Leimbach v. Nicholson

• Decision Date: 17 March 1959
• Docket Number: No. 114,114
• Citation: 219 Md. 440,149 A.2d 411
• Parties: Herbert J. LEIMBACH and Anne B. Leimbach v. Edwin H. NICHOLSON.
• Court: Maryland Court of Appeals

Page 440

219 Md. 440

149 A.2d 411

Herbert J. LEIMBACH and Anne B. Leimbach v. Edwin H. NICHOLSON.

No. 114.

Court of Appeals of Maryland.

March 17, 1959.

Dissenting Opinion March 31, 1959.

W. Hamilton Whiteford, Baltimore (Due, Nickerson, Whiteford & Taylor, Baltimore, on the brief), for appellants.

W. Lee Harrison, Towson (Richard C. Murray, Towson, on the brief), for appellee.

Before BRUNE, C. J., and HENDERSON, HAMMOND, PRESCOTT and HORNEY, JJ.

HENDERSON, Judge.

In this case the plaintiff, appellee, brought an action in one declaration against two sets of defendants. The claim against Mark E. and Beatrice R. Gann was based on an alleged tortious interference with a contract between Nicholson and the Leimbachs. At the conclusion of the plaintiff's case the trial court granted the motion of these defendants for a verdict in their favor, and there was no appeal from the judgment entered thereon. The claim against the Leimbachs was for broker's commissions due upon the sale of the Leimbachs' farm property. At the conclusion of the whole case, the court denied a motion for directed verdict, and the jury brought in a verdict of $5,000. The court denied a motion for judgment N.O.V. and the Leimbachs appealed. Nicholson filed a cross-appeal, claiming that the jury should have been allowed to return a larger verdict predicated upon standard commissions.

The appellants make two contentions, that the evidence was legally insufficient to warrant the submission of the case to the jury, and that there was error in the court's charge. The first contention requires a rather detailed statement of the facts. It was shown that, in the summer of 1954, Nicholson, an experienced real estate broker, asked Leimbach if he would care to sell the farm where he resided; and although Leimbach did not show much interest, he indicated that he would consider any offer Nicholson produced. Nicholson testified, but Leimbach denied, that an asking price of $150,000 was fixed, and there was an understanding that if Nicholson consummated a sale, he would receive the usual commissions. Leimbach testified, however, that Nicholson said he would charge a flat fee of $5,000. In August, Nicholson brought the Ganns to the property and showed it to them in the presence of the Leimbachs. Dr. Gann made an offer of $100,000, which Leimbach refused. Later in the fall, the Ganns again visited the property, accompanied by a Mr. Edward Myerberg, a licensed real estate broker and developer, who was a close friend and patient of Dr. Gann, and whose advice he sought. The Leimbachs were out of town at this time, but Leimbach learned of the visit subsequently. Dr. Gann, through Nicholson, submitted an offer of $110,000, which Leimbach refused. Nicholson testified that Leimbach said he would consider $125,000, but Leimbach denied that he ever agreed to accept such a figure.

In November, Nicholson submitted an offer of $115,000 on behalf of the Ganns, which Leimbach refused. Nicholson testified that Mrs. Leimbach was indignant that the Ganns had visited her house, and brought people in her house, when she wasn't there. She said it was a 'Jew trick' and she did not want to sell to Jews. Leimbach testified Mrs. Leimbach had only said that the neighbors might object. However, Nicholson reported the remark to the Ganns, who were offended, and said they were no longer interested in buying. Leimbach testified that he told Nicholson later in that month that they had decided not to sell the place. He testified he did so because Nicholson had not been able to obtain an adequate offer, and not because of any racial or religious question. Nicholson did not specifically deny this, but testified that around Christmas Leimbach phoned him to inquire if the Ganns were still interested in buying the property. Leimbach denied having any communication with Nicholson after November. In any event, Nicholson discontinued his efforts to sell to the Ganns. In January, 1955, he tried to interest them in an adjoining property, in a letter (which Gann testified he did not receive) stating: 'I do not know whether we are going to be able to get his [Leimbach's] place or not.'

Dr. Gann testified that in March, 1955, a friend, Edward Myerberg, came to his office and told him 'he had the opportunity of purchasing the Leimbach farm.' Dr. Gann told him to go ahead, that he was not interested, but he doubted if he could buy it, as the Leimbachs had said they would not sell to Jews. Myerberg said he had no fears on that score. Dr. Gann said he had no fears either. Myerberg said he was thinking of buying the property as a home, moving his family there, and selling off part of the farm in lots. Early in April, the Ganns called at the home of the Myerbergs, and learned that they had made an appointment to visit the Leimbach property. At the invitation of the Myerbergs, the Ganns accompanied them to the Leimbach farm. Mr. and Mrs. Leimbach were at home, and were very hospitable and courteous. There is no testimony as to what matters were discussed at that time. On May 10, 1955, Myerberg asked Gann whether he would be willing to take the place if Myerberg's family decided not to move there. He told Gann the price was $122,500 plus a $5,000 commission to another real estate broker, Albert J. Strobel, Jr. Gann agreed to take it, if Myerberg did not. A contract of sale was signed by Myerberg and the Leimbachs on May 12, 1955. Myerberg insisted on a clause giving him the right to assign the contract without recourse. His explanation was that he would probably want to take title in the name of one of his development corporations. On May 20, 1955, Myerberg executed an assignment of the contract to the Ganns, but did not inform Leimbach of the assignment until four days before the settlement on July 12.

Leimbach testified that after the withdrawal of Gann's offer $115,000 he had no further communications in regard to the property until the end of April, when he received a phone call from a broker, Strobel, who was a close personal friend. This, of course, is not consistent with Gann's testimony that he and Myerberg visited the property and talked to Leimbach early in April. Strobel told him he had a prospective purchaser who was familiar with the property. After consultation with his wife, he called Strobel and put a price of $122,500 net on the place. Strobel told him that the prospect was Myerberg. Strobel had never shown the property to Myerberg, or to anyone else. At a luncheon meeting between Myerberg, Strobel and Leimbach the terms were agreed upon, and the contract of sale was drawn by their attorneys. Strobel died shortly thereafter.

There was testimony that Myerberg paid $5,000 to Strobel's firm at the time of settlement, although the contract of sale had been previously assigned. The sales price was listed as $127,500. No part of the commission was remitted to Myerberg or to anyone else. Dr. Gann testified he paid the full price for the farm, so evidently he reimbursed Myerberg for his down payment, and the payment of the commission.

We think the evidence was sufficient to show an initial employment of Nicholson by Leimbach. Employment may be implied from conduct, and need not be supported by evidence of a written, or even explicit oral, argeement. Heslop v. Dieudonne, 209 Md. 201, 206, 120 A.2d 669; Glaser v. Shostack, 213 Md. 383, 387, 131 A.2d 724; Code (1957), Art. 2, sec. 17. The fact that a sale is consummated by the owners without the participation of the broker is not decisive. Cowal v. Marletta, 216 Md. 222, 226, 139 A.2d 712. The broker must establish, however, that he is the primary, proximate and procuring cause, and it is not enough that he may have planted the seed from which the harvest was reaped. Keener v. Harrod, 2 Md. 63, 71; Attrill v. Patterson, 58 Md. 226, 251; Way v. Turner, 127 Md. 327, 328, 96 A. 676; Tahir Erk v. Glenn L. Martin Co., 4 Cir., 143 F.2d 232, 235. Cf. Steele v. Seth, 211 Md. 323, 328, 127 A.2d 388, and cases cited. In the instant case it is clear that Nicholson did not produce a purchaser ready and willing was buy at a price satisfactory to the owners. The best offer he was able to obtain was $115,000, less a commission of $5,000. The sale effected was at a price of $127,500, or $122,500 net to the owners. In short, Strobel, or Myerberg, succeeded, where Nicholson had failed, in procuring the end result. Nicholson did not have an exclusive agency. The contract was unilateral to pay commissions only if he produced a purchaser ready and willing to meet the owner's price.

It is of course true that on owner may not take advantage of a broker's services to secure a prospective purchaser and then deprive him of his commissions by selling directly to his client at a price less than the broker could sell under his authority, particularly where the authority is unrevoked. Cowal v. Marletta, supra, and cases cited. In such a case the inference may be drawn that the broker was in fact the procuring cause, and that the owner's refusal to accept the offer submitted was a subterfuge to avoid payment of commission which the broker had fairly earned. In the relatively few cases in which the sale has ultimately been made through other means at a higher price, and where there was no prospect of success when negotiations through the first broker terminated, it has been held that the dual inference, first, that the first broker was the procuring cause of the sale, and second, that the sale at a higher price was a subterfuge to defeat the first broker's right to commissions, does not arise. See note, 27 A.L.R.2d 1348, 1430. See, also, Richards, Inc. v. Shearer, 186 Md. 36, 40, 45 A.2d 627; Murphy v. Linsky, 94 Conn. 475, 109 A. 412; Rosenfield v. Wall, 97 Conn. 418, 109 A. 409, 9 A.L.R. 1189, and Williston, Contracts, (Rev.Ed.) § 1030A. The Murphy case suggests that the rule might not have been applicable if as the broker there contended but failed to show,...