Moore v. Irwin

116 S.W. 662, 89 Ark. 289, 1909 Ark. LEXIS 81

• Court: Supreme Court of Arkansas
• Decided: February 8, 1909
• Status: Published

Opinion

Wood, J.,

(after stating the facts.) The parties, as .indicated by the requests for instructions, treated appellant as the procuring cause of the contract betwen appellee and Humphries as to the sale of the land. But appellee contends that appellant was not entitled to his commission under the contract with appellee until the executory contract of sale and purchase had been completed by the payment of the purchase money and the transfer of the title. He also contends that he paid the commission to appellant, relying upon certain representations made by him, which were not'true, and were not carried out by appellant, and therefore (appellee) was entitled to recover the commission. Appellant, on the other hand, contended that he was entitled to his commission as soon as he had procured a purchaser who entered into the contract-for the purchase of the land upon the terms expressed therein as prescribed by appellee and who paid a part of the purchase money.

In Rice v. Mayo, 107 Mass. 550, it is held that: “A written contract for the purchase of an estate, binding both vendor and purchaser, is a sale within the meaning of an agreement to pay a commission to a broker upon sale of the estate.” In note to Lunney v. Healey, 44 L. R. A. 593, it is said: “The business of a real estate broker or agent is only to find a purchaser, and the settled rule as stated by the courts is that, in the absence of an express contract between the broker and his principal, the implication generally is that the broker becomes entitled to the usual commission whenever he brings to his principal a party who is able and willing to take the property and enter into a valid contract upon the terms then named by the principal, although the particulars may b'e arranged and the matter negotiated and completed between the principal and purchaser directly.” In Pinkerton v. Hudson, 87 Ark. 506, we quoted the above and the syllabus, that “where a real estate broker contracts to produce a purchaser who shall actually buy, he has performed his contract by the production of one financially able, and with whom the owner actually malees an enforceable contract of sale. The failure to carry out that contract, even if the default be that of the pu„ .baser, does not deprive the broker of his right to commissions.”

Appellee relies upon this case 'to sustain his contention that the broker must present a purchaser financially able to carry out his contract of purchase. But the question here did not arise in that case, nor in any case (and they are numerous) where the financial ability of the purchaser is not questioned. In the absence of an express contract by which the broker warrants the financial ability of the purchaser procured by him, or in the absence of fraud on his part, he does not lose his commission, where a binding contract of sale is effected through his agency, because the purchaser procured by him is financially unable, -or for any other reason fails to carry out his contract of purchase. The broker, having presented a. proposed purchaser who is capable of entering into a contract of purohase, and willing to do so, has earned his commission when the vendor accepts him and enters into a valid contract with him for the sale of his ■ land, even though the sale is never in fact consummated by reason of the failure of the proposed purchaser to perform his part of the contract. Where the broker does not expressly warrant the financial ability of the purchaser procured by 'him, nor agree to see that the purchase money is paid, and is guilty of no fraud upon .his principal, ■the latter takes the responsibility of accepting the proposed purchaser. If he does so, and enters upon an executory contract for the sale of the land upon his own terms, the broker is entitled to the commissions agreed upon, whether the contract is ever fully executed or not. In the absence of contract it is not the business of the broker to see that the purchase money is paid, or to enforce the contract of sale. That is the business of his principal, the vendor.. These principles are sound, and, we think, are supported by the weight of authority. 19 Cyc., title “Factors and Brokers,” p. 270 and cases cited in note. See also Pinkerton v. Hudson, 87 Ark. 506; Coleman v. Meade, 13 Bush (Ky.) 358; Glentworth v. Luther, 21 Barb. 145; Alt v. Dosher, 102 N. Y. App. Div. 344; Rapalje on Real Estate Brokers, § 102.

There is nothing in Boysen v. Frink, 80 Ark. 254, in conflict with the doctrine here announced. There the commission was “conditioned on payment of the price.” It follows that under the contract between appellee and appellant the rulings of the court in modifying appellant’s requests for instructions were 'erroneous. The requests as asked were correct. The court should not have left it to the jury to determine whether appellee relied on his own judgment as to the financial ability of Humphries in ascertaining whether or not Humphries was an acceptable purchaser. The court should have declared this to be his duty, under the evidence in this case, as matter of law.

The allegations and the proof were not sufficient to sustain a recovery for deceit. See Louisiana Molasses Co., Ltd., v. Port Smith Wholesale Grocery Co., 73 Ark. 542.

No exceptions were saved to the rulings of the court in giving or refusing other requests for instructions. For the error-indicated the judgment is reversed, and the cause is remanded for new trial.