E. A. Strout Realty Agency, Inc. v. Wooster

• Decision Date: 06 October 1953
• Docket Number: No. 827,827
• Parties: E. A. STROUT REALTY AGENCY, Inc. v. WOOSTER.
• Court: Vermont Supreme Court

Page 689

99 A.2d 689

118 Vt. 66

E. A. STROUT REALTY AGENCY, Inc. v. WOOSTER.

No. 827.

Supreme Court of Vermont.

Oct. 6, 1953.

Norbert J. Towne, Northfield, for plaintiff.

Philip Angell, Randolph, for defendant.

Before SHERBURNE, C. J., JEFFORDS, CLEARY and ADAMS, JJ., and CHASE, Superior Judge.

CLEARY, Justice.

This is an action of contract to recover a commission on the sale of certain real estate in Randolph Center. Trial was by court, findings of fact were filed and judgment entered for the defendant. The case is here on the plaintiff's exceptions to the findings, to the court's failure to find as requested and to the judgment.

It appears in the findings of fact that the defendant was the owner of the property involved which she listed for sale with the plaintiff real estate agency on April 5, 1948, through the plaintiff's local representative, Orville Curtis. This listing was under a written agreement signed by both parties.

Under the contract the defendant employed the plaintiff 'to procure a purchaser ready, willing and able to buy' the property 'at the stated price and terms.' 'If a customer is procured through you or your associates, on price and terms herein stated, or at a price and terms acceptable to me' the defendant agreed to pay the plaintiff a commission. The defendant reserved the right to sell the property by her own efforts and if so sold no commission was to be paid. 'But if sold or caused to be sold to a customer procured through or by you or your agents, directly or indirectly, at a price and terms acceptable to me, I will pay you your commission.' The contract was terminable upon thirty days' notice in writing but if within one year after such termination the property was sold to a customer procured by the plaintiff before such termination the commission was payable to the plaintiff. By a subsequent agreement in writing dated November 6, 1948, and signed by both parties, the selling price was reduced from $11,000 to $9,500 and the commission fixed at 5% of the sale price. Sometime in 1948 the defendant had become very anxious to sell and informed the plaintiff's representative that she might be willing to take even less than $9,500 for her property and directed him to notify her of all offers.

In July 1949 the plaintiff's representative took Mr. and Mrs. Wesley Herwig to see the property and went over it with them with a view of selling it to them. After the inspection the Herwigs talked with Curtis about price and finally asked Curtis to tell the defendant that they would give her, according to the testimony of the Herwigs, the sum of $6,000, and according to the testimony of Curtis, $4,000 for the place. Curtis thought the offer was so low that it was unworthy of serious consideration, that it indicated a lack of genuine interest in the place and, therefore, he did not inform the defendant of the Herwigs' offer as previously directed by her. He never brought the Herwigs and the defendant together, made no attempt to put them into communication with each other so they could negotiate, dismissed from any further consideration the thought of the Herwigs as prospects, and abandoned all further efforts to induce them to buy the property. He never mentioned the matter to the Herwigs again, though from time to time he met Mr. Herwig on the street in Randolph.

On June 19, 1950 Herwig wrote directly to the defendant regarding purchase of the property and asked for her lowest possible price. When the defendant received this letter she was completely unaware that the Herwigs had ever been approached by Curtis. As a result of correspondence the defendant and the Herwigs came to terms for the purchase of the property at the agreed price of $6,500. On July 7, 1950 the defendant wrote the plaintiff and the plaintiff replied by letter dated July 8, 1950, claiming that the Herwigs were its customers and claiming a commission for the sale. The defendant then inquired of Mr. Herwig if he and his wife were broker's customers and Herwig told the defendant 'just what occurred: of how he had submitted an offer to Curtis. The defendant, knowing that Curtis had not in fact informed her of the offer, as she had directed him to do, concluded that the Herwigs could not be the plaintiff's customers.' On August 14, 1950, the defendant conveyed her property to the Herwigs in fulfillment of the agreement made with them prior to any knowledge of the plaintiff's claim.

The plaintiff excepted to parts of findings numbered 6, 15, 18 and 19 which parts read as follows: 6. 'and directed that he notify her of all offers for the place.' 15. 'as she had directed him to do.' 18. 'the broker had knowledge that it was essential that it report all offers so that his principal could pass on their acceptability.' 19. 'The failure of the plaintiff to obey the directions of his principal in reporting all offers was the failure of an agent to meet a duty owing to his principal in the circumstances of this case,' and 'the non-disclosure by the broker was prejudicial to the defendant.'

The plaintiff claims three grounds for its exception: First, because the portions excepted to were based on oral testimony which contradicted a written contract; and cites Wood v. James, 93 Vt. 36, 41, 106 A. 566, and Hayden v. Hoadley, 94 Vt. 345, 349, 111 A. 373. By the terms of the written contract the defendant had agreed to pay a commission if the plaintiff procured a customer at the stated price and terms or at a price and terms acceptable to the defendant. The evidence on which the findings were based did not contradict the written contract but was consistent with it. So its reception did not violate the rule set forth in the two cases relied upon by the plaintiff and they are not in point. The defendant's direction to the plaintiff to notify her of all offers for the place were material and relevant to the issue and properly admitted in evidence. Field v. Mann, 42 Vt. 61, 64-65; Dunklee v. Goodnough, 68 Vt. 113, 114, 34 A. 427; Roof v. Jerd, 102 Vt. 129, 131-133, 146 A. 250, 68 A.L.R. 235. The second ground of the exception is because the testimony was offered contrary to Rule 18(1) of the Rules of County Court, as the defendant had not denied the contract in her pleading. County Court rule 18(1) relates only to proof of the execution, endorsement or assignment of a written contract. So it was not contrary to the rule. The third ground of the exception is because the evidence could not become a legal obligation on the plaintiff under any theory of the law. It is the general rule that a real estate agent must act in compliance with the instructions of his principal. Shatz Realty Co. v. King, 225 Ky. 846, 10 S.W.2d 456, 60 A.L.R. 1374, 1376. A broker is but an agent and is bound to follow the directions of his principal. Gallagher v. Jones, 129 U.S. 193, 9 S.Ct. 335, 32 L.Ed. 658, 660; Richardson v. Shaw, 209 U.S. 365, 28 S.Ct. 512, 52 L.Ed. 835, 841. A broker employed to sell real estate is bound to make disclosure to his principal of all matters that are material and might affect the action of his principal. Coppage v. Howard, 127 Md. 512, 96 A. 642, 646; Young v. Hughes, 32 N.J.Eq. 372, 383; Quinn v. Phipps, 93 Fla. 805, 834, 842, 113 So. 419, 54 A.L.R. 1173; Skinner Mfg. Co. v. Douville, 57 Fla. 180, 185-186, 49 So. 125. In the absence of a special agreement, it is the principal's judgment, and not the agent's, that it to control. Gallagher v. Jones, 129 U.S. 193, 9 S.Ct. 335, 32 L.Ed. 658, 660. This defendant was entitled to have all offers of purchase submitted to her in order for her to decide whether the offers were acceptable to her, particularly so, after she directed the plaintiff to submit all offers of purchase to her. Instead of complying with his duty to follow the directions of his principal the defendant's representative made no report of Herwig's offer to the defendant, made no attempt to put the parties into communication with each other, concluded Herwig's offer was unworthy of consideration, dismissed the thought of the Herwigs as prospective purchasers and abandoned all further efforts to induce them to buy the property. He not only violated his duty but was controlled by his own judgment, rather than that of his principal. This he could not legally do. So the exception is of no avail on any of its grounds.

In its brief the plaintiff claims that if such evidence is admitted without objection the court should have ignored it as a matter of substantive law, citing Phillips Co. v. Gay's Express, 112 Vt. 49, 20 A.2d 102 and Reid v. Abbiatti, 113 Vt. 233, 239, 32 A.2d 133. The Phillips Co. case concerned an oral agreement prior to and varying the written contract. The Reid case was a tort action for the negligent operation of an automobile. The portion of the opinion to which our attention is called related to the duty of the trial court respecting instructions to the jury. Neither case controls the present case. The claim was not a ground of the exception and we have already shown that reception of the evidence did not violate the parole evidence rule.

The plaintiff also excepted to findings numbered 18 and 19 on the ground that they are findings of law and to finding numbered 19 on the ground that the plaintiff did not receive any legal binding offers for the place at any price prior to the sale. None of these grounds are briefed and so they are waived. Town of Randolph v Ketchum, 117 Vt. 468, 470, 94 A.2d 410; In re Lake Seymour, 117 Vt. 367, 371, 91 A.2d 813; Hackel v. Burroughs, 117 Vt. 328, 329, 91 A.2d 703.

The plaintiff also excepted to those portions of findings numbered 18 and 19 quoted supra and to finding numbered 20 on the ground that if supported at all it is by evidence which was objected to and if properly admitted does not support the findings. Finding numbered 20 reads as follows: 'The pliantiff's excuse for not reporting the Herwig's offer because no deposit and no offer in writing...