Middleton v. Thompson , 163 Pa. 112 ( 1894 )

Opinion by

Mb,. Justice Mitchell,

Brokers, says Sharswood, J., in Keys v. Johnson, 68 Pa. 42, “ are persons whose business it is to bring buyer and seller together. They need have nothing to do with the negotiation of the bargain.” This is said generally of brokers, though the words used are “ buyer and seller,” and the case was one of the sale of real estate. There is no good reason why the same principle should not apply to a broker negotiating a loan as to one negotiating a sale. The basis of his right to compensation in either case is the same, his bringing to his principal a party able and willing to carry out the desired transaction. It is said in some of the cases that there must be shown a contract binding on the party produced. But this is not essential. Keys v. Johnson decides that the principal cannot take the matter out of the broker’s hands and thus deprive him of his right to the commissions though he had as yet’made no contract. In Clendenon v. Pancoast, 75 Pa. 213, no binding contract appears, and in Sweeney v. Oil & Gas Co., 130 Pa. 193, it affirmatively appears that no such contract was made. So in Reed’s Exr. v. Reed, 82 Pa. 426, there was no contract, because while the expected purchaser was considering the matter under a time option allowed for that purpose, the principal sold to another party, and it was held that the broker had earned his commissions. These cases show clearly that a binding contract is not essential where the party produced by the broker stands ready to perform his part of the proposal, and the failure to do so occurs through the fault or inability of the principal.

We are therefore of opinion that there is no ground for a distinction in the extent of the duty of a broker to effect a loan and one to effect a sale. In the former case as in the latter, as said by Baron Bbamwbll in the closely analogous case of Green v. Lucas, -33 Law Times Reports, 584, “ the word ‘ procure ’ means to procure the lender and not the money, and the contract was completed, so far as the plaintiff was concerned, when he had procured a person who was ready and willing to advance the money.”

Did the plaintiff complete his part of the contract in the sense so explained? He found a lender whose ability is not questioned, and whose willingness must be tested by' the grounds of final refusal. If these were the fault of the defendants, then the failure to obtain the money was no defence to the plaintiff’s claim.

A man who proposes to sell land, or to borrow money upon mortgage on it, impliedly warrants that he has a marketable title for the purpose desired, and, in the absence of specific instructions to the contrary, his employment of a broker is sufficient authority to the latter to make representations and negotiations on that basis. And such authority is not negatived by merely leaving unanswered questions which have been put by the broker on a blank furnished by him for the purpose of obtaining information.

It is objected on the- part of defendants that plaintiff’s contract with the Fidelity Company was not sufficient in that it was not binding in form, and it was not in accordance with the agreement between'plaintiff and defendants as to the loan. The necessity for a binding contract has already been considered. The objections under the second head are, first, that plaintiff’s contract with the Fidelity Company provided that defendants should pay the state tax in addition to the agreed interest; secondly, that the contract stipulated that the proposed mortgage should be a first lien, while defendants had made no representations as to incumbrances ; and thirdly, that it subjected the title to the opinion of special counsel, whose injection of it would terminate the agreement without remedy to the defendants.

The first objection was not well founded in fact. It is true that a provision for the payment of the tax appears in the memorandum of agreement, but plaintiff offered to prove by the other party to it, the Fidelity Company’s officer, that it was in there by mistake, through the use of a. printed form, and that it was no part of the actual contract. .This proof should have been admitted. Of course the officer’s mere letter was not of-the requisite grade of evidence, except by the agreement of counsel that it should represent what the officer would testify to if examined in person. Under such agreement it should have been admitted.

The second objection would ordinarily raise a question of fact for the jury. As already said an owner proposing to borrow on mortgage and employing a broker to find a lender of the money, impliedly warrants that his title is marketable for mortgage purposes, and that may require certain conditions as to liens, according to the custom of business. In the present case the point is conceded by appellee to be immaterial, as the stipulation for priority of the mortgage was modified by the Fidelity Company, and as so modified was complied with. It was not therefore a cause of the failure of the loan.

The third objection also raises a'question of fact. The application by plaintiff to the Fidelity Company for the loan stated that “ full brief of title and searches, with opinion of counsel, will be required.” This was within the implied authority of plaintiff. Any owner, as already said, was bound to know that a loan would not in- the ordinary course of business be made on mortgage without an examination of title, and finding it marketable for mortgage purposes, and this was a matter for the opinion of counsel. The brief memorandum of acceptance by the Fidelity Company contained the words, “ Opinion of J. C. Stillwell, Esq.” This does not necessarily mean anything more than the suggestion of Mr. Stillwell as the counsel whose opinion should be obtained in the first instance. There is no provision that he is to be the final arbiter in the matter, and such stipulation will not be understood as intended without express words to support it. But even if he were made the arbiter, the question whether the plaintiff went outside of his authority in submitting the matter to him would depend on the nature of the objections raised against the title. The plaintiff had authority to stipulate that, the title should be marketable in the opinion of counsel. If Mr. Stillwell’s opinion required nothing more, then plaintiff did not exceed his authority. If, on the other hand, Mr. Stillwell through over caution or excessive particularity raised objections not sufficient to destroy the marketability of the title in the general opinion of the profession, and the refusal of the Fidelity Company to-lend was based on those objections, then the plaintiff would be held to have failed to produce a willing customer within the requirements of his contract with defendants. But these questions would be for the- jury.

From the foregoing it follows that the defendants failed to raise .any defence which was sufficient to prevent the plaiutiff’s recovery as a conclusion of law, or to justify a binding direction that he could not recover his commissions. He was entitled to go to the jury on the question. whether he had completed his agreement by procuring a party able and willing to make the loan, and if so whether the loan finally failed through no fault of the plaintiff but through defects in the title of defendants which were sufficient in the usual course of such business to justify the proposed lender in declining to go on with the transaction.

Judgment reversed and a venire de novo awarded. .