Opinion
No. 6710
Decided November 25, 1946.
Real estate broker — Broker employed "to procure a purchaser," earns commission, when — Written contract to sell entered into — Seller not excused from paying commission, when — Buyer not ready, willing and able — Sale to another at reduced price.
1. A broker employed as sole agent for six months "to procure a purchaser" earns his commission by presenting to the seller a purchaser who is ready, willing and able to buy on the terms authorized.
2. Where a seller enters into a written contract with the purchaser procured by the agent, the seller cannot thereafter defend against payment of the agent's commission on the ground that the buyer was not ready, willing and able.
3. When the broker has obtained a purchaser and the seller has entered into a written contract with him to sell the property and the seller thereafter during the terms of the exclusive agency of the broker, sells the property to another at a reduced price the broker is entitled to a commission based on the price which the purchaser obtained by him agreed to pay.
APPEAL: Court of Appeals for Hamilton county.
Mr. B. Wm. Heidkamp, for appellant.
Mr. Irwin I. Aronoff, for appellee.
This is an appeal from a judgment for the defendant in an action to recover an agreed commission for services as a selling agent.
In the plaintiff's amended bill of particulars he alleged that the defendant entered into a contract with him, whereby he was given the exclusive agency for six months to sell a certain store and business at 2032 Western avenue, Cincinnati, Ohio, and that defendant agreed that should he, plaintiff, negotiate a sale during that period she, the defendant, would pay him a commission of ten per centum of the selling price. The plaintiff alleged that he procured a purchaser and that the defendant entered into an agreement with such purchaser to sell the store and business for $3,800, but that the defendant refused to pay the agreed commission of $380.
The answer contained a general denial and by way of explanation averred that the plaintiff had agreed to reduce his commission to $300 to induce defendant to reduce the selling price from $4,000 to $3,800, that the defendant was not to be liable for the commission unless the purchaser consummated the transaction by payment of the entire purchase price according to the terms of the contract, and that the purchaser had refused to perform.
The case went to trial upon those pleadings. The plaintiff introduced the written contract of agency and while some of its printed provisions are irrelevant, resulting from the use of a form more appropriate where the subject matter is real estate, it is perfectly clear that the plaintiff was employed by the defendant as her sole agent for six months from November 7, 1945, and was authorized to sell the store for not less than $3,500 net to the defendant and, subject to that, agreed to pay the commission established by The Cincinnati Real Estate Board, which was ten per cent of the selling price.
Acting under that authority, the plaintiff obtained a written offer of $3,800 for the store and business. This offer was presented to the defendant and she signed the written acceptance printed at the bottom of the offer, which also included an agreement to pay the plaintiff the commission for his services.
The evidence conclusively shows that the purchaser was able to pay the purchase price and was ready and willing, except that there was some slight delay in raising money by mortgage upon real estate owned by her due to the usual time required to examine the title, and, as a result, the 30-day period provided in the contract for consummating the sale expired, whereupon the defendant at once notified the purchaser that she would not complete the sale. Had the defendant not given this notice to the purchaser and the bank from which she was arranging to borrow the required amount of money, the purchaser would have been ready in a few days to pay the entire purchase price.
Notwithstanding the defendant's refusal to complete the sale, she still regarded the purchaser as bound and 17 days later, through her attorney, threatened to sue the purchaser unless she paid damages for breach of the contract. It also appeared from the defendant's own testimony that within the six-month period during which the plaintiff had the exclusive selling agency the defendant sold her store and business.
There was some oral testimony proferred and some admitted in evidence that tended somewhat to prove the commission was not to be paid unless and until the selling price was actually paid. That evidence was clearly incompetent, as tending to contradict the terms of the written contract, but as will be pointed out later, even if competent, it would not have affected the rights of the parties.
Upon that evidence, we are of the opinion that the plaintiff was entitled to judgment for $300, for the following reasons:
(1) When the plaintiff submitted a written offer and the defendant accepted it, the right to the commission accrued. The contract required plaintiff only "to procure a purchaser."
In Carey v. Conn, 107 Ohio St. 113, 140 N.E. 643, the Supreme Court held, as stated in the first paragraph of the syllabus, that:
"Where a real estate agent or broker makes a contract with the owner of property `to find a buyer for his real estate at a commission of two per cent. for his services,' and pursuant thereto performs such services by producing the buyer, and the owner enters into a written contract of sale with such buyer, the real estate agent or broker, in the absence of fraud, is entitled to his commission for his services."
At page 116 of the opinion the court said:
"The financial responsibility of the prospective purchaser was open to question by Carey until the contract of sale was agreed upon and completed. After the contract was duly executed by the parties, such contract constituted a waiver so far as Conn was concerned in regard to the purchaser being ready, willing, and able to purchase the property. Whatever infirmities may have arisen out of the contract and conduct of the parties thereafter did not and could not in any wise prejudice the rights of Conn to recover upon his contract to find such purchaser and make such sale."
(2) The fact that the contract between the seller and buyer fails for any reason, not relating to the binding quality of the contract, when entered into, is no defense to the action of the agent for his commission. A judgment in an action on the contract by the seller against the buyer in favor of the buyer would be no bar to an action by the agent for his commission. Second paragraph of syllabus of Carey v. Conn, supra.
(3) In this case it was the defendant who repudiated the contract. Although she threatened to sue for damages she did not do so. Because of the fact that the subject matter of this contract was a business, including a lease for five years of the real estate where it was conducted, she without doubt could have enforced specific performance against a resisting purchaser — which the purchaser was not in this case — just the contrary. Instead of resorting to one or the other of these remedies or of co-operating with the buyer in consummating the transaction, defendant chose to treat the delay of a few days as justification for refusal to proceed. The delay did not justify this attitude even against the buyer and certainly not against the agent. Time was not the essence of this contract as to either the seller or buyer. 12 American Jurisprudence, 863.
(4) The plaintiff's contract gave him the exclusive right for six months to sell this store and business. Even assuming that the buyer's contract required her to pay the entire purchase price within 30 days and that failure to do so would prevent her from enforcing the contract, still the plaintiff had produced her as a purchaser and notwithstanding her failure to pay within the 30 days specified in the contract, she was ready, willing, and able to perform long before the expiration of the plaintiff's agency contract and was prevented by the defendant's refusal.
(5) Furthermore, the defendant sold this property within the period of the plaintiff's sole agency, which prevented him from selling to the purchaser whom he had already obtained. That fact violated the plaintiff's rights and is an additional reason for recovery in this case.
For these reasons, the judgment is reversed and the cause remanded to the Municipal Court of Cincinnati with instructions to render final judgment for the plaintiff for $300 and costs.
Judgment reversed.
HILDEBRANDT, P.J., MATTHEWS and ROSS, JJ., concur in the syllabus, opinion and judgment.