Reiger v. Bigger

Hall, J.

The plaintiffs, to be entitled to their commission under their contract of employment, had to find one ready, able, and willing to purchase the defendant’s real estate at the sum of twenty thousand dollars. The contract in evidence was prepared, and executed on the part of the defendant in his absence, by the plaintiffs as his agents, under the finding of facts made by the court. The question, therefore, is, was such contract binding upon the other parties thereto, requiring them to complete the purchase at the price of twenty thousand dollars, or in default thereof to respond in damages-at large ? This question must be answered in the negative. The provision contained in the contract in these words: “And it is further agreed that in failure to take deed by said McClure, Austin, and Clarke they shall forfeit the five hundred dollars and no more,” was-clearly inserted for the benefit of the parties named, and gave them an option to relieve themselves of any obligation to complete the purchase. Kimberly v. Henderson, 29 Md. 515 .

When a broker is employed by one to sell his land for a certain sum, the broker must perform his contract in order to be entitled to his commission. In this case-the plaintiffs have no right to recover unless the defendant accepted the contract in evidence as performance by plaintiffs of their contract to effect a sale of his land for the sum of twenty thousand dollars.

The broker may enter into a contract with reference to the land, and his employer may accept and approve the contract without thereby accepting it as a performance by the broker of his contract. Thus, the broker-employed to procure a sale of the land for twenty thousand dollars, may obtain a purchaser at the price of ten thousand dollars, and the owner of the land may sell for the latter sum, and yet by so doing he would not accept the sale as a performance by the broker of his- *428 contract requiring a sale for twenty thousand dollars. Anri so, where the broker is employed to make an absolute and unconditional sale at a fixed sum, a conditional sale made by the broker such as to relieve the purchaser of the obligation to complete the sale on the payment .of a portion of the purchase price, although approved by the owner of the land, would not be an acceptance by the latter as a performance by the broker of his undertaking to make an absolute and unconditional sale. Of course, in both of said instances, and in' all such cases the owner of the land might accept such contract made by the broker as a complete performance by him of his obligation under his contract, but - there must be some evidence of such acceptance; the mere approval of the contract made by the broker, where it is substantially .different from the contract which he was employed to make, cannot, of itself, be held to be an acceptance by the owner as performance of the broker’s obligation. The counsel for plaintiffs makes the point that the defendant, by approving the contract in evidence, agreed to accept the sum of five hundred dollars as an equivalent for the completion of the purchase of the land by the other parties to the contract in accordance with its terms, and, hence, also accepted the contract as .a performance by plaintiffs of their obligation under their contract with defendant. The case of Leete v. Norton, 43 Conn. 219 , is cited in support of this point. The facts in that case are correctly stated in the syllabus of the report of it, thus: “The plaintiff, a real-estate broker, having in his hands certain property of the defendant for sale or exchange, arranged for an .exchange with C., and a contract was executed by C. .and the defendant by which each was to take immediate possession of the other’s property, and on or before a .day fixed was to convey his property to the other by warranty deed ; and if either should fail to perform he was to pay the other five hundred dollars as liquidated ■damages. C. failed to perform, without fault on the part of the defendant.” It was held that plaintiff was en *429 titled to his commission. After stating the contract effected by the broker the court said: “Now, had the contract been consummated, had Clinton given the defendant a conveyance of his property, and received from the defendant a deed of his in exchange, according to the agreement, it cannot be doubted that the plaintiff would have been entitled to the commissions now demanded. And for the conclusive reason that he would have done just that, and all that, which the defendant employed him to do ; just and all that which he undertook to do. The defendant would have obtained a property more valuable, in his estimation, than the one with which he had parted ; so much more valuable that he preferred paying the plaintiff the compensation demanded for negotiating the contract which enabled him to obtain it. In looking a little further into this agreement, we find that, for the sum of five hundred dollars, the defendant was willing, and for that sum he agreed, to discharge Clinton from his obligation to perform this contract. These are the words : £ It is further-mutually agreed by said parties that if either of them shall neglect or refuse to perform the promises and agreements binding upon him as hereinbefore mentioned, he shall pay to the other on demand the sum of five hundred dollars as liquidated damages.’ Now, though the plaintiff has not effected a sale or an exchange of the defendant’s property, yet he has negotiated a contract for such exchange, agreed to by the defendant, in which contract a sum of money is specified which the defendant agrees to accept, and in consideration of which, to relieve Clinton from his obligation to make the exchange of properties. Having thus fixed on the sum of five hundred dollars as an equivalent for the performance of this contract to exchange his property, as between himself and his co-contractor, the defendant cannot be allowed to deny that that sum of money is an equivalent, as between himself and the plaintiff, by whose aid he made the contract.”

I think that the decision of that case was wrong. *430 The broker was employed to make an absolute and unconditional sale or exchange of the property ; the contract of exchange as made was conditional, so as to relieve the other party to the contract from completing the exchange on the payment of five hundred dollars. There was no evidence that the broker’s principal accepted the contract which was made as performance by the broker of his obligation under his contract. It is true that the principal accepted and approved the conditional contract by which he agreed to receive five hundred dollars and relieve the other party to the ■ contract of the obligation to make the exchange, and so he may be said to have fixed on that sum as an equivalent, as between himself and such party, for the performance by the latter of his contract to make the ■ exchange. But how can such fact be held to constitute .an acceptance by the principal of the contract made as performance by the broker of his contract ? The contract made was not the contract which the .broker was employed to make. Can the mere fact that the principal approved a substantially different contract negotiated by the broker be deemed an acceptance of such contract, instead of the one which the broker contracted to negotiate? The argument, that the principal, having fixed upon the sum of five hundred dollars as an equivalent for the performance of the contract of exchange, thereby accepted the contract as performance by the broker, of his contract, which required him to effect such exchange, is plausible but not sound. Although the principal, by the terms of the contract, agreed to receive such sum as an equivalent for the exchange, there was nothing to indicate that he considered such sum as an equivalent in fact for the exchange. The principal may have approved the contract for various reasons, other than the opinion that the sum mentioned was an equivalent to him for the exchange, such, for instance, as the inability of his broker to procure any other ■contract, or the belief that the sum, although not a full equivalent to him for the exchange, was sufficient to *431 induce the other party to complete the exchange. But even if he did consider and accept such sum as such equivalent, as between himself and the other party to the contract, what was there to indicate that he accepted said sum as such equivalent as between himself and the broker. The broker having contracted to make an absolute and unconditional sale or exchange, his principal had the right to hold him to the contract. The principal may, in fact, have considered the contract negotiated by his broker as an equivalent in its benefits to him for the contract which the broker was to negotiate, and yet the principal did not have to accept or approve the contract; and he could have approved and accepted the contract without accepting it as full performance by the broker of his contract. What was thereto indicate that the principal accepted the contract as performance by the broker? Nothing whatever. I think that to say: •‘Having fixed on the sum of five hundred dollars as an equivalent for the performance of this contract to exchange his property, as between himself and co-contractor, the defendant cannot be allowed to deny that that sum of money is an equivalent, as between himself and the plaintiff, by whose aid he made the contract,” is, for the reasons given hereinbefore, the statement of a non seqnilur. There is no force in the suggestion that the contract was made by the broker’s aid. In that case, as in this case, the broker did not sue for the value of services in negotiating the contract actually made, but sued for the commission originally agreed upon on the theory that the contract made through his aid was a full performance by him of his agreement.

There is a possible distinction between that case and the present case. In that case the five hundred dollars formed no part of the consideration to be paid for the defendant’s property, whereas, in the present case, such sum did form a part of such consideration. But, whether such difference amounts to a distinction or not, it is clear that in this case the defendant did not accept the contract in evidence as performance by the plaintiffs of *432 their contract. The commission agreed upon for the performance by plaintiffs of their contract was five hundred dollars. It is inconceivable that the defendant accepted the contract negotiated by plaintiffs as performance by them of their undertaking, when that contract by its terms secured to the defendant only the sum of five hundred dollars. If the defendant did so, the forfeiture was intended to benefit the broker only, and in no sense can it be deemed an equivalent to the defendant for the perform anee, of the contract. The contract negotiated by the plaintiffs was not such a contract as they were required to procure, and the defendant did not accept it as such. The defendant should have had judgment in the circuit court.

For that reason, the judgment is merely reversed.

All concur.