Opinion
No. 29676.
February 1, 1932.
1. BROKERS.
Brokers producing purchaser ready, willing, and able to pay price agreed on, to be bid at trust deed foreclosure sale, held entitled to compensation, where principal itself bought property at foreclosure sale.
2. BROKERS.
Brokers who, under agreement, were not to receive commission for procuring purchaser to bid at trust deed foreclosure sale, if higher cash bid was made, were entitled to commission, where sale was to principal at higher bid and through it to another under credit arrangement.
APPEAL from chancery court of Sunflower county. HON. J.L. WILLIAMS, Chancellor.
Tom T. Ross, of Clarksdale, and Cooper Thomas, of Indianola, for appellant.
It is a general rule of law that any person dealing with an agent is chargeable with notice of the extent of the agency and the scope thereof.
Philip Gruner Bros. Lbr. Co. v. First National Bank et al., 143 Miss. 454, 109 So. 274.
All persons dealing with an agent must take notice of his authority to bind his principal.
Royal Feed Milling Co. v. Thorn, 142 Miss. 92, 107 So. 282.
Where a principal employs an agent with limited power, the agent cannot bind his principal by an agreement beyond the scope of his authority.
Philip Gruner Lbr. Co. v. Algonquin Lumber Company et al., 123 Miss. 157, 85 So. 191; Ismert-Hincke Milling Co. v. Natchez Baking Co., 124 Miss. 205, 86 So. 588.
It was the duty of appellees to inquire as to the authority of the attorney representing appellant bank, and they were charged as a matter of law that it was the duty of appellant bank, its attorney, and the commissioner appointed by the court, to make the lands bring the best possible price.
The right of the grantor in a deed of trust or mortgage with power of sale to the utmost good faith and fairness in the execution of the power is undoubted.
Smith et al. v. Deeson, 14 So. 40.
Where a broker's right to compensation is conditioned upon the actual consummation of the contract negotiated it is incumbent upon him to show that such condition has been complied with, and where his employer refuses to consummate a transaction for reasons which to all appearances are sufficient to justify such action, the burden of proof is on the broker to show that the refusal is for an insufficient reason.
Green v. Hollingshead, 40 Ill. App. 195.
The appellees did not have an exclusive agency or exclusive right to sell the property in question. They were to receive their commission only in the event that the property was purchased by the Aldridges for twenty-seven thousand five hundred dollars or by the bank, in the latter event the bank agreeing to retransfer the property to the Aldridges for the same sum.
A subsequent payment will not give rise to a resulting trust, unless it is made in pursuance of and as a part of the original transaction or purchase, as where he secures the same at the time to be thereafter paid.
29 Cyc. 130.
The peculiar capacity in which the bank acquired the title at the foreclosure sale did not entitle the appellees to any commission, for Fred T. Cooke was the real and actual purchaser and the bank only a nominal purchaser.
Moody Johnson, of Indianola, for appellees.
The appellees produced purchasers ready, able and willing to buy the land upon the specified terms, and having performed their duty, they thereupon became entitled to the agreed commission of one thousand dollars.
Skermetti Realty Company v. Devitt, 145 Miss. 815, 111 So. 302; Jenny v. Smith-Powell Realty Co., 125 Miss. 608, 88 So. 171; Johnson v. Sutton, 94 Miss. 544, 49 So. 970.
The sale to the purchasers produced by the appellees would have been consummated, but for the act of the bank and its failure to carry out its agreement. Where the commission of a real estate broker is based on the amount to be realized from the consummated sale, if the sale is not consummated by reason of the fault of the owner of the land, there is a breach of the contract by the owner with the broker for which the latter is entitled to recover his compensation.
Lizana v. Brown Realty Company, 146 Miss. 758, 111 So. 867, 869.
The First National Bank of Birmingham, Alabama, had a deed of trust upon certain lands in Mississippi given by J.W. Cooke, and it became necessary to foreclose the deed of trust upon one of the plantations embraced therein.
It appears that the note securing the deed of trust was in excess of the value of the property, and that, at the time of the sale, there was not much prospect for bids in large amounts, and it was probable that a loss would be incurred. The bank had negotiated with certain other parties for them to purchase the land at the sale. While the matter was pending, and before the sale was made, the attorneys for the appellant (the First National Bank of Birmingham), having charge of the foreclosure, had a conversation with the appellees Mitchell Cantwell, a real estate firm in Sunflower, Mississippi, in which Mitchell Cantwell proposed to procure a purchaser for twenty-seven thousand five hundred dollars, provided they were given a commission of one thousand dollars for so doing. The attorneys tentatively made this arrangement, and wrote to the appellant the facts so proposed, and the appellant instructed the attorneys to make this arrangement with the understanding that, if any one else bid a higher price, the trustee was to accept such higher bid, but, otherwise, he would sell to the purchaser produced by the real estate agents.
After this arrangement had been made between the appellees and the attorneys representing the appellant, said J.W. Cooke, having learned the fact that other persons were ready to bid the property in for cash consideration, went to Birmingham and took up with the appellant a deal whereby Cooke would become the purchaser at the sale, or from the appellant, if the appellant bid in the property at the sale, at and for the sum of thirty-six thousand two hundred dollars.
The attorney handling the foreclosure sale was notified of this arrangement, and was requested to bid in the property for the appellant, but, if he could not do so on account of being trustee, then to procure some one to bid it in for the appellant at the sale, the bid to be for thirty-six thousand two hundred dollars. Whereupon Cooke bid for the appellant the sum of thirty-six thousand two hundred dollars, and the land was sold to the appellant. This was a matter of surprise to appellees and to the purchasers procured by them, and they tendered to the appellant, after the purchase, the sum of twenty-seven thousand five hundred dollars, and demanded a deed, which was refused. Whereupon Mitchell Cantwell brought this suit against the appellant for the sum of one thousand dollars commission due them.
On the hearing, the correspondence passing between the appellant and its Mississippi attorney was introduced in evidence and showed the facts above stated, and that the appellant was seriously considering taking the price of twenty-seven thousand five hundred dollars at the time the arrangement was made between its attorney and Mitchell Cantwell.
It is argued that the attorney had no authority to make any such arrangement; it being in excess of his authority as an attorney. This is completely negatived by the correspondence, which shows that the appellant ratified the arrangement and authorized its commission; but that, after so doing, without notice to Mitchell Cantwell, it entered into the arrangement with J.W. Cooke as above stated, and became the purchaser of the property.
Mitchell Cantwell, having complied with their contract by producing a purchaser ready, willing, and able to pay the price agreed upon, are entitled to recover their compensation.
A party cannot breach its own contract and escape liability.
It is also argued that the agreement evidenced by the correspondence was that the trustee was to accept any cash bid above twenty-seven thousand five hundred dollars, and that this provision would prevent the appellees' recovery, because the sale price was for a greater amount than that embodied in the contract with Mitchell Cantwell.
This would be a valid contention had a third person, in good faith, been the purchaser, but the sale to the appellant, and through it to Cooke, under a credit arrangement, was a different arrangement from that contemplated in the correspondence.
The chancellor having allowed the one thousand dollars commission due to Mitchell Cantwell, and finding no reversible error, the judgment will be affirmed.
Affirmed.