Court Opinion

ID: 3973939
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:32:08.100977+00
Date Added: 2024-06-11T14:17:56.368978
License: Public Domain

We are of opinion, upon a reconsideration of the case upon the motion for rehearing, that the case has been correctly *Page 301 
disposed of. There is no uncertainty in the writing which defined appellant's right to commissions. He was to receive a compensation for making a sale of the bonds, to be paid out of the proceeds of the sale, as the proceeds were received. Appellee's contention is substantially this: That it was a condition to the payment of his compensation that the sale should be consummated and proceeds of sale received; and that if for any cause not the willful or fraudulent act of the appellee the sale was not effected, or the purchase money not paid, appellant was not to be compensated. That the contract might have been worded to have this effect can not be doubted. Pryor v. Jolly, 40 S.W. Rep., 959; Flower v. Davidson, 46 N.W. Rep., 308; Peete v. Sherwood, 45 N.W. Rep., 85. Had the sale been made on deferred payments, the payments would clearly have been a condition to defendant's liability to pay appellant under this writing.
The cases cited by appellee (Pryor v. Jolly, 40 Southwestern Reporter, 959; Toombs v. Alexander, 101 Massachusetts, 255; Walker v. Tirrell, 101 Massachusetts, 257) are not authority for its position. In Hinds v. Henry, 36 New Jersey Law, 328, also cited, the cloud on the title which broke off the contract to sell was known to the agent when he received his power of attorney, and the opinion in that case states that the evidence showed that the defendant made no fraudulent concealment of the defect in his title, and that the plaintiff acted with the full knowledge that his efforts might prove abortive by the defendant's inability to convey as was stipulated. It is well settled that when a broker, at the time he contracts or at the time he performs the work for which he asks compensation, knows of the matter which ultimately defeats his efforts, he is not entitled to recover. But when he does not know, the rule is that he has the right to assume and his principal impliedly warrants that the title to the property he deals with is free from infirmity. Gauthier v. West, 47 N.W. Rep., 656; Birmingham Co. v. Thompson, 5 So. Rep., 473; Sweeney v. Oil Co., 18 Atl. Rep., 612; Phelps v. Prusch, 23 Pac. Rep., 1111; Peete v. Sherwood, supra.
In the case of Gauthier v. West, it is stated that if the broker agrees to wait for his commission until the sale is fully completed, there is an implied contract that the defendant had the ability and would confer upon the purchaser a perfect title to the property. We think this is sound. And we are unable to see any difference between cases where the owner agrees to pay the agent generally, and where there is a stipulation that he is to receive his pay when the sale is completed, or out of the proceeds when they are received. In the latter case it is true the agent would have to await the completion of the sale, or the receipt of the proceeds after the sale. So far his compensation would be conditional. In cases where he is to be paid upon the completion of the sale, the authorities are that the broker is nevertheless entitled to compensation, if the sale was not completed because of the owner's inability to give a good title. This being the case, how can it be said that a stipulation that he was to await the payment of the purchase money, or be paid out of the *Page 302 
purchase money when received, relieves the owner from the implied warranty that he has a good title, when this sale is defeated and thereby the fund out of which the agent was to be paid is defeated, for such reasons? If the agent can recover in the one case, he should in the other.
As a matter of course, an agreement might be made whereby the broker will not be entitled to compensation if the sale is defeated by reason of the title or for any other reason. There is nothing in the contract that can be so construed. It is plain and unambiguous. It was agreed that he should have for his services in selling appellant's bonds the excess over a fixed sum net, to be paid in cash as the same should be received from the purchasers. In other words, if he sold the bonds for a surplus over the fixed sum, he was to be paid this surplus, but as to deferred payments, having to await their payment, to this extent only his pay was conditional. There was no condition that if the sale failed for any reason he was to receive no commissions. If such had been his agreement, it may be that it would have done away with all implied warranty, as was held in Flower v. Davidson, supra.
It may be proper to state in this connection that in a later case in Minnesota, Cromer v. Miller, 57 Northwestern Reporter, 318, the doctrine announced in Flower v. Davidson was, it seems, applied to a case where the agent's commission depended upon the payment of the purchase money, and the court held in that case, citing Flower v. Davidson, in effect, that such a stipulation did away with the implied warranty concerning the title. There is no reference to Gauthier v. West, which seemed to hold the contrary, a case decided by the same court. We are of opinion that it requires more than the agreement shows in the present case to be construed to exclude such warranty.
The charge copied in the opinion and there stated to be correct was in accord with the views above expressed, and the portion in conflict with these views also set forth in the opinion, should not have been added.
It is also claimed by appellee that plaintiff can not recover because the contract he procured to be made by the purchaser provided the title to appellee's properties and the legality of the issue of bonds should be satisfactory to the purchaser's attorneys, and this was a recognition that such adverse contingency might arise and was a sole condition made in view of possible defects liable to defeat it. If there is anything in the rule that the broker has a right, in negotiating a sale, to assume that his principal has a good and marketable title to the property given him to sell, then there is nothing in the above contention. He may proceed with a sale, and if he is authorized to contract, he may enter into a contract, upon the theory that the property is in that condition. He can not have a right to rely on this and lose it merely by relying on it.
We may add, in view of what is said in the motion, that the form in which Berg's commission was stipulated did not place him in any other attitude than that of a broker. He was to get all above a fixed sum as commission so stated, and the fact that this might be great or might be small does not effect a different relation. *Page 303 
As already stated, if the facts or circumstances show that appellant had notice of the condition of the bonds at the time he did the work, he could not recover. Or if the defect in the issue was due to him, then he can not recover. Nor can he recover if, as a matter of fact, the purchasers would not have completed the purchase had the bonds been without defect.
The other subjects referred to in the motion have been, we believe, correctly decided and sufficiently explained.
The motion is overruled.
Overruled.