Court Opinion

ID: 9752497
Source: CourtListenerOpinion
Date Created: 2023-08-28 18:10:27.800934+00
Date Added: 2024-06-11T07:27:16.786804
License: Public Domain

*450Hammond, J.,
filed the following dissenting opinion, in which Prescott, J., concurred.
I do not challenge the proposition that an owner of property may himself negotiate with, and sell to, a prospect brought to him by a broker, without having to pay commissions in either of two situations—if he has previously terminated the authority of the broker in good faith or if the broker has voluntarily abandoned the undertaking. The owner cannot escape commissions if he discharged, the broker in bad faith to avoid payment of commissions, or if he wrongly compelled or induced the broker to withdraw.
I dissent earnestly from the finding of the majority that, as a matter of law, the broker in this case was not the procuring cause of the sale to the ultimate purchaser because, as a matter of law, the owner had in good faith discharged the broker or the broker had withdrawn voluntarily. The testimony and the inferences it clearly permits allow a finding to the contrary on all points.
Almost always the questions of procuring cause, good faith, and voluntariness of abandonment are for the jury, even though the owner deals with, and sells to, the prospect direct or through another broker. Steele v. Seth, 211 Md. 323, 330-331; Howard v. Street, 125 Md. 289; Clark v. Banks, 158 Md. 24; Mechem, Agency, (2d Ed.), Secs. 2435 and 2442. This almost necessarily must be the case where the broker admittedly brings to the owner a hitherto unknown prospect, who makes increasing offers until one is accepted.
The majority opinion recognizes that the owner may not deprive the broker of commissions by selling direct to his prospect at a lower price than the prospect had offered through the broker, for “in such a case the inference may be drawn that the broker was in fact the procuring cause, and that the owner’s refusal to accept the offer submitted was a subterfuge to avoid payment of commissions which the broker had fairly earned.” But they say that where the sale is at a higher price, the dual inferences that the broker was the procuring cause and of bad faith do not arise. I do not find the distinction relied on by the majority, as the very basis of the decision, to be made by the writers or the Courts. The *451texts and the cases say that the decisive inquiry is good faith or bad faith, or reasonableness or arbitrariness, whether the sale be for a higher or a lower price. Mechem, op. cit., Sec. 2437, pp. 2034-2035. In 12 C. J. S., Brokers, Sec. 86 b, p. 197, it is said: “More specifically, a broker who is the procuring cause of a transaction consummated by the principal is entitled to a commission, even though the principal accepts property in lieu of cash, makes a sale at a higher price or on better terms than he had authorized, or sells at a lower price than that originally quoted by him to the broker * * The cases support the text. O’Connell v. Casey (Mass.), 92 N. E. 804 (Broker’s offer $15,000—price accepted $18,000); McCarthy v. McCarthy (R. I.), 142 A. 142 ($6,000-$6,500); Holland v. King (Ga.), 33 S. E. 2d 275 ($11,000-$12,500); Cole v. Crump (Mo.), 156 S. W. 769, 770 ($60 an acre-$65 an acre); Flournoy v. Atlas Oil Co. (La.), 91 So. 714 ($185,000-$200,000) ; Darnell v. Smith (Miss.), 76 So. 547 ($7,500-$8,250); Goodman v. Marcol, Inc. (N. Y.), 184 N. E. 755 ($177,500-$180,000) ; Murphy ¶. Linsky (Conn.), 109 A. 412. I read the Maryland law as in accord. In Howard v. Street, supra, 125 Md. 289, the broker’s offer was $30,000, and eleven months later the owner accepted directly from the same prospect $47,000, of which, by agreement, $30,000 was allocated to the land. The questions of good faith and procuring cause were held to be for the jury. In McLean v. Peyser, 169 Md. 1, 9, the offer to buy physical assets was changed to an offer to buy capital stock and assume debts, and the Court said: “The fact that the offer so secured and accepted may have been changed or modified before final acceptance of the purchaser by the seller would not deprive the broker of the right to his commission if he was the procuring cause of the offer so made and accepted."
The majority opinion goes on to suggest that, in any event, there was no evidence to support what is called “a possible exception” to the rule of greater price there relied on—that is, no evidence that the Ganns were desirous of purchasing the property and willing, before the broker’s efforts ceased, to pay the price they finally paid. There was testimony that *452showed, or permitted the clear inference, that the Ganns had fallen in love with the Leimbach place, that they were not and could not be interested in any other, that Dr. Gann took Myerberg to the farm on his second visit in the fall of 1954 to get his expert opinion on the value of the place and how much to pay for it, that later, with no change in conditions, it became known that Myerberg felt $122,500 to Leimbach and $5,000 commission was a fair price to pay, that Dr. Gann told Myerberg he would take the place if Myerberg did not at whatever price Myerberg agreed on, and that when the final price was quoted to him Dr. Gann accepted instantly, without batting an eye or consulting Mrs. Gann. It is difficult to see how circumstantial evidence of desire to buy and willingness to pay the necessary price could be clearer or more persuasive. In any event Leimbach, who originally put a price of $150,000 on the place, finally sold it for $122,500 net. The situation is analogous to that in Stokes v. Wolf, 137 Md. 393, 412: “The testimony was that when Wolf was employed he was told that his employer wanted $650,000, but that this price could be reduced and that amount was named tentatively and not as a conclusive or final selling price, and later on his employer did agree to sell it to persons brought to him by the appellee for $615,000. Wolf was not employed to procure a buyer who would pay $650,000 for the hotel, but to procure a purchaser who would buy it at a price fixed by and satisfactory to his employer. Under such circumstances it cannot be seriously contended that he was not employed to sell the property for the amount which his employer agreed to accept for it.”
In determining whether a defendant is to be let out as a matter of law the Court must accept as true all testimony and inferences fairly flowing from it, favorable to the right of the plaintiff to recover. In finding as a matter of law that the Ganns were neither desirous of buying nor willing to pay the necessary price the majority, it seems to me, applied the rule in reverse and gave the defendant owner the benefit of the assumptions of truth of favorable evidence. The same thing can be said of the rejection by the majority, as a matter of law, of the broker’s contention that the agency was *453never terminated and never abandoned but merely was frustrated by the owner’s arbitrary, if not mala fide, misrepresentation that he would not sell to the Ganns because they were of the Jewish faith.
The testimony and its reasonable inferences allowed these findings: That when $115,000 was offered for the place, the owner told the broker that he would not sell to Jews and that Nicholson told this to the Ganns; that in spite of this flat statement in the fall of 1954 (and in the face of the owner’s testimony that he had earlier finally discharged the broker), the owner called Nicholson after Christmas to see if the Ganns still were interested; that when Nicholson talked and wrote to the Ganns (as late as January, 1955), they said they would not deal further for fear of being humiliated (Dr. Gann said he did not want to make Leimbach tell him the same thing to his face); that the broker did not go back to the Ganns after the $115,000 offer was rejected because of what Dr. Gann told him about being humiliated; that Leimbach’s real refusal was insufficiency of price; that he was entirely willing to sell to a Jewish buyer who would pay his price; that in order to receive that price, Leimbach entered into an arrangement with Myerberg, whom he knew, and Strobel, a broker who was Leimbach’s lifelong friend and a friend of Myerberg, to get the Ganns to pay that price without giving a commission to Nicholson.
If the efforts of the broker Nicholson to consummate the purchase by the Ganns were frustrated by the owners, the Leimbachs, arbitrarily or capriciously, that is, if the cessation of activity by the broker, his claimed withdrawal, or abandonment of effort were induced by misrepresentation of the owners, they are liable to him for commissions if the sale was to the Ganns, the prospects of the broker. The principle is like that applicable in cases where the owner arbitrarily or capriciously refuses to consummate an agreed to sale. McLean v. Peyser, supra, 169 Md. 1, 10-11; Richards v. Jackson, 31 Md. 250; Melvin v. Aldridge, 81 Md. 650, 658; Carrington v. Graves, 121 Md. 567, 570. In such case the owner is liable for commissions. Or, as the Court of Appeals of New York put it in Goodman v. Marcol, Inc. (N. Y.), supra, *454184 N. E. at page 756, the broker does not lose his commissions if his efforts “are rendered a failure by the fault of the employer” for “no one can avail himself of the non-performance of a condition precedent, who has himself occasioned its non-performance.”
The owner, Leimbach, through his able and experienced counsel, admits the proposition just discussed. In his brief he says that Nicholson stopped trying to sell to the Ganns because of the attitude of the Leimbachs towards Jewish people and that this may be assumed to be an insufficient and improper reason for the Leimbachs to refuse to negotiate further with the Ganns through Nicholson, and adds: “If the Leimbachs had indeed negotiated and sold to the Ganns at a later date, the argument would be untenable that they' owed Nicholson no commissions because his agency had not been terminated and that he was not the procuring cause of the sale by the Leimbachs to the Ganns.”
The concession is but a candid appraisal of the controlling-law which is well expressed by the Supreme Judicial Court of Massachusetts in O’Connell v. Casey, cited above (at page 807 of 92 N. E.) : “Where the evidence warrants the jury in finding that the negotiations had progressed to such a point that a revocation of the broker’s authority (if his authority is revoked) is made in bad faith, the question of the plaintiff’s being the efficient cause of the trade subsequently made does not arise. The fact that through the broker’s efforts the negotiations have reached the point where it can be found that his authority, if revoked, has been revoked in bad faith, is of itself a finding that he found the customer for luis principal if his principal finally agrees on a price with the customer found by the broker. It is no part of the broker’s duty to see to the making of the contract between his principal and the customer found by him.”
The decisive question, then, becomes not that of procuring cause or of good faith, but whether the owner knew or should have known that he was selling to Gann. Again, the testimony and fair inferences permit, if they do not indicate a finding, that he did. Leimbach knew that Myerberg was the friend and adviser of the Ganns, that he had visited the place only with *455the Ganns, that Myerberg was a licensed broker and that Strobel, the third broker, had no part whatever in finding or influencing Myerberg to buy. tie must have known that there could be no need nor possible use for importing Strobel into the transaction if Myerberg was going to buy for himself. The contract presented to Leimbach in express terms permitted Myerberg to assign the contract to any individual without further liability to Myerberg.
The facts before the experienced Leimbach were such as to put any reasonable person on notice that the real purchasers in all probability were the Ganns, and his sale with this imputed knowledge would make him liable for commissions. Zellan v. Winston (Mun. Ct. of App., D. C.), 108 A. 2d 163. It is undisputed that four days before signing the deed Leimbach knew the Ganns were the buyers. The conveyance with this knowledge would make him liable. Restatement, Agency, (2d Ed.), Sec. 448, comment f, illustration 12.
That the Ganns were always the real purchasers could be deduced from the facts that Myerberg, knowing his family did not want to move to the farm, would not buy until Dr, Gann agreed to take the place from him, the visit to the farm by the Myerbergs and the Ganns together in April of 1955 just before the contract was signed, the assignment clause in the contract, and the assignment.
It is clear to me that the case was one for the jury.
Judge Prescott has authorized me to say that he concurs in the views herein expressed.