Riggs v. Turnbull

Pearce J., delivered the opinion of the Court. This action was brought by Edwin L. Turnbull for the recovery of commissions as a broker for the sale of a house and lot, No. 903 North Charles street, the property of Clinton L. Riggs. Sometime in March, 1905, the plaintiff was employed by William B. Ehlen to purchase for him the adjoining property, No. 901 North Charles street, to be converted into an apartment house, and while this negotiation was pending the plaintiff urged Ehlen to purchase the defendant’s adjoining property and convert the two into one large apartment house. Ehlen authorized plaintiff to negotiate for him for the purchase of this property also, but upon the distinct understanding that he would not pay any commissions upon that purchase, though he had agreed to pay commissions upon the purchase of No. 901, because the owner refused to pay them.

After three interviews with Riggs, plaintiff negotiated a sale to Ehlen for $38,000, Riggs agreeing to pay the usual commissions of 2y2 per cent, on the purchase price, the commissions to be paid when Riggs received his money, and at that time plaintiff informed Riggs that the two properties were to be used as an apartment house, but did not disclose to him that he was acting for Ehlen in the purchase of the property. On the date of the last interview, March 29, 1905, a written agreement was entered into between Riggs and his wife, and Ehlen for the purchase by the latter of the property No. 903 North Charles street for the sum of $38,000 of which $300 had been paid before the signing of the agreement, and the balance was to be paid as follows; “$4,300. on the 1st of June 1905, at which time a deed for the property shall be executed, and a mortgage for the unpaid ¹⁴⁷ price shall be given, with a satisfactory bond for improvements to be erected. Said mortgage to bear 5 per cent interest and to be payable as follows: $ 5,000 in 6 months from date of mortgage, $3,000'in 12 months, balance payable within 5 years at option of vendee.” The plaintiff explained that the bond for improvements mentioned in this agreement was to protect Riggs in event that the existing improvements were torn down to make way for the new and to secure him until the new improvements were erected, and Riggs testified that when Ehlen was disclosed as the purchaser he questioned his financial responsibility, and at the suggestion of Riggs brother, who was his counsel, it was stipulated in the agreement that a satisfactory bond should be given for the erection of the apartment house which was to cover the property, so that he might be protected. On June 1st, 1905, Riggs had moved out of the house and was ready to deliver it to Ehlen, but Ehlen told him he was unable to carry out the terms of the contract, but he then paid $3,000. and asked indulgence until he could get his clients together and put the deal through.

This indulgence was given and Riggs testified that he repeatedly urged Ehlen to comply with the contract and did everything in his power to aid him, personally offering to fake $50,000 of the bonds to carry out the scheme of the apartment house. This condition of affairs continued until the month of October. In the meantime, Riggs had placed the matter in the hands of his brother Alfred R. Riggs, as his attorney, who testified that he told Ehlen he was instructed to enforce the contract, and Ehlen assured him he had not a dollar in the world ; that the men who had agreed to go in the deal with him had all backed out, and if he was sued, it would simply put him out of business, and Riggs would get nothing. The result of this was that on Oct. nth, 1905, Ehlen gave his note for $2,000 payable four months after date, and the contract was cancelled by Alfred R. Riggs, attorney for Clinton L. Riggs» by endorsement thereon.

No part of this note has ever been paid. The adjoining property, No. 901 North Charles St., was not converted ¹⁴⁸ into an apartment house at all, and is now occupied as a furniture store, and Mr. Riggs has since endeavored to sell his property at $5,000 less than Ehlen contracted to pay, but has been unable to find a purchaser at any price because the adjoining property is in the hands of real estate speculators. The bond for improvements stipulated for in the contract was never given, and it is clear from Ehlen’s statement to Alfred R. Riggs that he was utterly unable to comply with that stipulation. In 23 Amer. and Eng.

Enc. of Law, 917, the general rule is said to be that “Where the purchaser presented by the broker is accepted by his employer, and they enter into a valid, binding, and enforceable contract of sale, the broker is entitled to his commissions, whether or npt the contract is actually carried into effect, and the sale made.” And substantially the same rule is announced in Mechem on Agency, sec. 966, and in Clark and Skyles on Agency, sec. 773. An examination of the cases shows that this rule prevails in most of the States of this country where the question has been clearly raised and decided. The ground upon which most of these cases proceed may be illustrated by the case of Ormsby v. Graham, 123 Iowa, 202 , in which a consummated sale is defined as “one consummated by such a contract as will be enforced by the Courts if enforcement be demanded.” And by the case of Brennan v. Perry, 7 Phil. 243 , where it was held that “In order to entitle a broker to commissions there must be an actual sale vesting the right to the purchase money in the vendor, and transferring the right of property to. the purchaser.” But this is not the rule prevailing in England, orin this State. In Keener v. Harrod, 2 Md. 70 , the Court said, “The legal import of an agreement to procure a purchaser, binds the party to name a person who ultimately buys the property,” as was held in Murray v. Currie, 32 Eng.

Com. Law, 641, cited by the Court in support of its language. In Kimberley v. Henderson and Lupton, 29 Md. 515 , the Court said, “To be entitled to their commissions as brokers they should have ¹⁴⁹ completed the sale, that is they should have found a purchaser in a situation, and ready and willing to complete the purchase according to the terms agreed upon. The undertaking to procure a purchaser requires of the party so undertaking, to produce a party capable and who ultimately becomes the purchaser.

These propositions are settled in Keener v. Harrod and Brooke, 2 Md. 63 , and McGavock v. Woodlief, 20 How. 221 .” In Kimberly v. Henderson and Lupton, supra, there was a written agreement for sale with a stipulation that in case either party should fail to comply with the contract, a forfeit of $ 1,000 should be paid by the party in default to the other party. The vendee was unable to comply, being disappointed in the receipt of funds which he expected to receive, and he paid the forfeit accordingly. In a suit for brokers’ commissions, the Court below granted a prayer of the plaintiff that if the agreement for the sale of the property offered in evidence was made through the plaintiffs as brokers of defendant, the plaintiffs were entitled to their commissions as brokers, “for their services in effecting the negotiations which terminated in said agreement, as fully as if a deed had been executed for said property, and the purchase money had been paid,” and refused a prayer of defendant that plaintiffs were not entitled to recover, “even if the j ury found that the parties entered into the contract offered in evidence, if the jury further found that the contract of sale was put an end to by the payment by the purchaser of the forfeit of $1,000.” On appeal this Court reversed a judgment in favor of the plaintiffs, saying that the prayer of the plaintiffs should have been refused, and that of the defendant should have been granted, and it will be seen that this prayer of the plaintiffs presented the theory that the broker is entitled where the parties enter into a contract of sale, whether the contract is actually carried into effect or not, while that of the defendant made the right of recovery to depend upon the carrying of the contract into execution. In delivering the opinion in that case Judge Alvey said, ¹⁵⁰ “A party was produced, it is