Summary
adopting RESTATEMENT OF AGENCY 15
Summary of this case from ERA Pat Demarais Associates, Inc. v. Alexander Eastman FoundationOpinion
No. 4660.
Submitted June 4, 1958.
Decided July 1, 1958.
1. In an action to recover a real estate broker's commission for having been the effective cause of procuring a customer willing and able to buy the property upon the terms proposed by the owner a motion to set aside verdict for the defendant was properly denied where the evidence would warrant a finding that the broker was not acting as defendant owner's agent.
2. Testimony of the defendant owner, in such case, that he thought the plaintiff real estate broker was working for the prospective purchasers and not for him and that he did not intend that the plaintiff was to act as his broker was not incredible as a matter of law.
3. An agency relationship exists only if there has been a manifestation by the principal to the agent that the agent may act on his account, and consent by the agent so to act.
ASSUMPSIT, to recover a real estate broker's commission brought by the broker against the owner of the real estate in a case where the sale was never completed. Trial by the Court resulted in a verdict for the defendant. The plaintiff's exception to the denial of his motion to set aside the verdict was reserved and transferred by Leahy, C. J.
On August 16, 1955, the plaintiff, accompanied by the prospective purchasers, inquired of the defendant if this property was for sale and was advised that it was at a price of $28,000. The plaintiff was known to the defendant, as a real estate broker since the latter had declined to list the property for sale two years previously. The property was inspected and the prospective purchasers stated they would "take" the property. The defendant and the prospective purchasers signed the following memorandum, which was endorsed upon the margin by the plaintiff as "agent":
"Tuftonboro, N.H. Aug. 16, 1955
Property of Rudolph A. Sibley on Upper Bay — Tuftonboro We Norman E. Catherine M. Langdon agree to buy shore property comprising all land and Bldgs. thereon and all shore front from Public land to land of Bell on Upper Bay for ($28,000.00) twenty-eight thousand dollars.
This shall constitute an option agreement also to run concurrently with formal contract title-search, etc. — contract to have consent of Mrs. Edna Colbath.
/s/ Rudolph A. Sibley /s/ Catherine M. Langdon /s/ Norman E. Langdon"
The provision that the contract was to have the consent of Mrs. Colbath was inserted at the defendant's insistence. Mrs. Colbath was the defendant's housekeeper who had no legal interest in the property but she was opposed to the sale. The following day the defendant declined to sign a formal contract of sale although during the discussion the defendant said he would sign if a toss of the coin came out in favor of the prospective purchasers which it did. At this point the housekeeper made some uncomplimentary remark to the defendant who postponed signing the formal contract. Subsequently he advised the plaintiff that he would not sell. Additional facts appear in the opinion.
James J. Kalled for the plaintiff.
Eliot U. Wyman for the defendant.
In the previous transfer of this case it was decided that the prospective purchasers were not entitled to specific performance since the consent of the housekeeper, Mrs. Colbath, was a condition precedent to the defendant's obligation to convey the property. Langdon v. Sibley, 100 N.H. 373. That case is not necessarily determinative of the right of the broker to recover his commission. Anno. 169 A.L.R. 605; Parker v. Estabrook, 68 N.H. 349.
A real estate broker is entitled to his commission if he is the effective cause of procuring a customer willing and able to buy upon the terms proposed by the owner. Philbrick v. Chase, 95 N.H. 82; Restatement, Agency, s. 448; comment a; Wilson v. Atwood, 81 N.H. 61, 62. It is not seriously disputed that the plaintiff produced a customer able and willing to buy at the price stipulated by the defendant. The defense is grounded on the proposition that the consent of the third party was not obtained, which was one of the terms of the sale, and more particularly on the proposition that the plaintiff was not the agent of the defendant. On this latter point the evidence discloses that the parties never discussed agency or commissions. The defendant testified that he thought the plaintiff was working for the prospective purchasers and not for him, and that he did not intend that the plaintiff was to act as his real estate broker. This testimony did not have to be believed by the Trial Court but it was not incredible as a matter of law, and the trier of fact was entitled to give it such weight as he saw fit. Hines v. Donovan, 101 N.H. 239; Williams v. Walker, 95 N.H. 231; A Survey of the Law of Real Estate Brokerage Contracts in New England, 36 B. U. L. Rev. 285. There was also evidence that the prospective purchaser and the plaintiff formed a corporation engaging in real estate business in the winter of 1955. But this evidence has not been referred to by counsel in their arguments, and we have not considered it decisive here.
The plaintiff, in his carefully prepared brief, has advanced several theories upon which he should be allowed to recover his commission in this case. However, an indispensable basis for any theory of recovery is a finding that the plaintiff was acting as agent for the defendant. Russo v. Slawsby, 84 N.H. 89. "An agency relationship exists only if there has been a manifestation by the principal to the agent that the agent may act on his account, and consent by the agent so to act." Restatement, Agency, s. 15. The plaintiff could not have been nonsuited in this case in view of his testimony that he was acting as agent. The contrary evidence of the defendant presented an issue of fact for the Trial Court. If the defendant's evidence is accepted as true the real estate broker was not the defendant's agent, and the decree for the defendant is supported by the record. Toohey v. Davis, 85 N.H. 80. It is therefore unnecessary to consider the argument that the defendant had waived the necessity of obtaining the consent of Mrs. Colbath to the sale.
Exception overruled.
All concurred.