Odem Realty Company v. Dyer

• Decision Date: 19 January 1932
• Parties: Odem Realty Company et al. v. Dyer.
• Court: United States State Supreme Court — District of Kentucky

Page 58

242 Ky. 58

Odem Realty Company et al. v. Dyer.

Court of Appeals of Kentucky.

Decided January 19, 1932.

1. Brokers. — Where employment contract requires broker to find customer able, ready, and willing to enter transaction on principal's terms, broker complying with contract is entitled to commission whether principal completes transaction or not.

2. Brokers. — Broker is entitled to commission when principal enters into binding contract with purchaser produced by broker.

3. Brokers. — When brokerage contract contemplates completed transaction, there is no obligation to pay commissions until conditions of payment are fulfilled.

4. Contracts. — Party to contract obligated to make payment out of particular funds is impliedly obligated to do nothing to prevent performance of contract.

5. Contracts. — Obligated party to contract preventing creation of conditions under which payment would be due, without fault on other party, is estopped to avail himself of situation brought about by own wrong.

6. Contracts. — To place party to realty contract in default, necessary tender of performance by other party, or that he was "ready, able and willing" to perform, must be averred.

7. Brokers. — Brokers held not entitled under contract to agreed commissions, without allegation vendor collected equivalent amount from purchaser or that vendor refused performance when purchaser was willing, able, and ready to perform.

Facts disclosed contract under which vendor agreed to sell property included stipulation for vendor to pay $1,000 brokers' commission out of money he collected from purchaser. Vendor refused to perform contract with purchaser, and brokers sued for commissions.

8. Brokers. — Purchaser's absolute obligation for commissions held not to render vendor liable for commissions which were contingent on payment of money collected from purchaser, where contract was never carried out.

9. Exchange of Property; Vendor and Purchaser. — Measure of damages for breaching contract for sale or exchange of real estate does not include commissions paid for negotiation or procurement of contract.

Appeal from Hardin Circuit Court

MARK BEAUCHAMP and J.E. WISE for appellants.

FAUREST & FAUREST for appellee.

OPINION OF THE COURT BY JUDGE WILLIS.

Affirming.

This was an action by real estate brokers for the recovery of commissions. It was dismissed on demurrer to the petition, and the plaintiffs have prosecuted an appeal. The defendant, J.B. Dyer, owned a business and stock of merchandise at Sonora in Hardin county, Ky. The brokers negotiated a contract between Dyer as seller and J.H. Pile and wife as buyers, by the terms of which Dyer agreed to sell his stock of merchandise, fixtures, and business to the purchasers for $35,000, payable as follows: $12,400 to be paid out of the receipts from the sale of merchandise under certain fixed conditions, and the balance of $22,600 to be paid by the conveyance of certain incumbered real estate designated in the contract. The agreement further provided:

"It is agreed that the said J.B. Dyer shall pay one thousand dollars agents' commission for making this sale, to be paid out of the money he collects from the said J.H. Pile and the said Pile is to pay the amount he has agreed upon with the agent. The said Pile is to pay agents' commission at the same pro rate as said Dyer."

The petition alleged that, when the contract was reduced to writing and signed by defendant and the purchasers, it became a binding contract between the parties, and that the plaintiffs were then entitled to their commission of $1,000 from defendant herein, and to the sum of $1,659 from J.H. Pile.

The alleged breach of the contract on the part of Dyer was stated as follow: Notwithstanding the fact that the defendant had made the contract to sell his stock of merchandise, fixtures, and business to J.H. Pile, he refused to comply with the contract and to convey his property in accordance therewith, although J.H. Pile was ready at all times to comply with the contract and to convey his property in accordance therewith. It was further alleged that, by reason of the refusal of Dyer to comply with the contract, the plaintiffs were unable to collect their commissions from Pile, and hence plaintiffs asserted a right to collect from the defendant Dyer the entire commissions due from both parties. It will be observed that the action is based upon the written contract by the terms of which the defendant agreed to pay the sum of $1,000 out of the money collected by him from J.H. Pile. The obligation of Pile to pay a commission to the plaintiffs was not so conditioned, but was absolute.

The argument for the appellants proceeds upon the theory that, when the brokers negotiated a valid contract which was signed and accepted by both parties, they were entitled to the commission. The general rule is well established that, if the contract of employment simply requires the broker to find a customer who is able, ready, and willing to enter into a transaction on the terms prescribed by the principal, the broker is entitled to his commission whether or not the principal completes the transaction. Randle v. Bloomfield, 146 Ky. 421, 142 S.W. 677; Fowler v. Thomson, 193 Ky. 593, 236 S.W. 1047; Kock v. Emmerling, 22 How. 69, 16 L. Ed. 292; Beougher v. Clark, 81 Kan. 250, 106 P. 39, 27 L.R.A. (N.S.) 198. It is equally well settled that, when the customer accepts the purchaser produced by the broker and enters into a binding contract with him, the commission is earned, if such was the contract of the parties. Ferguson v. Harris, 200 Ky. 146, 254 S.W. 329; Casey v. Hart Wallace & Co., 188 Ky. 441, 222 S.W. 111; Swinebroad v. Foster, 196 Ky. 459, 244 S.W. 881; Stuart-McKnight & Co. v. Monroe, 222 Ky. 602, 1 S.W. (2d) 1054. But this is not such a case. This case is based upon the written obligation of Dyer to pay $1,000 out of money collected from J.H. Pile. When the contract of brokerage, like any other contract, contemplates a completed transaction, there is no obligation to pay until the conditions of payment are fulfilled. Hale v. Kumler (C.C.A.), 85 F. 161; Holton v. Job Iron & Steel Co. (C.C.A.), 204...