Gresham v. Lee

111 S.E. 404, 152 Ga. 829, 1922 Ga. LEXIS 291
CourtSupreme Court of Georgia
DecidedFebruary 23, 1922
DocketNo. 2604
StatusPublished
Cited by22 cases

This text of 111 S.E. 404 (Gresham v. Lee) is published on Counsel Stack Legal Research, covering Supreme Court of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gresham v. Lee, 111 S.E. 404, 152 Ga. 829, 1922 Ga. LEXIS 291 (Ga. 1922).

Opinion

Hines, J.

1. The Court .of Appeals desires instructions of this court upon the following question:

“Where property has been listed for sale with two or more real-estate brokers, and one of them, with the knowledge of the owner, superior court. February 14, 1921. [830]*830has interested a customer in the purchase, and, while the negotiations with the broker are still pending, the owner proceeds to close the sale with the same customer through another broker, the second broker being the first to present the customer as ready, able, and willing to buy, and actually offering to buy. at the price and on the terms stipulated by the owner, and where the owner, pending such negotiations, has committed no act. of bad faith, amounting to a failure to remain neutral between the brokers, or to an interference in favor of the broker actually closing the sale, must the efforts of the broker thus actually closing the trade be regarded, as a matter of law, as the procuring cause of the sale, so as to exclude the claim against the owner for commissions by the other broker, whose prior negotiations were then still pending ? ”

Where the services of a broker, as well as those of another broker, have conjointly contributed to the successful termination of negotiations resulting in the sale of real estate for an owner, the question which of the brokers is entitled to commissions from the owner for effecting such sale depends upon whose efforts were the primary, proximate, and procuring cause of the sale negotiated. The broker whose services and efforts were the primary, proximate, and procuring cause of the sale would be entitled to the commissions. Beougher v. Clark, 81 Kans. 250 (106 Pac. 39, 27 L. R. A. (N. S.) 198); Votaw v. McKeever, 76 Kans. 870 (92 Pac. 1120).

Where one broker, with the knowledge of the owner, has interested a customer in the purchase, and, while negotiations with the broker are still pending, the owner proceeds to close the sale with the same customer through another broker, who first presents the customer as ready, able, and willing to buy, and actually offering to buy, at the price and on the terms stipulated by the owner; and where the owner, pending such negotiations, has committed no act of bad faith amounting to a failure to remain neutral between the brokers, or to an interference in favor of the broker actually closing the sale, the broker thus actually closing the trade can not be said, as a matter of law, to be the one whose efforts were the primary, proximate, and procuring cause of the sale. Under such circumstances it becomes a question of fact as to which broker was the proximate, predominating, and procuring [831]*831cause of the sale. Murray v. Currie, 7 Car. & P. 584, 2 Eng. R. C. 527.

Where a broker for the sale of property notifies the owner that he has a customer, and introduces such customer to the owner, and where the negotiations between such broker and such customer are pending and have hot fallen through, the owner can not, with the knowledge of the facts, complete the purchase through another agent and avoid his liability for the commission due the first broker. Beougher v. Clark, 81 Kans. 250 (supra); Jennings v. Trummer, 52 Ore. 149 (96 Pac. 874, 23 L. R. A. (N. S.) 164, 132 Am. St. R. 680); Day v. Porter, 161 Ill. 235; Rigdon v. More, 226 Ill. 382 (80 N. E. 901).

The law will not permit one broker who has been entrusted with the sale of land, and is working with a customer whom he has found, to be deprived of his commission by another agent stepping in and selling the land to the customer so found by the first broker. Williams v. Bishop, 11 Colo. App. 378 (53 Pac. 239); Clifford v. Meyer, 6 Ind. App. 633 (34 N. E. 23); Hogan v. Slade, 98 Mo. App. 44 (71 S. W. 1104); McCormack v. Henderson, 100 Mo. App. 647 (75 S. W. 171); Holland v. Vinson, 124 Mo. App. 417 (101 S. W. 1131); Gilmour v. Freshaur, 126 Mo. App. 299 (102 S. W. 1107); Wood v. Wells, 103 Mich. 320 (61 N. W. 503); Elmendorf v. Golden, 37 Wash. 664 (80 Pac. 264).

Between the principal and the broker the ntmost good faith must be exercised. Jennings v. Trummer, 52 Ore. 149 (supra).

Hnder the facts recited in the above question it can not be said, as a matter of law, that the second broker was the procuring cause of the sale; and we answer this question in the negative.

2. The Court of Appeals propounds this question: “Is it the rule, in such a case, that the owner could only proceed at his periL to effect the sale and pay the commission to the broker thus closing the sale, for the reason that, under such circumstances, it is not a question of law, but one of fact, to be determined under the particular circumstances of the case, as to whose efforts were the primary, proximate, and procuring cause of the sale ? ” Hnder the above authorities and .the principles therein • ruled we answer the above question in the affirmative.

3. The Court of Appeals propounds this question: “In such á case, does the mere fact that a broker was the first to interest [832]*832the purchaser ih the property, to the extent that he began negotiations for a purchase, which continued until a sale was effected to the same customer through another broker, render the owner liable, as a matter of law, for commissions to the first broker, as the one whose efforts must be taken to be the procuring cause of the sale, although the owner commits no act of bad faith toward the first broker, but merely knows that he found the prospect and was the first to begin negotiations?” Under the facts stated in the first question and in this question, would the owner, as a matter of law, be liable to the agent for his commissions? According to the case as stated, one broker, with the knowledge of the. owner, interested a customer in the purchase. While the negotiations between the purchaser and this broker were still pending, the owner proceeded to close the sale with the purchaser through another broker. The relation between the owner and the first broker had not been terminated, but continued until a sale was effected to the customer through the second broker. The second broker first presented the customer as ready, able, and willing to buy, and actually offering to buy, at the price and on the terms stipulated by the owner, and the owner had committed no act of bad faith in the transaction. Under these circumstances, would the owner be liable as a matter of law to pay the first broker his commissions ?

The general rule is, that, where the owner of property employs a broker to sell the same, in order to earn his commissions the broker must procure a purchaser who is able, ready, and willing to buy, and who actually offers to buy, on the terms stipulated by the owner. Phinizy v. Bush, 129 Ga. 479 (59 S. E. 259); Civil Code, § '3587. Where a broker employed to negotiate a sale of a parcel of land procures a purchaser ready, able, and willing to purchase upon terms satisfactory to the principal, the principal can not defeat the broker’s right to commission by taking the proceeding out of the hands of the broker and completing the sale himself. Gresham v. Connally, 114 Ga. 906 (41 S. E. 42). The same result would follow if the owner dealt with the customer through another broker. Jennings v. Trummer, 52 Ore. 149 (supra).

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Bluebook (online)
111 S.E. 404, 152 Ga. 829, 1922 Ga. LEXIS 291, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gresham-v-lee-ga-1922.