Jacobs v. Rothschild

PER CURIAM. Plaintiffs brought this action to recover a broker’s commission of $2,750 allegedly due for their efforts in selling an apartment house owned by defendants. In May, 1945, defendant Rothschild, as owner and agent for other owners, gave plaintiffs a written contract of employment to sell an apartment house owned by defendants. In July, 1945, the plaintiffs secured a purchaser who was willing to purchase upon defendants’ terms and executed a contract for purchase of the property and made an earnest money payment of $2,750. This contract was presented to defendant (in his own behalf and as agent), who refused to sign the contract. The contract was again presented to defendant and he refused to sign, although he never objected to the contract or the purchaser. However, after having refused to sign the contract de [600] fendant ordered the abstract on the property, advising the mortgage holder he was selling the property. Defendant thereafter turned the matter over to one Edwards (defendant’s attorney herein), but the transaction was never consummated. Plaintiffs brought this action alleging substantially the above facts, and that having fully performed their contract of employment they were entitled to recover their commission in the sum of $2,750. Defendants filed separate demurrers, which were overruled, and defendants thereafter filed their separate answers in the form of general denials except for admitting ownership of the property. Plaintiffs’ evidence established that plaintiff Jacobs met defendant Rothschild and a meeting was arranged to discuss listing of the property for sale. Jacobs made certain preliminary examinations of the records respecting the property and with his associate, Story, prepared a contract for use in the event defendant agreed to list the property with them. After meeting with defendant and examination of the property, defendant, on June 4, 1945, executed the written contract giving plaintiffs exclusive listing to sell the property at $85,000, with the exception that one Edwards, defendants’ attorney, also had the right to sell the property. Plaintiffs then associated themselves with a realty company and with, their help secured one Tiffany as a prospective purchaser. After viewing the property the second time this prospective purchaser agreed to purchase the property for $85,000, executed a contract for the purchase, and deposited $2,750 with the realty company as earnest money. Plaintiffs thereafter sought to have defendant Rothschild sign the contract for sale of the property. Although he did not object to the contract or the purchaser, defendant did not sign the contract. Some other dealings were carried on among the parties, and at one time defendant wrote the mortgagee to send the abstract on the property as he was selling same. However, upon defendant’s failure to sign the contract, plaintiffs brought this action for $2,750, the commission set out in the brokerage contract. At the close of the plaintiffs’ testimony, defendants demurred to the evidence and the demurrers were sustained. The appeal is presented under the single proposition that the trial court erred in sustaining defendants’ demurrers, dismissing the petition and entering judgment for defendants, for the reason plaintiffs made out a prima facie case by showing written authority to sell the property, and that a purchaser was found who entered into a contract of purchase and made part payment, although defendant refused to consummate the sale. We are of the opinion the trial court erred in sustaining the demurrers to plaintiffs’ evidence, and in dismissing the petition and entering judgment for defendants. There being no denial of the written contract granting plaintiffs’ authority to sell the property, plaintiffs’ right to recovery then rests entirely upon the question whether plaintiffs’ evidence established that they had secured a purchaser who was ready, able and willing to buy upon the terms and conditions of the contract. Defendants urge that plaintiffs were required to offer proof of the purchaser’s financial ability, when such purchaser was not accepted by defendants and no sale ever consummated, and in failing to offer such proof plaintiffs failed to make out a prima facie case. We think this position is untenable. In 8 Am. Jur., Brokers, §226, the following statement is found: “According to some decisions, if the broker was engaged to negotiate the sale of real estate, a primary requisite to the establishment of the ability and [601] willingness of the party procured to perform is that the broker should have procured a written contract signed by the proposed purchaser so that nothing but the signature of his employer is wanting to make the transaction binding upon both. . . .” In Gilliland v. Jaynes, 36 Okla. 563, 129 P. 8, this question was considered: “In order for a real estate agent to recover his commission for making a sale which has not been completed, it is necessary for him to find a purchaser who is ready, willing, and able to buy, and to procure a written agreement to buy from the purchaser,. which will be enforceable against him, if accepted and signed by the seller, provided the seller and purchaser have not come together, and an oral agreement to buy accepted by the seller.” In the body of the opinion, after discussing the rules of other jurisdictions, the following statement is found: “ . . . We are not inclined to follow either of these classes of cases, regarding them as extreme and exceptional. The true rule is that the broker is entitled to his commissions if the purchaser presented by him and the vendor, his employer, enter into a valid, binding, and enforceable contract. . . .’ ” The holding in this case was followed in Scott v. Kennedy, 152 Okla. 165, 3 P. 2d 907, and in this case it was pointed out that one of two events must transpire, to wit: (1) A purchaser must be presented to the seller, in order that the seller may accept or reject him; or (2) a contract of purchase binding the purchaser to buy on the terms offered must be presented to owner. And, until one of these things is done — absent a contract to the contrary — no compensation is due the broker as commission. Numerous decisions are cited and relied upon by defendants as sustaining their contention that plaintiffs failed to make out a prima facie case that they produced a purchaser “ready, willing and able” to purchase on the terms and conditions upon which plaintiffs were authorized to negotiate. The contention fails to take into consideration the distinction between procuring one willing to be bound as a purchaser and procuring one who is bound. In the former the minds of seller and purchaser are yet to meet, while in the latter they have already met. In the former the seller does not have to contract unless the would-be purchaser measures up to the standard. In the latter the broker on authority of the owner has in effect accomplished the sale and the owner is in duty bound to recognize it unless he can show reason to the contrary. If, when the contract, signed by the purchaser, was presented to the owner, the refusal of the seller to sign had been placed upon the ground that the purchaser was unable to perform the contract, the broker would have had the opportunity to show that the purchaser was ready, willing and able to buy, thus proving the existence or nonexistence of his right to the commission, which right the owner was in duty bound to respect. To decline to execute the contract without valid reason was arbitrary. And where grounds for refusal could have been given but were not given, the same cannot be urged as a defense to the action for commissions. McFarland v. Lillard, 2 Ind. App. 160, 50 A. S. R. 234; Fiske v. Soule, 87 Cal. 313, 321; Young v. Metcalf Land Co. (N.D.) 122 N. W. 1101 (and numerous cases therein cited). Furthermore, for the owner in such action even to raise the question, it would be necessary for him to plead and prove the fact of the inability of the purchaser to comply. McFarland v. Lillard, supra; Young v. Metcalf Land Co., supra. The authorities relied upon by defendants are not persuasive as agaitist the contract of purchaser signed by the party charged and binding upon her acceptance by defendants, and further discussion of such cited cases is deemed unnecessary. Defendants also urge that there was a variance between the plaintiffs’ con [602] tract of employment and the sales contract signed by the purchaser. This contention is without substantial merit. The contract of employment provided for a sale price of $85,000, and cash payment of $33,800, which defendants assert meant all in cash for their equity in the property; while the contract provided for a price of $85,000, the balance above the deposit, earnest money, to be “cash upon delivery of title to the buyer.” However, the contract of employment, after recitation of the terms of the sale, contained the following provision: “Upon consummation of a sale, on the above terms, or on the basis of all cash to ourselves and the holders of our mortgage as our various interests appear, ...” We are unable to detect the alleged variance between the contract of employment and the sales contract which defendants assert was sufficient to vitiate the plaintiffs’ contract, because the property was sold upon a basis different from that provided in their authority to sell. The judgment is reversed and the cause remanded, with directions to set aside the judgment sustaining defendants’ demurrer and dismissing plaintiffs’ petition. HURST, C.J., DAVISON, C.J., and RILEY, BAYLESS, WELCH, GIBSON, ARNOLD, and LUTTRELL, JJ., concur. CORN, J., dissents.