Parker v. Walker

• Citation: 8 S.W. 391
• Parties: PARKER <I>v.</I> WALKER.
• Decision Date: 05 May 1888
• Court: Supreme Court of Tennessee

8 S.W. 391

PARKER

v. WALKER.

Supreme Court of Tennessee.

May 5, 1888.

Error to circuit court, Shelby county; L. H. ESTES, Judge.

Action by Minter Parker, a real-estate broker, against J. F. Walker, to recover commission for making a sale of land. The action was tried in the circuit court upon an agreed statement of facts, and judgment was rendered for defendant, and plaintiff brought error.

John D. Martin, for plaintiff in error. Poston & Poston, for defendant in error.

LURTON, J.

This case was heard upon an agreed state of facts, from which it appears that the plaintiff, a real-estate broker, agreed to procure a purchaser for certain property at $12,300, and take $300 for his commissions as compensation. In pursuance of this agreement, Parker did find a number of gentlemen who agreed to take the property together at the price the owner was willing to take. A written agreement of purchase was drawn up, at the suggestion of Parker, by the attorney of Walker, and signed by Mr. Walker, and the purchasers so secured by the broker. Twenty days was given within which the purchasers should examine the title, and reject same if unsatisfactory. This agreement was a definite agreement to consummate the sale if title was sound; and, being signed by the parties was valid under the statute of frauds, and enforceable in equity by a bill for specific performance, by either party. The purchaser, within the time allowed by the contract, consulted counsel as to the title, and, being advised that it was defective, declined to carry out their agreement. Walker caused a bill to be prepared to enforce performance, and notified the purchaser that it was his purpose to compel a performance of their agreement; but for reasons not stated did not file his bill, and abandoned his purpose to hold the purchasers to their bargain. Parker, under this state of facts, insists that he has done all he was obligated to do by his employment; but that he is entitled to his commissions. Walker, upon the other hand, resists payment upon the ground that no sale has been made, and that the refusal of the purchasers to complete the purchase has caused the failure of the negotiations, and that he is not bound to compel a specific performance, but may drop the matter as an unsuccessful effort to make a sale, for which he owes nothing to the broker. This view of the matter was taken by the circuit judge to whom the issues of law and fact were submitted, who rendered a judgment for the defendant. The controversy turns upon the extent of the obligation undertaken by one who assumes to act as a broker, and the duty which he agrees to perform.

"A broker," says Judge Story, "is an agent who is employed to negotiate sales between the parties for a compensation in the form of a commission. In the proper exercise of his functions, he does not act in his own name, but only as middle-man." Story, Cont. § 344. In his work on Agency, he defines a broker as "one who makes a bargain for another, and receives a commission for so doing. Properly speaking, a broker is a mere negotiator between the other parties." Story, Ag. § 28. In the substantial correctness of this definition all the authorities concur. The office he undertakes, is to bring the buyer and seller to an agreement, or, as some of the cases put it, he undertakes to procure a purchaser willing and able to enter into an agreement of purchase upon the terms of the seller. This general obligation which he assumes or undertakes may, of course, be varied by contingencies, and broadened or narrowed by specific contract. In the case now under consideration, the very terms of the agreement between the owner of the property and his agent only required the latter to "procure a purchaser," and the particular agreement conforms to the very definition of a broker's general contract and undertaking. "To procure a purchaser" of real estate, not only implies that the purchaser shall be one able to comply, but the further idea that the seller and the purchaser must be bound to each other in a valid contract. To this must we agree. An oral agreement upon the part of the purchaser would not be a valid agreement; and if he refused to complete the sale after such oral agreement, without fault upon the part of the seller, the obligation of the broker would not be fulfilled, and he could not recover his commissions. If, on the other hand, the purchaser was not only able but willing to complete the sale, and the vendor then refused to sell, or is unable to fulfill the terms upon his part, or make a good title, or the trade falls through for any other default upon the part of the seller, the commissions are nevertheless earned. 2 Add. Cont. (Morgan's Ed.) § 931; Cook v. Fiske, 12 Gray, 491; Tombs v. Alexander, 101 Mass. 255, 3 Amer. Rep. 349; Mooney v. Elder, 56 N. Y. 238. But if a valid and enforceable agreement be entered into by the purchaser, and he decline to complete the sale for insufficient reasons, the seller ought not to be allowed to deprive the broker of his commissions by his refusal to compel the performance of a valid contract of purchase. The broker, in such case, has done all he can do, and all he undertakes to do. He has produced a purchaser able to comply, or one satisfactory to the seller, for he has accepted him as a purchaser; and willing to purchase, for he has freely bound himself by a valid agreement to buy the property. The subsequent unwillingness to carry out his purchase cannot affect the validity of the agreement by which he has bound himself to take the property. This assent of the contracting parties, and this valid agreement, having been brought about through the intervention of the agent, completes his obligation, and is all he undertook to do, and just what his principal employed him to do. If such a purchaser, being thus bound, undertakes to avoid his agreement upon insufficient legal grounds, the vendor may, if he choose, compel a specific performance; but if he elect to release him, rather than incur the expense or annoyance or delay of a litigation, he ought not, in equity and justice, make such election at the expense of his broker. Under the particular engagement entered into between the plaintiff and defendant, and under the general and usual agreement implied from the very definition of the term "broker," the plaintiff in this case has accomplished just what he undertook to do, and just what the defendant agreed to pay him for doing. No objection is made, or can be made in this case, as to the ability of the purchaser procured by defendant to comply with the terms of the contract of purchase. Such an objection should have been made before Walker accepted them as purchasers, and bound himself to sell to them. Royster v. Mageveney, 9 Lea, 151. The willingness of Walker to accept the purchasers as such, and his satisfaction with the trade, is shown by an extract from the agreed statement of facts: "After their introduction as would-be purchasers, they either would not or could not pay the $12,300 cash, which Walker had authorized Parker to sell the property for, but offered to buy it upon the terms specified in Exhibit A, [part cash, balance on time.] * * * Walker agreed to those terms; and thereupon Parker, being present at said interview, suggested that said agreement be reduced to writing, and signed by the parties, both buyers and seller, whereupon the written contract, Exhibit A, was drafted by Walker's lawyer, and executed by all the parties." Upon the execution of this agreement of sale, nothing more remained that the broker could do, or that he was bound to do. It was for his principal to elect whether he would hold the purchasers to their bargain or release them. If he had chosen to have enforced the agreement, it must be conceded that the broker could have recovered his commissions. Can it be, then, that if, on the other hand, his principal preferred to release them, that he can thereby defeat their claim to their reward? The question as to whether the title of Walker was or was not good is wholly immaterial. If it was bad, and the sale defeated on that account, the broker, by all the authorities, is entitled to his commissions, unless he was apprised of the defective title, and undertook, with such knowledge, to find a purchaser. The title does, however, from the abstract in the record, appear to have been good, and the objection of the purchasers captious. The liability of the seller to his broker, under such a state of facts, seems clear upon a fair interpretation of the agreement between them.

The conclusion which we entertain is supported by considerations of equity and justice to an energetic and useful class of middlemen. That, in some cases, a hardship will result to would-be vendors, who may, in order to avoid paying commissions, be forced to compel the unwilling purchaser to comply with his contract, is not a matter so serious as to determine that the law must therefore be otherwise. If a seller prefers to release a purchaser who is morally and legally bound to comply with his bargain, he ought not to complain if the law holds that he cannot do so at the expense of his broker, whose labors and ability have brought about a binding agreement. The weight of authority seems to support the view we have taken. Coleman v. Meade, 13 Bush, 358; Tombs v. Alexander, 101 Mass. 255, 3 Amer. Rep. 349; Love v. Miller, 53 Ind. 294, 21 Amer. Rep. 192. This last is a well-reasoned case, and the learned judge refers to a large number of cases, as supporting the view here announced, to...