Holton v. Shepard

• Decision Date: 13 September 1935
• Citation: 291 Mass. 513,197 N.E. 460
• Parties: HOLTON v. SHEPARD.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

291 Mass. 513

197 N.E. 460

HOLTON v. SHEPARD.

Supreme Judicial Court of Massachusetts, Suffolk.

September 13, 1935

Exceptions from Superior Court, Suffolk County.

Action of contract by Herbert H. Holton against John Shepard, Jr. After verdict for plaintiff in the sum of $122,752 was recorded for plaintiff with leave reserved, verdict was ordered for defendant, and plaintiff saves exceptions.

Exceptions overruled.

A. C. Burnham and G. S. Fuller, both of Boston, for plaintiff.

F. P Garland and J. De Courcy, both of Boston, for defendant.

RUGG Chief Justice.

This is an action of contract to recover a broker's commission in connection with the sale in 1928 of the Shepard Stores, so called, owned and conducted by the defendant in Boston and Providence. The declaration consists of three counts. It is alleged in the first count that there was an agreement between the parties that, if the plaintiff should produce a customer to whom the defendant should ultimately make or cause to be made a sale of the Shepard Stores, or the capital stock of the corporations owning and operating these stores, upon terms satisfactory to the defendant, the latter would pay to the plaintiff reasonable compensation, and that there has been performance of the agreement by the plaintiff. In the second count it is alleged that there was the same agreement as in the first count and performance by the plaintiff in procuring Edmund Seymour & Co., Inc., to whom the defendant made the sale, although nominally the sale was made to Sawyer Brothers, Inc. The third count is upon an account annexed for services performed by the plaintiff at the request of the defendant in procuring the sale of the properties. It is further alleged in each count that the liability of the defendant to the plaintiff is $100,000 plus interest. Although not so alleged, it is plain that all the counts are for the same cause of action. The defendant's answer contains a general denial as to each count. It is averred as an additional defense that the plaintiff forfeited all right to a commission from the defendant if he had any connection with the matters alleged in his declaration by reason of having executed an agreement in writing with Edmund Seymour & Co., Inc., for a commission to be paid to him by it touching the matters alleged in the declaration, and that this agreement was unknown to the defendant. The defendant rested at the close of the plaintiff's evidence and presented a motion for a directed verdict in his favor on each count. This motion was denied subject to the defendant's exception. The case was submitted to the jury under leave reserved and a general verdict returned for the plaintiff. Subsequently, upon motion and by order of the trial judge, a verdict was entered for the defendant under the leave reserved. G. L. (Ter.Ed.) c. 231, § 120. The plaintiff's exception to the entry of this verdict raises the question of law to be considered.

The burden of proof rested upon the plaintiff to establish the allegations of his declaration. The test to determine the correctness of the action of the trial judge in ordering the entry of a verdict for a defendant under leave reserved is whether the evidence in its aspect most favorable to the plaintiff could rightly be found to support the contentions essential to the maintenance of his cause of action. Curtis v. Comerford, 283 Mass. 589, 591, 186 N.E. 585; Buono v. Cody, 251 Mass. 286, 289, 146 N.E. 703; Niland v. Boston Elevated R. Co., 208 Mass. 476, 94 N.E. 703; Salem Trust Co. v. Deery (Mass.) 194 N.E. 307; Sheffer v. Rudnick (Mass.) 196 N.E. 864.

The parties are in substantial accord to the effect that a contract was made as alleged in the declaration. The contract was not in writing. The defendant promised to pay the plaintiff a commission, the amount of which also is not in controversy, if he produced the purchaser to whom the defendant acting in his own behalf should sell his business. The plaintiff was not the agent of the defendant, but was working in his own interest and at his own expense. The plaintiff was not employed to make a sale or a contract for the sale of the properties. He had no authority to commit the defendant in any respect. He had no exclusive right to try to procure a customer. The defendant might deal with anyone whom he chose in making a sale. There must be evidence in the record to support a finding that the plaintiff performed that agreement in order to entitle him to go to the jury. John T. Burns & Sons, Inc., v. Hands, 283 Mass. 420, 422, 186 N.E. 547; Elliott v. Kazajian, 255 Mass. 459, 461, 152 N.E. 351; Glendon v. Pyne, 275 Mass. 528, 176 N.E. 602.

Where the sale is made to a customer produced by the broker, he may be found to be the efficient cause although not personally conducting all the negotiations leading to the transfer. Hall v. Grace, 179 Mass. 400, 60 N.E. 932; French v. McKay, 181 Mass. 485, 63 N.E. 1068; Johnstone v. Cochrane, 231 Mass. 472, 121 N.E. 529; Provost v. Burgin, 287 Mass. 273, 191 N.E. 362. The terms proposed by the broker and those finally adopted in the sale need not be identical. Stuart v. Valsom, 249 Mass. 149, 152, 143 N.E. 815. The broker may make out his case if he produces the customer to whom the sale is made without termination of his employment, Walsh v. Grant, 256 Mass. 555, 558, 152 N.E. 884, 47 A.L.R. 852; Elliott v. Kazajian, 255 Mass. 459, 461, 462, 152 N.E. 351, and no new forces enter into the transaction which break the causal relation between his efforts and the sale, Gleason v. Nelson, 162 Mass. 245, 250, 38 N.E. 497,Delaney v. Doyle, 267 Mass. 171, 176, 177, 166 N.E. 623,Glendon v. Pyne, 275 Mass. 528, 530, 176 N.E. 602,John T. Burns & Sons, Inc., v. Hands, 283 Mass. 420, 422, 186 N.E. 547.

The evidence consisted of the oral testimony of the plaintiff, the defendant, his son and his attorney, and one Sawyer, president of Sawyer Brothers, Inc., together with correspondence and other written instruments. No representative of the Seymour Company testified.

There was testimony tending to show these facts: The defendant, through ownership of stock in corporations, was the proprietor of the Shepard Stores. After the contract was made, the plaintiff tried without success to interest a number of different persons in the purchase of these stores, keeping the defendant informed of his efforts. Finally, early in 1927, he began negotiations with Edmund Seymour & Co., Inc., hereafter called the Seymour Company, a corporation with offices in New York City. No one except the plaintiff directed the attention of the defendant to that corporation. By March, 1927, the plaintiff had aroused the interest of that corporation in purchasing the Shepard Stores. The plaintiff informed the defendant promptly, and thereafter corresponded with him reporting progress and requesting data concerning the business operations of his stores. This data the defendant did not furnish. He expressed an unwillingness to sell except for cash, or to participate in a transfer consisting of stock in corporations. The basis of these conferences by the plaintiff was that the annual profits of the Shepard Stores were about $500,000, and that the sale price demanded by the defendant was about $5,000,000. The plaintiff gave the defendant full information as to the financial resources and business responsibility of the Seymour Company. He caused a letter by the president of a New York bank to be written to the defendant assuring him of the capacity of the Seymour Company to handle a transaction of that size. He outlined to the defendant a brief skeleton of a Seymour plan to form and finance a corporation to take over the Shepard Stores, rather than to operate them directly. Negotiations were suspended during the summer of 1927 because of the absence of a member of the Seymour Company, but efforts of the plaintiff were renewed in the autumn and continued until the end of December. On November 14, 1927, the plaintiff received a letter from the Seymour Company saying, in reply to one written by himself, that that concern was interested in the Shepard Stores but that no statements of earnings, balance sheets or other necessary information had been furnished and there was nothing to work on. The plaintiff sent this letter to the defendant and received no reply from him, but later talked with him concerning it. No such information as was thus requested was given to the plaintiff. Concerning this interview, the plaintiff testified that the defendant ‘ told him not to concern himself longer with this proposition. He told Mr. Shepard that the Seymour group wanted to know that everything was all right and if Mr. Shepard would go on. * * * Shepard told him that he would.’ The plaintiff so reported to the Seymour Company.

There was evidence that the defendant, in the latter part of 1927 began to deal with Sawyer Brothers, Inc., a Massachusetts corporation hereafter called Sawyer, with which a contract to sell the Shepard Stores was finally made. That corporation was engaged in the investment and brokerage business in Boston. Sawyer, its president, testified that, although not a direct representative, he had close business relations with the Seymour Company through mutual buying and selling of securities. The testimony of Sawyer and the defendant was to the effect that Sawyer became interested in the purchase of the Shepard Stores through one Fellows, with whom the defendant had had dealings concerning a customer and who claimed to have an option on the Shepard Stores, pronounced by the defendant to be fictitious. This evidence was introduced by the plaintiff and was uncontradicted. If it...