior Court, Middlesex County; R. W. Irwin, Judge.

Action by Herford N. Elliott against Donabed Kazajian and others. On defendant's exceptions after verdict for plaintiff. Exceptions sustained, and judgment entered for defendants.Max J. Cohen, of Lowell, for plaintiff.

F. M. Qua, of Lowell, for defendants.

WAIT, J.

The plaintiff alleges that the defendants made an agreement with him whereby the plaintiff was to secure a customer ready, willing and able to purchase for $29,000 real estate of the defendants on Gorham street in Lowell, and that they were to pay him $1,000 upon his producing such a customer. He alleges that on or about October 6, 1922, he secured the customer, and thereby became entitled to payment, and that the defendants have refused to pay him. The defendants make general denial thereof.

At the trial in the superior court the jury found for the plaintiff. The defendants saved exceptions (a) to the refusal of the judge to direct a verdict for the defendants at the conclusion of the evidence; (b) to his failure to instruct the jury:

‘(2) If the jury shall find that the plaintiff or his agent never produced a customer who was ready, able and willing to purchase the defendants' real estate for $29,000 on terms of payment satisfactory to the defendants, their verdict must be for the defendants.

‘(3) If the jury shall find that the plaintiff's customers. Pressman and Rose, never came to any agreement with the defendants as to the terms of payment of the purchase price, the time for completion of the bargain or any other ‘terms which were to govern the rights of the parties,’ then their verdict must be for the defendants.

‘(4) If the jury shall find that the defendants never accepted as customers the persons introduced to them by the plaintiff's agent, then their verdict must be for the defendants,’ -and (c) to portions of the charge in which he left to the jury to say whether the customers were able to meet the conditions laid down by the plaintiff, and in which he instructed them:

‘That when a man lists his property with a real estate man, he thereby makes a contract with the real estate man to find a purchaser for him.’

An owner of property does not make a contract of employment with a broker merely by listing property with him for sale. Cadigan v. Crabtree, 179 Mass. 474, 480, 481, 484, 61 N. E. 37,55 L. R. A. 77, 88 Am. St. Rep. 397. He makes an offer which ripens into a contract when the broker has accepted the offer by fulfilling its terms. Fitzpatrick v. Gilson, 176 Mass. 477, 57 N. E. 1000;Roche v. Smith, 176 Mass. 595, 597, 58 N. E. 152,51 L. R. A. 510, 79 Am. St. Rep. 345;Monk v. Parker, 180 Mass. 246, 63 N. E. 793;Goodnough v. Kinney, 205 Mass. 203, 91 N. E. 295;Rosenthal v. Schwartz, 214 Mass. 371, 101 N. E. 1070;Woods v. Matthews, 224 Mass. 577, 585, 113 N. E. 201;Bruce v. Meserve, 228 Mass. 463, 117 N. E. 830;Johnstone v. Cochrane, 231 Mass. 473, 121 N. E. 529;Cesana v. Johnson, 232 Mass. 444, 122 N. E. 444;Doten v. Chase, 237 Mass. 218, 129 N. E. 363;Buono v. Cody, 251 Mass. 286, 146 N. E. 703;Hall v. Kotowski, 251 Mass. 494, 146 N. E. 717; Williston, Contracts, §§ 60, 60a, 60b.

Until a contract comes into existence the owner can withdraw the offer; and although the broker may have incurred expense, have been put to trouble and have spent time and energy in the effort to fulfil the conditions of the offer, he has no claim for compensation. Cadigan v. Crabtree, supra; Id., 186 Mass. 7, 12, 70 N. E. 1033,66 L. R. A. 982, 104 Am. St. Rep. 543;Leonard v. Eldridge, 184 Mass. 594, 69 N. E. 337;Smith v. Kimball, 193 Mass. 582, 585, 79 N. E. 800;Willard v. Wright, 203 Mass. 406, 409, 89 N. E. 559;Clark v. Bonner, 217 Mass. 201, 104 N. E. 494;Ballou v. United Button Co., 241 Mass. 457, 135 N. E. 558;Marden v. Howard, 242 Mass. 350, 136 N. E. 385;Maksoodian v. Keller, 243 Mass. 249, 137 N. E. 263;Des Rivieres v. Sullivan, 247 Mass. 443, 142 N. E. 111;Bemister v. Hedtler, 249 Mass. 40, 143 N. E. 818,33 A. L. R. 570. See McKeon v. Tyler (Mass.) 149 N. E. 615.

The right to revoke is not dependent upon the reasons which may lead to its exercise, provided that it is exercised in good faith, which here means for any reason other than to obtain the results of the broker's efforts without paying for them. O'Connell v. Casey, 206 Mass. 520, 92 N. E. 804;Leonard v. Eldridge, 184 Mass. 594, 69 N. E. 337. An attempted revocation in such bad faith is in law no revocation. Cadigan v. Crabtree, 186 Mass. 7, 70 N. E. 1033,66 L. R. A. 982, 104 Am. St. Rep. 543. The broker can, in such circumstances, recover compensation. This will be a commission, if a sale actually takes place, O'Connell v. Casey, 206 Mass. 520, 528, 92 N. E. 804; or the value of his time, labor and expense if no completed transaction is carried through by the owner, Pullen v. Baltzer, 243 Mass. 419, 137 N. E. 926.

Of course the owner and broker at any moment in their negotiations may enter into a contract of employment if they so choose; but if they do, the compensation of the broker is not properly a commission, but an agreed sum or damages for breach of the particular contract made. Cohen v. Ames, 205 Mass. 186, 91 N. E. 212;Rosenthal v. Schwartz, 214 Mass. 371, 101 N. E. 1070;Smith v. Plant, 216 Mass. 91, 103 N. E. 58; Pullen v. Baltzer, supra.

Much of the apparent confusion in the decisions in suits by brokers for compensation is removed if this fundamental distinction between proposal and contract is kept in mind.

In the case before us the defendants contend that they had a right to withdraw any offer and to revoke any authority to act for them, by refusing, as they did, to go on to consider a sale at less that $31,000. They assert that a careful analysis of the evidence in its aspect most favorable to the plaintiff makes clear that, assuming that the plaintiff was employed to find a customer ready, willing and able to make the cash payments required and to give mortgages for the balance on terms acceptable to and accepted by the defendants, they put an end to the employment by raising their price before the terms which the alleged customers were willing to make had been communicated to the defendants for their acceptance. They are right in this contention if, assuming what took place constituted an offer, the plaintiff had not fulfilled all its conditions before it was withdrawn; of if, assuming that a contract of employment had been made, everything had not taken place on which the plaintiff's right to recover depended. See Sibley v. Felton, 156 Mass. 276, 31 N. E. 10.

The test, whether the basic transaction was an offer or a contract of employment, is whether, when made, consideration was furnished. Williston, Contracts, § 60. It appears that there was no bilateral contract entered into. None is alleged. The consideration was the performance of certain things to be done in the future. At the beginning, then, there was merely an offer, not a contract. The offer could be withdrawn at any moment before the conditions were fulfilled. The conditions as stated by the plaintiff's agent, if made in February, 1921, were: To get a customer for his property, total price $29,000, ‘four or five thousand dollars in cash, the balance to be on a mortgage, a first mortgage to be taken by the bank,’ and ‘he would take a second...