Pond v. Carter

• Decision Date: 04 April 1967
• Docket Number: No. 1067,1067
• Citation: 126 Vt. 299,229 A.2d 248
• Court: Vermont Supreme Court
• Parties: Arlington POND v. Lee CARTER.

Page 248

229 A.2d 248

126 Vt. 299

Arlington POND v. Lee CARTER.

No. 1067.

Supreme Court of Vermont.

April 4, 1967.

Corsones & Hansen, Rutland, for plaintiff.

Bishop, Crowley & Jeffords, Rutland, for defendant.

Before HOLDEN, C. J., and SHANGRAW, BARNEY, SMITH and KEYSER, JJ.

KEYSER, Justice.

The plaintiff, a real estate broker, brought this action in Rutland County Court to recover his commission under an exclusive listing agreement. Trial was by jury. Following a verdict and judgment for the plaintiff, the defendant appealed. He asserts error by the trial court on several grounds.

The defendant moved for a directed verdict at the close of plaintiff's evidence and again at the close of all of the evidence. The court overruled these motions which defendant claims was reversible error. The defendant has briefed two arguments in support of his contention that a directed verdict should have been granted.

First, he asserts 'the better view of the law is that an 'able, ready and willing' buyer has not been produced and the commissions are not earned until the purchaser is bound in a manner not within the Statute of Frauds.' The record does not reveal that the defendant made any reference below to the Statute of Frauds in support of his motion. This ground at it relates to the Statute of Frauds is raised in this Court for the first time and, not having been advanced below, is not for our consideration. Gaylord v. Hoar, 122 Vt. 143, 149, 165 A.2d 358. Secondly, defendant contends the wording of the exclusive sales agreement is such that an agreement signed by the buyer was necessary before the commission was earned.

In cases involving claims for commissions by real estate brokers, the first consideration must be as to the nature of the contract between the seller and broker. The contract here was executed on October 9, 1964, and was for an exclusive listing for the sale of real estate located in Hydeville, Vermont, at the price of $9500.00. The pertinent paragraphs of the agreement follow:

'1. I hereby grant to you for the period of 12 months from this date, and thereafter until this agreement is revoked by fifteen days notice in writing, delivered to you, but in no event for a term of longer than 1 year, the exclusive power and authority to sell the property described on the reverse side hereof, for the price and upon the terms hereon set forth, or any other price or terms acceptable to me.

2. In consideration of the acceptance by you of this agency and of your efforts to secure a buyer for the property, I agree to pay you a commission of 10% on the gross sale price, whether such sale be made by you or me or by any other person acting for me in any behalf.

5. I agree to furnish a warranty deed showing a merchantable title.

7. I further agree that if a purchaser is found by you ready, able and willing to comply with the above-mentioned terms and I do not accept them I will pay you the above-mentioned commission.

8. Commission shall be deemed earned when the agreement of sale is executed by the buyer and seller and you are authorized to deduct all or part of your commission from the initial deposit at the time of signing of sales agreement.

10. As my agent, you are authorized to accept, receipt for, and hold all money paid or deposited as a binder thereon and should such deposit be forfeited by the purchaser you may retain one-half of such deposit as your compensation, but not exceeding the full amount of your commission.'

On the reverse side this appears: 'Owner Lee Carter.'

In considering a motion for a directed verdict, the evidence must be viewed in the light most favorable to the party against whom the motion is made. The tendency of the evidence and its weight is to be considered. Fuller v. City of Rutland, 122 Vt. 284, 288, 171 A.2d 58.

The selling price under the listing agreement was $9500.00. The efforts of plaintiff to sell at this price were not fruitful and, after plaintiff discussed the situation with defendant, the latter agreed to a reduction in the selling price to $7000.00. After advertising the property at this figure, the plaintiff received an offer of $6000.00. He told the defendant of this who said he didn't think it was quite enough and he would like to talk with his boys about it. About a week later defendant told plaintiff he wanted $6000.00 net which plaintiff said would mean the price would be $6600.00. To this the defendant said 'go ahead on that.' This revised price was acceptable to the proposed purchaser and plaintiff so informed defendant. A few days later plaintiff received the purchaser's check for $600.00, and told defendant he had it. Plaintiff told defendant to see his lawyer to have a deed prepared and gave him the names of the purchaser and his wife. The defendant failed to come forward with a deed. Plaintiff saw defendant several times about getting it prepared and he said he would. After plaintiff had produced this buyer for the property, he learned through defendant's daughter-in-law that an estate was involved in the property but defendant still insisted he had the right to sell it. It developed that the property in question was not owned by the defendant but title was in his wife who had deceased about two years previously. She left surviving her, the defendant and two sons, one of whom was the administrator of his mother's estate. Plaintiff returned the deposit to the proposed purchaser after it became apparent the sale was not to be consummated.

The listing agreement granted the plaintiff the exclusive authority 'to sell' the property. Even though the parties make use of such words as 'sale', or 'to sell' or 'to make a sale', a contract that the broker will find a purchaser ready, able and willing to buy the property on the exact terms authorized or agreed to by the seller may result. The language of the instrument is construed to mean that the plaintiff was to produce a buyer ready, able and willing to buy on the terms of the agreement. This is plain from the phrases: 'efforts to secure a buyer' and 'if a purchaser is found by you.' The agreement delegates no authority to plaintiff to execute a sales agreement between a purchaser and plaintiff in behalf of the defendant. The execution of such sales contract was reserved to be performed only by the seller himself as provided by Paragraph 8.

This paragraph of the listing agreement stipulates that the 'commission shall be deemed earned when the agreement of sale is executed by the buyer and seller.' Under the agreement completion or consummation of a sale was not a condition precedent to the earning of a commission but a mutually enforceable sales contract between the purchaser and the defendant was necessary.

No question is raised by the defendant but that the plaintiff produced a purchaser ready, able and willing to buy the listed property. The evidence tended to so prove. Plaintiff's evidence also tended to show the defendant had agreed to accept the buyer. He admits this in his brief. The evidence shows the plaintiff did all that Paragraph 7 of the listing agreement required him to do to be paid his commission unless by Paragraph 8 a written sales contract signed by the purchaser and defendant was a prerequisite to earning it.

Several cases decided by this court cited by the defendant are not in point. Those cases deal with situations where a binding sales contract was entered into by the buyer and seller, or where the person produced was not a ready, willing and able purchaser, or where the action was barred by the Statute of Frauds.

Clearly, as plaintiff argues, a broker is entitled to his commission where the proposed buyer and seller enter into a valid, binding contract for the purchase and sale of property even though the buyer declines to later honor his contract. Benoit v. Wing, 117 Vt. 477, 478, 479, 94 A.2d 237. This is also true where the failure of the purchaser to complete the sale as agreed results from the inability of the vendor to make a good title, and without fault on the part of the broker. Wilson v. Mason, 158 Ill. 304, 42 N.E. 134, 135. In either instance the broker's commission is deemed to have been earned.

The crux of defendant's argument is that a binding sales contract signed by the buyer was required by the exclusive listing agreement before plaintiff had earned his commission. The agreement required that the buyer and seller both sign the contract. Otherwise, the contract would be unilateral only and not constitute a mutually enforceable contract as contemplated by the listing agreement. The procurement of such sales contract is a requirement which the defendant could waive by his conduct. 12 Am.Jur.2d, Brokers, § 192. If he did waive it, the procurement of a binding sales contract was not a condition precedent to plaintiff earning his commission.

It is plain that the purchaser procured by plaintiff would have bought but for the fact that the defendant, although he accepted the sale, did not produce a warranty deed of the property. It thus appears that the sale negotiated by the plaintiff was defeated solely by the failure of defendant to make good his stipulation to furnish a warranty deed showing a merchantable title. The bargain fell through by defendant's fault or inability to complete it and not because of any fault or failure of the plaintiff. Even where the contract negotiated is void by reason of the statute of fruads, if the party procured by the broker is ready, able, and willing to perform, and performance is prevented solely by the employer, the broker will be entitled to his commissions. 12 Am.Jur.2d, Brokers § 192.

The fact that the purchaser was ready, able and willing to buy, and would have done so had he not been prevented by the defendant's failure to produce a warranty deed, must be regarded as controlling, and as dispensing with, and as a waiver of, the necessity of a binding sales contract, which might otherwise exist. Hamburger &...