Summary
holding that ordinarily determining whether the efforts of the broker to interest a prospect proceeded to the point where the prospect would be considered a likely purchaser was a question of fact for determination by the jury
Summary of this case from Coldwell Banker Roth Wehrly Graber v. Laub Bros. Oil Co.Opinion
May 5, 1952 —
June 3, 1952.
APPEAL from a judgment of the circuit court for Dane county: ALVIN C. REIS, Circuit Judge. Affirmed.
For the appellant there was a brief by Bull Biart and S.W. Franken, all of Madison, and oral argument by Mr. Franken.
For the respondent there was a brief by Sauthoff Hansen of Madison, and Elliot N. Walstead of Milwaukee, and oral argument by Mr. Walstead.
This is an action to recover a real-estate broker's commission for the sale of real estate under an exclusive listing agreement. On January 9, 1948, the defendant, Paula Furrer, and her husband, John Furrer (who subsequently died in February, 1948), signed a listing contract submitted by the plaintiff, Earl H. Munson, to sell their home located in the city of Madison, Wisconsin, at a specified sale price of $23,000. The form of this listing agreement had been drafted by the plaintiff, who is also an attorney as well as a real-estate broker, and after so drafting the same he had it printed for use in his real-estate-brokerage business. The contract specified that it was to remain in force until March 9, 1948, and that if the property was "sold or exchanged within three months after termination of this contract to anyone with whom you [the plaintiff] negotiated during the life of this contract, I [the defendant] agree to pay you five per cent commission on the sale price."
The plaintiff resided at Cambridge in Dane county and he advertised the defendant's property for sale in newspaper advertisements and had various Madison real-estate brokers, as his subagents, show the property to prospects. On March 5, 1948, a Mr. and Mrs. Lien, as subagents of the plaintiff, exhibited the property to a Mrs. Yopack. Mrs. Yopack expressed interest in the property and stated that she would like to have her husband see it.
On March 9, 1948 (the last day of the original term of the listing contract), the Liens exhibited the property to Mr. and Mrs. Yopack, and the latter informed the Liens that they would like to have a carpenter or contractor look over the property to see whether a partition wall could be moved in order to provide an extra bedroom. Mr. Yopack testified that he concluded on March 9th, after going through the property, that he would make an offer to purchase for $19,000. On March 12th (three days after the listing contract had expired) Yopack did submit to the Liens a written offer to purchase for $19,000, which the plaintiff transmitted to the defendant, and which she rejected. Thereafter, the defendant listed the property with another real-estate broker who secured an offer of $19,500 from Yopack, and which was accepted and the property conveyed to him and his wife, the deal being closed on April 15, 1948.
The plaintiff brought suit for his commission on the sale price, claiming that he had " negotiated" with the Yopacks for the sale of the property during the life of the listing contract, and therefore was entitled to his commission because it was sold to Yopacks within three months after the termination date. The trial court submitted a special verdict to the jury in which one of the questions inquired as to whether the plaintiff, by himself or agent, did negotiate with the Yopacks prior to the expiration date of the contract for the sale of the property, and the court answered such question as a matter of law, "Yes." Judgment was entered on the special verdict on June 28, 1951, in behalf of the plaintiff and against the defendant in the sum of $1,297.68, being the amount of the five per cent commission claimed by plaintiff, together with interest and the costs and disbursements of the action. The defendant has appealed from such judgment.
The determination of the within action turns on the proper interpretation to be placed on the word " negotiated" in the real-estate broker's listing contract signed by the defendant, wherein the defendant undertook to pay the plaintiff a commission for the sale of her property if the property was sold at any time within three months after the expiration of the listing contract to anyone with whom the plaintiff broker had " negotiated" during the life of the contract. This is apparently a case of first impression in this court and there seems to be a paucity of decisions on this point by the courts of other jurisdictions.
12 C.J.S., Brokers, p. 203, sec. 88, note 43, lays down the following rule with respect to the meaning of the word " negotiation" in a broker's exclusive listing contract, such as that in the instant case, providing for payment of commission if sale is made to anyone with whom the broker had negotiated prior to the termination date:
"` Negotiation,' within the meaning of such a contractual provision, means efforts which so far interest a person that, at the expiration of the agency, he may be considered a likely buyer; it does not embrace the broker's mere offer to sell which is met with a prompt refusal and which has no effect on the subsequent sale."
In the case of Bullis Thomas v. Calvert (1926), 162 La. 378, 382, 110 So. 621, there was involved a listing contract very similar in wording to that in the instant case which required the property owner to pay the plaintiff brokers a commission if the owner should sell the real estate after the expiration of the contract to a buyer "with whom you have been negotiating prior to the expiration of this agreement." In that case plaintiff brokers had contacted during the term of the contract a certain Mr. Morgan, as an officer of a corporation which the brokers considered might be a prospect, for the sale of the land. Morgan expressed only mild interest and stated that his company might be willing to pay $325,000, but the lowest offer the owner would then accept was $350,000. After the expiration of the contract, the property was sold to a corporation having substantially the same stockholders as the other corporation to whom plaintiff brokers had offered the property, such new corporation having been formed by Morgan. The court said (p. 383):
"The question here involved, therefore, amounts to this, Were plaintiffs the first to interest Morgan in the purchase of the lands sold, and had their negotiations with him progressed so far, at the time the contract expired, that he seemed then a likely purchaser, so that it would be unfair, and contrary to the intent of the parties, that they should be deprived of the fruits of their labor by the mere circumstance that the sale was not complete before the expiration of the extension contemplated by the contract?" (Emphasis supplied.)
The Louisiana court found that the evidence did not support a conclusion that the i plaintiff brokers were entitled to recover and stated further (p. 386):
". . . that plaintiffs were not negotiating with Morgan during the term of the contract (or even during the alleged extension thereof) in such manner as to interest him as a likely purchaser thereof, or beyond the mere fact of advising him that the land was for sale but could not be purchased for the price which he seemed willing to give for it."
Another similar case is that of Werner v. Hendricks (1936), 121 Pa. Super. 46, 47, 182 A. 748, except that the property listed for sale was a newspaper route instead of real estate. The listing contract provided that if the defendant owners, subsequent to the termination of the listing, sold the route "`to anyone with whom the broker had heretofore been negotiating, then the full commission shall be paid to the broker.'" The plaintiff broker had advertised the route for sale and called the attention of one Conrad to the fact that the route was for sale but without arousing any seeming interest. Subsequent to the expiration of the contract another party did interest Conrad, who then did purchase the route. The court held that the plaintiff was not entitled to recover, and said (p. 49):
"To merely call attention to the route without further discussing the details, which necessarily must follow for the consummation of the transaction or sale, can hardly be called a negotiation. Unless the discussion can be brought to the point whereby the interest of the proposed buyer can be aroused or the terms of the sale discussed, it cannot be classified as a negotiation. Negotiation presupposes a mutual interest in the subject matter and merely directing one's attention without further enlisting interest or discussion falls far short of negotiations. The mere offer or solicitation, which meets with prompt refusal or rejection having no effect whatever upon the subsequent purchase of the route, cannot be regarded as negotiations within the meaning of the contract." (Emphasis supplied.)
From the foregoing authorities it would appear that if an exclusive broker's listing contract provides that the broker is to receive a commission if the property is sold by the owner subsequent to the expiration of the contract to anyone with whom the broker has " negotiated" within the original term of the contract, the word " negotiated" means that the efforts of the broker to interest a prospect must have proceeded to the point where the prospect would be considered a likely purchaser. Ordinarily this would be a question of fact for determination by the jury. However, in the instant case such fact is conclusively established in favor of the plaintiff by the undisputed testimony of Mr. Yopack, that on March 9, 1948 (the date of expiration of the contract), he had concluded to submit an offer for purchase, and therefore it was proper for the trial court to determine such fact as a matter of law from such undisputed testimony.
Appellant's counsel contend that the trial court should have submitted to the jury the question as to whether or not the plaintiff broker's efforts were "the procuring cause" of the sale of the premises to the Yopacks. It is our conclusion that such a test would cast an undue burden upon the broker. In fact, if the evidence in the instant case had disclosed merely that plaintiff had exhibited the property during the original term of the listing contract to the Yopacks, and that they subsequently, shortly thereafter, had purchased the property, a jury question would have been presented as to whether as of the date of the termination of the contract the Yopacks had been sufficiently interested through plaintiff's efforts exerted during the term of the contract to be considered likely purchasers.
By the Court. — Judgment affirmed.