Thompson v. Foster

Annotate this Case

82 S.E.2d 109 (1954)

240 N.C. 315

THOMPSON et al. v. FOSTER et ux.

No. 528.

Supreme Court of North Carolina.

May 19, 1954.

*111 Henry E. Fisher and Lelia M. Alexander, Charlotte, for plaintiffs, appellants.

Kennedy, Kennedy & Hickman, Charlotte, for defendants, appellees.

JOHNSON, Justice.

The brokerage contract or listing here in suit does not purport to have conferred on the plaintiffs the exclusive right to sell the defendants' property. Therefore, the legal principles involved will be stated and discussed, and should be interpreted, against that factual background. See 8 Am. Jur., Brokers, Sections 57 and 192.

Ordinarily, where property is listed with a broker for sale at a stipulated price, *112 out of which the broker's compensation is to be paid, and a sale is effected through the broker as a procuring cause, he is entitled to compensation, even though the final negotiations be conducted by the owner, who in order to make a sale accepts a price not exceeding or less than that stipulated to the broker, the theory being that the owner waives the stipulation regarding the price, and this being so, the law will not allow the owner of property sold to reap the benefits of the broker's labor without just reward. Therefore, in such case recovery may be had upon quantum meruit. Lindsey v. Speight, 224 N.C. 453, 21 S.E.2d 371; American Trust Co. v. Goode, 164 N. C. 19, 80 S.E. 62; Martin v. Holly, 104 N.C. 36, 10 S.E. 83; 8 Am.Jur., Brokers, Sections 172 and 190; Annotations: 43 A.L.R. 1103, 1104; 128 A.L.R. 430.

However, if the broker's contract provides for a stipulated net price to be paid the owner, with the broker's compensation being contingent upon payment out of whatever sum, if any, he is able to obtain for the property over and above the fixed sum to be obtained by the owner, the broker may not recover when the owner sells at the stipulated net price, or less, to a person to whom the broker first shows the property, unless the broker is able to show (1) that he was a procuring cause of the sale in the sense that he first called the purchaser's attention to the property and started the negotiations which culminated in the sale, and (2) that he, the broker, was prevented by fault of the owner from making a sale at a sum in excess of the stipulated net price. See 8 Am.Jur., Brokers, Sec. 190, p. 1102; Annotations: 43 A.L.R. 1103, 1111 et seq., and 9 A.L.R. 1194. See also Mallonee v. Young, 119 N.C. 549, 26 S.E. 141; Holcomb v. Stafford, 102 Minn. 233, 113 N.W. 449; Ball v. Dolan, 21 S.D. 619, 114 N.W. 998, 15 L.R.A.,N.S., 272; Gilmore v. Bolio, 165 Mich. 633, 131 N.W. 105, 34 L.R.A.,N.S., 1050; Karr v. Moffett, 105 Kan. 692, 185 P. 890.

In Holcomb v. Stafford, supra, the broker was to receive as his compensation all he could obtain for the property above $500. The property was afterwards sold by the owner to the broker's customer for that sum. On conflicting evidence the trial court found that the purchaser at all times refused to pay more than $500. The Court said: "Here the broker was entitled to the excess over and above the net price to the owner, and he was not entitled to a commission, except on procuring a purchaser ready, able, and willing to pay more than that price."

In Gilmore v. Bolio, supra, the defendant authorized the plaintiff to sell property for $1,400 net to defendant, and the prospective purchaser introduced by the plaintiff broker refused to buy on those terms, but about six weeks later purchased from the defendant for $1,300. Held, that the plaintiff was not entitled to recover, his right to compensation being dependent upon his ability to obtain a purchaser for a greater sum than $1,400.

Similarly, under the terms of the contract in the case at hand the plaintiffs' right to compensation was dependent upon their ability to obtain a purchaser for a sum greater than $50,000. They have alleged in substance that the defendants, after being advised that J. D. Crowder was a prospect, took over the negotiations with him, and that the defendants, after being offered $55,000 by Crowder, nevertheless closed the deal with him at $50,000.

These crucial allegations, with others set out in the complaint, when taken as true and liberally construed in favor of the plaintiffs, as is the rule on demurrer, Scott v. Statesville Plywood and Veneer Co., 240 N.C. 73, top page 77, 81 S.E.2d 73, are sufficient to state a cause of action against the defendants on the theory that the plaintiffs were the procuring cause of the sale in the sense that Crowder was their initial prospect and that they were prevented by fault of the defendants from making a sale at a sum in excess of the stipulated net price of $50,000. This overthrows the demurrer. The judgment below is

Reversed.