Frederick May & Company v. Dunn

368 P.2d 266, 13 Utah 2d 40, 1962 Utah LEXIS 142
CourtUtah Supreme Court
DecidedJanuary 24, 1962
Docket9356
StatusPublished
Cited by18 cases

This text of 368 P.2d 266 (Frederick May & Company v. Dunn) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Frederick May & Company v. Dunn, 368 P.2d 266, 13 Utah 2d 40, 1962 Utah LEXIS 142 (Utah 1962).

Opinion

WADE, Chief Justice.

Plaintiff Frederick May & Company appeals from a summary judgment dismissing its complaint seeking a broker’s commission from defendant, W. Prescott Dunn, respondent here, for the sale of the outstanding capital stock of Keith O’Brien Company to Sperry and Hutchinson Company, dealers in S & H Green Stamps. Frederick May is the president and main owner of the Frederick May & Company with offices in New York City. W. Prescott Dunn was the president of Keith O’Brien Company, who, with his family and relatives, owned the outstanding capital stock of that company, which was sold to S & H. Dunn was also a stockholder and director of defendant, Tracy Collins Trust Company, a banking corporation.

About May 6, 1953, at Dunn’s request, May came to Salt Lake City, where he met with Dunn and Mr. Collins of Tracy Collins Trust Company. At that meeting an oral agreement was reached that the Frederick May Company and Tracy Collins Trust Company would act as co-brokers for the sale of the outstanding capital stock or assets of Keith O’Brien Company for a $25,000 commission to be divided equally between them. Immediately thereafter May commenced making contacts all over the United States to find a buyer. He met a number of prospective buyers at different times in Salt Lake City.

Both May and Dunn were acquainted with various officers of S & H through business deals before the May, 1953, contract. At least three times after the May, 1953, contract, May contacted representatives of S & H at their request, communicated to him through Dunn. Once in 1954, when May was negotiating with Mr. Guberman, who, through May as broker, had bought and then owned a business in Colorado Springs with financial backing from S & H. The president of S &' H asked May to discourage Guberman from *42 trying to buy Keith O’Brien Company. Two other times May contacted S & H personnel at their request, communicated to him by Mr. Dunn, in connection with the sale of the Keith O’Brien stock to a Mr. Riordan, who was relying on S & H backing to make the deal.

The deal with Riordan did not materialize because S & H refused to furnish him enough money, which coupled with his own resources, would enable him to buy that business. The last of these negotiations occurred in Salt Lake City from June 12 to 19 in 1956. During these negotiations two representatives of S & H were present, and May furnished Riordan and the S & H representatives with a written prospectus and much information emphasizing the advantages of making this purchase. May, however, conceded that he never considered S & H as a prospective purchaser, and that he never negotiated with it as such or proposed or offered to sell directly to that company. Thereafter May continued to try to interest other prospective purchasers.

Dunn testified that in his earlier contacts with S & H representatives, he asked, “(W)hy don’t you buy the business?” and was told, “(W)e might do that.” Within a week or so after June 19, 1956, Dunn received a phone call from the S' & H New York office indicating an interest in purchasing the Keith O’Brien stock. After considerable negotiation, the sale was consummated July 27, 1956. Thereafter about July 31, 1956, Dunn called May in New York and told him they had decided to keep the stock and agreed to send him $4,500 in addition to $500 previously paid for his efforts in trying to make the sale. May had heard nothing of the sale to S & H and so he agreed to this proposition on condition that if they later sold to anyone suggested by him, he would be entitled to the agreed commission. Dunn also paid Tracy Collins $11,000 for this sale to S & H. On November 1, 1956, May first heard through Riordan that S & H had purchased the Keith O’Brien stock and shortly thereafter he instituted this action.

To sustain a summary judgment, the pleadings, evidence, admissions and inferences therefrom, viewed most favorably to the loser, must show that there is no genuine issue of material fact, and that the winner is entitled to a judgment as a matter of law. 1 Such showing must preclude, as a matter of law, all reasonable *43 possibility that the loser could win if given a trial.

May’s deposition clearly shows that the oral brokerage contract contains no agreement that Dunn, the owner, would not sell the Keith O’Brien Company himself without paying the brokerage commission. It is generally recognized that a broker’s authority to sell property is not exclusive and does not require the payment of the commission to the broker upon a sale not procured by him, unless made so by the contract of employment in clear and unequivocal terms or by necessary implication. 2

From the evidence it is clear that this brokerage agreement did not give to the brokers an exclusive right to sell this property. The contract does not limit the time within which plaintiff could make the sale and the sale was made more than three years after the contract was entered into. It would be very unusual for parties by an oral contract to grant to the broker the right to collect the commission from the owner if the owner made the sale, without any limitation of the time within which such sale might be made. Further, there is no evidence that such was the agreement of the parties. By his deposition in answering the questions whether the oral agreement gave an exclusive right to make the sale, May said: “I would say on a moral basis, yes, but I wouldn’t say that he just outright agreed that we were his exclusive agents.” Since May admitted that there was no outright agreement of exclusive agency, we conclude that there was no reasonable basis to support a finding of fact that this contract granted to the brokers an exclusive right to sell this property or collect a fee therefor if the property was sold by the owner.

This brokerage contract is what is called a general listing agreement which leaves the owner free to sell the property himself as long as he does so in good faith. 3 Under such contracts a broker must be the procuring cause in order to be entitled to a commission for such sale. The cases use many different words in conjunction with, or in place of, the words, “procuring cause” to indicate the necessary extent the broker must induce the sale in order to be entitled to a commission, such as “proximate cause,” “actuating cause,” “moving cause”, and the like; all meaning about the same thing. However, the extent to which the broker’s efforts must induce the sale depends on the terms used in the contract and the understanding and intention of the parties in making such agreement and the facts and circumstances of the case. Usually, whether the broker first approaches, or brings to the attention of the buyer that the property is for sale, or brings the buyer into the picture, has con- *44 ' siderable weight in determining whether the buyer is the procuring cause of the sale. 4 The fact that the sale was consummated without participation by the broker in the final negotiation does not preclude him from recovering his commission if the sale was otherwise procured by him. 5

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Bluebook (online)
368 P.2d 266, 13 Utah 2d 40, 1962 Utah LEXIS 142, Counsel Stack Legal Research, https://law.counselstack.com/opinion/frederick-may-company-v-dunn-utah-1962.