Garfinkel v. Schwartzman

Smith, J., delivered the opinion of the Court. We have here two. appeals. David Garfinkel (Garfinkel)' appears here as appellant in one appeal and as appellee in the other: He is a real estate broker. In 1964 he and Harold Sampson, another broker, obtained a listing of property in Montgomery County owned in part by Aaron Schwartzman (Aaron), who appears here as appellee in the Garfinkel appeal, and in part by "his brother, Marcus Schwartzman (Marcus), who appears as appellee in the Garfinkel appeal and is also an appellant.

Thé contract was an exclusive listing agreement dated June 2, 1964, and expiring December 2, 1964. It was signed on behalf of the seller by Aaron and not by Marcus. The property is described as: “Approximately, two hundred acres of ground in Mont ⁷¹³ goniery County, Md. situated about midway between Rockville and Norbeck with a frontage of some four thousand feet on the Norbeck Road and bounded by County park ground to the West and North, the (former) McIntosh tract to the East, and the Norbeck Road to the South * * It is conceded that this description would embrace the land of both Marcus and Aaron. The Marcus tract contained approximately 107 acres while the Aaron tract contained approximately 91 acres.

Aaron originally owned the entire tract. He conveyed a portion thereof to Marcus at some point prior in time to that in issue. Aaron is a physician. Marcus is a dentist.

Marcus and his wife contracted through a broker by the name of Leder on September 3, 1964, to sell the 107 acre portion. Aaron and his wife contracted through the same broker to sell the remaining portion of the land. The contract was dated December 5, 1964, although the claim is made that Aaron executed it on December 7, 1964, five days after the expiration of the exclusive listing agreement. Settlement was made.

Gariinkel and Sampson received no commission. Gariinkel and Sampson filed suit in the Circuit Court for Montgomery County against Aaron and Marcus and their respective wives based on the listing contract of June, 1964. The declaration contained two counts. The first count was based upon their allegation that they produced a buyer pursuant to the contract terms and that the defendants refused to make sale.

The second count claimed breach by defendants of the exclusive listing agreement by a sale to Manor Lake Corporation “at and for the total purchase price of $630,000”. Damages in the amount of $66,450.00 were claimed in each count. The claim of Mr. Sampson was ordered dismissed without prejudice at the same time that, the original attorneys for the plaintiffs sought to withdraw from the case on the basis of personality clashes which had arisen between them and Gariinkel. New counsel was obtained by Gariinkel for trial.

He apparently ultimately disagreed with them since the order for appeal to this Court was entered in proper person and his third set of counsel appear here. ⁷¹⁴ The matter came on for trial before a jury. The trial judge at the end of the plaintiff’s case granted the motion of all defendants for a directed verdict as to the first count and granted a similar motion of the respective wives as to the second count. Ruling was reserved as to Aaron on the second count. Aaron and Marcus rested without presenting evidence and renewed their motions.

Motion was, thereupon, granted for a directed verdict on the second count as to Aaron. The jury returned a verdict in favor of Garfinkel against Marcus in the amount of $17,387.50. Garfinkel and Marcus appeal. We shall affirm the judgments.

Marcus presents five questions on appeal, namely (1) whether the trial court should have granted his motion for a directed verdict on the ground that the exclusive listing agreement upon which Garfinkel’s suit was brought is too uncertain and indefinite to be enforceable, (2) whether the trial court should have granted the motion of Marcus for a directed verdict on the ground that there was no legally sufficient evidence to support Garfinkel’s claim that Aaron Schartzman was acting as the agent of Marcus Schwartzman at the time Aaron signed the exclusive listing agreement, (3) whether the trial court should have granted the motion of Marcus for a directed verdict on the ground that there was no legally sufficient evidence that Garfinkel had knowledge of and relied upon either actual or implied authority on the part of Aaron to execute a listing agreement in behalf of and as agent for Marcus, (4) whether the trial court should have granted Marcus’ motion for directed verdict on the ground that Garfinkel failed to establish the existence of a valid real estate broker’s or salesman’s license issued to and held by his co-broker, Harold Sampson, prior to acceptance of the exclusive listing agreement on June 2, 1964, and (5) whether the listing agreement included any authority from Aaron to the brokers to offer for sale the property of anyone other than Aaron, or was the description of the property as “approximately 200 acres” an inadvertent mistake on the part of the draftsman. Garfinkel presents four questions, namely (1) whether the direction of a verdict in favor of Aaron was error, (2) whether the execution by Aaron of an exclusive listing agreement for ⁷¹⁵ the sale of 200 acres bound Aaron irrespective of his ownership or lack of ownership of the land referred to in the listing agreement, (3) whether the sale of a part of the 200 acres within the period of the exclusive listing agreement constituted a breach of the listing agreement and rendered Aaron liable for damages, and (4) whether the proper measure of damages for such a breach was a sum equal to the commission which would have been earned. Garfinkel testified that, in conjunction with another individual who thought that Aaron might be interested in selling, he first had contact with Aaron in the spring of 1963. Aaron at that time indicated an interest in selling.

He rejected a contract for $5000.00 or $5500.00 per acre. Garfinkel described the land as “raw acreage”. Garfinkel never met Marcus until a year after his initial contact with Aaron, nor did the name Marcus come into the original discussion. Garfinkel ultimately arranged a meeting with Aaron and Harold Sampson in late January or February of 1964.

Garfinkel testified: “The doctor provided me with facts of the ground ... I mean [plats] of the ground, this is my first clear recollection that we were dealing with a two hundred acres of tract. Because the [plat] he gave me embraces both tracts.” The record then reads : “Q. Doctor Aaron gave you the [plats] ? A. Yes.

This was done to get a preliminary idea of how development might work out in terms of cost from an economical standpoint, and they gave me an appraisal of that. “Q. This was handled by you? A. Yes. “Q. At the direction of whom? A. Doctor Aaron Schwartzman.” Prior to the introduction of Sampson to Aaron, Garfinkel had suggested to Aaron that Aaron proceed with his own development of the land, after his having rejected certain other development plans. It was for that reason, it was claimed, that plats were involved.

Garfinkel said he was shown a plat by ⁷¹⁶ Aar.on that showed two separate parcels of land making up the 200 acres with the name of Marcus on one portion and the name of Aaron on the other. At another point the record reads: “Q. Did Doctor Marcus Schwartzman direct you in your activities? A. No, I never saw him. “Q. Never saw Doctor Marcus Schwartzman? A. No. “Q. You were dealing with Aaron all of the time?

A. Yes. '“Q. With how many acres? A. For the first time I have a clear recollection. He gave me a [plat] and I remember very distinctly when the engineer gave me their preliminary analysis. The sum of it was while storm sewers for one tract would be higher [than] for the other it would just even out on the board and from this I distinctly recall we were dealing with two tracts.” Garfinkel said an application for rezoning was filed based on this 200 acre tract.

The description for the listing contract was taken from such a plat, there apparently being a number of plats which Garfinkel examined. Harold Sampson testified that Garfinkel introduced him to Doctors Aaron and Marcus Schwartzman. At one point the examination of Sampson is as follows: “Q. Tell us, please, when and where you first met Doctor Aaron Schwartzman? A. I believe it was at his farm; I believe it was a Sunday afternoon; I’m sure it was Sunday Afternoon when I met Doctor Aaron Schwartzman and Doctor Marcus Schwartz-man. “Q. Was Mr. Garfinkel present at that meeting?

A. Yes. “Q. Fie introduced you in fact? A. Yes. “Q. What discussion, if any, did you have with Doctor Aaron Schwartzman concerning their -land, if you recall at that time? A. Well, we . . . the doctor 'showed us his home and .the property and boundaries ⁷¹⁷ and so forth of the entire tract. And we discussed the feasibility of developing it and how many homes you could build on it and what the development cost would be and so forth. “Q. Now, with whom did you hold these discussions ?

Were you talking to one or both of the doctors ? A. At that initial meeting it was both. “O. Both heard what proposals that you had? A. Yes. However, to qualify that, you cannot determine that the development costs were going to be; yes I discussed it with both, the feasibility of the development. “O. Did you, at that initial meeting, hear any reference to the amount of acreage involved, sir?

A. Yes, 200 acres, plus or minus. I believe there was a small piece of condemnation; it was plus or minus a few acres. “Q. Any discussion for the development for less than 200 acres? A. No. “Q. 96 acres, for instance? A. No. I called and met Doctor Marcus Schwartzman and he showed me his property lines and Doctor Aaron Schwartzman showed me his and we combined them altogether. “Q. Did you have any agreement, tentative or otherwise at the end of that meeting as to the amount of acreage you would deal with in the development of this property?

A. Yes, 200 acres. It was always 200 acres. It was not feasible, which I can show you with the proposed development plans. This land was not economically feasible to subdivide it into acre tracts; there were too many factors involved.

Even if the land was to be sold to as one parcel, because one standing on his own was not . . . Doctor Marcus’ had a gas line running through the hill. Now, to develop around that and come out with a good street and work out and take best ... if you have an entire package of 200 ⁷¹⁸ acres where you can work this into it, and also for example: On sewer lines, the large trunk sewer line had to go through one property to get to. the other. It made sense that they brought or were together, and a school site was to be located there and if you work the two together you could . . . anyway, it would serve more people.....” Sampson on cross-examination testified that he knew the first day he went on the land that there were two tracts of approximately 100 acres each.

He said Dr. Aaron Schwartzman showed him the property lines from the house, it being on a hilltop. Dr. Marcus Schwartzman and Sampson walked over the land and Marcus showed him “the corner points of his property”. The testimony of Sampson relative to the exclusive listing agreement was in part as follows: “Q. Would you tell the Court and jury if you please, the circumstances leading up to the execution of that agreement? A. Prior to getting to the point of making a determination of Doctor Schwartzman or to sell the land versus the land development method, I had worked with Doctor Aaron Schwartzman and engaged engineers, land planners, scheduled and talked with zoning attorneys, had prepared preliminary studies, site plans of the entire tract.

And again, the purpose of this was, we were acting as advisors to Doctor Aaron Schwartzman as to what is the best thing to do here, how can I make the most money out of the land. And first we had to determine what the development was going to cost and I have here the copy and the figures that I gave to Doctor Aaron Schwartzman at the time. And if you saw the land, this is what you would earn if you developed the land; I can give you those figures. Here is what you would earn if we get the land at least part of it zoned and in what you would earn.

We weighed out the various things. Could I refer to my notes, I would like to make a point and elaborate on the point whether to sell this land.” ⁷¹⁹ SCHWARTZMAN’S APPEAL I Marcus claims the exclusive listing agreement is a nullity because it “fails to state the terms upon which the Seller agrees to sell his property, and is, therefore, incapable of interpretation to ascertain either the intent or understanding of the parties thereto”. The listing agreement specifically described the property in question. The price was “Seven thousand, five hundred dollars per acre, as it is, with no contingencies.” It states that the terms of sale are “to be negotiated”.

Fundamentally, the argument of Marcus is that the contract with the broker failed to state what terms other than price will be required of a customer, pointing out that even if a purchaser proposed to pay all cash for the property this would not remove the cloud of indefiniteness and uncertainty since for tax or other reasons a seller might not deem cash advantageous. We are not presented in this case with a situation where a landowner is seeking to extricate himself from an exclusive agency contract or exclusive sale agreement during the term thereof. We do not have before us a situation where Garfinkel as broker has produced a buyer willing to pay the listed price of $7500.00 per acre, but the parties are unable to agree on other terms and Garfinkel as broker is suing the owner for breach of the contract, the owner having refused to convey. What we do have is a situation in which a part of the property covered by the contract has been sold during the period of the contract on terms that must have been acceptable to the seller or no sale would have been made.

Examination of the contract reveals that it is in two parts. One part gives the brokers what they call an exclusive listing. The other part provides for commissions. We note that Restatement, Agency 2d, § 445, comment d (1958) states: “d.

Effect oj completeness of terms given broker. The principal may either specify all his terms or furnish the broker with only part of the terms, the price, for example, with the understanding that further details ⁷²⁰ are subject to negotiation between the principal and the customer when found. ■“When the principal has furnished the broker with only.part of the terms, with the understanding that further details are subject to negotiation between the i principal and the customer, the principal, unless acting in bad faith * * * is free to terminate such negotiation [with the customer] without liability to the broker.” Had Garfinkel produced this purchaser and Marcus accepted 'the terms, Garfinkel would have been entitled to his commissions. The parties pledged themselves to co-operate with other brokers. There was an exclusive listing.

Another broker during the listing period produced a purchaser on acceptable terms. Generally, when a contract contains ambiguous terms, an attempt is made to determine the intention of the parties at the time the contract was entered into. Mascaro v. Snelling and Snelling, 250 Md. 215, 229 , 243 A. 2d 1 (1968). In addition, the rule applicable here was stated in Balto.

City v. Indus. Elec., 230 Md. 224, 229 , 186 A. 2d 469 (1962) to be that “an interpretation which makes a contract fair and reasonable will be : preferred to one leading to a harsh or unreasonable result, so that a reading which produces a forfeiture will not be favored. WILLISTON ON CONTRACTS (3rd Ed.), Sec. 620; Carozza v. Williams, 190 Md. 143, 150 .” An interpretation which renders a contract valid and its performance possible will be preferred to one which makes it void or its performance impossible or meaningless. 4 Williston, Contracts, § 620 (3rd Ed. 1961). The contract was a valid one.

II Marcus claims there was no legally sufficient evidence from which the jury could properly find the existence of an agency on the part of Aaron authorizing him to act for Marcus in the execution of the listing agreement. The trial court instructed the jury: “Apparent authority is that authority which the principal has held the agent out as possessing or which he ⁷²¹ has permitted his agent to represent that he possesses and which the principal may not, therefore, deny. “An agent’s act is within his apparent authority when a reasonably prudent person, having knowledge of the ttsages of a business, would be justified in supposing from the character of the agent’s known duties that the agent is authorized to perform such act. In order for a third person to avail himself of the apparent authority of an agent he must have dealt with the agent in good faith, relying upon the agent’s apparent authority in the exercise of reasonable prudence, and he