Cadigan v. Crabtree

55 L.R.A. 77, 61 N.E. 37, 179 Mass. 474, 1901 Mass. LEXIS 599

• Court: Massachusetts Supreme Judicial Court
• Decided: September 5, 1901
• Status: Published

Opinion

Loring, J.

1. The presiding justice was right in directing a verdict for the defendant on the fifth and sixth counts.

There was no evidence which would have warranted a verdict for the plaintiff. The most that could have been found in favor of the plaintiff was that the defendant employed him as a broker, in September, 1898, to find for her a purchaser for the Hotel Reynolds and that it was then stated that he was the only broker in the matter. The plaintiff’s employment in the matter was brought about by one Gilman, the agent in Boston of the defendant, who did not live in that city. The plaintiff testified that Gilman “said that he thought that Miss Crabtree, from his conversation with her, would sell the property for $800,000. Under a suggestion that I ask $815,000, I started out.” The plaintiff got several offers; one for $750,000 in cash, and another for $750,000, part in cash and part in “ other property in trade.” These offers were reported to the defendant personally between November 7 and November 11 of the same year, and were refused. The defendant then fixed her price at $1,100,000, which the plaintiff testified “ practically stopped the negotiations.” On February 25, 1899, the defendant notified the plaintiff that she was willing to take $850,000 for the property; but on March 1 following she revoked the plaintiff’s authority to sell the estate at all, and notified him that she had put the property in the hands of another broker for sale,, to the exclusion of the plaintiff and every one else.

No sale of the property has been made. It appears that the defendant has paid the plaintiff the amount he was out of pocket in the matter.

The plaintiff’s contention is that he is entitled to recover damages from the defendant for preventing him from earning a commission by finding a person who would buy the estate, and on the ground that he was entitled to a reasonable time in which to find a customer and his authority to do so was revoked before that time had passed.

Until February 25, when the defendant put a price upon the property, it is plain that the defendant could revoke the plaintiff’s employment without coming under any liability to the plaintiff for so doing. We take February 25, as the date when a price was put upon the property because the plaintiff’s contention was that the price of $1,100,000 put upon the property in the early part of November could not seriously be regarded as a price that could be obtained for the property. Where the owner of property employs a broker to bring him an offer for the purchase of it, without naming a price at which he is willing to sell, — that is to say, where the owner of property employs a broker to bring him an offer which he is to pass upon after it is brought to him, — there can be no implied agreement or understanding that the broker is to be entitled to a reasonable time in which to procure such an offer; in such a case, the owner has a right to reject every offer brought to him, as was held in Walker v. Tirrell, 101 Mass. 257; and it is plain that under those circumstances he could decide not to accept any offer and to dismiss the broker altogether. But the right of an owner to put an end to the broker’s employment is based on a consideration which goes deeper than that, and includes the case where a price is named by the owner at which he is willing to sell his property. That consideration is the nature of a brokerage commission; the very essence of a brokerage commission is that- it is dependent upon success and that it is in no way dependent upon, or affected by, the amount of work done by the broker. A brokerage commission is earned if the broker, without devoting much, or any, time to hunting up a customer, succeeds in procuring one; and it is equally true, on the other hand, not only that no commission is earned if a broker is not successful, but a broker is not entitled to any compensation, no matter how much time he has devoted to finding a customer, provided a customer is not found. See in this connection Sibbald v. Bethlehem Iron Co., 83 N. Y. 376, 383. The promise to pay a brokerage commission if a customer is found to purchase at a stated price is not the ordinary employment of labor, but is more in the nature of an offer, namely, an offer to pay a commission if a person is produced who buys at the price named; and, like any other offer, it can be withdrawn at any time, without regard to the fact that work has been done by a person in reliance on it, provided the work done has not brought the person within the terms of the offer. A broker who has • not been successful in procuring a customer for his principal is never entitled to recover on a quantum meruit for work done. Where a broker has done work, but another broker has closed the trade, it was held that under the peculiar circumstances of Dowling v. Morrill, 165 Mass. 491, not that he could recover on a .quantum meruit for work done, but that a commission was earned if his work was in fact the efficient and predominating cause of the sale; and so, where a customer is found to purchase property but the trade is not made or is not carried through because the broker’s principal is not able, or does not choose, to convey the property for which he employed the broker to find a purchaser, it is now settled that the broker’s remedy is to sue his principal for a commission, and that in such an action he can recover his commission; see Fitzpatrick v. Gilson, 176 Mass. 477, and cases there cited; although at one time countenance was given to the proposition that in such a case the remedy of the broker was on a quantum meruit for work done. See Brury v. Newman, 99 Mass. 256, 258; also Walker v. Tirrell, 101 Mass. 257, 258, citing with approval Prickett v. Badger, 1 C. B. (N. S.) 296.

2. The defendant’s exception to the refusal of the justice to direct a verdict for the defendant upon the fourth count must be sustained.

It appears that on or about November 2, 1898, the plaintiff was asked, as a broker, to find'a tenant for the Hotel Reynolds, the property which he had been trying to sell for the defendant in the two previous months of September and October. The hotel was then under lease to one Reynolds, and that lease apparently ran out on January 1,1899. In the latter part of November the plaintiff brought the matter to the attention of Gould and Polio. Gould and Polio then suggested that they might take a lease at $25,000 a year, the hotel being put in running order at the expense of the lessor. This was rejected by the defendant. Later the plaintiff secured a proposál from one Mann to take a lease of the hotel; this was accepted by the defendant, and a lease was drawn up; this lease, however, fell through on December 20, 1898, for some reason not discloséd. The terms of this lease were $25,000 for the first five years and $30,000 for the next five years, the lessor to lay out $35,000 in repairs and alterations and to receive six per cent interest on that expenditure. On December 22 or 23, a few days after the negotiations for the Mann lease had fallen through, the plaintiff again approached Gould and Polio on the subject, and they came to his office and saw there some plans of the hotel sent to the plaintiff’s office by Mr. Gilman, the defendant’s agent, for that purpose. We understand that these plans were plans showing the alterations to be made in the hotel under the Mann lease. Gould and Polio were then told by the plaintiff what the terms of the Mann lease were. On December 29, acting under instructions from the defendant, the defendant’s agent, Gilman, directed the plaintiff to take down his sign, which was then hanging in the,window of the hotel, as the defendant had decided to sell the property “ if it took a year or even more than a year to do it.” On January 2,1899, the plaintiff called on the defendant "at a hotel in Boston where she was then stopping, but “ she said she was going away, and would do nothing about letting the Reynolds until she got back.” She then left Boston and did not return until after the conclusion of the matters which gave rise to this litigation. On February 8, she wrote the plaintiff that the hotel was “ for sale only ”; and there was evidence that this was in answer to an inquiry from the plaintiff about letting it. On March 3, the defendant notified the plaintiff, in writing, that she had decided not to sell the hotel, and had placed it in the hands of one Fitzpatrick to be let, and added that he was her “sole agent, and he only has authority to negotiate for me.” On March 12, Fitzpatrick took Gould to New York, and in an interview then had between Gould and the defendant a lease from the defendant to Gould and Polio was agreed upon. This was a lease for ten years, the lessee paying $25,000 a year for the first five years, and $30,000 a year for the second five years, the lessor putting in the necessary plumbing and doing outside repairs. It appeared that the plumbing cost about $15,000, and that about $75,000 was voluntarily spent by Gould and' Polio, the lessees, in alterations and repairs.

The presiding justice instructed the jury that in order to recover the plaintiff must satisfy them that on January 2,1899, when the defendant changed her mind and decided not to lease the hotel, the plaintiff had gono so far in his negotiations with Gould and Polio that they had agreed to take a lease of the hotel on the terms of the Mann lease, and that Miss Crabtree, on being told of that, had elected not to lease the hotel to them and afterwards had made substantially the same trade with them through another broker; but, on the other hand, if, on the second of January, when she notified him (the plaintiff) that she was not going any further with the thing, — if, at that time, negotiations had not reached such a stage as to constitute an agreement on the part of Gould and Polio to take that property on substantially the same terms on which it was afterwards leased by her through the agency of Fitzpatrick, then the plaintiff has not made out his case, and he was not entitled to recover. In addition to this, the jury were distinctly told that if the plaintiff failed to get Gould and Polio to take a lease and afterwards Fitzpatrick succeeded in procuring a lease from them, the plaintiff was not entitled to a commission.

We are of opinion that the Mann lease and the Gould and Polio lease were not so far different one from the other as to prevent the plaintiff from recovering a commission if his services resulted in an offer from Gould and Polio to take a lease on the terms of the Mann lease; we are also of opinion that, if the jury were satisfied that the plaintiff was the efficient cause of the lease to Gould and Polio, they were justified in finding that the plaintiff’s services brought the mind of the lessees to accept the terms finally agreed upon. Had there been any evidence to go to the jury that Gould and Polio had agreed to take a lease of the hotel on the terms of the Mann lease prior to January 2, there would have been no error in these instructions; but we are of opinion that there was no evidence on which the jury were warranted in finding that the negotiations between the plaintiff and Gould and Polio had gone so far as to result in an agreement on the part of Gould and Polio to take the hotel on the terms of the Mann lease before January 2.

Before disposing of this matter, we will deal with the rulings set forth in the twelfth and thirteenth requests made by the defendant. In those requests, the defendant asked the court to rule, in substance, that to recover on the third count the plaintiff had to prove that he procured an offer from Gould and Polio in January to lease the hotel on terms fixed by the defendant, but that the defendant did not avail herself of that offer. This ruling the court refused to give, and instructed the jury that if the plaintiff procured an offer from Gould and Polio to lease the hotel in January, and the defendant subsequently leased the hotel to them through another broker in March, on substantially the same terms, they might find that the plaintiff was the efficient cause of the lease which was made, and if they so found they might render a verdict for the plaintiff on the third count. This was wrong. The case stated in the third count is a different case from that put in by the plaintiff under the fourth count. The difference between the two cases is that in the first case the plaintiff was entitled to his commission on submitting the offer in January ; in the second case, he was not entitled to a commission until the leasé was made in March. The ground of recovery in the first case is that the broker procured a customer on the terms fixed by the defendant; in such a case, he earns a commission even though the defendant neglects to avail herself of the bargain which has been secured by the broker. Fitzpatrick v. Gilson, 176 Mass. 477. The ground of recovery in the second case is that the offer procured in January did not, of itself, entitle the plaintiff to a commission because the defendant had not then fixed the terms on which she would lease the hotel, and the commission was not earned until the defendant availed herself of the plaintiff’s services by closing a trade through another broker in March, on substantially the terms of the January offer. The issues in the two cases are quite different. The presiding justice ruled that the plaintiff was not entitled to recover on either count unless he proved that he was the efficient cause of the lease which was made in March. This was, in effect, a ruling that the plaintiff had not made out the case set forth in his third count.

We are of opinion that under the defendant’s general request that there was no evidence to go to the jury on the fourth count, it is open to her to contend that even if it was not necessary for the plaintiff, in order to maintain the action set forth in that count, to prove that Gould and Polio made an offer to take the hotel on the terms of the Mann lease (upon which we express no opinion), yet, inasmuch as the presiding justice ruled that unless the plaintiff proved that such an offer had been made he had not made out his case, if there was no evidence that such an offer had been made, the defendant is entitled to have her general exception sustained.

On a fair construction of the testimony set forth in the bill of exceptions, the jury were not warranted in finding that such an offer had been made. On the direct examination, the plaintiff testified that “ Mr. Gould was very anxious at the time to hire the hotel.” When asked by his own attorney as to what was said at that time, he testified: “ They were ready to talk and do business; they came down and looked the plans over.” The defendant’s attorney at that point interrupted the plaintiff’s examination with the question, “ What did they say?” and the plaintiff answered, “ They were ready to take the hotel, from what they talked with me. I told Miss Crabtree that I had talked with them, and that they were anxious to get the hotel. She said she was tired out and was going to New York, and would not do anything about it until she came back. That was about January 2, 1899.” On cross-examination the plaintiff testified, in answer to the question, “ Did you ever get any offer from Gould and Polio for that property?” — “No, because I gave them the terms at that time, the same terms given to Mann, and just at that time Miss Crabtree said she would not do anything about the property.” He also testified on cross-examination that he never got from Gould and Polio any offer and never communicated to Miss Crabtree or to Mr. Gilman any offer from Gould and Pollo, and that “ they always talked about hiring it on the same plan that Mann hired it on.” This testimony falls short of proving an offer to take the hotel on the terms of the Mann lease, and there is nothing in the rest of the cross-examination which brings this testimony up to being evidence of that fact. On re-direct examination, the plaintiff testified: “ I told her [Miss Crabtree] they were ready to hire on the same terms as the Mann lease.”

On a fair construction of this testimony as a whole, we are of opinion that the jury were not warranted in finding that Gould and Polio offered to take the hotel before January 2, on the terms of the Mann lease. The jury were justified in finding that the plaintiff told the defendant that Gould and Polio were ready to take the hotel on those terms4 but taking into account the refusal of the plaintiff to testify that any such offer was made, when he was asked on direct examination what was said by Gould and Polio to him, and taking into account the explicit statement on cross-examination that no direct proposition was ever made by Gould and Polio, we think that all the jury would have been justified in finding was that Gould and Polio were believed by him to be ready to take the hotel on the terms of the Mann lease, but that they never said so and never made an offer to that effect.

*"Exceptions to the ruling on the fifth and sixth counts overruled; exception to the ruling on the fourth count sustained.