Marsteller v. Martin

McWilliams, J., delivered the opinion of the Court. Appellant (Marsteller) is a real estate broker. His suit to recover a $36,000 commission from appellees (Martin) ended abruptly when the trial judge directed a verdict for Martin at the conclusion of Marsteller’s case. The transaction out of which Marsteller’s claim arose is as unusual as it is involved.

In the spring of 1962 Martin 1 owned 8.2822 acres of land in the Greenbelt area of Prince George’s County. He asked Marsteller to find someone who would be willing to lend money on the property. Marsteller produced Alfred Stidham with whom an arrangement was eventually negotiated. The essential details of their agreement, dated 14 August 1962, are set forth below: 1.

Stidham agreed to lend Martin $180,000 for 2jjj years at 6°/o, to be secured by a first deed of trust on the 8.2822 acres. 2. Martin agreed to trade Parcel A (2 acres of the 8.2822 acres) for Lot 46 (owned by Stidham and located in the District of Columbia) provided the 8.2822 acres, or the major portion thereof, could, within 7 months, be rezoned 1-1 (Industrial, Light) and provided also an entrance thereto from Kenilworth Avenue could be obtained. ⁴⁷² 3. Martin gave Stidham an option for 3 years from the date of settlement of the exchange of Parcel A for Lot 46 to purchase the remainder of the 8.2822 acres for $300,000. In the event the exchange was not consummated (it was not) Martin gave Stidham an option to purchase the entire 8.2822 tract, at any time before 31 December 1965, for $450,000. 4.

Martin agreed “to pay the real estate commission due * * * Marsteller for services rendered in negotiating this agreement in accordance with a separate agreement between them.” (Emphasis supplied.) Settlement took place on 5 September 1962. For reasons not disclosed in the record Martin and Stidham executed another agreement, dated 5 September 1962, which restated the terms of the options but omitted any mention of the $180,000 loan. The paragraph dealing with Marsteller’s commission was repeated verbatim, except for the insertion of the word “option” so as to read “in negotiating this option agreement.” The attorney who conducted the settlement of the loan paid Marsteller $6000 in cash. Martin gave him a 90 day note for an additional $3000.

It is conceded this note has been paid. Marsteller testified that, after the settlement, the fact that he had nothing in writing concerning his commission “started worrying” him. On 8 October 1962 Martin and Marsteller executed an agreement, dated 5 September 1962, the essential details of which are as follows: 1. For procuring the $180,000 loan Martin agreed to pay Marsteller a fee of $9000.

(As has been said, $6000 of this had already been paid and Marsteller had the 90 day note for the remaining $3000.) 2. For procuring the option to buy the remainder of the 8.2822 acre tract for $300,000 Martin agreed to pay Marsteller $30,000 “to be paid at settlement if said option is exercised.” (Emphasis supplied.) 3. “For procuring the exchange * * * of Parcel A for Lot 46” Martin agreed to give Marsteller an exclusive listing, for an indefinite period, to sell Lot 46 and to pay “a commission equal to 10% of the gross sales price, less, ⁴⁷³ however, the sum of $9000.” Martin reserved the right to cancel the listing but he agreed to pay Marsteller $6000 if he did so. Martin also agreed (if the exchange took place) to pay Marsteller $6000 if Lot 46 was still unsold on 31 March 1964. The rezoning had not been accomplished by 5 April 1963, when the 7 month period expired.

In fact, it was never accomplished. This was a condition precedent for the exchange which, of course, likewise never came to pass. On 30 January 1964 Stidham and Martin modified the agreement of 5 September 1962, the effect of which was that Stidham waived the interest on the note and Martin reduced the option price from $450,000 to $369,000. No change was made in the due date (1 March 1965) of the note.

On 20 November 1964 Martin borrowed an additional $120,-000 from a source other than Stidham. This was secured by a second trust on the 8.2822 acres. On 1 March 1965 the $18,000 became due and payable. Martin defaulted and Stidham instructed his attorneys to begin foreclosure proceedings.

To avoid a foreclosure sale, Stidham agreed, after much discussion, to cancel the $180,000' note, assume the $120,000 trust and pay Martin $45,000 in cash for a deed to the 8.2822 acres. Settlement was concluded on 10 April 1965. In his declaration, Sled 7 October 1965 in the Circuit Court for Montgomery County, Marsteller alleged that he “procured * * * Stidham * * * as purchaser of 8.2822 acres” for which Martin (and Solomon) agreed “to pay *