Nestle' Co., Inc. v. J. H. Ewing & Sons, 58878

• Decision Date: 07 February 1980
• Docket Number: No. 58878,58878
• Court: Georgia Court of Appeals
• Parties: NESTLE' COMPANY, INC. v. J. H. EWING & SONS et al.

Page 61

265 S.E.2d 61

153 Ga.App. 328

NESTLE' COMPANY, INC. v. J. H. EWING & SONS et al.

No. 58878.

Court of Appeals of Georgia.

Argued Oct. 30, 1979.

Decided Jan. 8, 1980.

Rehearing Denied Feb. 7, 1980.

Albert Sidney Johnson, Harmon W. Caldwell, Jr., Atlanta, for appellant.

Charles H. Ivy, William L. Bost, Jr., Kenneth M. Weiss, Atlanta, for appellees.

BANKE, Judge.

The four plaintiff-appellees, J. H. Ewing & Sons, Real Estate Concepts, Inc., Eugene H. Anderson, and Eugene D. Scott, sued Nestle' Company to recover a broker's commission on the transfer of certain real estate which Nestle' subleased to Scripto, Inc. Scripto is not a party to the action. The plaintiffs sought recovery based on breach of an alleged agency agreement, tortious interference with property rights, and quantum meruit. In addition to the commission, they sought punitive damages and attorney fees.

Most of the facts are undisputed. Nestle' initially named the brokerage firm of Coldwell Banker as its exclusive agent to find a tenant for the property in question; however, this exclusive agency expired on June 1, 1977; and the property was thereafter placed on "open listing." On August 11, 1977, Coldwell Banker, acting in concert with the Allen Morris Company, another brokerage firm, showed the building to Scripto's vice-president for operations, Sam Rawlins. Immediately afterwards, Coldwell Banker and Allen Morris registered Scripto with defendant Nestle' as a prospective tenant.

Plaintiffs Anderson and Scott were employed as real estate agents for plaintiffs J. H. Ewing & Sons and Real Estate Concepts, respectively, both of which are licensed brokerage firms. The two men had been assisting Scripto since 1976 in a search for a suitable building in which to relocate its business operations. In return, they expected to receive a broker's commission from the owner of whatever facility Scripto finally chose.

Acting on his own behalf and on behalf of the other plaintiffs, Anderson showed the Nestle' building to a Scripto consultant in June of 1976. Scripto displayed no interest in it at that time; however, by late 1977 Scripto's needs had changed, and the defendant's building again came under consideration. On September 20, 1977, less than six weeks after Coldwell Banker and Allen Morris had shown the property to Scripto's vice-president Rawlins, Anderson telephoned Nestle's general manager for warehousing, Howard Wellman, and advised him that he had a "hot prospect" for the building. Wellman confirmed to Anderson that the building was still available and that there was no longer an exclusive listing on it.

There is a conflict in the testimony as to whether Anderson identified Scripto as his "hot prospect" during this initial phone conversation. Anderson insisted that the did; Wellman recollected, somewhat less categorically, that he did not. In any event arrangements were made for Anderson to show the building to his prospect. The following day, Anderson accompanied Scripto's president and board chairman, along with vice-president Rawlins and two engineers, on an inspection tour. They reacted very positively, and Anderson was instructed to pursue negotiations with Nestle'. Later that day (September 21), Anderson again telephoned Wellman, advised him of Scripto's favorable response, and requested certain documents regarding the building. There is no question that Scripto was identified as the prospective tenant during this conversation.

Realizing that he had a potential commission dispute on his hands, Wellman consulted with his management, who instructed him not to have any further communication with Anderson. Nestle' soon thereafter obtained a statement from Coldwell Banker describing its efforts on Scripto's behalf and, apparently based on this statement, decided that the Coldwell Banker group would be entitled to the commission if Scripto decided to rent the building. Approximately two weeks later, in early October, Anderson again phoned Wellman to check on the documents which he had requested. Wellman's secretary informed him that Wellman was not available. He phoned again the next day and was told that Wellman did not wish to speak to him and that further calls regarding Scripto's interest in the building should be directed to Coldwell Banker. Anderson reported this state of affairs to Scripto and advised its management to contact Nestle' directly. Scripto did so and was placed in contact with Coldwell Banker. A sublease was negotiated soon thereafter and was closed on November 1, 1977. Coldwell Banker handled the negotiations and received from Nestle' a commission of $59,000.

In response to written questions submitted by the court, the jury found that "(t)here was an agency agreement between plaintiffs and defendant, and defendant breached it to plaintiffs' detriment." They also found that Nestle' was guilty of tortious interference with the plaintiffs' property rights, viz., their alleged contractual relationship with Scripto. The plaintiffs were awarded $70,069 as compensation for the lost commission, plus exemplary damages in the amount of $50,000 and attorney fees in the amount of $21,381. Following the denial of its motions for new trial and for judgment notwithstanding the verdict, Nestle' filed this appeal, enumerating 21 alleged errors. Held :

1. We find ample evidence to support the award of compensatory damages. However, we find that the trial court committed reversible error in allowing the plaintiffs to recover without a determination that they were the "procuring cause" of the transaction.

"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 (transfer) of real estate for an owner, the question which of the brokers is entitled to commissions from the owner for effecting such (transfer) depends upon whose efforts were the primary, proximate, and procuring cause of the (transfer) negotiated. The broker whose services and efforts were the primary, proximate, and procuring cause of the (transfer) would be entitled to the commissions. (Cits.)" Gresham v. Lee, 152 Ga. 829, 830, 111 S.E. 404, 405 (1921). The broker makes out a prima facie case that he was the procuring cause of the completed transaction "when he shows that negotiations for the sale were set on foot through his efforts, that he performed every service required by his employment which it was possible to perform, and that the failure on his part to personally consummate the (transaction) was due to the interference of the defendant." Tomlin v. Bickerstaff, 85 Ga.App. 48, 51-52, 68 S.E.2d 224, 227 (1951), citing Gresham v. Connally, 114 Ga. 906, 909, 41 S.E. 42 (1902). See also Wilcox v. Wilcox, 31 Ga.App. 486(3), 119 S.E. 445 (1923); Sharp-Boylston Co. v. Lundeen, 145 Ga.App. 672, 673, 244 S.E.2d 622 (1978).

The evidence was ample to make out a prima facie case for the recovery of a commission based on the above principles. Therefore, the trial court was correct in rejecting the general grounds of the motion for new trial and in denying the motion for judgment notwithstanding the verdict. However, in its charge to the jury, the trial court erroneously stated that Nestle' would be liable for the payment of a commission to plaintiffs either if they had procured Scripto as a tenant or if they had entered into an agency agreement with Nestle', and Nestle' had breached it. In the written interrogatories submitted to the jury, the issue of procuring cause was omitted altogether, despite a specific exception by Nestle' on this point. As shown above, Nestle's breach of an agency agreement with the plaintiffs would not entitle the plaintiffs to a full commission in the absence of proof that they were the procuring cause of the sale. Thus, we hold that the omission of the procuring cause issue from the written questions to the jury constituted reversible error.

2. The jury's verdict finding the defendant guilty of tortious interference with the plaintiffs' contractual rights with Scripto is not supported by the evidence. It does not appear that the plaintiffs were contractually obligated to find Scripto a suitable relocation site, nor does it appear that Scripto was obligated to pay them anything. Instead, it appears that the plaintiffs joined in Scripto's search for a...