Phinizy v. Bush

129 Ga. 479 | Ga. | 1907

Lumpkin, J.

(After stating the foregoing facts.)

William E. Bush sued Leonard Phinizy for commissions alleged' to be due him as a broker, for services rendered by him in selling for the defendant 445 shares of stock in the Augusta Railway & Electric Company to the Augusta-Aiken Railway & Electric Company. The jury found in favor of the plaintiff $1,-446.25, besides interest. A motion for a new trial was overruled,, and the defendant excepted. The motion contained numerous grounds, but, under the view we take, it will be unnecessary to discuss them in detail.

1-3. Where an owner of property employs a broker to procure a purchaser, the general rule is that, in order to earn his commission, he must procure a purchaser who is able, ready, and willing to purchase on the terms prescribed by the owner, an?" offers to do so; and the burden of showing this is on the broker if he sues to recover commissions. Civil Code, §3015. If thd broker does this, and the sale is not completed solely through the fault of the owner or his inability to make a good title,' ho is liable for the commissions. Doonan v. Ives, 73 Ga. 295; Davis v. Morgan, 96 Ga. 518. So also if the owner interferes and makes the sale himself to the purchaser thus procured. Gresham v. Connally, 114 Ga. 906. And this is true even if he makes some modification in the terms. If, however, the customer procured by the broker should be accepted by the principal, the burden would be upon the latter to show that the purchaser was not able to comply with the contract. Davis v. Morgan, 96 Ga. 520, supra. If the duty of the broker, under his employment, is not merely to procure a purchaser, but also to do some other act, the broker suing for commissions, after showing his employment, must also show that he performed the obligations undertaken by him, unless performance was prevented by the fault of the principal. 19 Cyc. 278. We omit any discussion of questions of adoption by ratification of acts of an unauthorized person purporting to act as agent, or of intervention by the principal preventing the completion of performance by the broker within the time prescribed, according to the contract, because no such questions are presented here. If the thing to be done by the broker, whether procuring a customer or effecting the transaction, is limited to be done in a specified time, he must show that it was done within that time, or that the time was extended or the limitation waived; and if the owner had ceased to be bound, by reason of the terms of his contract, even if he should afterwards sell to the same person with whom negotiations had been had prior 'to the expiration of the time limited, unless the delay was caused by the negligence, fraud, ,or default of the owner, this would not give a right to commissions. 19 Cyc. 254, and citations; Emery v. Atlanta Exchange, 88 Ga. 321.

Under his letter to Jackson, dated November 7, 1903, Bush agreed" to give Jackson the option of purchasing the stock owned by him and represented by him as trustee, at a fixed price. For this option there was to be paid $40,000 in bonds, and, if the option was exercised and the stock paid for, the bonds should be returned, otherwise not. Both stock and bonds were to be deposited in the custody of the Georgia Bailroad Bank, or with the Equitable Security Company, as Bush should elect. Bush was not only to maké the offer for acceptance by Jackson, but, if it was accepted, he was to select the depository where the stock and bonds were to be deposited and held together in trust for the owners of the stock. This was an integral part of the contract allowing an option. In the letter from Bush to Jackson no time was specified. Hence a reasonable time might have been contemplated. But Phinizy had not only seventy shares in the “pool,” but 375 shares beside. He wrote the letter authorizing Bush to sell all of his shares “in accordance with” the letter to Jackson; and agreed that he would pay, for Bush’s service in making the trade, what the other stockholders should pay. But not being satisfied to leave the matter of time as in the other letter, he added: “This authority is good for thirty days only, to expire December 7, 1903.” The other stockholders agreed to a different character of trade, selling the stock itself, instead of an option; but Phinizy declined to do this, and he was later segregated from them, and the trade proceeded on the original basis as to him. Belatively to him and his stock, the duties incumbent on Bush, under the letters referred to above, remained, and must have been complied with in the time limited, unless it was extended, or unless compliance was prevented by the fault of Phinizy, in order to bind him to pay commissions. Bear in mind that this was not a complete sale of his stock, but a contract for an option; it might be termed a sale of an option.

The bonds, instead of cash, were to be paid and deposited for the option. If it had been cash to be paid, and ,the time had been limited, there eonld be no doubt that it would have been necessary for the cash to have been paid or offered within that time, in order to have bound Phinizy. If an owner of property' should say that a purchaser might have an option for a definite time, by paying a given amount in cash by a fixed date, it could not be claimed that the proposed purchaser could merely sajr that he would agree to take the option, and bind the owner without payment. And if a broker -was employed to sell the option by a named day to a purchaser for a cash consideration, he could not say he had earned his commissions by agreeing for a credit, or to extend the time for payment beyond that day, substituting, in place of the cash which he was authorized to accept, a promise of the other party to pay at some indefinite time, or in a reasonable time. Here the bonds take the place of' cash in the illustration. The point is controlled in principle by the decision in Emery v. Atlanta Exchange, 88 Ga. 321, 327, supra. See also Larned v. Wentworth, 114 Ga. 208. In Emery’s case it was said: “In this case, the true test whether that compensation was earned is this: Was the sale completed within the agreed time; and if not, did the brokers within that time put the seller in a situation where, on failing to make the sale, he'would have been liable to a good action by the purchaser for such failure? In other words, the sale would have to occur within the time agreed, or else be postponed beyond that time by the seller’s fault. See Hyams v. Miller, 11 Ga. 608. It is plain that the purchaser could not maintain his action without having tendered the purchase-money before the option expired.”

Under the undisputed Svidence, the bonds were not put up as payment for the stock, nor was the depository even named, so far as disclosed, before December 1, when the time fixed expired; nor is there any evidence that Phinizy prevented the completion of the trade by that date. Unless Pliinizy waived this or extended the time, Jackson could not have compelled him to proceed by merely agreeing within the time limited that he would take the option and pay for it later. And Bush could not say that he .had completed his work and earned Ms commissions.

4. WMle a contract may be closed by a letter or telegram and become binding, yet before it is a binding trade, there must be a mutual assent of the parties to the Same thing in the same sense. Tf it is claimed that a seller has become bound by the acceptance •of his offer by the buyer, the offer must be accepted unequivocally, unconditionally and without variance. Robinson v. Weller, 81 Ga. 704. Treating the two letters of November 7 as applying to Phinizy’s stock alone, was the'telegram of Jackson to Bush, dated December 5, such an acceptance of the proposition made as sufficed to bind Phinizy? We think there was a variance between the offer and the acceptance. The letter of Bush' to Jackson, dated November 7, provided that, in the event the option should be exorcised, there should be added to the price of fifty cents on the ■dollar of the par value of the stock interest at the rate of seven per cent, per annum on the purchase-price of the stock, “and the said interest shall be calculated from the date of this.option up do and including the date'upon which it is exercised.” What was "the date of this option?” Was it the date of the letter making the offer? Or, if not, what date? Certainly not later than its -acceptance. It would hardly be that Phinizy should be bound .and liable for commissions on the ground that there was a complete, binding option contract, and yet interest did not run. The parties subsequently drew and signed, on December 28, a more formal contract, but there is nothing on the face of the original letter providing for it. The telegram of Jackson, dated December 5, says that the proposition for an option for twelve months is accepted, “with interest at seven per cent, per annum from date option is signed until payment.” This evidently contemplated, not the date of the telegram or of the letter of November 7, but a future date, when some other signing should take place. This was not an acceptance of the offer without a variance or modification. The telegram was not a hasty or careless one. It was shown to have been fully discussed and carefully authorized at a meeting of the board of directors of the electric railway company for whom Jackson was acting. It also referred to the option accepted as •one for twelve months, while strictly it was offered for six months, with the right to continue it for six months more by making a ■certain payment. But as it was stated that “we accept your proposition giving us an option for twelve months,” this language could be considered in connection with the proposition, and was not ■necessarily a variance.

For the reasons stated, the sending of the telegram by Jackson to Bush, on December 5, did not of itself create a contract binding on Phinizy; and therefore did not alone entitle Bush to commissions on the basis of Phinizy’s letter to him of November 7. An owner may agree to a variation or modification of the terms of a proposed contract; and if he does so, he will be bound by the contract as varied. If the broker undertakes to vary or modify the terms' of the offer, the principal may reject the change, and decline to be bound, or he may ratify the change and will then be bound as if he had authorized it. As to what transpired between December 5 and December 16, the evidence was conflicting,— whether Phinizy declared the transaction at an end, and subsequently was induced to again take up negotiations and proceed under a new agreement from Bush as to his compensation, or whether the modified acceptance was ratified*and the trade treated as in force while a formal written contract was being prepared, with the concurrence of Phinizy, to perfect it. There was some eyidence that the trade was spoken of, after December 7, by the parties, as a proposed agreement and a proposed sale; and this was urged as a circumstance to corroborate the view that the contract was not considered by the parties as binding; but there was conflict as to what took place, and that was for the jury.

5. Phinizy was not bound prior to December 16, unless he ratified the modifications already referred to, so as to waive completion in the time limited by him in his letter of November 7, and accept the change as to interest. If he did not do this, he had a right to decline to go forward with the matter, whether or not. bis doing so would have caused Bush inconvenience or the loss of a sale of his own stock or other stock. He was entitled to stand on his contract, whether it was a liberal one or a strict one. Nor would the mere fact that he may have made a profit on his stock affect the question of whether or not Bush was entitled to commissions.

Again, it is said that the final contract signed varied from the primary proposal. It named the date when interest should run according to the telegram of Jackson, dated December 5, and it provided ten days after signature for depositing the stock and bonds. If Jackson was acting for the electric company, the placing of its name as the purchaser in’the formal contract, without objection from Phinizy,. would not amount to a novation. There were other minor changes, but they appeared to be in' Phinizy’s favor. If a person agrees to one contract, he is not bound to sign another varying from the first, unless he assents to the change. This, of course, he can do, and be bound. Gilder v. Davis, 137 N. Y. 504; 4 Am. & Eng. Enc. Law (2d ed.), 974, and citations; note to Walker v. Osgood, 93 Am. Dec. 175.

6, 7. If Phinizy was already liable to Bush for full commissions, and indebted therefor under his letter of November 7, am agreement to take less, without any new consideration, would not be binding. The Civil Code, §3735, provides that “An agreement by a creditor to receive less than the amount of his debt can not be pleaded as an accord and satisfaction, unless it be actually executed by the payment of the money, or the giving of additional security, or the substitution of another debtor, or some other new consideration.” Davis & Co. v. Morgan, 117 Ga. 504. This rule has reference to a fixed liability or duty; and would not preclude an accord and satisfaction by securing a doubtful claim, or by an agreement based on a new consideration. Civil Code, §§3732, 3734. If Phinizy had already become bound by the contract for the sale of the option, and had become liable for a definite, fixed commission, and assented to the changes above referred to in the preparation of the formal contract, but refused to sign, not on the ground of any objection to the writing as not carrying out the previous contract, but merely to compel a waiving or partial remission of commissions already incurred, the agreement of December 16 would be without consideration. Mooney v. Elder, 56 N. Y. 238. And see Fenn v. Ware & Owens, 100 Ga. 563. But if Phinizy was not already bound and liable for a fixed commission before the agreement of December 16, and, in order to induce him to make a contract, Bush agreed to leave the amount of compensation to his- determination, such agreement took the place of the original one as to commissions. Its effect is not now before us.

As Jackson, or his principal, agreed to trade with other sellers of stock in a separate and different way, and to deal with Phinizy alone, he could not be held responsible for results of a breach as if on a joint contract. It was either joint or several as to him. If it was joint, there was no right to turn it into a several contract except by his consent. If it was not several at the outset, but became so by agreement, then as against him it could not be treated as a joint contract. We think the charge of the court touching the contention of Bush as to possible damages to him from a refusal of Phinizy to consummate the trade, without further ex- , planation as to the rule touching non-liability of an agent acting for his principal, was calculated to make an erroneous impression on the jury, and one which may have had a serious effect upon their verdict. The situation of Bush could be shown in explanation of his conduct, but his' mere contention as to the legal effect of a refusal by Phinizy should not have been left to stand, without explanation, where the judge’s • attention was called to it by requests. The requests themselves, however, in this case were subject to criticism.

8-11. As to the liability of an agent on contracts- entered into in his own name, the Civil Code, §3022, declares: “The form in which the agent acts is immaterial; if the principal’s name is disclosed, and the agent professes to act for him, it will be held to be the act of the principal.” Section 3039 reads: ' “Where the agency is known, and the credit is not expressly given to the agent, he is not personally responsible upon the contract. The question to whom the credit is given is a question of fact to be decided by the jury under the circumstances in each case.” An agent may expressly contract on his own credit and be bound, even though his principal be known. The declaration of intention and agreement in writing on the part of the agent to bind himself personally may be so explicit as to admit of no denial by parol. But usually where the principal is disclosed, the question is one of fact. Cleaveland v. Stewart, 3 Ga. 283; Fleming v. Hill, 62 Ga. 751; Nall v. Farmers Warehouse Co., 95 Ga. 770; Partridge v. Hollinshead, 105 Ga. 278; Raleigh & Gaston R. Co. v. Pullman Co., 122 Ga. 700. Sec also, on this subject, 1 Am. & Eng. Enc. L. 1118, and citations; 19 Cyc. 302, and citations.

It was also an erroneous statement of the defendant’s contention to say that “Mr. Phinizy says that he owes Mr. Bush absolutely nothing.” The jury may have been caused to believe that the issue was whether the plaintiff should be paid for his work $3.25 per share or nothing; while the real issue on this feature of the case was whether the measure of his compensation was to be on the basis of the original letters of November 7, 1903, on which, the suit was based, or according to the agreement contained in Bush’s letter of December 16. In his answer to the petition the defendant denied that he owed the plaintiff anything under the contract sued on, but stated that he had offered to pay, and was still willing to paj, $1 per share; that this was under the agreement of December 16, and not the one on which the suit was founded; and that the plaintiff was not entitled to recover on such contract.

The expression used in the charge, that if, within the time limited in Phinizy’s letter of November 7, Bush had sold Phinizy’s stock, “and this sale had been consummated and closed so far as Bush could close the same,” he would have earned his commissions, was subject to misinterpretation. It might have led the jury to think that, if Bush had done all he could to close the trade, he was entitled to commissions, whether or not he had succeeded, or had fulfilled the conditions of Phinizy’s letter, • and whether or not, if he failed, any fault of Phinizy’s caused the failure. Our learned brother of the circuit bench probably did not mean this, but the jury may have so understood.

We hardly think that the reference to the sale of the stock and the consummation by delivery, and payment of the “money” therefor, complained of in the 14th ground of the motion, was entirely clear, taken with the context in which it was used. It must be borne in mind that the thing which had to be done within the limit of thirty days was to close the sale or trade for an option and do what was required for that purpose under the terms of the letters of November 7. The final delivery of the stock itself to the purchaser, if the option were exercised, and the payment of the money therefor, was a matter for later consummation. Doubtless this was what the presiding judge had in view. The case is one of closely contested evidence, and, in view of some inaccuracies in the charge, we think there should be a new trial.

Other grounds of the motion need no further discussion. Except so far as indicated in this opinion, they would not require a now trial.

Judgment reversed.

All the Justices concur, except Holden, who did not preside.