Doonan vs. Ives & Krouse

Supreme Court of Georgia1885-02-07

73 Ga. 295

Summary · law.co

Holding. The judgment is reversed because testimony that would have shown the brokers were not the procuring cause of the sale should have been admitted to the jury. The controlling rule is that an owner owes brokers commissions only if the brokers procured the buyer and the owner thereafter fraudulently interfered with the broker's negotiations to consummate the sale; if the buyer approached independently or was already known to the owner, no commissions are due.

Brokers sued a property owner for commissions after she sold land to a prospective buyer they had identified. The trial court ruled in favor of the brokers and denied a new trial. On appeal, the court found that certain evidence should have been admitted regarding whether the brokers actually influenced the buyer or were the effective cause of the sale. The court determined the case was close on the merits and that the exclusion of this material testimony constituted reversible error.

The court established that a property owner who engages brokers to sell remains free to sell the property themselves, but cannot ethically intercept a sale to a buyer the brokers have already procured as a customer. If the owner deliberately diverts a transaction that the brokers initiated—particularly by interfering with ongoing negotiations to avoid paying commissions—the owner remains liable for the agreed compensation. However, if the buyer approached independently or negotiations had concluded, the brokers cannot claim commissions. The critical question in each case is whether the brokers were the procuring cause of the sale or whether the buyer was already a customer of the owner through other means.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether brokers are entitled to commissions when a property owner completes a sale to a prospect after engaging those brokers
Whether an owner may avoid paying brokers by directly selling to a customer the brokers had identified
What evidence is admissible to prove whether brokers were the procuring cause of a sale

Procedural posture

The brokers obtained a judgment for commissions at trial; the owner moved for a new trial, which was denied, and appealed.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Jackson, Chief Justice.

The defendants in error sued the plaintiff in error for commissions as .brokers, and recovered. A motion for a new trial was overruled, and plaintiff in error excepted.

We think that the plaintiff in error should have been permitted to prove by Keely that-the brokers had no influence on him in the sale made by herself to him, and that the testimony in the eighth, ninth and tenth grounds of the motion sought to be drawn out by the questions asked, should have been admitted, and the answers to those questions should have gone to thejury.

The ease, to say the least, is quite close whether the plaintiffs below can recover on the facts, and any material error should operate to make a new trial necessary to the ends of justice. The brokers must have done something to earn their commissions. They must either have sold the property or have been the procuring cause of the sale. If Keely, though spoken to by them, had abandoned all idea of the trade, and they had no influence at all in bringing it about, we do not see how they were the procuring cause of the sale, and entitled to commissions. 83 N. Y., 378; 20 Howard, U. S., 221.

We think that the testimony of the son and agent of the plaintiff in error, to the effect that he had seen Keely before the brokers communicated with him about the property, and told him it was for sale, and he had said he would like to buy it, to hold it awhile, was admissible as bearing on the point whether or not the brokers procured Keely as a probable buyer, inasmuch as the party desiring to sell knew that he might buy before they procured him, and as bearing on the point whether the plaintiff in error took advantage of what the brokers had done in turning Keely’s mind on the property, and in fraudulently interfering pending negotiations of the brokers, so as to save commissions. The son was the agent who employed these brokers in behalf of his mother.

We hold that the true law of the case is this : If, under their contract with Mrs. Doonan, the brokers set to work to sell this property, and had procured Keely as a customer, or one likely to buy from them, and pending their negotiations with him, Mrs. Doonan interfered with a view to save commissions, knowing or having information that they were negotiating with him, and sold the property to the customer so procured by the brokers, even with some modification of the terms on which she had authorized them to sell, then she could not defeat their commissions, because it would be the fraudulent taking advantage of their labor without paying for it; but if the negotiations were at an end between Keely and the brokers, and she sold to him without their aid, then they could not recover; or if she knew that Keely wished to purchase without their procurement of him as a purchaser, deriving her knowledge from nothing they had done in her employment, and sold on her own hook to Keely, as an original customer or buyer, then they could not recover.

Because one puts property in the hands of brokers to sell, it does not follow that he himself cannot sell. If he does not use their labor to help him, he owes them nothing ; if he does use it, and puts in to take the trade — its consummation — out of their hands so as to escape paying them, then ex equo et bom, he does owe them, and must pay just what they could have made by the contract if he had not prevented it. This is sound sense and good law, and. whatever there may be conflicting with it in the charges excepted to, if anything, is, in our judgment, erroneous.

The cream and reason and spirit of the authorities cited on both sides do not collide with what is said above; if ■any of them do collide, we adopt the adverse line. Indeed, Hyams vs. Miller, trustee, 71 Ga., 608, rules the principle above stated.

Judgment reversed.

Cited for plaintiff in error, 18 Am. Law R., p. 926, an Iowa case; 53 Wisconsin, 41; 29 Minn., 126; 83 N. Y., 378; 55 Id., 322; 61 Id, 415; 51 Id., 124; 49 Id., 561; 63 Id., 448; 41 How. Pr., 145; 20 How. U. S., 221; 22 How., 72; 54 Penn. St., 394; Wharton on Ag’cy, §§325, 326, 327.

For defendants, Cent. Law Jour., April 18, 1884., p. 317, a Md. case; Story on Sales, 86; 54 Pa., 394; 9 Ves., 234; 20 How. U. S., 221; 22 Id., 69; 54 Pa. St., 394; 32 Minn., 664; 36 Conn., 136; 79 Ill., 435; 46 Mo., 555; 59 Ind., 275; 9 Mo., 216; 46 Ga., 80.