Summary
In Thornton v. Lewis (1962), 106 Ga. App. 328, 126 S.E.2d 869, property was listed with the agent for sale upon specific terms.
Summary of this case from Estate of LeaseOpinion
39507.
DECIDED JULY 16, 1962.
Action for commission. Fulton Civil Court. Before Judge Smith.
Stephens Mitchell, Mitchell, Clarke, Pate Anderson, for plaintiff in error.
Harry P. Hall, Jr., John L. Westmoreland, John L. Westmoreland, Jr., M. K. Pentecost, Jr., contra.
1. Since the listing of the property with the real estate agent required that the latter would secure a commitment for a loan, an offer providing that the agent will secure a loan varied from the terms of the listing.
2. The death of the owner of the property revoked the power of the real estate agent to act under the listing contract. Under the allegations of the petition, no right had accrued to a commission prior to death, and none can accrue thereafter.
DECIDED JULY 16, 1962.
Plaintiff, a licensed real estate agent, sued Robert Lewis, individually and as administrator of the estate of Elmer Lewis, to recover a commission allegedly earned upon the sale of property belonging to the deceased.
The petition alleged that on July 1, 1960, Elmer Lewis listed property with the plaintiff for sale, upon terms set forth in the petition, at a price of $17,500; that the plaintiff secured three named parties as prospects, showed them the property, interested them in it, and on July 9, 1960, submitted a contract signed by these persons to Lewis which embodied the terms of the listing, but Lewis refused to sell the property to the prospects secured by the plaintiff; that on August 11, 1960, Robert L. Lewis, as temporary administrator of the estate of Elmer Lewis, deceased, sold the identical property to the three persons from whom the plaintiff obtained the contract in the terms of the listing; that the order referred to in the deed, i.e., that the grantor executed and delivered the deed under and by virtue of an order granted August 8, 1960, by the Fulton County Court of Ordinary, and the petition on which the order of the ordinary was based, recognizes the contract of purchase and sale entered into between Elmer Lewis and the three named grantees; and that the plaintiff was the procuring cause of the sale because he first showed the property to the purchasers and first interested the purchasers in submitting an offer to Elmer Lewis for it.
The trial court sustained the general demurrers of Robert L. Lewis, individually, and as administrator of the estate of Elmer Lewis, to the petition. The basis of the trial judge's sustaining of the general demurrer was that there was a variance between the offer which the plaintiff tendered to the deceased and the terms of the original listing. While the offer provided for the same purchase price and down payment, it also contained a provision that the agent "will secure a first mortgage loan" in the amount stipulated by the listing, but the listing provided that the agent "would secure a commitment for a first loan" in the amount stipulated.
To the order of the trial court sustaining the general demurrers, the plaintiff excepted.
The two main questions presented by this appeal are: (1) Did the petition set forth a cause of action on the basis of the plaintiff's procuring an offer from a purchaser ready, able and willing to buy, and who actually offered to buy, on the terms stipulated by the owner? and
(2) Even though the offer to purchase secured by the plaintiff was different from the actual terms of the listing, is the plaintiff entitled to recover because he was known to the seller to be the procuring cause of the sale actually made?
1. Our Code provides that the placing of property in the hands of a broker to sell, unless otherwise agreed, shall not prevent the owner from selling, and 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. Code § 4-213. Numerous cases interpreting this statute have pointed out that an offer by the proposed purchaser to buy on terms not stipulated by the owner, which is refused, will not entitle the agent to a commission. Even a slight variation will prevent the agent from recovering. Weldon v. Lashley, 214 Ga. 99 (1) ( 103 S.E.2d 385), reversing Weldon v. Lashley, 96 Ga. App. 761 ( 101 S.E.2d 779).
As alleged in the petition here, the listing given by the owner to the agent provided that the latter "would secure a commitment for a first loan." (Emphasis added). However, the offer to buy the property, attached as an exhibit to the petition, and which was refused by the owner, specifically stated that "agent will secure a 1st mortgage loan." (Emphasis added).
As correctly pointed out by the trial judge in his order sustaining the general demurrers, an agreement to secure a loan is vastly different from the requirement of the listing that the agent would secure a commitment for a loan.
So much of the petition as might be interpreted as seeking to recover on the basis that an offer had been obtained in accordance with the terms of the listing by the agent did not state a cause of action.
2. We turn now to the question whether a cause of action was stated by the remainder of the petition.
The petition specifically alleges that the plaintiff was the procuring cause of the sale made by the temporary administrator as petitioner first showed the property to the purchasers and first interested them in submitting to Elmer Lewis, the deceased owner, an offer to buy it.
While even the slightest variation from the terms the owner fixed in the listing with the agent will prevent the recovery of commissions, when the agent relies upon the allegations that he found a buyer ready, willing and able to buy upon the terms stipulated by the owner, such a departure does not in all cases prevent the agent from recovering commissions where a sale has been made by the owner to a buyer procured by the agent. The test to be applied is whether the agent was the procuring cause of the sale made to a buyer directly by the owner. Even though the sale be made at a reduced price, the owner may be liable for the commission if the broker's efforts are found to be the procuring cause of the sale. A sale by the owner within a reasonable time to a customer procured by the agent will render the owner liable where the agent was the procuring cause. Spence v. Walker, 92 Ga. App. 609 (1) ( 89 S.E.2d 668).
This latter rule is subject to the further requirement that the owner have knowledge, at the time of entering into the contract of sale or of selling it without a contract, of the fact that negotiations were pending between the agent and the buyers or that the buyers were procured by the agent. State Life Ins. Co. v. Whitehurst, 67 Ga. App. 646 ( 21 S.E.2d 474). This knowledge must exist at the time of entering into the contract. National City Bank of Rome v. Graham, 105 Ga. App. 498 ( 125 S.E.2d 223).
Where the owner of property has listed it with a real estate agent to be sold and the broker procures a prospective buyer, but the owner knowing of this fact sells the property to the prospect procured by the broker, an inference is authorized that the broker has earned a commission which he can recover from the owner. Arnold v. Jowers, 102 Ga. App. 29 ( 115 S.E.2d 623), and cases there cited.
Where the owner of real property authorizes an agent to sell it and does not fix a time limit in the authorization, he is bound to exercise good faith toward the agent and may not withdraw the listing for the purpose of defeating the agent's commission. "If no time limit is fixed in a contract authorizing an agent to sell real estate, then, under the law, he has a reasonable time within which to do so; and what is a reasonable time is to be determined by the jury." Wood v. Planzer, 73 Ga. App. 731 ( 37 S.E.2d 813). See also, Holland v. King, 72 Ga. App. 179 ( 33 S.E.2d 275); and McMillan v. Quincey, 137 Ga. 63 (1) ( 72 S.E. 506).
Where the agent expends time and effort in endeavoring to effect a sale pursuant to his employment by the owner to obtain a specified commission if a sale is made, the listing ripens into a contract by the agent's furnishing a consideration through the expenditure of his physical and fiscal efforts to find a buyer. When the listing has ripened into such a contract and no time limit has been fixed, its duration is for a reasonable time. See Wood, Holland and McMillan, supra.
The allegation in the petition charging that the agent procured an offer from the three buyers, which was transmitted to the owner while he was in life, though not accepted by him as the offer was not precisely presented in the terms of the listing, showed the expenditure of time and effort which furnishes consideration to cause the listing to ripen into a contract between the owner while he was in life and the agent which would endure for a reasonable length of time.
Although there may be here a contract of listing which under the above authorities ordinarily would endure for a reasonable time, nevertheless, this contract of listing is nothing more than an agreement between an agent and a principal for the former to represent the principal in finding a buyer. Generally an agency is revocable at the will of the principal, and the death of either principal or agent revokes the power of the agent to act. There are no allegations in the petition showing that the agent had become entitled to the commission prior to the death of the owner by virtue of having presented to the owner an offer within the terms of the listing or an executory contract of sale. Clearly the sale by the temporary administrator took place after the death of the owner. Since the death of the owner revoked the authority, the listing contract terminated upon the death. Code Ann. § 4-214(1).
Judgment affirmed. Hall, J., concurs. Felton, C. J., concurs in the judgment.