Thomas-McCain, Inc. v. Siter

Decision Date22 February 1977
Docket NumberTHOMAS-M,No. 20365,20365
CourtSouth Carolina Supreme Court
PartiescCAIN, INC., Respondent, v. William Bartlett SITER, Appellant.

Dusenbury, Hendrix & Little, Myrtle Beach, Allen L. Ray, Conway, for appellant.

Bellamy, Ruttenburg, Epps & Gravely, Myrtle Beach, for respondent.

RHODES, Justice:

This action was brought by Thomas-McCain, Inc. (Broker), a real estate firm located in Myrtle Beach, to recover a commission of $9,490.00. The commission sought allegedly was earned by procuring one Charles Dean Phillips (Purchaser) to enter into an agreement to buy a motel from William Bartlett Siter (Seller) for the consideration of $383,000.00. From a verdict in favor of the Broker, the Seller appeals. We affirm.

The property in question was listed with the Broker by the Seller, and it is undisputed that the Seller and the Purchaser were brought together through the efforts of the Broker. The Broker contends that its services were fully performed and that its right to the commission vested when the Seller accepted the Purchaser and entered into a valid and binding contract of sale. The Seller maintains that under the terms of the contract the Broker was not to receive any compensation until the consummation of the sale.

The contract of sale provided that most of the consideration for the purchase of the motel was to be in the form of the Purchaser's assumption of outstanding mortgages on the property. The contract further provided that the sale would be closed on May 29, 1975. However, the sale was never consummated.

The Seller bases his contention on the following contract provision:

'. . . and the undersigned will pay to the listing broker On or settlement the sum of Nine Thousand Four Ninety (sic) and no/100 Dollars ($9490.00) . . .' (emphasis added)

The Broker relies upon the general rule that ordinarily a broker has earned his commission when he procures a purchaser who is accepted by the owner of the property and with whom the latter, uninfluenced by any representation or fraud on the part of the broker, enters into a valid and enforceable contract, and that such right to compensation will not be defeated by the failure or refusal of the purchaser to consummate the contract. This rule is adhered to by the overwhelming majority of jurisdictions. Hamrick v. Cooper River Lumber Co., 223 S.C. 119, 74 S.E.2d 575 (1953). It was recognized by this Court in Fairly v. Wappoo Mills, 44 S.C. 227, 22 S.E. 108 (1895). The law is equally well settled to the following effect:

(T)he broker and owner 'may make such a contract for the broker's services as is agreeable to them, and may make the payment of the broker's commission dependent upon the full performance of the contract of purchase or sale, or postpone the payment of the commission, or make the broker's right to the commission contingent upon the happening of future events'. (citation omitted) . . .

'Where the obligation of the principal to pay commissions depends upon the performance of conditions precedent, the broker takes the risk of nonperformance on the part of the customer . . .. '(A) broker may bind himself not to demand payment unless the contract is actually carried out. . . . Such agreements are lawful and proper, and not unusual." Hamrick v. Cooper River Lumber Co., supra, 74 S.E.2d at 577.

In Hamrick, the contract of sale provided that '(s)ettlement is to be made not before April 1, 1947 or after April 15, 1947, upon the delivery of a good and marketable title to the property above described.' The contract further stated that '(t)he Seller agrees to pay George H. Hamrick a commission of ten (10%) per cent on date of settlement.' The intended purchaser deliberately defaulted, thereby preventing a consummation of the agreement. The Court held that the language used in the contract of sale (as set forth above) made the seller's liability for the commission contingent upon the payment of the purchase price and the closing of the transaction. In short, the Court held that the particular wording of the contract created a condition precedent to the payment of the broker's commission and that since there had been no closing of the sale, the broker was not entitled to receive his commission.

The purpose of all rules of contract construction is to ascertain the intention of the parties to the contract. Where the agreement in question is a written contract, the parties' intention must be gathered from the contents of the entire agreement and not from any particular clause thereof. Bruce v. Blalock, 241 S.C. 155, 127 S.E.2d 439 (1962). In the case at bar, the entire provision of the contract of sale relating to the Broker's commission reads as follows:

'The undersigned jointly and severally agree to sell the within described property to the above named purchaser on the terms and conditions stated in this contract and further jointly and severally agree that the within named listing broker Has earned his...

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