Copenhaver v. Beers Bros.

Singley, J., delivered the opinion of the Court. William K. Copenhaver and F. Moran McConihe (the Trustees), trustees under a deed of trust from Hillandale Medical Corporation (Hillandale) are valiantly resisting the efforts of Beers Brothers, Inc. (Beers) to collect a $15,000 unpaid balance of real estate brokerage commissions from the proceeds of a foreclosure sale conducted by the Trustees. We shall affirm the order of the Circuit Court for Montgomery County (Levine, J.) which allowed the Beers claim. . On 16 January 1965, Burbank Developers, Inc. (Burbank) contracted to sell a tract of some 107 acres to Hillandale for $376,800.

The contract provided that Burbank would pay to its broker, Beers, a 6% commission on the sale price. Since the contract also contemplated the payment of $90,000 in cash at settlement, and the payment ⁵⁸⁹ of the balance of $286,800 over a period of six years, the deferred payments to be secured by a deed of trust, a provision was added that “[t]he agent, Beers Brothers, Inc., agrees to receive real estate fee on a basis of 6 % of monies received by sellers.” Beers was not a party to the contract, but confirmed this arrangement in a letter written several days after the signing of the contract to two of the owners of Burbank, Tom and Tracy Coleman (the Colemans). Settlement was had on 16 July 1965, at which time Hillandale delivered to Burbank its note for $286,803, being the balance of purchase price, which provided for the payment of interest annually at the rate of 6 %, commencing on 16 July 1966, and for annual payments in reduction of principal beginning on 16 July 1967. Immediately after settlement, the Hillandale note was deposited for collection with.

Potomac National Bank. The letter of transmittal was written on Burbank’s letterhead, but was signed by Herman Schmidt and the Cole-mans: “Burbank Developers, Inc. BUILDERS and DEVELOPERS 963 SELIM ROAD SILVER SPRING, MD. Juniper 9-6022 National 8-9257 July 19,1965 Potomac National Bank Potomac, Maryland Gentlemen: We hand you herewith for collection our first trust note made by Hillandale Medical Corporation in the sum of $286,803.00 bearing even date herewith, secured by 107.685 acres, known as Dr. Lyons farm, on River Road, Montgomery County, Maryland. You are hereby requested to pay to Beers Bros., ⁵⁹⁰ Inc. 6% of principal payments received on said deed of trust when, as and if said payments are made, and deduct said 6 % from the amount due.

Very truly yours, /s/ Herman Schmidt Herman Schmidt /s/ Thomas L. Coleman Approved & accepted Beers Bros. Inc. by [illegible] Thomas L. Coleman /s/ Tracy O. Coleman Tracy O. Coleman” Hillandale had defaulted in its payments on the note by 9 June 1967, and the Trustees instituted foreclosure proceedings. On 16 August 1967, the property was sold at public sale for $250,000 to Herman Schmidt, acting in his own behalf and as agent for the Colemans. The Trustees returned their report of sale, and Beers filed its claim for $15,000, representing a commission of 6% on the $250,000 sale price.

The sale was ratified, and the case referred to an auditor, who filed a report in which the Beers claim was neither allowed nor disallowed. Beers countered with exceptions to the auditor’s report, and the case came on for hearing. No testimony was taken, the