Foster v. Roach , 119 S.C. 102 ( 1922 )

I agree fully with the very clear and convincing decree of the Circuit Judge and think that it should be affirmed.

The controversy has arisen over the terms of a written contract for the sale by one E.H. Johnson through his agents, Roach Kirk, of a house and lot to the plaintiff. The agreed price was $3,500, payable $350 cash, and the remainder at stated times. The contract provides that, if the buyer (plaintiff) failed to comply with the terms of the contract, the cash payment of $350, "the amount paid to bind the obligation," should be forfeited and equally divided between the owner of the property (Johnson) and the broker (Roach), acting apparently for his firm (Roach Kirk).

This contract was signed by the three parties interested, Foster, Roach, and Johnson, the buyer, the broker, and the seller, and each of them was of course bound by the terms thereof, appropriate to their several obligations.

The complaint alleges that subsequently to the making of the contract Foster, the buyer, and Johnson, the seller, by mutual agreement, rescinded the contract of sale, Johnson accepting $175, one-half of the initial cash payment of $350, on account of five months' rent of the premises. It does not allege, and we must assume that such was not the fact, that the broker was consulted as to this rescission or that his interest in the so-called forfeit was considered at all. The plaintiff appears to have been careful in concluding the interest of Johnson therein, but indifferent to that of the brokers, which was identical with that of Johnson, and expressly made so by the signature of the plaintiff to the tripartite agreement.

The defendants in their answer deny the allegation of the complaint that there had been a rescission of the contract as between the plaintiff and Johnson, and claim the benefit of the provision in the contract that, if the plaintiff failed to comply with his contract, they should be entitled to one-half of the initial payment agreed to be forfeited.

It does not make a particle of difference how it came about that the plaintiff failed and refused to comply with his contract, if, as a matter of fact, admitted by the answer, he did so fail and refuse. It might have occurred, and doubtless it did occur, as the plaintiff declares, by a rescission of the contract by agreement between him and Johnson; but the defendants were not parties to that agreement, and their rights could not be bartered away by the plaintiff and Johnson, both of whom by contract fixed what those rights were. Or it might have occurred, if the defendant's denial of a rescission be established, by the failure and refusal of the plaintiff to comply. In either event, the defendants are entitled to what the contract gives them.

It must be assumed that the brokers gave value received for their services; at least the plaintiff is in no position to dispute that fact after having agreed to the measure of their compensation and how it was to be paid by signing the contract in the event of his failure to comply.

The plaintiff settled with Johnson by applying his half of the $350 to the rent of the premises for five months. Johnson received therefor no more than the rent, nothing under the contract. The plaintiff would settle with the brokers for the same $175 with which Johnson was satisfied. If it required a new contract to settle with Johnson, why did it not require a new contract to settle with the brokers, who had an equal interest, by the plaintiff's express agreement, in the $350?

In any aspect of the case, the order overruling the demurrer was right, and should be sustained.