Hamrick v. Cooper River Lumber Co.

Decision Date09 February 1953
Docket NumberNo. 16714,16714
Citation223 S.C. 119,74 S.E.2d 575
CourtSouth Carolina Supreme Court
PartiesHAMERICK v. COOPER RIVER LUMBER CO.

Norval N. Newell, Moncks Corner, Woods & Woods, Marion, for appellant.

Hagood, Rivers & Young, Charleston, for respondent.

OXNER, Justice.

This action was brought by George H. Hamrick, a real estate broker in Charleston, to recover commissions of $5000 alleged to have been earned by procuring a purchaser who entered into a contract to buy from the Cooper River Lumber Company a tract of land in Charleston County, containing 700 acres, for $50,000. The purchaser refused to comply. The broker alleges that his services were fully performed and his right to compensation arose when the seller accepted the purchaser and entered into a valid and binding contract of sale. The seller contends that under the terms of the contract the broker was not to receive any compensation unless the sale was consummated.

By consent of the parties, the case was referred to the Master for Charleston County, as special referee, to hear and determine the issues involved. He decided all questions in favor of the broker and recommended that he have judgment against the seller for the sum of $5000, which represented a commission of 10% on the purchase price. This report was confirmed by the Circuit Court. The seller, Cooper River Lumber Company, has appealed.

The controlling facts are not in dispute. In November, 1946, respondent, who did not personally know the officers of the Cooper River Lumber Company and had had no previous dealings with them, wrote a letter to the Secretary and Treasurer, stating that he had a party who was interested in buying the 700 acre tract of land and inquiring whether the Lumber Company was interested in selling. The latter indicated that it was. Considerable negotiations followed. Finally, on February 11, 1947, appellant wrote respondent, giving Dr. J.T. Hiott, a prominent Charleston physician and a prospective purchaser found by respondent, an option to purchase the property on or before February 22nd for $50,000. On February 22, 1947, respondent, the broker, prepared and Dr. Hiott executed a contract to purchase this property for said amount of $50,000, payable in cash, and Dr. Hiott delivered to respondent a binder in the sum of $2500. On the same day, respondent forwarded this contract in triplicate, along with his check for $2500, to the Secretary and Treasurer of appellant for execution. The contract was promptly signed by appellant and two copies returned to respondent.

It was stipulated in the contract of sale: "Settlement is to be made not before April 1, 1947 or after April 15, 1947. Upon the delivery of a good and marketable title to the property above described." It was also provided: "The Seller agrees to pay George H. Hamrick a commission of ten (10%) per cent on date of settlement." The contract further recited that the sum of $2500 had been paid to the seller on account of the purchase price, which the parties agreed should be forfeited to the seller, "should default be made in the payment of the balance of the purchase price upon the terms and conditions aforesaid."

As heretofore stated, Dr. Hiott, the purchaser, refused to comply. He stated in his testimony that he was unable to raise the money to pay the purchase price. He further testified that he became convinced that he was faced with a loss of six or seven thousand dollars if he purchased the property, and that he preferred to forfeit the deposit of $2500 rather than comply with the contract. The seller, after some inquiry as to the financial condition of the purchaser, decided not to institute an action for specific performance. There is some conflict in the testimony as to the financial worth of Dr. Hiott and as to whether any judgment against him would be collectible. The Master made findings of fact, which were concurred in by the Circuit Judge, that the purchaser was financially able to buy the property; that respondent acted in good faith in handling the transaction; and that the only reason the purchaser refused to comply was that he preferred to forfeit the $2500 deposit rather than incur the possibility of a greater loss by complying. The correctness of these factual conclusions will be assumed, and the case regarded as one where a purchaser, financially able to comply, enters into a valid and binding contract of sale with the seller and deliberately defaults.

Respondent relies, and recovery was allowed by the Court below, upon the rule that ordinarily a broker has earned his commission when he procures a purchaser who is accepted by the owner of the land and with whom the latter, uninfluenced by any misrepresentation or fraud on the part of the broker, enters into a valid and enforceable contract, and that such right to compensation will not be defeated by the failure or refusal of the purchaser to consummate the contract. The stated rule seems to be sustained by the overwhelming weight of authority. 8 Am.Jur., Brokers, Sections 179 and 186; Annotations 51 A.L.R. 1390 and 73 A.L.R. 926. It was recognized by this Court in Fairly v. Wappoo Mills, 44 S.C. 227, 22 S.E. 108, 116,29 L.R.A. 215. In that case, Mr. Chief Justice McIver quoted with approval the following: "The broker undertakes to furnish a purchaser, and is bound to act in good faith in presenting a person as such, and when one is presented the employer is not bound to accept him or to pay the commission, unless he (the purchaser) is ready and able to perform the contract on his part according to the terms proposed; but if the principal accepts him, either upon the terms [previously proposed or upon modifications] then * * * agreed upon, and a valid contract is entered into between the principal and the person presented by the broker, the commission is earned."

It is equally well settled that the broker and owner "may make such a contract for the broker's services as is agreeable to them, and may make the payment of the broker's commission dependent upon the full performance of the contract of purchase or sale, or postpone the payment of the commission, or make the broker's right to the commission contingent upon the happening of future events". Brown Paper Mill Co., Inc. v. Irvin, 8 Cir., 146 F.2d 232, 235. In Segal Brokerage Co., Inc. v. Lloyd L. Hughes, Inc., 9 Cir., 96 F.2d 208, 210, the Court said: "Where the obligation of the principal to pay commissions depends upon the performance of conditions precedent, the broker takes the risk of nonperformance on the part of the customer. As said in Fuller v. Bradley Contracting Co., 183 App.Div. 6, 170 N.Y.S. 320, 328, 'a broker may bind himself not to demand payment unless the contract is actually carried out. * * * Such agreements are lawful and proper, and not unusual.' "

It follows from these authorities that the concrete question here is whether there was any special agreement by which commissions were dependent upon some condition beyond that implied by the ordinary broker's contract. More specifically, we must determine the effect of the stipulation in the contract that appellant was to pay respondent "a commission of ten (10%) per cent on date of settlement." Does this contemplate that respondent was not to receive any commission unless the transaction was consummated by the payment of the purchase price?

Promises to pay brokers' commissions for selling real estate have been held to be conditional when expressed to be performed " 'on the day...

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  • The Huffines Co., LLC v. Lockhart
    • United States
    • United States State Supreme Court of South Carolina
    • 23 May 2005
    ...of certain conditions." Champion v. Whaley, 280 S.C. 116, 119, 311 S.E.2d 404, 406 (Ct. App.1984) (citing Hamrick v. Cooper River Lumber Co., 223 S.C. 119, 74 S.E.2d 575 (1953)); accord Chambers, 351 S.C. at 451, 570 S.E.2d at 532. A real estate broker suing on a conditional sales contract ......
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    ...is payable. Beattie-Firth, Inc. v. Colebank, 143 W.Va. 740, 105 S.E.2d 5, 74 A.L.R.2d 431 (1958); Hamrick v. Cooper River Lumber Company, 223 S.C. 119, 74 S.E.2d 575 (1953); Hilsenrath v. Dale Holding Corporation, Sup., 37 N.Y.S.2d 134 (1942); Cate v. Madden, 165 Tenn. 371, 55 S.W.2d 262 (1......
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    ...consideration'); Simon v. Myers, 284 Pa. 3, 130 A. 256 ('at settlement' of the total consideration). See also Hamrick v. Cooper River Lumber Co., 223 S.C. 119, 74 S.E.2d 575; Dal Maso v. Gregory (Mun.Ct.App.D.C.), 112 A.2d 923, supra; Jones v. Palace Realty Co., 226 N.C. 303, 37 S.E.2d 906;......
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    ...Water Service, the conclusion of the lower court was based entirely upon the terms of the contract. Cf., Hamrick v. Cooper River Lumber Co., 223 S.C. 119, 126, 74 S.E.2d 575 (1953). Where a contract, as here, has been reduced to writing and a question arises as to the intention of the parti......
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