Hillis v. Lake421 Mass. 537
PROCEDURAL HISTORY: Appellant agents challenged the decision of the Massachusetts Appeals Court, which reversed the trial court's judgment that the agents were entitled to a commission from appellee sellers on a sale of real estate.
FACTS:
-The sellers entered into an agreement for the agents to serve as exclusive brokers for their property. -The agents obtained a buyer, but after hazardous materials were found, the buyer's investor and its mortgagor withdrew from the project.
-The buyer located another investor, and the sellers also purchased an interest in the project.
-After the sellers could not produce certification that the contamination had been cleaned up, the sellers repurchased the property and discharged the mortgage.
-The agents brought an action against the sellers to recover their commissions.
-The trial court concluded that the agents were entitled to a commission with interest and, on the finding of a violation of Mass. Gen. Law ch. 93A, an award of attorney's fees.
-The appeals court reversed.
-On appeal, the court affirmed the appeals court's decision and reversed the judgment of the trial court.
-The court held that the conditions for payment of a broker's commission were not met because no closing occurred.
RULES
-When a broker is engaged by an owner of property to find a purchaser for it, the broker earns his commission when (a) he produces a purchaser ready, willing and able to buy on the terms fixed by the owner, (b) the purchaser enters into a binding contract with the owner to do so, and (c) the purchaser completes the transaction by closing the title in accordance with the provisions of the contract.
-The requirement that the sale actually be consummated, however, is subject to an exception.
-A broker has an enforceable claim when the first two requirements are met but the failure of completion of the contract results from the wrongful act or interference of the seller.
-Ordinarily, when an owner of property lists it with a broker for sale, his expectation is that the money for the payment of commission will come out of the proceeds of the sale.
-Brokers also have legitimate expectations, and if the broker brings the parties together on mutually acceptable terms he expects a commission for his labor.
OUTCOME: The court affirmed the appellate court's reversal of the trial court's judgment in favor of the agents in an action to recover commission from the sellers of real estate.
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PROCEDURAL HISTORY: Appellant agents challenged the decision of the Massachusetts Appeals Court, which reversed the trial court's judgment that the agents were entitled to a commission from appellee sellers on a sale of real estate.
FACTS:
-The sellers entered into an agreement for the agents to serve as exclusive brokers for their property. -The agents obtained a buyer, but after hazardous materials were found, the buyer's investor and its mortgagor withdrew from the project.
-The buyer located another investor, and the sellers also purchased an interest in the project.
-After the sellers could not produce certification that the contamination had been cleaned up, the sellers repurchased the property and discharged the mortgage.
-The agents brought an action against the sellers to recover their commissions.
-The trial court concluded that the agents were entitled to a commission with interest and, on the finding of a violation of Mass. Gen. Law ch. 93A, an award of attorney's fees.
-The appeals court reversed.
-On appeal, the court affirmed the appeals court's decision and reversed the judgment of the trial court.
-The court held that the conditions for payment of a broker's commission were not met because no closing occurred.
RULES
-When a broker is engaged by an owner of property to find a purchaser for it, the broker earns his commission when (a) he produces a purchaser ready, willing and able to buy on the terms fixed by the owner, (b) the purchaser enters into a binding contract with the owner to do so, and (c) the purchaser completes the transaction by closing the title in accordance with the provisions of the contract.
-The requirement that the sale actually be consummated, however, is subject to an exception.
-A broker has an enforceable claim when the first two requirements are met but the failure of completion of the contract results from the wrongful act or interference of the seller.
-Ordinarily, when an owner of property lists it with a broker for sale, his expectation is that the money for the payment of commission will come out of the proceeds of the sale.
-Brokers also have legitimate expectations, and if the broker brings the parties together on mutually acceptable terms he expects a commission for his labor.
OUTCOME: The court affirmed the appellate court's reversal of the trial court's judgment in favor of the agents in an action to recover commission from the sellers of real estate.
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Interested in learning how to get the top grades in your law school classes? Want to learn how to study smarter than your competition? Interested in transferring to a high ranked school?
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