Seelye v. Broad

379 Mich. 289 (1967)

150 N.W.2d 785

SEELYE v. BROAD.

Calendar No. 20, Docket No. 51,409.

Supreme Court of Michigan.

Decided June 6, 1967.

Rehearing denied July 21, 1967.

Frank C. Glabach, for plaintiff.

Bodman, Longley, Bogle, Armstrong & Dahling (Michael B. Lewiston, of counsel), for defendants.

DETHMERS, C.J.

Plaintiff, a realtor, brought this suit for a sale of real estate commission against defendants who were the property owners. From circuit court judgment of no cause for action in favor of defendants, plaintiff appealed to the Court of Appeals and, from its affirmance,[*] he sought and was granted appeal here.

The question presented is whether defendants had the right, with respect to their written authorization of plaintiff to sell the property, for a period of one day, to terminate it before that day had expired and to sell the property themselves without liability to plaintiff for the commission agreed upon in the authorization *291 agreement. The latter recited that in consideration (1) of plaintiff's assistance to defendants in its preparation and (2) of plaintiff's presentation of defendants' offer to sell for acceptance by certain intended prospective buyers named in the agreement, defendants agreed that it was irrevocable for one day.

Within the specified one-day period plaintiff secured from the said intended buyers a counter-offer and presented it to defendants. They turned it down and advised plaintiff that they already had sold to another buyer who was unknown to plaintiff. Plaintiff then went again to the said intended buyers and promptly, within said one-day period, returned to defendants with a written acceptance by said intended buyers of defendant's offer to sell at the price and on the terms provided by defendants in their written authorization agreement and offer to sell.

The Court of Appeals relied on Schostak v. First Liquidating Corporation, 320 Mich 406, and defendants, in addition, cite Pastras v. Oberlin, 350 Mich 183, and McOmber v. Campion, 219 Mich 604, for the proposition that the owner of real estate may, during the life of a listing agreement, but before the realtor has produced a purchaser ready, willing, and able to buy on the owner's terms, rescind it, sell the property himself and not become obligated to the realtor for the specified commission. If these can be said to hold that only if the realtor has actually produced a buyer on the owner's terms has he acquired irrevocable rights under the contract, then it must be concluded that they are, to that extent, superseded by the more recent case of Ladd v. Teichman, 359 Mich 587, in which this Court said:

"Thus it appears that where a contract to sell real estate contains a provision for exclusive sale rights *292 and a reasonable time limit, and the broker is able to show substantial performance of the duties imposed upon him by the contract (even though he does not produce a buyer), when the owner makes the sale within the contract dates, the contract is held to be enforceable and the broker entitled to his commission."

Mr. Justice EDWARDS in Ladd wrote:

"But in 2 cases where the language of the agreement granted what we construe to be exclusive sale rights for a specified period and there was specific language which purported to assure a commission to the broker even if the owner made an unassisted sale, the broker was allowed to recover after the owner sold. Axe v. Tolbert, 179 Mich 556; DeBoer v. Geib, 255 Mich 542. Even as to these last 2 cases, however, there was either claim or recital of consideration on the part of the broker.

"None of these cases is squarely in point as to our present situation, but they help to illustrate the pre-occupation of the Michigan Court with the question of consideration as it relates to a claim for commission under a contract to sell real estate."

In 2 Restatement, Second, Agency, § 453, comment c, appears the following:

"c. When a promise not to terminate authority. If there is merely an offer to pay compensation without a corresponding agreement to perform service, ordinarily the offer can properly be revoked at any time. This is true in the usual agreement with real estate brokers and, unless he acts in bad faith (see § 454), the principal commits no breach of contract and hence has to pay no commission if, on the eve of success by a broker, he withdraws the property from the broker's control for any reason. However, there are many variants. Thus, if the broker promises to make specific efforts or otherwise gives consideration *293 therefor, the principal may be found to have promised that he will not terminate the employment until the broker has had a reasonable time in which to find a customer." (Emphasis supplied.)

The variant from the general rule in this case is the existence of two specific items of consideration furnished by plaintiff broker, to which reference was made in the authorization agreement's recital of consideration, namely, plaintiff's assistance to defendants in preparation of that agreement and offer to sell and plaintiff's presentation thereof to the intended purchaser. With "the preoccupation of the Michigan Court with the question of consideration as it relates to a claim for commission under a contract to sell real estate," as stated in Ladd, it seems that the recital and acts of consideration present in this case require a holding for plaintiff under the meaning of the decision in Ladd. There are distinguishing factual features between the two cases but, on the fundamental principle that a consideration flowing from the realtor to the owner supports a binding obligation on the part of the latter, they are the same.

"To the general rule of law that a principal may revoke the power of his agent or attorney at his mere pleasure or caprice, there is a well-defined exception to the effect that where an authority or power is coupled with an interest, or where it is given for a valuable consideration, or where it is part of a security, unless there is an express stipulation that it shall be revocable, it is, from its very nature and character, in contemplation of the law, irrevocable, whether it is expressed to be so on the face of the instrument conferring the power or not." 7 ALR 947, annotation. (Emphasis supplied.)

Discussion of other points considered in the briefs is unnecessary to decision here.

*294 Reversed and remanded for entry of judgment for plaintiff as prayed. Costs to plaintiff.

KELLY, BLACK, SOURIS, O'HARA, and ADAMS, JJ., concurred with DETHMERS, C.J.

T.M. KAVANAGH, J., concurred in result.

BRENNAN, J., took no part in the decision of this case.

[*] 2 Mich App 177. REPORTER.