Opinion
32826.
DECIDED MAY 19, 1950. REHEARING DENIED JUNE 7, 1950.
Complaint; from Savannah City Court — Judge MacDonell. October 17, 1950. (Application to Supreme Court for certiorari).
Samuel M. Eplan, Emanuel Kronstadt, for plaintiff.
Myrick Myrick, Maxwell Rosenthal, for defendant.
Neither of the two counts of the petition was subject to the ground of demurrer that the action was to recover upon a written contract to purchase real estate, signed by the defendant's agent, and that such contract was unenforceable because no written authority to the agent to sign the contract was set forth. Each count showed, on the contrary, that the action was to recover commissions for services in procuring a purchase of real estate under an oral agreement, the defendant having accepted the services of the plaintiff, the procuring cause of the purchase subsequently consummated by the defendant through another real-estate broker.
( a) Nor was either count subject to the ground of demurrer that the terms of the proposed purchase as expressed in the petition were at variance with those stated in the written instrument signed by the defendant's agent, which it was contended should control, such instrument, a copy of which was attached to the petition, not being the basis of the plaintiff's cause of action, but, in connection with the allegations of the petition, merely illustrating the acceptance of the plaintiff's services, and the plaintiff not being chargeable with anything done by the agent, by way of changing the terms of the deferred payments, as the defendant had accepted the terms named by the seller and communicated to him by telephone as stated in the petition.
DECIDED MAY 19, 1950. REHEARING DENIED JUNE 7, 1950.
Allen M. Pierce, trading as Pierce Realty Company, brought an action against Ben Deich in the City Court of Savannah, the petition as amended being in two counts. Count one alleged: The defendant, some time prior to January 18, 1949, was negotiating for the purchase of certain property, known as 1610 Ponce de Leon Avenue, in DeKalb County, Georgia, the property of Elizabeth Bell, who was asking therefor a price of $95,000, including the furnishings. The defendant was not willing to pay the said price and was unable, through his agent, A. Miles Willcox, of Willcox Realty Company, Savannah, Georgia, to effect a purchase at a figure which the defendant considered fair and reasonable. As a result thereof the negotiations through the said A. Miles Willcox were suspended. M. H. Rosenthal, a former resident of Savannah, then residing in Fulton County, Georgia, and a personal friend of the defendant, was assisting the defendant in the negotiation for the purchase of the property, and when negotiations reached a point where the defendant's former agent could not effect a purchase at a price acceptable to the defendant, the said Rosenthal suggested to the defendant that he be allowed to call in another real estate agent in Atlanta, Georgia, with the idea of obtaining the said property at a price and under terms acceptable and satisfactory to the defendant. The defendant accepted and consented to the suggestion and directed the said Rosenthal to select an agent who the said Rosenthal thought could bring about a consummation of the purchase of the property at a price and terms satisfactory and acceptable to the defendant. Pursuant to the said direction the said Rosenthal obtained for the defendant a licensed real-estate broker in Atlanta, Georgia, who contacted the owner of the property and convinced him to sell it for the price of $75,000, of which $20,000 was to be paid in cash by the defendant, and the balance to be represented by the assumption of the then loan on the property and by a second loan (deed?) to the seller. The said Rosenthal and the plaintiff telephoned the defendant by long distance, at which time they were on extension lines and listened to the conversation, in which the defendant was informed that the plaintiff had obtained from the owner of the property authority to sell the same for $75,000, which sum was $20,000 less than the original asking price, and of which $20,000 was to be paid in cash, and the balance to be represented by the assumption of the loan then on the said property and a second deed to secure debt to the seller. At the conclusion of the conversation the defendant advised the said Rosenthal and the plaintiff that the arrangements were satisfactory, and directed, instructed and authorized the said Rosenthal to sign the sales contract as his agent, using M. H. Rosenthal's own name, and that the defendant would send a cashier's check for $5000 the following morning as earnest money.
Pursuant thereto the said Rosenthal, on January 18, 1949, signed the sales contract as directed, a copy of which is attached to the petition as Exhibit "A" and made a part thereof. The exhibit recites that the buyer agrees to buy and the seller agrees to sell, through Pierce Realty Company, agent for Elizabeth Bell, "Improved property known as 1610 Ponce de Leon Avenue, DeKalb County, Georgia, including all lighting fixtures attached thereto, and all heating, water heating, and plumbing equipment therein" for $75,000, to be paid as follows: "Pay cash twenty thousand ($20,000) dollars and assume loans for balance of purchase price." It was further recited: "Rents, taxes and insurance to be prorated at date of closing. All furniture and furnishings to be included with property." This instrument was signed "M. H. Rosenthal (Buyer)." On the reverse side of this paper was a statement of sales commissions and rules, showing a minimum charge of $50 on each sale and that in city limits the commission was to be as follows: "Improved or vacant property, charge 5 percent on first $10,000 and 3 percent on balance." The petition further alleged: When the defendant failed and refused to send the cashier's check as promised by him the owner, Elizabeth Bell, refused to sign the said contract until such check was sent and actually deposited as earnest money. The defendant, after refusing to forward the check to the petitioner as he had agreed to do, came back to Atlanta and signed another contract for the purchase of the property from the said owner under the same terms and conditions as brought about through the efforts and ingenuity of the plaintiff, but purchased property through the office of another real-estate agent. The plaintiff had fully carried out all of his instructions and had expended much time and effort in bringing about the purchase and sale of the said property, had procured for the defendant a price and terms satisfactory and acceptable to him, had done all that was required of him to bring about the consummation of the sale, had earned his fees and commissions which would have been paid to him had the sale been consummated through the office of the plaintiff, and since the failure to consummate the sale was brought about by the defendant's failure to go through with his contract the defendant is now liable to the plaintiff in the sum of $2450, which represents the commissions the plaintiff would have earned had not the defendant breached his contract, the said commissions and amount being fixed by the Real Estate Board of Atlanta, Georgia, as will appear by reference to the rules on the reverse side of the said sales contract. The prayers were for judgment for $2450 plus interest at 7 percent per annum from January 18, 1949, until paid and for process.
Count two of the petition as amended contained allegations which were the same as those in count one except that, in one paragraph, instead of alleging that because of the failure of the defendant to go through with "his contract" he was liable to the plaintiff in the sum of $2450, the amount of commissions fixed by the Real Estate Board of Atlanta, Georgia, it was alleged that because of the failure of the defendant to go through with "his promise and agreement" he was liable to the plaintiff in the sum of $2450 which represents a reasonable fee for his services and what is ordinarily charged among real-estate brokers for services of like character in Atlanta, Georgia, and that his services were accepted by the defendant and culminated in the defendant purchasing the property. The prayer was for $2450 plus interest at 7 percent per annum from January 18, 1949, until paid.
The defendant demurred to the original petition on general and special grounds. After the petition was amended the defendant, without renewing the previous demurrers, demurred as follows:
To the first count of the petition as amended the defendant demurred upon the following grounds:
"1. Plaintiff is suing upon a written contract attached to the petition purporting to be signed by M. H. Rosenthal for and in behalf of the defendant. The alleged contract is for the purchase of real estate. No written authority appears in the said petition from the defendant Ben Deich to M. H. Rosenthal authorizing the said Rosenthal to act as agent for and in behalf of the defendant in employing the plaintiff. In the absence of such written authority the alleged contract signed by M. H. Rosenthal is void and of no effect."
2. (Overruled and not necessary to be set forth.)
"3. The alleged contract sets forth that the purchase price of the said property involved was $75,000, to be paid as follows: `Pay cash $20,000 and assume loans for balance of purchase price.' The petition itself sets forth that the purchase price was $75,000 `which sum represented $20,000 less than the original asking price, of which $20,000 was to be paid in cash and the balance to be represented by the assumption of a loan then on the said property, and a second deed to secure debt to the seller.'
"(a) There is a variance between the terms of the contract and the foregoing allegation in the fifth paragraph of the plaintiff's petition, and said variance is fatal to the plaintiff's cause of action.
"(b) Regardless of the foregoing, the contract itself governs, and the terms of the contract with reference to the balance of the purchase price are vague, indefinite and uncertain, and the manner in which the loans were to be assumed, the terms of the payment of the loans, and the dates on which the payments were to be made are not set forth. Accordingly, the contract is void and can not be enforced."
To count two of the petition as amended the defendant demurred as follows:
"The second count undertakes to sue upon a quantum meruit for services alleged to have been performed by the plaintiff for and in behalf of the defendant. Nevertheless the action is based upon the contract attached to the second count, which is identical with the contract set forth in the first count, and the said second count sets forth no cause of action against the defendant for the following reasons: [Then are set forth grounds which are identical with grounds 1, 2 and 3 of the demurrer to count one.]"
The court sustained all grounds of the demurrers except ground 2 which was urged to both counts, and the exception is to that judgment.
1. Count one of the petition is not subject to the ground of demurrer that the action is upon a written contract to purchase real estate, and that it must fall because the authority of the agent Rosenthal to sign the contract was not in writing. The action is one in which the plaintiff seeks to recover commissions for services in procuring a purchase of real estate under an oral agreement. It was alleged that the agent Rosenthal, at the request of the defendant Deich, employed the plaintiff to obtain from the owner of described property an agreement to sell the same at a price and on terms which would be satisfactory to the defendant. It was further alleged that the plaintiff did contact and induce the owner to sell, and that the plaintiff and Rosenthal talked over long distance phone to the defendant in Savannah, Georgia, and informed him of the owner's willingness to sell the property for $75,000, $20,000 of which was to be paid in cash, and the balance to be represented by the assumption of a loan then on the property and by a second deed to secure debt to the seller. It was alleged that the defendant assented to the price and terms, and that he then directed Rosenthal to sign such a sales contract in his own name as the defendant's agent, promising to send a cashier's check for $5000 as earnest money the following morning. These allegations as to directing Rosenthal to sign a written contract and as to sending a check as earnest money were not, however, necessary to the cause of action whereby a licensed real-estate dealer sues for commissions, and did not, as apparently the trial judge erroneously conceived, establish the action as a suit upon a written contract to purchase real estate. They merely illustrate the assent and the intention of the defendant to go forward with the trade which the efforts of the plaintiff had made available to him, and which, in so far as the petition shows, the seller was then ready to consummate at once. In a case of this kind it is not essential to recovery that there shall have been executed a written contract of sale binding alike on the seller and the purchaser. Humphries v. Smith, 5 Ga. App. 340 ( 63 S.E. 248); Wilmot v. Cosby, 26 Ga. App. 196 (1-a) ( 105 S.E. 654). The written offer to buy and sell, signed by Rosenthal, was not any agreement to which the plaintiff was to become a party and upon which he might sue in case of a breach. It was not anything required by the seller but was an instrument which was prepared by others and obviously to be presented to the seller for signature. The forwarding of a $5000 check as earnest money is not shown to have been a part of the terms named by the seller, but was volunteered by the defendant, and when not remitted the seller then refused to sign until received. The injection of this element into the case by the defendant and his failure to abide by his voluntary promise can not prejudice the rights of the plaintiff, since he had obtained from the seller terms which did not include this condition and which had been accepted by the defendant. The plaintiff's complaint is only upon an oral agreement, and not upon the written contract form signed by Rosenthal. An agreement, express or implied, for the performance of services of the kind set forth in the petition does not come within the provisions of the statute of frauds (Code, § 20-401 (4)), as constituting a "contract for the sale of lands, or any interest in, or concerning them." Garrett v. Wall, 29 Ga. App. 642 (1) ( 116 S.E. 331); Lingo v. Blair, 32 Ga. App. 111 ( 122 S.E. 802). It is provided in the Code, § 4-213, that "The broker's commissions are earned when, during the agency, he finds a purchaser, ready, able, and willing to buy, and who actually offers to buy on the terms stipulated by the owner." This rule has been followed in innumerable decisions of this court and the Supreme Court. It does not mean that a broker is entitled to his commissions only when the transaction has been closed by a conveyance and payment of the purchase price. As stated by Judge Powell, speaking for the court in Humphries v. Smith, supra: "Ordinarily a sale is an executed contract — a completed transaction binding on seller and buyer alike. In contracts creating the relationship of principal and real-estate broker, however, a different meaning is generally given by construction. The broker `sells' when he finds a purchaser ready, able, and willing to buy on the terms proposed by the principal. A contract for commissions on sales entitles the broker to the specified compensation whenever, through his influence, such a prospective purchaser has been brought to the principal, though, by reason of some fault or disinclination of the latter, the sale is never completed, or is consummated on terms somewhat different from those originally proposed by the principal." Furthermore, "where property placed in the hands of a broker for sale is subsequently sold by the owner, the broker is entitled to the commission if he was the procuring cause of the sale, although the sale was actually consummated by the owner." Wilcox v. Wilcox, 31 Ga. App. 486 (2) ( 119 S.E. 445); Vaughn v. Clements, 65 Ga. App. 823, 825 ( 16 S.E.2d 607). Of course, by analogy these principles apply where a broker is engaged to find a seller as well as when employed to find a purchaser. Thus, in Roberts v. Martin, 15 Ga. App. 205 (1) ( 82 S.E. 813), it was held: "A real-estate agent employed to purchase land is as much entitled to be compensated, in accordance with his contract, as one employed to sell land in behalf of the owner." In Hendrix v. Crosby, 76 Ga. App. 191, 193 ( 45 S.E.2d 448), it was alleged in count one of the petition that the plaintiff was employed to purchase certain described property for the defendant and that he entered upon his employment and contacted the owner of the property and discussed the sale with the owner's agent, but that the defendant, in an effort to defeat paying the commission agreed upon, went directly to the owner's agent and purchased the property for a slightly higher amount than he had authorized the plaintiff to pay for the property. The petition further alleged that the plaintiff's efforts and negotiations were the procuring cause of the sale and that they culminated in the plaintiff's (defendant's) purchase of the property. After setting out the facts as above stated, as well as certain citations of authorities, this court, speaking through Sutton, C.J., said: "Under the allegations of the petition, the defendant used the plaintiff's labor in getting the price of the property reduced from $12,500 to $8750 and used the information furnished by the plaintiff in contacting the seller's agent, and the plaintiff's effort was the procuring cause of the sale and culminated in the defendant purchasing the property. In these circumstances, he could not defeat the broker's right to his commission by purchasing the property directly through the seller's agent, even though he paid a slightly higher price for it than he had authorized the broker to pay, but the broker would be entitled to his commissions for purchasing the property." See also Erwin v. Wender, 78 Ga. App. 94 (2) ( 50 S.E.2d 244).
In count one the transaction is referred to as a "contract" but it is not alleged what compensation was agreed upon. It is shown, however, that the defendant accepted the services of the plaintiff, assented to the terms of the trade, and that though the property was purchased from the owner through another real estate agent the efforts of the plaintiff were, in substance, the procuring cause of the purchase. It is settled law that "Ordinarily, when one renders services or transfers property valuable to another, which the latter accepts, a promise is implied to pay the reasonable value thereof; but this presumption does not usually arise in cases between very near relatives." Code, § 3-107. While the petition does not show that any specific compensation was agreed upon under the "contract," it does show that the plaintiff's efforts were the procuring cause of the purchase of the property in question and that the fruits of his efforts were accepted and availed of by the defendant. It is alleged that the plaintiff is entitled to $2450, which represents the amount of commissions, according to the rules of the Real Estate Board of Atlanta, Georgia, thus stating a basis of recovery on a quantum meruit basis. It is clear, therefore, that count one is not subject to ground one of the defendant's demurrer.
Another ground of demurrer attacks the allegations of count one of the petition (a) as to the terms of the purchase being at variance with those stated in the exhibit of an instrument signed by Rosenthal, it being contended that such variance is fatal to the plaintiff's cause of action. We have demonstrated, however, that this instrument was not the basis of the plaintiff's cause of action, but, in connection with the allegations of the petition, was merely illustrative of the defendant's acceptance of the plaintiff's services, and that the plaintiff is not chargeable with anything done by Rosenthal, as the defendant's agent, by way of changing the terms of the deferred payments, since the defendant had accepted the terms named by the seller and communicated by telephone as stated in the petition.
The contention (b) in this ground, that the exhibit must govern, and being vague, indefinite and uncertain as to the terms of the sale is unenforceable, is without merit for the reasons hereinbefore stated.
2. The ground of demurrer to count two erroneously assumes that the action is based upon the instrument signed by Rosenthal, rather than upon the services rendered by the plaintiff as a licensed real estate broker under an oral agreement, and for which recovery is sought upon a quantum meruit basis in accordance with commissions fixed by the Real Estate Board of Atlanta, Georgia. The same objections are urged as in the ground of the demurrer to count one of the petition and are likewise without merit, since the action is not based upon the written instrument shown by an exhibit attached to the petition.
Because of the error of the trial court in sustaining the demurrers above mentioned the judgment must be reversed.
Judgment reversed. Sutton, C.J., and Felton, J., concur.