Opinion
No. 6789.
May 19, 1949. Rehearing Denied June 29, 1949.
APPEAL FROM THE CIRCUIT COURT OF OZARK COUNTY, TOM R. MOORE, J.
Rogers Rogers, of Gainesville, for appellant.
Green Green, of West Plains, Paul Boone, of Gainesville, for respondents.
We will refer generally to defendants and plaintiffs as below. Defendants have appealed.
We do not know when this suit was begun, since there is no original petition in the transcript. An amended petition was filed October 4, 1946. To this, defendants filed an answer May 31, 1947. No reply appears in the transcript.
The case was tried below without the intervention of a jury, and, on March 22, 1948, the trial court rendered a judgment in favor of plaintiffs in the sum of $1,100.00. Thereafter, defendants took the proper steps to appeal to this Court. The case has been briefed by both plaintiffs and defendants; but was not argued in this Court.
Only one question is raised by defendants. They have cited the following cases and authorities, to-wit: 13 C.J. page 331, Section 179; 17 C.J.S., Contracts, § 100; 13 C.J. page 341, Section 192; 17 C.J.S., Contracts, § 101; 2 C.J. page 527, Section 151; 2 C.J.S., Agency, § 73; 2 C.J. page 531, Section 154; 2 C.J.S., Agency, § 75; 2 C.J. page 532, Section 156; 2 C.J.S., Agency, § 75; Burwell v. Lantz, 210 Mo. App. 51, 240 S.W. 471; Kolb v. Bennett Land Co., 74 Miss. 567, 21 So. 233; Jayne v. Drake, Miss., 41 So. 372; Pepper v. West Plains Telephone Co., 224 Mo.App. 1055, 34 S.W.2d 540.
As only one proposition is involved in defendants' appeal, we feel entirely safe in relying on defendants' (appellants') brief for the facts in the case. We quote from appellants' brief as follows:
"This action was begun in the Circuit Court of Ozark County, Missouri, by the plaintiffs filing in said Court their petition setting out the fact that they were duly licensed real estate brokers; that the defendants had signed a contract authorizing the plaintiffs to sell a certain hotel in the city of Gainesville, which the defendants at that time owned and that for their commission in making said sale, the plaintiffs should be paid ten percent of the selling price.
"The plaintiffs also alleged that the contract provided `that if the property described herein is sold, during the life of this agreement, to a purchaser procured through my own efforts, I will forthwith pay you one-half the amount of commission as provided in clause (c) above.'
"The plaintiffs further alleged that on the 11th day of March, 1946, while the contract and agreement aforesaid was in full force and effect, and while the plaintiffs were endeavoring to sell the property aforesaid, the defendants sold said property for $22,000.00 and that the defendants refused to pay the commission in the sum of $1,100.00 which plaintiffs claimed.
"The defendants answered admitting that the plaintiffs were duly licensed real estate brokers; admitting the execution of the contract; admitting that the plaintiffs were to be given one year in which to sell said property; admitting that by the contract, if the property was sold by defendants during the life of the contract, the plaintiffs were to receive five per cent of the selling price and setting up the fact that the contract was without consideration and that the agreement was revoked by the defendants by notifying the plaintiffs prior to the sale of the property covered under the agreement."
There was an agreed statement of facts filed. In their answer to plaintiffs' amended petition, defendants admitted the facts alleged by plaintiffs in paragraphs I, II, III and IV, of said amended petition. Those allegations were also set out in the agreed statement of facts. In their answer, defendants denied all other allegations of said amended petition.
The agreed statement of facts referred to Exhibit "A". That exhibit is very long, consisting of three single spaced typewritten pages in the transcript, and, as the sole question in the case seems to be the right of defendants to cancel Exhibit "A", before the date mentioned therein, and to revoke plaintiffs' authority thereunder, it does not seem necessary to quote Exhibit "A" in full. We will only refer to such parts of said exhibit as we deem essential to the only question in the case.
The cases cited and the authorities support defendants' contention that, where the contract is unilateral, the owner of the property can revoke such contract of sale at any time, without liability to the named agent. So, the real question in the case is whether the contract for the sale of defendants' property, as stated in Exhibit "A", was unilateral. In other words, whether or not such contract lacked mutuality.
Defendants asked declarations of law, A, B and C. Requested Declaration A is not set out in the transcript. We must therefore assume that no point is now made on its refusal.
As declarations of law B and C involved the same contention defendants nor make, no point is made in appellants' brief as to their refusal, and we do not deem necessary to quote them.
In paragraph 3 of the agreed statement of facts, it was agreed that "after the signing of Exhibit `A' by the defendants, and before the sale hereinafter referred to, the defendants orally notified the agents of the plaintiffs to take the hotel described in Exhibit `A' from their list." (Emphasis ours.)
It is therefore apparent that defendants did not give plaintiffs notice in writing, as specified in paragraph 3 of Exhibit "A".
Exhibit "A" was signed by defendants and approved by G. C. Newcomb, local representative of plaintiffs.
It was stated in paragraph 4 of the agreed statement of facts that plaintiffs spent considerable time and money in attempting to sell the property and in showing that property to prospective buyers, and that plaintiffs were on a deal, at that time, to sell such property. On this statement of facts, we must hold that plaintiffs had an interest in the contract of sale and that defendants had no right to take the property, described in Exhibit "A", from plaintiffs or to compel plaintiffs to take that property off their list.
Under the authorities and cases cited even by defendants, plaintiffs had an interest in the contract of sale, which was attempted to be revoked by defendants, and plaintiffs were entitled to the judgment given them by the trial court.
Respondents cite 12 C.J.S., Brokers, § 94, page 220. That paragraph reads as follows: "An action on the contract is proper where the contract expressly provides for the payment of a commission to plaintiff on any sale whether made by plaintiff or defendant."
Respondents also cite Keeney v. Freeman, 236 Mo.App. 260, 151 S.W.2d 532, 535. That was an opinion by the St. Louis Court of Appeals. The facts, as stated by Judge McCullen, were almost identical with the facts admitted in this case. In stating those facts, Judge McCullen said: "The evidence shows that plaintiffs were partners in the real estate business in the City of St. Louis; that defendant entered into a real estate contract with plaintiffs whereby plaintiffs were given a six months' exclusive agency to sell property located at 6338 Amelia Avenue in the City of St. Louis, being a lot forty feet by one hundred and fifteen feet, with a brick bungalow thereon. The contract was dated August 11, 1938. By its terms, defendant agreed that, in the event the said real estate was sold within six months from the date thereof, he would pay to plaintiffs five per cent, on the gross amount of the sale up to and including $20,000."
In disposing of the case, Judge McCullen said: "In view of the whole record, we think the action of the trial court was proper. It was undisputed that defendant entered into the contract in question. The contract provided for an exclusive agency in plaintiffs; it also provided for a five per cent. commission to be paid to them by defendant if a sale should be `made by any one' within the six months period after the contract was made. It is conceded that the property was sold within the six months' period for $4,500. Hence the amount of the commission at five per cent. was $225, which was the amount of the verdict. In view of such a record showing no substantial evidence to support any kind of a defense, there was nothing for the trial court to do but direct a verdict for plaintiffs."
In George J. Wanstrath Real Estate Company v. Wenz, also cited by plaintiffs, as in 185 Mo.App. 162, reported in 170 S.W. 345, 346, Judge Allen of the St. Louis Court of Appeals, said: "It is urged that the defendants could rightfully revoke plaintiff's agency, upon the theory that the latter was one not coupled with an interest, which the principal could terminate at any time, that defendants had so terminated the same, and that hence the contract was not in force when defendants sold their property. But this contract not only appointed plaintiff as defendants' agent, but defendants thereby agreed to pay plaintiff a commission upon the sale price of the house, whether such sale were made by plaintiff, the defendants, or any one else, during the life of the contract, whereby the defendants disabled themselves from making a sale of their property, without liability to plaintiff, during the period for which the contract would lawfully remain in force."
That case was almost identically like the case at bar, except that the time limit was not shown to have been definitely fixed, as here. Respondents have cited a number of cases to the same effect, but we will not lengthen this opinion by reviewing them, since it seems to us so unreasonable that the owner of property can enter into a contract of sale thereof and agree on a commission to be paid to the real estate agent, under certain circumstances, and then have the power to revoke the authority of the real estate agent before he has actually made a sale, and before the time stated, and that the owner can thereafter proceed to sell the property himself, at a less price than fixed by said contract of sale, and thereby defeat the claim of the real estate agent for the commission provided by such contract.
We do not see how the trial court could have rendered a judgment for defendants, under the circumstances in this case.
The judgment is affirmed.
VANDEVENTER, P. J., and McDOWELL, J., concur.
On Motion for Rehearing.
Appellants have asked a rehearing in the above case, and we have this day overruled their motion therefor. Our opinion filed May 19, 1949, was based largely upon what the St. Louis Court of Appeals said in the cases cited in such opinion, and in other cases.
We also think that the Supreme Court of Missouri in Glover v. Henderson, 120 Mo. 367, 25 S.W. 175, 41 Am.St.Rep. 695, a quantum meruit case, fortifies the position of the St. Louis Court of Appeals, as announced in those cases.
We also think this conclusion is fortified by what the Supreme Court of Tennessee said in the case of Lazarov et al. v. Nunnally, 217 S.W.2d 11, not reported in the State Reports.
While we think that appellants had the power to terminate their contract with respondents, before the time specified in such contract had expired, appellants are still liable to respondents for the actual damages respondents have sustained for whatever they have done under such contract of sale before its termination by appellants.
Whenever the contract also specifies what the actual damages are, respondents can enforce such contract for the actual damages so specified, even where respondents have no interest in the property itself.
In the case of Burwell v. Lantz, 210 Mo. App. 51, 240 S.W. 471, the Kansas City Court of Appeals has held that the owner of property was under no liability to the agent, even for actual damages, unless such agent had an interest in the property itself, other than his interest in the commission for such sale.
While we have overruled appellants' motion for rehearing in this Court, we are of the opinion that this case should be transferred to the Supreme Court of Missouri, on account of such conflict of opinion of this Court and the St. Louis Court of Appeals with the above-cited case of the Kansas City Court of Appeals, and accordingly sustain appellants' motion for such transfer.
McDOWELL, J., concurs.
VANDEVENTER, P. J., concurs in separate opinion filed.
I concur in the result reached by BLAIR, J., in this case but wish to express some additional reasons for arriving at that conclusion.
This case was submitted on an agreed statement of facts, which is brief. The defendants, in writing, entered into an exclusive contract of agency (Exhibit A) with plaintiffs, duly licensed real estate brokers, for a period of one year from September 7, 1945. Defendants agreed to pay the plaintiffs a ten percent commission if plaintiffs sold their property (a hotel) and a five percent commission if anyone else sold it "during the term of this agreement." The plaintiffs were granted "the sole and exclusive right" to procure a purchaser for the property within a period of one year and the contract should continue thereafter until thirty days notice in writing "shall have been received by you (plaintiffs) at the above address." (Gainesville, Mo.) The contract contained this provision, "I acknowledge that the listing of this property and your endeavor to procure a purchaser for same shall constitute a good and sufficient consideration for this agreement; * * *."
After the execution of this contract, plaintiffs "spent considerable time and money in attempting to sell said property and in showing said property to prospective buyers and that the agent of plaintiffs was on a deal and attempting to sell said property to a person residing in the State of Oklahoma at the time said property was sold by defendants." Sometime after this contract was entered into and after the above mentioned expenditures, the defendants notified "the agents of the plaintiffs to take the hotel described in Exhibit `A' from their lists." Thereafter on March 11, 1946, and within one year from the date of the execution of the contract, the defendants sold the property "through their own efforts and without the assistance of plaintiffs" for $22,000. Plaintiffs sued on the contract for the five percent commission amounting to $1,100.00. The defendants, in their answer, admitted the execution of the contract, that plaintiffs were licensed real estate brokers, the contractual provisions relative to the ten percent and five percent commissions, but assert that the contract was without consideration and was revoked by defendants prior to their sale of the property. Defendants' theory at the trial and in their brief here, was and is that the defendants orally revoked the agency of plaintiff and that consequently they are not liable on the contract.
This contract, it appears to me, has two separate and distinct parts. One part relating to the act of plaintiffs selling the property, for which they would get ten percent, the other part being that if the defendants sold the property, the plaintiffs' commission would be five percent. Plaintiffs' acts in advertising the property, calling it to the attention of prospective buyers and expending money in trying to sell it would have the effect of interesting would-be purchasers, who might go direct to the plaintiff or they might go to the defendant owners. This would have been a benefit to the defendants if plaintiffs had never been given authority to sell the property.
It has been often said, and it appears to be the law, that a principal had the power to revoke the authority of his agent to speak for, represent him and act in his stead but that he does not always have the right to do so. The reason given for this rule is that the principal confers the authority which is to be executed for his benefit and the agent cannot well insist on acting where confidence has been withdrawn and aid no longer desired. If the principal exercises this power without the right, he is liable to the agent for the amount of his commission, if the agent has procured a purchaser who is able, ready and willing to pay the price. Or, if the agent so elects, he may consider the contract rescinded and sue in quantum meruit for the reasonable value of his services in trying to sell.
But, does it follow as a matter of law under a contract like this one that the revocation of the agent's authority to act for his principal in actually selling the property also revokes that portion of the contract which provides for the five percent commission and which is not at all dependent upon the agent procuring a purchaser? There can be no doubt but what the plaintiffs, had they elected to do so, could have sued for damages for breach of the contract and recovered the value of their services in trying to sell the property before the attempted revocation. But the fact that they could have done that does not prevent them from suing on the separable portion of the contract which was independent of the agent's authority to sell.
In Burwell v. Lantz, 210 Mo.App. 51, 240 S.W. 471, loc.cit. 472, the Kansas City Court of Appeals held the general rule to be that the principal had the power to revoke the authority of his agent at any time and for any reason but said: "There are, however, exceptions to this rule; one is where the power is coupled with an interest and the other where the authority is given for a specified time for a valuable consideration." The court then held that the broker's authority to sell the property on commission was not a power coupled with an interest.
This case further held that there was no consideration to support that portion of the contract fixing the time within which the agency could not be revoked by the principal. I think the acceptance of the contract in this case by the plaintiffs, the expenditures of money, time and effort in trying to procure a purchaser constituted a sufficient consideration for the giving of an exclusive contract. Jones v. Hollander, 130 A. 451, 3 N.J.Misc. 973; Gunning v. Muller et ux., 118 Wash. 685, 204 P. 779; Greene v. Minn. Billiard Co., 170 Wis. 597, 176 N.W. 239; Bell v. Dimmerling, 149 Ohio St. 165, 78 N.E.2d 49.
It has been held that facts as in this case, create an agency coupled with an interest. J. C. McGray Son v. Pfost, 118 Mo.App. 672, 94 S.W. 998; Axson v. Thompson, 239 Mo.App. 732, 197 S.W.2d 326, loc.cit. 331.
I think this case is in conflict with the following cases: Burwell v. Lantz, supra; Pepper v. West Plains Telephone Co., 224 Mo.App. 1055, 34 S.W.2d 540.
But it is in accord with the following cases of the St. Louis Court of Appeals: George J. Wanstrath Real Estate Co. v. Wenz et al., 185 Mo.App. 162, 170 S.W. 345; Mercantile Trust Co. v. Lamar, 148 Mo.App. 353, 128 S.W. 20; J. C. McCray Son v. Pfost, supra; Mercantile Trust Co. v. Johnson, 177 Mo.App. 503, 160 S.W. 535, and Glover v. Henderson, 120 Mo. 367, 25 S.W. 175, 41 Am.St.Rep. 695; Beebe v. Columbia Axle Co., 233 Mo.App. 212, 117 S.W.2d 624.
This conflict should be settled and I am in favor of overruling the motion for rehearing, but sustaining the motion to transfer the cause to the Supreme Court for that reason.