Case ID: nc_182/html/0676-01.html
Source: Caselaw Access Project
Author: {"author": "Stacy, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

GIBSON LAND AUCTION COMPANY v. W. T. BRITTAIN.
    (Filed 21 December, 1921.)
    Contracts — Breach—Principal and Agent — Brokers—Commissions—Compensation — Actions—Evidence—Nonsuit—Trials.
    There is no relation of privity or otherwise between the agent or broker who sells lands under contract for compensation by commission with the owner, and the purchaser he has accordingly procured; and when such purchaser has not in any manner obligated to pay anything to the agent or broker, the latter has no cause of action against him to recover the commissions for which the owner has obligated himself, and this is especially so when the owner of the lands has released the purchaser from the obligations of his contract.
    Appeal by plaintiffs from Shaw, J., at July Term, 1921, of McDowell.
    Civil action to recover damages for loss of commissions arising' out of defendant’s alleged breach of contract to purchase nine lots, same having been sold to him as the last and highest bidder at a public sale.
    From the judgment of nonsuit entered at the close of the evidence, plaintiffs appealed.
    
      Pless, Winborne & Pless for plaintiffs.
    
    
      Avery & Ervin for defendant.
    
   Stacy, J.

The following statement of the case will suffice for our present decision:

Plaintiffs, auctioneers, by agreement with the owner of the property, were to receive as their compensation for conducting the sale a given per cent of the selling price of the lands. The defendant was present and became the last and highest bidder of the lots in question, and signed memoranda containing the following stipulation: “This is to certify that I have this day bought of R. Williams, through Gibson Land Auction Company, the following real estate, as shown on the map of the R. Williams property, and on the terms and conditions announced at sale of said property.”

The defendant refused to accept the deeds, which were tendered for the lots bid off by him, and declined to pay the purchase price, as per his agreement, because of some misunderstanding on his part; and, in consequence of which the owner of the land afterwards released the defendant from his bid and sold the lots to another or other parties.

The written contract between plaintiffs and the owner of the land contained a stipulation to the effect that plaintiffs should receive “a commission of 10 per cent for any sale or sales of any part or all of the property that may be sold by the parties of the second part, and confirmed by the parties of the first part.”

Tbe plaintiffs never bad any contract witb tbe defendant for tbeir commissions, and tbe sale to bim was not carried out. It is alleged, however, tbat by reason of tbe defendant’s failure to take tbe property, according to bis bid at tbe auction sale, tbe plaintiffs bave suffered a loss to tbe extent of tbe value of tbeir commissions, and tbat tbe defendant should be held liable in damages therefor.

Upon tbe foregoing facts being made to appear in evidence, bis Honor granted tbe defendant’s motion for judgment as of nonsuit, and tbe appeal presents for review tbe correctness of this ruling.

It will be observed tbat tbe plaintiffs bad no contract witb tbe defendant, but tbeir commissions were to be paid by tbe owner of tbe land. Tbe case, therefore, in principle, is not unlike Faison v. Marshburn, ante, 133, where a recovery was denied to tbe broker who bad sued tbe prospective purchaser when be alone bad a contract for bis commissions witb tbe owner. Here, as was tbe case there, an attempt is being made to bold tbe deiendant responsible for violating bis contract, not witb tbe plaintiffs, but witb a third party who is a stranger to tbe suit. It is conceded tbat tbe plaintiffs bave no interest in tbe land, and tbat they cannot sue upon tbe contract of purchase. They are unable to perform tbe contract as vendors, or to enforce its performance; hence, they are not in position to maintain an action for its breach. Tbe only contractual obligations which may be insisted on by reason of defendant’s bid, so far as be is concerned, are those existing between tbe defendant and tbe owner of tbe land. Tbe plaintiffs are neither parties nor privies to tbe contract of sale, and tbe defendant is neither party nor privy to plaintiffs’ contract for commissions. So, whatever rights, if any, tbe plaintiffs may bave, as against tbe defendant, apparently are not contractual in tbeir nature. On tbe other band, there is no contention tbat tbe defendant has breached any extra-contractual legal duty for which tbe plaintiffs may maintain an action in tort. In all events, if tbe plaintiffs be entitled to recover, they must recover in an action growing out of contract; and none has been shown witb tbe defendant.

In all tbe cases called to our attention by tbe plaintiffs, seemingly in support of tbeir position, there was a contract direct witb tbe defendant, or a request by bim for tbe broker’s services; and, in each case, recovery was allowed on this contract, or upon an implied contract, for services rendered to tbe defendant, and not upon tbe contract of purchase, though tbe loss of commissions may bave been fixed as tbe proper measure of damages. 4 R. C. L., 333.

In Atkinson v. Pack, 114 N. C., 597, a case chiefly relied on by plaintiffs, tbe above distinction is clearly drawn, tbe Court saying: “There were plainly two contracts made by plaintiffs: tbe one witb defendant, tbe effect of which was tbat plaintiffs would provide a purchaser of tbe land at tbe agreed price, commissions to be paid by tbe purchaser; tbe other with tbe purchaser, that be would pay tbe plaintiffs’ commissions upon tbe conclusion of tbe sale. If through tbe negotiation of plaintiffs tbe parties bad been brought together, and bad concluded tbe trade between them, tbe plaintiffs would have been entitled to their commissions from Harding, tbe purchaser, according to tbe terms of their contract. But this action is for damages; tbe gravamen of tbe charge is that defendant committed tbe wrong and injury upon plaintiffs by a refusal, without cause, to comply with bis contract with plaintiffs to sell tbe land to plaintiffs’ principal, with tbe distinct understanding that plaintiffs were to be compensated by the purchaser. Tbe natural effect and consequence of this refusal by defendant was tbe loss by plaintiffs of their commissions.”

To like effect is tbe decision of tbe Saint Louis Court of Appeals in tbe case of Cavender v. Waddingham, 2 Mo. App., 551. There it was understood that tbe plaintiffs were to receive, as commissions, a certain percentage of tbe purchase price of tbe land, but it was stipulated that this should be paid by tbe vendors, and tbe plaintiffs would divide tbe same, when realized, with tbe defendant, allowing him one-fifth part thereof. Plaintiffs consummated tbe agreement for tbe purchase in exact accordance with defendant’s directions. Tbe defendant then refused to accept tbe deed. Upon these facts tbe Court observed:

“Tbe first question to which our attention is directed is whether, upon tbe facts stated, tbe plaintiffs bad any right of action against tbe defendant. It is argued that they bad none, because it was expressly stipulated that their commissions were to be paid by.tbe Messrs. Scudder, and not, in any event, by tbe defendant; that this is an attempt to bold a party responsible for violating bis contract, not with tbe party suing, but with a third party — tbe defendant'here having violated none except that made through tbe plaintiffs, Messrs. Scudder. But this argument ignores tbe prominent fact that there were two distinct contracts. One was made by defendant, through bis agents, in the purchase of tbe property. Tbe other was made with tbe agents, in securing their services to bring about tbe purchase. Tbe latter is tbe subject of tbe present suit.
“When tbe plaintiffs were employed by tbe defendant to effect a purchase for bis benefit, they undertook to do so for a consideration, which was clearly understood. This was, that, in tbe event of success, they wele to be compensated according to tbe usages of their business, by a percentage upon the amount of purchase money. The defendant said to them, in effect: ‘You procure the consent of the property owners to sell to me upon the terms indicated. I undertake, on my part, to consummate the trade by paying the purchase money, so that you will realize your commissions.’ Tbe defendant’s undertaking to take and pay for tbe property, so tbat plaintiffs would get tbeir compensation, was as emphatic and as binding as if be bad agreed to pay tbe commissions himself.”

Without prolonging this discussion, it may be stated tbat we have examined tbe following cases, cited by plaintiffs, and find them to be in support of, rather than in conflict with, what is said above. Livermore v. Crane, 26 Wash., 529, and cases cited in briefs as reported in 57 L. R. A., 401; Eells Bros. v. Parsons, 132 Iowa, 543, and cases cited in note as reported in 11 Anno. Cases, 475; Ackerman v. Bryan, 33 Neb., 515; 4 R. C. L., 334, and eases there collected. See, also, Tinsley v. Dowell, 87 Texas, 23, and Thompson v. Kelly, 101 Mass., 291.

But for a further reason tbe plaintiffs are not entitled to maintain this suit. Tbe owner of tbe land, plaintiffs’ principal, has voluntarily released tbe defendant from bis contract of purchase; hence,.whatever obligations may have been incurred by tbe defendant’s bid are now at an end. They have been surrendered and discharged with tbe consent of tbe owner, who alone was entitled to insist upon performance. There is no contract now existent of any kind relating to this matter to which tbe defendant is a party. Therefore, upon tbe record we think tbe judgment of nonsuit must be upheld.

Affirmed.