Gresham v. Lee

• Decision Date: 23 February 1922
• Docket Number: 2604.
• Citation: 111 S.E. 404,152 Ga. 829
• Parties: GRESHAM v. LEE.
• Court: Georgia Supreme Court

111 S.E. 404

152 Ga. 829

GRESHAM v. LEE.

No. 2604.

Supreme Court of Georgia

February 23, 1922

Syllabus by the Court.

Where property has been listed for sale with two or more real estate brokers, and one of them, with the knowledge of the owner, has interested a customer in the purchase, and, while negotiations with the broker are still pending, the owner proceeds to close the sale with the same customer through another broker, the latter being the first to present the customer as ready, able, and willing to buy, and actually offering to buy, at the price and on the terms stipulated by the owner; and where the owner, pending such negotiations has committed no act of bad faith, the efforts of the broker thus actually closing the trade cannot be regarded, as a matter of law, as the procuring cause of the sale, so as to exclude the claim of the other broker against the owner for commissions.

In such a case the owner must proceed at his peril, in effecting the sale and paying the commissions to the broker thus closing the sale.

Under the facts stated in the questions propounded by the Court of Appeals, it cannot be said, as a matter of law, that a finding was demanded in favor of either of the brokers; it being, under said facts, a question of fact as to which broker was procuring cause of the sale, and therefore entitled to commissions.

Under subdivisions (a) and (b) of section 42 of the act establishing the municipal court of Atlanta (Acts 1913, pp 167, 168), a party who has made no oral motion for a new trial, nor appealed to the appellate division thereof from an order denying an oral motion for new trial, cannot urge that a judgment by that court, on a trial without a jury, is contrary to the evidence; and subdivision (b) denies such a right to a petitioner in certiorari.

Quære whether other facts in the record may or may not demand a finding in favor of the plaintiff, is not decided, because this court deals with questions propounded by the Court of Appeals only on such facts as are set out therein.

Additional Syllabus by Editorial Staff.

Where the services of two brokers conjointly contribute to a sale, the broker whose services and efforts were the primary, proximate, and procuring cause of the sale is entitled to the commissions.

Where a broker notifies the owner that he has a customer and introduces the customer to the owner, and the negotiations are still pending, the owner cannot, with knowledge of such facts, complete the sale through another agent and avoid his liability for the commission due the first broker.

Between a principal and a broker the utmost good faith must be exercised.

Under Civ. Code 1910, § 3587, a broker must procure a purchaser able, ready, and willing to buy, and actually offering to buy, on the owner's terms, but when he procures such a purchaser, the principal cannot defeat his right to commission by completing the sale himself.

Under Acts 1913, pp. 145, 167, § 42, subd. (a) the failure to move orally for a new trial in the Atlanta municipal court, or, if the motion is overruled, to appeal therefrom under paragraph (b), does not deprive a party of his right to apply for a writ of certiorari.

Certified Questions from Court of Appeals.

Action between W. B. Gresham and M. M. Lee. Judgment for the latter, and the former brought error to the Court of Appeals, which certified questions to the Supreme Court. Questions answered.

Neufville & Neufville, of Atlanta, for plaintiff in error.

Ernest Buchanan, of Atlanta, for defendant in error.

HINES J.

1. The Court of Appeals desires instructions of this court upon the following question:

"Where property has been listed for sale with two or more real estate brokers, and one of them, with the knowledge of the owner, has interested a customer in the purchase, and, while the negotiations with the broker are still pending, the owner proceeds to close the sale with the same customer through another broker, the second broker being the first to present the customer as ready, able, and willing to buy, and actually offering to buy, at the price and on the terms stipulated by the owner, and where the owner, pending such negotiations, has committed no act of bad faith, amounting to a failure to remain neutral between the brokers, or to an interference in favor of the broker actually closing the sale, must the efforts of the broker thus actually closing the trade be regarded, as a matter of law, as the procuring cause of the sale, so as to exclude the claim against the owner for commissions by the other broker, whose prior negotiations were then still pending?"

Where the services of a broker, as well as those of another broker, have conjointly contributed to the successful termination of negotiations resulting in the sale of real estate for an owner, the question which of the brokers is entitled to commissions from the owner for effecting such sale depends upon whose efforts were the primary, proximate, and procuring cause of the sale negotiated. The broker whose services and efforts were the primary, proximate, and procuring cause of the sale would be entitled to the commissions. Beougher v. Clark, 81 Kan. 250, 106 P. 39, 27 L.R.A. (N. S.) 198; Votaw v. McKeever, 76 Kan. 870, 92 P. 1120.

Where one broker, with the knowledge of the owner, has interested a customer in the purchase, and, while negotiations with the broker are still pending, the owner proceeds to close the sale with the same customer through another broker, who first presents the customer as ready, able, and willing to buy, and actually offering to buy, at the price and on the terms stipulated by the owner; and where the owner, pending such negotiations, has committed no act of bad faith amounting to a failure to remain neutral between the brokers, or to an interference in favor of the broker actually closing the sale, the broker thus actually closing the trade cannot be said, as a matter of law, to be the one whose efforts were the primary, proximate, and procuring cause of the sale. Under such circumstances it becomes a question of fact as to which broker was the proximate, predominating cause of the sale. Murray v. Currie, 7 Car. & P. 584, 2 Eng. R. C. 527.

Where a broker for the sale of property notifies the owner that he has a customer, and introduces such customer to the owner, and where the negotiations between such broker and such customer are pending and have not fallen through, the owner cannot, with the knowledge of the facts, complete the purchase through another agent and avoid his liability for the commission due the first broker. Beougher v. Clark, 81 Kan. 250, 106 P. 39, 27 L.R.A. (N. S.) 198; Jennings v. Trummer, 52 Or. 149, 96 P. 874, 23 L.R.A. (N. S.) 164, 132 Am.St.Rep. 680; Day v. Porter, 161 Ill. 235, 43 N.E. 1073; Rigdon v. More, 226 Ill. 382, 80 N.E. 901.

The law will not permit one broker who has been intrusted with the sale of land, and is working with a customer whom he has found, to be deprived of his commission by another agent stepping in and selling the land to the customer so found by the first broker. Williams v. Bishop, 11 Colo. App. 378, 53 P. 239; Clifford v. Meyer, 6 Ind. App. 633, 34 N.E. 23; Hogan v. Slade, 98 Mo.App. 44, 71 S.W. 1104; McCormack v. Henderson, 100 Mo.App. 647, 75 S.W. 171; Holland v. Vinson, 124 Mo.App. 417, 101 S.W. 1131; Gilmour v. Freshaur, 126 Mo.App. 299, 102 S.W. 1107; Wood v. Wells, 103 Mich. 320, 61 N.W. 503; Elmendorf v. Golden, 37 Wash. 664, 80 P. 264.

Between the principal and the broker the utmost good faith must be exercised. Jennings v. Trummer, 52 Or. 149, 96 P. 874, 23 L.R.A. (N. S.) 164, 132 Am.St.Rep. 680.

Under the facts recited in the above question it cannot be said, as a matter of law, that the second broker was the procuring cause of the sale; and we answer this question in the negative.

2. The Court of Appeals propounds this question:

"Is it the rule, in such a case, that the owner could only proceed at his peril to effect the sale and pay the commission to the broker thus closing the sale, for the reason that, under such circumstances, it is not a question of law, but one of fact, to be determined under the particular circumstances of the case, as to whose efforts were the primary, proximate, and procuring cause of the sale?"

Under the above authorities and the principles therein ruled we answer the above question in the affirmative.

3. The Court of Appeals propounds this question:

"In such a case, does the mere fact that a broker was the first to interest the purchaser in the property, to the extent that he began negotiations for a purchase, which continued until a sale was effected to the same customer through another broker, render the owner liable, as a matter of law, for commissions to the first broker, as the one whose efforts must be taken to be the procuring cause of the sale, although the owner commits no act of bad faith toward the first broker, but merely knows that he found the prospect and was the first to begin negotiations?"

Under the facts stated in the first question and in this question would the owner, as a matter of law, be liable to the agent for his commissions? According to the case as stated, one broker, with the knowledge of the owner, interested a customer in the purchase. While the negotiations between the purchaser and this broker were still pending, the owner proceeded to close the sale with the purchaser through another broker. The relation between the owner and the first broker had not been terminated, but continued until a sale was effected to the customer through the second broker. The second broker first presented the customer as ready, able, and willing to buy, and actually offering to buy, at the price and on the terms stipulated by...