BABCOCK v. MERRITT

27 P. 882

1 Colo.App. 84

BABCOCK
v.
MERRITT et al.

Court of Appeals of Colorado

October 12, 1891

Appeal
from superior court of Denver; MERRICK A. ROGERS, Judge.

Action
by Elmer W. Merritt and another against Mollie E. Babcock for
commissions for the sale of defendant's property.
Judgment for plaintiffs. Defendant appeals. Reversed.

Patterson
& Thomas, for appellant.

Doud &
Fowler, for appellees.

REED,
J.

This
was an action brought by appellees, Merritt & Grommon,
against Mollie E. Babcock to recover commissions as
real-estate brokers upon an alleged sale of property of
appellant in the city of Denver. Trial to a jury. Verdict and
judgment for plaintiffs (appellees) for $237.50. There is no
important conflict in the testimony. At the close of
plaintiffs' evidence motion for a nonsuit was made on
behalf of the defendant, which was disallowed by the [1
Colo.App. 85] court. The right to recover was based upon the
testimony of plaintiffs, which was not seriously controverted
by the defense.

The
first important question to be determined is one of
law,--whether, upon the testimony of the plaintiffs,
uncontradicted, they were shown to have earned and to have
been entitled to a commission. The following facts were
established by the evidence: In the fall of 1885, Mr. Merritt
met appellant, who said she was quite anxious to sell the
property; that the price was $7,500, but, if an offer of less
was made, it might be submitted to her through her agent. He
says: "I told her that I had a party at that time who
had been figuring on the property, that I had already shown
the property to, and that I hoped to complete a sale,"
etc. Another interview was had two or three weeks later.
"Mrs. Babcock asked me if I had yet completed the sale
to this party I had been figuring with before. I told her
that I had not yet succeeded in completing the sale, but that
I still had the party in tow, and was trying to sell to
them." On the 1st of January, 1886, witness formed a
partnership with Mr. Grommon, and at some subsequent time
again saw appellant, and informed her of the partnership;
told her "that we were endeavoring to sell her property;
had been advertising it, and were trying to complete a
purchase or sale, and that we should use every means in our
power;" that he personally never had any further
conversation with her. The party referred to by the witness
as being the one to whom he supposed he could sell the
property was a Mr. J.M. Tompkins, a resident of Cheyenne. The
last interview between Merritt and appellant seems to have
been in the latter part of February, 1886. On the 29th day of
April following, by an arrangement and trade made between Mr.
Tompkins and appellant, Mr. Tompkins became the owner of the
property. Mr. Merritt had shown the property to Mr. and Mrs.
Tompkins with a view of renting it to him. This was in the
latter part of February or early part [1 Colo.App. 86] of
March. It appears that while looking through the house for
the purpose of renting there was some talk of the possibility
of his purchasing it at some subsequent time. He wanted to
know if plaintiff thought the owners would take in exchange
some property which he owned in Cheyenne. He was told that he
thought not; that the owner wanted the money,
[27 P. 883]
etc.; that he tried to get an offer or proposition from
Tompkins to trade for or purchase the property, but none was
made; that Tompkins said that he would rent it for a month,
and perhaps he would make a proposition to purchase; that was
the last and only conversation he had regarding the sale. On
cross-examination, plaintiff said that he tried to get an
offer, but did not succeed. There is no evidence to show
either that the appellees were ever authorized to trade the
property, or sell for anything but cash. It is established by
the evidence, and uncontradicted, that the price of the
property was $7,500, and that the lowest offer that would be
entertained was $7,000 net, or clear of all commissions of
agents. It is also shown that no talk or conversation had
between appellees and Tompkins in regard to the probability
of a trade of property was communicated by plaintiffs to the
defendant. It is also shown that the offer of $7,000 cash net
for the property would not be entertained, unless the sale
was made and the transaction closed before appellant left
Denver for Omaha, which was to occur, and did, a day or two
after the last interview. It appears that some time during
the month of March or early part of April the agent of
appellant applied to Mr. Grommon to learn the name of the
party who had talked of trading for the property, and was
informed that it was Mr. Tompkins, who was renting the
property, and who had an office in Cheyenne. This appears to
have been the only participation of appellees in the
transaction subsequent to the facts stated above. It is shown
by the testimony of Mr. Merritt that neither he nor his
partner further participated in nor had any knowledge [1
Colo.App. 87] of the dealings between appellant and Mr.
Tompkins until some time subsequent to the transfer of the
property, when he learned the fact of the sale from the
county records. After learning the fact, he addressed the
following letter to appellant: "Denver, Colo., May 19,
1886. Mrs. M.E. Babcock, Omaha, Neb.--Dear Madam: We are
pleased to see by the records of Arapahoe county that you
have sold your property at No. 277 Broadway to Mr. J.M.
Tompkins, whom we had the pleasure of interesting in the
purchase, first through his wife, in November of last year,
soon after you were pleased to place it in my hands for rent
and sale, and afterwards Mr. Tompkins himself. We see by the
records that the price which you received for the place was
$7,000, and we are glad we succeeded in securing a good
customer. Our commission is regular board rates, viz., 5% on
first $2,500, and 2 1/2% on excess, making amount due us of
$237.50, which please remit us at once, and oblige yours,
truly, MERRITT & GROMMON. By MERRITT." In the purchase
made by Mr. Tompkins he assumed incumbrance on the property
of $4,000; gave his note for $1,000; put in one house and lot
in Cheyenne at an estimated value of $2,000,--making, as
supposed, the consideration $7,000.

There
are a great many reported cases of suits by real-estate
brokers to recover commissions. The decisions of the
different courts are not all in harmony, but there are some
well-settled rules and legal principles that seem to be well
founded in reason that are almost universally conceded as
controlling. Two of them only need be invoked in the
determination of this case: First. Before the broker can be
said to have earned his commission, he must produce a
purchaser who is ready, willing, and able to purchase the
property upon the terms and at a price designated by the
principal. Hungerford v. [1 Colo.App. 88] Hicks, 39 Conn.
259; Tombs v. Alexander, 101 Mass. 255; Barnard v. Monnot,
*42 N.Y. 203; Satterthwaite v. Vreeland, 3 Hun, 152; Rees v.
Spruance, 45 Ill. 308; McArthur v. Slauson, 53 Wis. 41;
[1]
Wylie v. Bank, 61 N.Y. 415. Second. The broker must be the
efficient agent or procuring cause of the sale. The means
employed by him and his efforts must result in the sale. He
must find the purchaser, and the sale must proceed from his
efforts acting as broker. McClave v. Paine, 49 N.Y. 561;
Lloyd v. Matthews, 51 N.Y. 124; Lyon v. Mitchell, 36 N.Y.
235; Briggs v. Rowe, *43 N.Y. 424; Murray v. Currie, 7 Car. &
P. 584; Wilkinson v. Martin, 8 Car. & P. 5. Tested by these
general principles, it at once becomes apparent that no
commission was earned. The employment was to make a cash sale
for $7,500, or within a short, definite, and limited time at
$7,000 net. These were the terms. No purchaser was found by
the brokers who made any proposition to purchase for cash, or
any definite proposition to trade property that was or could
be communicated by the brokers to their principal. With the
renting of the property to the subsequent purchaser, all
efforts to sell seemed to have been discontinued, and no
knowledge of the transaction with the principal was obtained
by the brokers until the fact of the transfer of the property
was learned from the county records. In the contemplated sale
for cash, commissions were contingent upon selling for
$7,500, or a sum above $7,000 sufficient to cover them. That
having been the contract proved, and the only one made, it is
hard to find a legal basis on which to rest the claim for
commission. Had the purchaser made, through the broker, a
definite proposition to exchange property, which he did not,
and the offer had been accepted, commission under the
contract proved could not be recovered unless the price
obtained exceeded the last net limit given; and, when it is
shown that no proposition to exchange was made, communicated
to, and acted upon by the owner, it is at once obvious that
the means employed by the [1 Colo.App. 89] brokers, and their
efforts, did not result in a sale. They found no purchaser,
and the sale was not made through their efforts as brokers.
The owner herself subsequently sold the property to the
tenant. It is true that the brokers gave to the owner the
name of the tenant who had previously made an indefinite
statement of his possible willingness to exchange properties.
But this of itself creates no legal liability to pay
commissions. It, at most, would only create a moral
obligation to pay for the information received, if the same
was beneficial.
[27 P. 884.]

They
had failed to find and produce a purchaser under the terms of
their employment, and the owner was under no obligation to
wait longer or indefinitely; and they having failed to
negotiate a sale or exchange with Mr. Tompkins, or even get
an offer from him, the fact that the owner subsequently sold
to the same party to whom they had ineffectually attempted to
sell has no legal significance. The law allowing
compensations to this class of agents for supposed
intervention in real-estate transactions has by many courts
been strained to its utmost tension. But I can find no
well-considered case sufficiently broad to allow the
appellees to recover under the facts in this case. I
certainly do not feel like extending it. The law should be so
defined and construed as to afford the owner of property some
protection against the persistent claims of brokers who seek
a recovery on purely technical grounds, and at the same time
assure to the broker compensation for services honestly and
actually rendered. I cannot indorse the proposition that the
placing by the owner in the hands of brokers, perhaps two or
three different firms, property for sale for an indefinite
time, creates a lien on the property in favor of the broker
for commissions in case the owner sells himself at some
subsequent time. In the case of Chandler v. Sutton, 5 Daly,
117, a case very similar and almost parallel with the one
under consideration, I find the conclusion of the opinion by
the eminent judge so pertinent, and my own ideas so much
better [1 Colo.App. 90] expressed than I can express them
myself, that I may be pardoned for quoting it: "The
preposterous proposition of Burnett is that because he was
employed to sell the defendant's house, and undertook to
sell it to a particular person, and could not, no sale of it
could be made to that person thereafter, no matter how
changed the facts may have been, without paying him a
commission; that he has only to lodge his caveat to prevent
the owner from selling thereafter to any one to whom he, as
broker, tried in vain to sell, unless at the peril of paying
to him his full commission." There are several other
errors assigned, notably the instructions to the jury. I may
be permitted to say that the instructions are in some parts
particularly faulty in submitting to the jury questions of
fact not warranted by the evidence. If I did not find the
judgment of the court erroneous in refusing a nonsuit, I
should be compelled to reverse the case upon the
instructions; but, having found that no commission was
earned, a review of the instructions is unnecessary. The
judgment should be reversed, and cause remanded.

---------

Notes:

[1] 9 N.W. 784.

---------