Defranceaux Realty Group, Inc. v. Leeth

Melvin, J., delivered the opinion of the Court. This is an action by real estate brokers (plaintiffs-appellants) for a commission from the sellers (defendants-appellees) under a contract for the sale of real ¹⁸⁸ estate. At the close of the plaintiffs’ case at a jury trial in the Circuit Court for Frederick County, the trial judge (Mathias, J.) granted the defendants’ motion for a directed verdict. From the judgment entered thereon, the brokers appeal.

We shall affirm the judgment in favor of the sellers. By written contract dated July 23,1971, the sellers agreed to sell approximately 115 acres of land in Frederick County to Urban Systems Development Corporation (buyer) for a price of $5,500 per acre. Under the contract the buyer was given the right to terminate the agreement within specified periods of time if commitments for public water and sewer could not be obtained or if “engineering, economic and/or topographic studies ... do not warrant the development of the property, in the sole discretion of the Purchaser”, or if the purchaser could not obtain appropriate zoning for the property to permit “a planned unit development” thereon. The contract provided that settlement was to-take place within thirty (30) days “after the final and unappealable rezoning approval has been granted”.

The contract provision for commissions is as follows: “THE SELLERS agree to pay a commission amounting to ten per centum (10%) of the gross sales price on their respective share thereof, and the attorneys, through whom settlement is made, are hereby authorized and directed to make deduction of the aforesaid commission from the proceeds of the sale, and to make the payment thereof to Paul B. Ganley, Inc., Agent and Broker, and Frederick W. Berens Sales, Inc., [1] (E. Brooke Lee, Jr., representative).” The contract further provided that: “IT IS further understood and agreed that all deposits under this contract shall be held until settlement or forfeiture in the name of Paul B. ¹⁸⁹ Ganley, Inc., Agent and Broker, Route 6, Frederick, Maryland. In the event of the default on the part of the Purchaser under this contract, such deposits shall be forfeited as provided and be paid one-half to the Sellers and one-half to Paul B. Ganley, Inc., Agent and Broker, and Frederick W. Berens Sales, Inc. (E. Brooke Lee, Jr., representative).” By the contract (which was signed by the brokers as well as the sellers) one of the brokers acknowledged receipt from the buyer of the only deposit ($10.00) mentioned in the contract, “to be applied as part payment toward the purchase price at settlement”. The brokers concede that under the contract provisions and the applicable Maryland case law construing similar provisions their right to a commission was conditioned upon a consummation of the sale and the creation of the fund, the “proceeds of the sale”, from which to pay it. See Berman v. Hall, 275 Md. 434, 439 , 340 A. 2d 251 (1975); Cohen v. Duclos, 272 Md. 41, 45 , 321 A. 2d 145 (1974); W. C. Pinkard & Co. v. Castlewood Realty Co., 271 Md. 598, 601 , 319 A. 2d 123 (1974); Snider Brothers, Inc. v. Heft, 271 Md. 409, 416 , 317 A. 2d 848 (1974); Prince George’s Country Club v. Carr, 235 Md. 591, 603 , 202 A. 2d 354 (1964); Chasanow v. Wilcox, 220 Md. 171, 176 , 151 A. 2d 748 (1959); Goss v. Hill, 219 Md. 304, 307-308 , 149 A. 2d 10 (1959).

It is undisputed that the sale in this case was never consummated and the fund for the payment of a commission was never created. The brokers, nevertheless, vigorously assert their right to a commission of approximately $62,000.00. 2 The evidence presented by the brokers, viewed in the light most favorable to them, showed that the buyer wrongfully refused to consummate the sale; that thereupon on May 25, 1973, the sellers and the brokers filed suit for specific performance against the buyer alleging their own readiness, willingness and ability to proceed to settlement pursuant to ¹⁹⁰ the contract provisions and the buyer’s unwarranted refusal to do so; that the same counsel represented the sellers and the brokers in that suit; that the specific performance case was eventually settled before trial in January 1974; that by the terms of the