Court Opinion

ID: 9635722
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:01:41.165499+00
Date Added: 2024-06-11T18:09:34.007873
License: Public Domain

Mason, J.,

dissenting:

Appellant, John C. Davis, operating as Columbia Real Estate, is a licensed real estate broker who was authorized by John S. Santini, et al., the sellers, to offer 66.59 acres of land in Howard County for sale. Davis procured a purchaser, appellee, Phase I, Limited and after negotiations, the buyer and sellers entered into a contract of sale for the land on July 5,1973. In pertinent part, the contract stated:
(g) The Parties recognize Columbia Real Estate as the Broker negotiating this sale. Buyer agrees to pay said Broker a brokerage fee for services rendered amounting to Twenty-Nine Percent (29%) of Ten Percent (10%) of the sale price at the time of settlement. Buyer agrees to give said Broker its promissory note for Seventy-One Percent (71%) of the Ten Percent (10%) brokerage fee without interest payable in Two equal annual installments measured from the date of settlement.
*703The contract provided for settlement on or before October 15, 1973. Phase I, however, was unable to obtain financing. Consequently, settlement never occurred.
After demands for payment of the broker’s commission were refused, Davis filed suit in the Circuit Court for Howard County. At the close of Davis’s case, Phase I made a motion to dismiss, which was granted.1 From this judgment, Davis filed an appeal.
At the time the contract was entered into, the statute governing real estate brokers’ commissions in Maryland was Code, Art. 21, § 14-105 (now substantially unchanged as Real Property, § 14-105), which stated:
Whenever, in the absence of special agreement to the contrary, a real estate broker employed to sell, buy, lease, or otherwise negotiate real or leasehold estate or mortgages, or loans thereon, procures in good faith a purchaser, seller, lessor or lessee, mortgagor or mortgagee, borrower, or lender, as the case may be, and the person so procured is accepted as such by the employer, and enters into a valid, binding and enforceable written contract of sale, purchase, lease, mortgage, loan or other contract, as the case may be, in terms acceptable to the employer, and such contract is accepted by the employer and signed by him, the broker shall be deemed to have earned the customary or agreed commission, as the case may be, whether or not the contract entered into be actually performed, unless the performance of such contract be prevented, hindered or delayed by any act of the broker, (emphasis added).
This statute was designed to settle the question when, in the *704absence of special agreement, a real estate broker is entitled to commission. Wyand v. Patterson Agency, 271 Md. 617, 319 A. 2d 308 (1974); Snider Bros., Inc. v. Heft, 271 Md. 409, 317 A. 2d 848 (1974). The Court of Appeals has interpreted “special agreement to the contrary” to be “an agreement specifying when in the sale process . . . the right to a commission accrues.” Wyand v. Patterson Agency, supra, 271 Md. at 624. If such a special agreement exists then the statute does not apply, and Maryland cases hold the broker cannot recover a commission if, as here, the contract was not consummated. See Wyand v. Patterson Agency, supra, 271 Md. at 625. By the same token, if there is no special agreement between the parties as to when the broker’s right to commissions comes into being, the statutory provisions control. Snider Bros., Inc. v. Heft, 271 Md. at 416.
The lower court in its memorandum opinion stated in part:
The view of this Court is dictated by the language in Paragraph 6 (g) of the contract, and, in its opinion, “settlement” constituted a condition precedent to the earning of the commission, and, therefore, there was a special agreement as to the payment of any commission.
In the proceedings below and before this court both in brief and argument, the issue was whether the provisions of Paragraph 6 (g) of the contract constituted a special agreement to the contrary under the statute. The majority does not find it necessary to address this issue because it construes the statute as only applying “where there is an employment relationship between the broker claiming the commission and the one from whom he is claiming it”. Thus, under this interpretation, the contract here would not come within the orbit of the statute. A careful reading of the statute, however, does not support this construction. The majority, by interpolation and implication, makes the statute express an intention clearly not evidenced by its language.
The statute itself plainly sets forth the conditions that *705must be met before a broker is entitled to his commission. The statute requires: (1) the procurement in good faith of a purchaser by the broker; (2) acceptance of the purchaser by the broker’s employer; (3) entrance by the purchaser into a valid, binding, and enforceable written contract in terms acceptable to the broker’s employer; (4) the employer’s acceptance of the contract and signature thereon. In the present case, all of these conditions have been met. The statute is clear that once these conditions have taken place, the broker has earned his commission, provided of course, there is no special agreement to the contrary, or wrongful interference with the performance of the contract by the broker. The statute does not require the existence of an employment relationship between the broker and the one from whom he is claiming his commission. In Cohen v. Duclos, 272 Md. 41, 321 A. 2d 145 (1974), the Court of Appeals was called upon to determine the right of a real estate broker to recover a commission from the prospective buyer of the property. Although in that case there was no evidence of an employment relationship between the broker and the purchaser, the Court of Appeals decided the case on the basis that the provisions contained in the contract of sale constituted a special agreement to the contrary under the statute.
The fact that no employment relationship existed between the broker and the purchaser in this case is of no controlling significance. The issue, which all the parties involved in the litigation assumed, is whether the contractual provisions in this case constituted a special agreement to the contrary under the statute. In my view, the contractual provisions, without more, did not make settlement a condition precedent to the payment of the broker’s fee. This conclusion is buttressed by dictum from Wyand v. Patterson Agency, supra. There a listing broker claimed a commission under a contract providing for a commission “if the property was sold”. The seller accepted a contract from the buyer procured by a non-listing broker, and the buyer later refused to perform. In the course of holding § 14-105 inapplicable on other grounds, the Court of Appeals stated:
*706... [W]e do not think that an agreement to pay a commission “if the property is sold” constitutes a “special agreement to the contrary” within the meaning of § 14-105. If it did, the statute would be rendered almost nugatory. In virtually all cases where a property owner ... employs a real estate broker, there is an agreement or understanding that the commission will be paid if the property is “sold” or if there is a “sale” or if a “purchaser” is procured. The question is: at what stage in the process is the property “sold” or is there a “sale” or is there a “purchaser”? It is this very question to which the statute and the previously discussed cases are addressed... 271 Md. at 624.
Although dictum, this is a strong indicator that language merely describing the time of payment is not sufficient to constitute a special agreement within the meaning of § 14-105, without other circumstances or contract language.
The case of Berman v. Hall, 275 Md. 434, 340 A. 2d 411 (1975), relied on by the majority is clearly inapposite. In that case there were two special agreements, (1) the commission was not due and payable until settlement; and (2) the commission was to be deducted from the proceeds of the sale. In the case, sub judice, the language of the contract was markedly different. There was no provision to the effect that the commission was due and payable at settlement or that the commission was to be paid from the proceeds of the sale.
In consideration of the evidence and the reasonable inferences therefrom, in a light most favorable to Davis, Phase I’s motion to dismiss was improvidently granted. I do not suggest however that the terms of the contract in this case are so clear as to preclude Phase I from establishing, after a full trial, that settlement was in fact a condition precedent to the payment of the broker’s commission. I would remand this case for further proceedings and admit parol evidence to explain the terms of Paragraph 6 (g) of the contract. Snider Bros., Inc. v. Heft, 271 Md. 409, 419, 317 A. 2d 848 (1974); Missler v. Anne Arundel County, 271 Md. 70, *70780, 314 A. 2d 451 (1974). This is so despite the existence of an integration clause in Paragraph 6 (c). See Whitney v. Halibut, 235 Md. 517, 202 A. 2d 629 (1964); Rinaudo v. Bloom, 209 Md. 1, 120 A. 2d 184 (1956).
For the reasons set forth herein, I respectfully dissent.

. The Court reserved judgment on the motion to dismiss and permitted Phase I to offer some evidence. The evidence offered, however, was subsequently stricken from the record and the motion to dismiss was granted. I disagree with the majority’s treatment of the case as an appeal from the court’s decision on the sufficiency of the evidence at the close of the entire case, rather than from its ruling on a motion to dismiss. Phase I clearly was not permitted to present its entire case.