Wilson v. Schmidt & Wilson
| Decision Date | 19 November 1945 |
| Docket Number | Record No. 2961. |
| Citation | 184 Va. 642 |
| Court | Virginia Supreme Court |
| Parties | GEORGE P. WILSON AND LOUISE S. WILSON v. SCHMIDT & WILSON, INCORPORATED. |
Present, Campbell, C.J., and Hudgins, Gregory, Browning, Eggleston and Spratley, JJ.
1. BROKERS — Actions for Compensation — Questions for Jury — Whether Broker Was Procuring Cause. — Whether a broker is the procuring cause of a sale of property listed with him is usually a question of fact.
2. APPEAL AND ERROR — Affirmance — Effect of Finding of Court on Ore Tenus Hearing. — The finding of the trial court on an ore tenus hearing has the force and effect of the verdict of a jury and settles all conflicts in the evidence.
3. BROKERS — Compensation — Evidence Showing Broker Was Procuring Cause — Case at Bar. — In the instant case, a proceeding to recover a broker's commission, appellants contended that the evidence failed to show that the broker was the procuring cause of the sale. The property was listed with the broker by a bank which had the property in charge, and a representative of the broker showed it to one of the appellants during an inspection of several properties. The broker's representative was unable to show the prospective customer the interior of the house because the bank retained the keys and no officer of the bank was then present. Later the customer inspected the interior of the house with an officer of the bank and thereafter appellants made an offer direct to the bank which was accepted.
Held: That the facts and circumstances justified a finding that the efforts of the broker were the procuring cause of the sale.
4. BROKERS — Compensation — Meaning of "Procuring Cause". — In determining whether a broker is the procuring cause of a sale of property, the expression "procuring cause" refers to the cause originating a series of events, which, without break in their continuity, result in the accomplishment of the prime object of the employment of the broker, which is the procurement of a purchaser ready, willing and able to buy the real estate on the owner's terms.
5. BROKERS — Compensation — Change of Price or Terms by Owner — General Rule. — If property is placed in the hands of a real-estate broker for sale at a certain price or upon certain terms, and a sale is brought about through the broker as a procuring cause, he is entitled to commissions on the sale even though the final negotiations are conducted through the owner, who in order to make a sale accepts a price less than that stipulated to the broker or terms more liberal than those the latter was authorized to accept.
6. BROKERS — Compensation — Change of Price or Terms by Owner — Where Commissions Expressly Made Dependent on Obtaining Certain Price. — If a real estate broker's contract of employment expressly makes the payment of commissions dependent on the obtaining of a certain price for the property, he cannot recover, even though the owner sells at a less price to a person to whom the broker first shows the property, unless the broker is prevented from making the sale by the fault, fraud, or bad faith of the principal.
7. BROKERS — Compensation — Change of Price or Terms by Owner — Effect of Stating Asking Terms to Broker. — In the ordinary case where the principal promises a broker a commission for finding a purchaser and the asking terms are stated to the broker, the usual interpretation is that the asking terms are intended merely to guide the broker in starting negotiations, and the broker is to have his commission if he produces a customer ready and willing to purchase on the asking terms or on such modified terms as the principal may subsequently accept before the agency is revoked.
8. BROKERS — Compensation — Change of Price or Terms by Owner — Evidence Showing Right to Commission Not Predicated on Sale at Stipulated Price — Case at Bar. — In the instant case, a proceeding to recover a broker's commission, the property was listed with the broker at $16,000 by a bank which had it in charge. After representatives of the broker had shown the property to appellants, an offer was made direct to the bank to purchase the property for $13,500, which offer was accepted. Appellants contended that the broker was not entitled to a commission because by the terms of the contract of employment the broker's right to a commission was predicated upon its procuring a purchaser at a stipulated price and that since the broker was unable to do this the bank had a right to sell the property at a less price to the broker's customer. The bank and the broker entered into no special contract whereby the broker's right to commissions was predicated upon the sale of the property at a stipulated price; there was a general listing of the property for sale at $16,000 with several brokers; the property was worth only from $13,000 to $14,000; under the terms of the listing, any offer was subject to the approval of the court; and the highest other offer received by the bank was $13,500, subject to a real-estate commission.
Held: That there was no basis for the contention that under the terms of the broker's employment its right to a commission was predicated upon its procuring a customer ready, willing and able to purchase the property at the price of $16,000.
9. BROKERS — Compensation — Ratification of Guardian's Employment of Broker — Case at Bar. — In the instant case, a proceeding to recover a broker's commission, the property was listed with the broker by a bank which was the guardian of an incompetent who was the owner of the property. The listing was made with the understanding that any offer was to be subject to the approval of the proper court and subsequently a decree was entered authorizing a special commissioner to seek a private sale of the property. After the property had been shown to appllants by a representative of the broker, appellants made an offer direct to the bank, which was approved by the court. Appellants contended that the bank as guardian of the incompetent person had no authority to list the property for sale with the broker, and that the latter, in acting under such listng, was a mere volunteer and was not entitled to commissions for having effected the sale. The trial court entered a decree holding that the broker was entitled to recover the amount of commissions claimed.
Held: That there was no merit in appellants' contention since, when the court accepted the services of the broker and decreed that it was entitled to the commissions, this was a ratification of the bank's employment of the broker.
Appeal from a decree of the Chancery Court of the city of Richmond. Hon. Brockenbrough Lamb, judge presiding.
The opinion states the case.
H. M. Ratcliffe and George E. Haw, for the appellants.
George B. White, for the appellee.
On May 2, 1944, the Savings Bank & Trust Company qualified under Code, section 1080a, as guardian of Mrs. Louise R. Westerhold, an incompetent person. On May 25 the bank listed the incompetent's dwelling house on Seminary avenue, in the city of Richmond, with several real estate firms, including Schmidt & Wilson, Incorporated. These listings were at $16,000, with the understanding that any offer made was to be subject to the approval of the proper court.
On June 7 the bank, as guardian of the incompetent person, instituted a suit under chapter 217 of the Code, for the sale of this real estate. The suit was docketed by consent and a decree was entered referring the cause to a commissioner in chancery with directions to execute the usual inquiries. The commissioner reported, among other things, that the fee-simple value of the property was from $13,000 to $14,000. By decree entered on July 5, this report was confirmed and a special commissioner was named to sell the property, after proper advertisement, at public auction. The special commissioner was further authorized to seek a private sale of the property, but no offer therefor was to be accepted by him until it had been submitted to and approved by the court.
On July 10 the special commissioner reported to the court that he had received a written offer from George P. Wilson and Louise S. Wilson to purchase the property at $13,500 cash, that this offer had been made direct to the bank without the intervention of any real-estate broker, and that hence no real-estate commissions were involved. The report recommended that this offer be accepted. On the same day a decree was entered confirming the report and directing the special commissioner to accept the offer and convey the property to the Wilsons upon the receipt of the stated purchase price.
Before any action had been taken under this decree, Schmidt & Wilson, Incorporated, hereinafter called the broker, filed its petition in the cause, alleging that the property had been listed with it for sale on May 25, 1944, subject to the usual real-estate commissions, that it had been the procuring cause of the offer which had been recommended to and accepted by the court, and that, therefore, it was entitled to a commission of five percent of the purchase price, or $675, for having effected the sale. It prayed that an allowance of that amount be decreed to it out of the purchase price.
The court, being convinced that the claim for commissions had been presented in good faith, put the purchasers upon terms either to accept the responsibility for and pay any commissions to which the broker might legally be entitled, or else submit to a vacation of the decree confirming the sale. After the Wilsons had filed an answer to the broker's petition, denying the latter's right to the commissions claimed, by consent of all parties a decree was entered under the provisions of which the matter was submitted to the lower court for its determination, with the reservation of the right appeal.
It was conceded by all parties, both in the court below and before us, that the Wilsons, as the...
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