{ "id": 8559726, "name": "S & W REALTY & BONDED COMMERCIAL AGENCY, INC., v. DUCKWORTH & SHELTON, INC.", "name_abbreviation": "S & W Realty & Bonded Commercial Agency, Inc. v. Duckworth & Shelton, Inc.", "decision_date": "1968-08-23", "docket_number": "No. 276", "first_page": "243", "last_page": "256", "citations": [ { "type": "official", "cite": "274 N.C. 243" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "284 S.W. 283", "category": "reporters:state_regional", "reporter": "S.W.", "case_ids": [ 10297249 ], "opinion_index": 0, "case_paths": [ "/sw/284/0283-01" ] }, { "cite": "60 S.E. 640", "category": "reporters:state_regional", "reporter": "S.E.", "opinion_index": 0 }, { "cite": "147 N.C. 20", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 11268705 ], "opinion_index": 0, "case_paths": [ "/nc/147/0020-01" ] }, { "cite": "137 S.E. 721", "category": "reporters:state_regional", "reporter": "S.E.", "opinion_index": 0 }, { "cite": "193 N.C. 605", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2217740 ], "opinion_index": 0, "case_paths": [ "/nc/193/0605-01" ] }, { "cite": "46 S.E. 2d 313", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1964, "opinion_index": 0 }, { "cite": "228 N.C. 507", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8627077 ], "year": 1964, "opinion_index": 0, "case_paths": [ "/nc/228/0507-01" ] }, { "cite": "133 S.E. 391", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1964, "opinion_index": 0 }, { "cite": "191 N.C. 809", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8631726 ], "year": 1964, "opinion_index": 0, "case_paths": [ "/nc/191/0809-01" ] }, { "cite": "56 S.E. 2d 607", "category": "reporters:state_regional", "reporter": "S.E.2d", "opinion_index": 0 }, { "cite": "231 N.C. 277", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8629324 ], "opinion_index": 0, "case_paths": [ "/nc/231/0277-01" ] }, { "cite": "31 S.E. 2d 371", "category": "reporters:state_regional", "reporter": "S.E.2d", "opinion_index": 0 }, { "cite": "224 N.C. 453", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8605814 ], "opinion_index": 0, "case_paths": [ "/nc/224/0453-01" ] }, { "cite": "46 A.L.R. 2d 848", "category": "reporters:specialty", "reporter": "A.L.R. 2d", "year": 1956, "pin_cites": [ { "page": "859" } ], "opinion_index": 0 }, { "cite": "60 S.E. 1124", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1956, "opinion_index": 0 }, { "cite": "147 N.C. 304", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 11269727 ], "year": 1956, "opinion_index": 0, "case_paths": [ "/nc/147/0304-01" ] }, { "cite": "143 S.E. 144", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1956, "opinion_index": 0 }, { "cite": "195 N.C. 591", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8630780 ], "year": 1956, "opinion_index": 0, "case_paths": [ "/nc/195/0591-01" ] }, { "cite": "82 S.E. 2d 109", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1956, "opinion_index": 0 }, { "cite": "240 N.C. 315", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8598344 ], "year": 1956, "opinion_index": 0, "case_paths": [ "/nc/240/0315-01" ] }, { "cite": "80 S.E. 62", "category": "reporters:state_regional", "reporter": "S.E.", "opinion_index": 0 }, { "cite": "164 N.C. 19", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8656268 ], "opinion_index": 0, "case_paths": [ "/nc/164/0019-01" ] }, { "cite": "10 S.E. 83", "category": "reporters:state_regional", "reporter": "S.E.", "opinion_index": 0 }, { "cite": "104 N.C. 36", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8650492 ], "opinion_index": 0, "case_paths": [ "/nc/104/0036-01" ] }, { "cite": "108 S.E. 2d 228", "category": "reporters:state_regional", "reporter": "S.E.2d", "opinion_index": 0 }, { "cite": "250 N.C. 224", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8621550 ], "opinion_index": 0, "case_paths": [ "/nc/250/0224-01" ] } ], "analysis": { "cardinality": 1055, "char_count": 34829, "ocr_confidence": 0.538, "pagerank": { "raw": 4.564925392609337e-07, "percentile": 0.9249095217520403 }, "sha256": "4582b993dcd0d3b0179758378909a66a8f042d0d2b92a85508ee54cd4091155f", "simhash": "1:d5cca9eb8359b589", "word_count": 5783 }, "last_updated": "2023-07-14T17:57:51.245619+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "S & W REALTY & BONDED COMMERCIAL AGENCY, INC., v. DUCKWORTH & SHELTON, INC." ], "opinions": [ { "text": "Sharp, J.\nIn this case, plaintiff alleges one brokerage contract; defendant\u2019s minutes, upon which plaintiff relies, show another; plaintiff\u2019s evidence shows a third. Understandingly, the issues do not bring the case into sharp focus.\nThese facts are conceded by both parties: On 23 November 1962, defendant agreed that it would pay plaintiff a 5% commission if plaintiff sold \u2022 defendant\u2019s Trade Street property to Belk\u2019s for $116,-500.00 or more. Plaintiff was never able to effect a sale upon those terms. Approximately two and one-half years later defendant sold the property to Belk\u2019s for $100,000.00 in negotiations conducted by an attorney, - Mr. Paul Ervin. The case was submitted to the jury to determine whether plaintiff was the procuring cause of the sale and, if so, what was the reasonable value of its services.\nOrdinarily, a broker with whom an owner\u2019s property is listed for sale becomes entitled to his commission whenever he procures a party who actually contracts for the purchase of the property at a price acceptable to the owner. Cromartie v. Colby, 250 N.C. 224, 108 S.E. 2d 228; Martin v. Holly, 104 N.C. 36, 10 S.E. 83. If any act of the broker in pursuance of his authority to find a purchaser is the initiating act which is the procuring cause of a sale ultimately made by the owner, the owner must pay the eommsision provided the case is not taken out of the rule by the contract of employment. Trust Co. v. Goode, 164 N.C. 19, 80 S.E. 62. The broker is the procuring cause if the sale is the direct and proximate result of his efforts or services. The term 'procuring cause refers to \u201ca cause originating or setting in motion a series of events which, without break in their continuity, result in the accomplishment of the prime object of the employment of the broker, which may variously be a sale or exchange of the principal\u2019s property, an' ultimate agreement between the principal and a prospective contracting party, or the procurement of a purchaser who is ready, willing, and able to buy on the principal\u2019s terms.\u201d 12 C.J.S. Brokers \u00a7 91, p. 209 (1938). Accord, 12 Am. Jur. 2d Brokers \u00a7 190 (1964).\nThe law does not permit an owner \u201cto reap the benefits of the broker\u2019s labor without just reward\u201d if he has requested a broker to undertake the sale of his property and accepts the results of services rendered at his request. In such case, in the absence of a stipulation as to compensation, he is liable for the reasonable value of those services. Thompson v. Foster, 240 N.C. 315, 82 S.E. 2d 109; Thomas v. Realty Co., 195 N.C. 591, 143 S.E. 144; Reams v. Wilson, 147 N.C. 304, 60 S.E. 1124. Of course, the listing agreement can make the payment of commissions dependent upon the broker\u2019s obtaining a certain price for the property. See Annot., 46 A.L.R. 2d 848, 859 (1956); Thompson v. Foster, supra.\nThe foregoing decisions, however, do not fit the facts of this case. This is not a situation in which an owner, who has listed real estate with the broker at a specified price, reduces the price and sells it to the broker\u2019s prospect. When that occurs, clearly the broker is entitled to compensation. Cromartie v. Colby, supra; Thompson v. Foster, supra; Lindsey v. Speight, 224 N.C. 453, 31 S.E. 2d 371; Trust Co. v. Goode, supra; Martin v. Holly, supra. Here, plaintiff-broker did not find the prospect to which defendant-owner sold the property nor did it initiate Belk\u2019s interest in the property. As every individual involved in the affairs of plaintiff and defendant well knew, Belk\u2019s wanted the land because it adjoined its property. Mr. Robinson, one of Belk\u2019s vice-presidents, testified that in 1964 he had told both Shelton, Sr., and Taylor that Belk\u2019s wanted the property; that it would pay $100,000.00 for it but no more. Belk\u2019s was defendant\u2019s prime prospect and \u2014 so far as this evidence reveals \u2014 its only one.' In making the sale, the directors\u2019 sole problem was how to exploit the strategic location of defendant\u2019s property and to get Belk\u2019s top dollar for it as soon as possible.\nDefendant\u2019s assignment of error that the judge erred in failing to grant its motion of nonsuit raises the question whether the evidence will support a finding that defendant employed plaintiff to negotiate the sale of its property to Belk\u2019s for $100,000.00 and that plaintiff procured the sale.\nTo establish its contract of employment to sell the property to Belk\u2019s for $100,000.00, plaintiff does not rely upon corporate minutes but upon the oral testimony of its two stockholders. A corporation is required to keep minutes of the proceedings of its shareholders and board of directors. G.S. 55-37. They are the best evidence of its acts. Pegram-West v. Insurance Company, 231 N.C. 277, 56 S.E. 2d 607; Respess v. Spinning Co., 191 N.C. 809, 133 S.E. 391. However, when it is shown that no minutes were made of a particular meeting, or that they are incomplete, the proceedings may be proved by parol testimony. Tuttle v. Building Corp., 228 N.C. 507, 46 S.E. 2d 313; Robinson, North Carolina Corporate Law and Procedure \u00a7 49 (1964).\nThe absence of the minutes authorizing the offer of the property to Belk\u2019s for $100,000.00 is not explained in the evidence. Notwithstanding the foregoing rule, Shelton, Jr., testified without objection that, at a meeting of the board of directors, Shelton, Sr., \u201cas representative of S & W was authorized to offer it (the land) to them (Belk\u2019s) for $100,000.00; that defendant\u2019s directors asked Ervin to accompany Shelton, Sr., to Belk\u2019s \u201cin his capacity.\u201d Also without objection, Shelton, Sr., testified that defendant\u2019s board of directors had directed Ervin to make the offer to Belk\u2019s through S & W Realty Company; that he himself employed Ervin to help him consummate the sale; and that it was he who directed him to make the offer to Belk\u2019s through plaintiff corporation, which \u201cwas exclusive agent at that time as there had never been anything changed from the meeting in 1962.\u201d He added, \u201cWe were continually discussing the property with Belk\u2019s up until the property was sold.\u201d\nThe only minutes in evidence which relate to the sale of the Trade Street property contain the resolution of 23 November 1962 and the resolution' of 2 July 1965, which approved the action of defendant\u2019s officers \u201cin negotiating for the sale\u201d of the Trade Street property to Belk\u2019s \u201cfor the sum of $100,000.00 as a part of the plan of liquidation and dissolution of the corporation.\u201d\nAn officer of a corporation has no right to compensation for services rendered the corporation in the absence of an express contract to pay for them. Credit Corporation v. Boushall, 193 N.C. 605, 137 S.E. 721; Caho v. R. R., 147 N.C. 20, 60 S.E. 640. Certainly, plaintiff-corporation was not an officer of defendant corporation, but Shelton, Jr., and Shelton, Sr., two of the three directors and- stockholders of defendant-corporation, were also the sole directors and stockholders of plaintiff-corporation. Thus, in the transaction in suit, all plaintiff\u2019s stockholders (two realtors now composing a corporation, G.S. 55-3-1) have an interest adverse to defendant-corporation. No corporate veil can conceal this interest. If the Sheltons, through plaintiff-corporation, obtain a realtor\u2019s commission upon the sale of the property, which they owned as stockholders in defendant-corporation, they will profit over and above their distributive share in the distribution of defendant\u2019s assets. Their gain will be at the expense of Taylor, a director and the majority stockholder, who testified that defendant never employed plaintiff to negotiate a sale with Belk\u2019s for $100,000.00.\nThe brokerage services which plaintiff-corporation alleges it rendered defendant-corporation were within the scope of the duties of the directors and officers of defendant-corporation, which was patently formed for the purpose of buying and selling real estate. Its only assets upon dissolution were the net proceeds of the sale to Belk\u2019s and a lot valued at $15,000.00. The reason for the rule which prohibits an officer of a corporation from maintaining an action against it for services rendered within the scope of his duties as such officer absent an express contract to pay for those services is equally applicable to the dealings between these two closely held corporations. Before plaintiff-corporation can recover commissions in this case it must prove an express contract of employment whereby defendant employed it to sell the Trade Street property to Belk\u2019s for $100,000.00. The testimony of Shelton, Jr., and Shelton, Sr., although largely a statement of their conclusions that plaintiff and defendant had entered into a contract, went in without objection; it constitutes a ;prima facie showing of a contract of employment between plaintiff and defendant.\nWe hold that plaintiff\u2019s evidence was sufficient to withstand defendant\u2019s motions for nonsuit.\nWe next consider defendant\u2019s assignments of error to the charge. After having instructed the jury as to the burden of proof, the court gave the following instruction as to the third issue: \u201cThe procuring cause, members of the jury, is the approximate cause, the cause originating a series of events which without breaking their continuity result in the accomplishment of the prime object. . . . (contentions omitted) . . . Now, members of the jury, if the plaintiff has satisfied you by the greater weight of the evidence that the effort, if any, which it put forth or expended in offering or trying to sell the property to Belk was the procuring cause, as I have defined procuring cause to you, of the sale of the property to Belk Investment Company, it would be your duty to answer this third issue \u2018yes.\u2019 If you fail to so find, it would be your duty to answer the third issue 'no.\u2019 \u201d\nThe foregoing instructions, which defendant assigns as error, were inadequate. Inter alia, they failed to comply with G.S. 1-180 in that the court made no attempt to apply the law to defendant\u2019s! evidence.\nIn effect, we have here the anomalous situation in which two stockholders and directors of defendant are suing defendant upon an oral contract which must be established by their testimony, which is unsupported by any minutes, and which is denied by the majority stockholder. Defendant contends that its three directors knew that they could sell the property to Belk\u2019s at any time they were willing to take $100,000.00 for it; that under these circumstances, the contract which plaintiff declares was not just and reasonable to the corporation; that Taylor would never have consented to pay a realtor to make a sale which was, in effect, already made; that the corporation could not have made such a contract without Taylor\u2019s consent\u2014 which was not given; and that defendant-corporation authorized Ervin to act for it in effecting the sale. Whom Ervin represented is one of the disputed facts in the case. Plaintiff contends that he represented it exclusively. Defendant contends that he represented the Sheltons individually as stockholders and directors (in this case, inseparable statuses) and that, in acting for them in that capacity, he acted for defendant-corporation under authority of the directors.\nIn April 1965, the contract which defendant had made with plaintiff on 23 November 1962 was at an end. It was then obvious to the directors that plaintiff would be unable to sell the property to Belk\u2019s for $116,500.00. When no time is specified in his contract, if a broker fails to find a purchaser or to make the sale within a reasonable time, his contract of employment is at an end. 12 C.J.S. Brokers \u00a7\u00a7 66(c), 88 (1938); 12 Am. Jur. 2d Brokers \u00a7 57 (1964). See Parkey v. Lawrence, 284 S.W. 283 (Tex. Civ. App.)\nNo legal bar prevented defendant from employing Shelton, Sr., \u2014 individually or through his corporation \u2014 to sell its property to Belk\u2019s and to pay the reasonable value of its services. A new and express contract of employment, however, was required. Furthermore, the provisions of G.S. 55-30 were applicable to the contract. Presumably, however, in this case, if the jury finds in accordance with the Sheltons\u2019 testimony that the directors of defendant employed plaintiff-corporation to effect a sale to Belk\u2019s for $100,000.00, such a finding would bring the contract within the provisions of G.S. 50-30 (b), (1) and (2). These sections validate a contract between a corporation and a director having an adverse interest if, after a full disclosure, the transaction is specifically approved by a majority of the voting shares other than those owned or contracted by the adversely interested directors. Taking plaintiff\u2019s evidence as true, and giving plaintiff the benefit of every inference of fact which may reasonably be drawn from the evidence \u2014 as we are required to do in passing upon a motion for nonsuit \u2014 , Taylor was one of the directors who \u201cauthorized\u201d plaintiff to sell the property to Belk\u2019s for $100,000.00. The transcript does not reveal the manner in which the directors are authorized to do business. G.S. 55-28 (d).\nThe judge should have instructed the jury (1) that the contract of 23 November 1962 had terminated in April 1965, that plaintiff could base no recovery upon it, and that it had no bearing upon the value of the services for which plaintiff sues; (2) that in order to recover, plaintiff must satisfy the jury by the greater weight of the evidence (a) that the directors of defendant-corporation made an express contract with plaintiff whereby it employed plaintiff to negotiate a sale of its Trade Street property to Belk\u2019s for $100,000.00, (b) that the contract came within the provisions of G.S. 50-30 (b), (1) and (2), or (3); and (c) that, pursuant to the contract, plaintiff did procure the sale to Belk\u2019s.\nOn the issue of damages, the court instructed the jury as follows: \u201cEven though the plaintiff failed to obtain a purchaser willing, able and ready to take the property at the price stipulated, $116,500.00, in the contract between the plaintiff and defendant, plaintiff may still recover the reasonable value of his services, if such services were the procuring cause of the sale of the property.\u201d\nDefendant\u2019s exception to the foregoing portion of the charge must likewise be sustained. It erroneously referred to the contract of 23 November 1962 as the basis of defendant\u2019s liability to plaintiff, and it inadequately dealt with the question of damages. Testimony that commissions for the sale of commercial property in Charlotte were 5% of the sales price was offered and admitted as evidence bearing upon what sum was ordinarily considered reasonable compensation for plaintiff's services as a broker. Even though the jury found plaintiff to be entitled to compensation for its services with reference to the sale to Belk\u2019s, it was not bound to fix plaintiff\u2019s compensation at this rate, and the court should have so instructed the jury. Thomas v. Realty Co., supra.\nAs heretofore pointed out, plaintiff did not procure Belk\u2019s as a prospect nor did it interest Belk\u2019s in the property. Defendant contends that plaintiff\u2019s evidence showed that little work was required to make the sale to Belk\u2019s once defendant\u2019s director-stockholders had decided to accept its offer to pay $100,000.00 for the property; that the sale was effected when, by a telephone call, Mr. Ervin gave Mr. Robinson this information; that if Shelton, Sr., did anything at all, he merely accompanied Mr. Ervin on a visit to Robinson; that if plaintiff paid Ervin for these services there is no evidence what the fee was.\nIf plaintiff is entitled to recover compensation in connection with the sale, it is entitled to recover only the reasonable value of the services it rendered after defendant reduced the price of the land to $100,000.00. In fixing this amount, the jury may properly consider the skill required and the time, effort, and cost expended in procuring the sale.\nFor the errors indicated, there must be a new trial. Prior thereto, plaintiff would be well advised to seek permission to recast its pleadings to conform to its evidence.\nNew trial.", "type": "majority", "author": "Sharp, J." } ], "attorneys": [ "Ervin, Horack & McCartha by Paul R. Ervin and William E. Underwood, Jr., for 'plaintiff appellee.", "Berry and Bledsoe by Louis A. Bledsoe, Jr., and C. Ralph Kinsey, Jr., for defendant appellant." ], "corrections": "", "head_matter": "S & W REALTY & BONDED COMMERCIAL AGENCY, INC., v. DUCKWORTH & SHELTON, INC.\nNo. 276\n(Filed 23 August 1968)\n1. Brokers and Factors \u00a7 6\u2014 right to commissions\nOrdinarily, a broker with whom an owner\u2019s property is listed for sale becomes entitled to his commission whenever he procures a party who actually contracts for the purchase of the property at a price acceptable to the owner.\n2. Brokers and Factors \u00a7 6\u2014 right to commissions \u2014 procuring cause of a sale\nThe broker is the procuring cause of a sale if the sale is the direct and proximate result of his efforts or services.\n3. Brokers and Factors \u00a7 6\u2014 \u201cprocuring cause\u201d defined\nThe term \u201cprocuring cause\u201d refers to a cause originating or setting in motion a series of events which, without br\u00e9ale in their continuity, result in the accomplishment of the prime object of the employment of the broker, which may variously be a sale or exchange of the principal\u2019s property, an ultimate agreement between the principal and a prospective contracting party, or the procurement of a purchaser who is ready, willing, and able to buy on the principal\u2019s terms.\n4. Brokers and Factors \u00a7 6\u2014 determination of broker\u2019s commission\nThe owner is not permitted to reap the benefits of the broker\u2019s labor without just reward if he has requested a broker to undertake the sale of Ms property and accepts the results of services rendered at Ms request; the owner is liable for the reasonable value of those servic.es, or the listing agreement can make the payment of commissions dependent upon the broker\u2019s obtaining a certain price for the property.\n5. Brokers and Factors \u00a7 6\u2014 right to commission \u2014 where broker ' does not find prospect\nThe rule that the broker is entitled to compensation where the owner of the listed property reduces the price and sells it to the broker\u2019s prospect does not apply when the broker did not find the prospect to whom the owner sold the property.\n6. Corporations \u00a7 4; Evidence \u00a7 31\u2014 corporate minutes \u2014 best evidence \u2014 oral testimony\nThe minutes of a corporation, which are required by G.S. 55-37, are the best evidence of its acts; when it is shown that no minutes were made of a particular meeting, or that they are incomplete, the proceedings may be proved by parol testimony.\n7. Corporations \u00a7 12\u2014 right of officer to compensation\nAn officer of a corporation has no right to compensation for services rendered the corporation in the absence of an express contract to pay for them.\n8. Brokers and Factors \u00a7 6\u2014 broker's .oral contract of employment with corporate defendant \u2014 sufficiency of evidence\nIn an action by plaintiff realty corporation to recover a commission of 5% of the purchase price of realty allegedly sold by the plaintiff on behalf of the defendant owner of the realty, testimony by the officers and stockholders of the plaintiff, who were also officers and minority stockholders of the defendant corporation, that there was an oral contract of employment between plaintiff and defendant to sell the realty at a price of $100,000, which testimony was not objected to, is held sufficient to constitute a prima facie showing of a contract between the parties, and defendant corporation\u2019s motion for nonsuit was properly denied.\n9. Trial \u00a7 33\u2014 instructions \u2014 application of law to evidence\nInstructions which fail to apply the law to the evidence are error. G.S. 1-180.\n10. Brokers and Factors \u00a7 2\u2014 termination of employment\nWhen no time is specified in his contract, if a broker fails to find a purchaser or to make the sale within a reasonable time, his contract of employment is at an end.\n11. Corporations \u00a7 12\u2014 contract between officer and adversely interested director \u2014 validation\nA contract between a corporation and a director having an adverse interest may be validated if, after a full disclosure, the transaction is specifically approved by a majority of the voting shares other than those owned or contracted by the adversely interested directors. G.S. 50-30(b), (1) and (2).\n12. Brokers and Factors '\u00a7 6\u2014 action for commissions \u2014 failure to submit to jury issues arising on the evidence\nIn an action by plaintiff realty corporation to recover a commission allegedly arising from the sale by plaintiff of property owned by the defendant corporation, there was sufficient evidence to require the submission of the following issues to the jury, and the failure to do so was error-: (1) that the original contract of employment between the parties to sell the property for $116,500 had terminated prior to the sale of the property for $100,000 and that the contract had no bearing upon the rights of'plaintiff\u2019s recovery; (2) that the plaintiff, in order to recover at all, must satisfy the jury by the greater weight of the evidence that th\u00e9 directors of defendant-corporation expressly employed the plaintiff to negotiate a ' sale of the property for $100,000 and that the directors validated the contract .pursuant to G.S. 50-30(b), (1) and (2); and (3) that, pursuant to the contract, the plaintiff did procure the sale of the property.\n13. Brokers and Factors \u00a7 6\u2014 instructions on broker\u2019s amount of damages \u2014 reasonable value of services\nIn an action by a realty corporation to recover a commission allegedly earned by the sale of defendant\u2019s property, instructions on the amount of compensation to which plaintiff was entitled to recover are erroneous where (1) the trial court referred to a terminated contract of employment as the basis of defendant\u2019s liability to plaintiff, the evidence showing instead that the sale was made pursuant to- a subsequent oral contract of employment in which no rate of commission was stated, and where (2) the court failed to charge the jury that it was not bound to fix the compensation at a rate of 5% of the sale, which rate was testified to by the plaintiff as the standard commission in the area on the sale of commercial property, but that the plaintiff was entitled to recover, if at all, only the reasonable value of the services it rendered, based upon the skill, time, effort and cost expended in procuring the sale.\nAppeal by defendant from Hasty, J., 18 September 1967 Schedule \u201cA\u201d Session of MecklenbuRG.\nAction to recover a brokerage fee.\nPlaintiff alleges: The name of plaintiff corporation has been changed to S & W Realty and Insurance Agency. Defendant corporation listed with plaintiff for sale certain properties which defendant \u201cowned in the City of Charlotte located on and adjacent to West Trade Street and agreed to pay a commission of 5% of the purchase price of said property in the event an acceptable offer was obtained on said property.\u201d On 8 July 1965, plaintiff sold the property to the Belk Investment Company for $100,000.00. It is, therefore, entitled to recover $5,000.00, which defendant refuses to pay. Answering, defendant denied that it made the alleged contract and that plaintiff made the sale to Belk\u2019s Investment Company. It further averred that plaintiff is a corporation solely owned and operated by R. C. Shelton, Sr., and R. C. Shelton, Jr., who are also officers and directors of defendant Corporation; that, because of the fiduciary relationship existing between the officers and directors of the two corporations, defendant could not make a contract to pay plaintiff a commsision unless its directors and stockholders gave their express consent, and that no such consent was given.\nBoth plaintiff and defendant offered evidence. That of plaintiff tended to show:\nFor the sale of commercial property in Charlotte during 1965, the usual compensation of brokers and real estate agents was 5%. At all times pertinent to this litigation, Shelton, Jr., owned 48% of the stock in defendant corporation; Shelton, Sr., owned 1%; and Fred L. Taylor, 51%. Shelton, Sr., was president of plaintiff corporation, a stockholder, and a member of its board of directors. Since March 1966, Shelton, Jr., has been with plaintiff. He is secretary-treasurer, a stockholder, and a member of the board of directors of plaintiff-corporation.\nThe minutes of the annual meeting of defendant's stockholders and directors on 23 November 1962 show: (1) The three stockholders were present. (2) The following directors and officers were elected: F. L. Taylor, president; R. C. Shelton, Jr., vice-president; R. C. Shelton, Sr., secretary-treasurer; and David Whitesell, assistant secretary. (The evidence contains no further mention of White-sell, who was not a stockholder.) (3) \u201cAfter general discussion, motion was duly made, seconded and adopted that: S & W Realty Company be authorized to offer Belk the 217-219 Trade and Arcade properties for $139,500.00 and would consider an offer of a minimum of $116,500.00. That S & W Realty Company be paid a commission of 5% of sales price. Further that; (sic) the Pegram Street properties could be sold for a minimum of $10,000.00 net after commission of 5% to S & W Realty Company.\u201d\nThe Trade and Arcade properties referred to in the preceding minutes (Trade Street property) were adjacent to land owned by Belk Brothers Department Store in Charlotte (Belk\u2019s). Shelton, Sr., offered it to Belk\u2019s for $116,500.00. The offer was not accepted although LeRoy Robinson, one of Belk\u2019s agents with whom he dealt, told Shelton, Sr., that the store wanted the property. During 1963, 1964, and 1965, the continuous efforts of Shelton, Sr., to sell the property to Belk\u2019s for $116,500.00 were unsuccessful. Shelton, Jr., took no part in these negotiations. During 1965 defendant\u2019s stockholders and directors decided to offer the Trade Street property to Belk\u2019s for $100,000.00. No minutes recording this decision were produced. According to Shelton, Sr., however, \u201cThere was bound to have been a meeting to authorize this sale,\u201d but he could not \u201crecall the exact place.\u201d At that meeting, however, nothing was said about a 5% commission, but Shelton said, \u201cIf I\u2019m exclusive agent for a piece of property I don\u2019t have to go back and reiterate I am due 5 per cent commission.\u201d He did know that \u201cthe meeting was called to confirm the sale which S & W Realty had made to Joe Robinson for Belk Industries.\u201d He himself employed Mr. Ervin (Paul R. Ervin, attorney) to represent him in the sale of the property to Belk\u2019s, and he authorized Ervin to make the proposition on behalf of S & W Realty Company. Defendant\u2019s directors did not authorize him to make it on behalf of defendant. \u201cS & W Realty was exclusive agent at that time as there had never been anything changed from the meeting in 1962. . . . We decided when we met that the proposition would be made, we authorized Mr. Ervin to make it.\u201d\nShelton, Jr., testified: \u201cMy father, as representative of S & W, was authorized to offer it to them (Belk\u2019s) for $100,000.00. Mr. Ervin . . . was asked by the Board of Directors of the defendant to accompany my father. So, yes, he did represent the defendant. . . . Nothing was said at this 1965 meeting of the board of directors and stockholders of Duckworth & Shelton concerning a 5 per cent commsision.\u201d\nPrior to the time Shelton, Sr., and Mr. Ervin made the $100,000.00 proposition to Mr. Robinson, there had been no deal with Belk\u2019s. On 21 April 1965, Mr. Ervin conferred with Mr. Joe H. Robinson and, through him, submitted the $100,000.00 proposition to Belk\u2019s. On that same day he wrote Taylor\u2019s attorney, Mr. Louis A. Bledsoe, Jr., that he believed Belk\u2019s would accept the offer; that defendant \u201cwould be obligated to Mr. R. C. Shelton, Sr., for a 5% commission on a sale of the property\u201d; and that \u201cthe tax implications\u201d of the sale suggested a dissolution of defendant corporation. The letter also referred to Taylor\u2019s offer to sell his stock in defendant for $40,000.00.\nOn 3 May 1965, Mr. Ervin wrote Mr. Joe H. Robinson that his firm represented Duckworth and Shelton, Inc., and had been authorized by its client to offer its Trade Street property to Belk\u2019s \u201cfor a period of thirty days,\u201d for a total price of $100,000.00. On 18 May 1965, Mr. Robinson wrote Ervin that Belk\u2019s accepted \u201cthe offer of Duckworth & Shelton, Inc., to sell this property for a total of $100,000.00.\u201d On 3 June 1965, Ervin wrote Bledsoe asking him to have Taylor sign the deed to Belk\u2019s so that the sale could be closed. \u201cWe can then,\u201d he wrote, \u201clitigate about the matters which are in dispute.\u201d\nOn 2 July 1965, the Sheltons and Taylor, with their respective attorneys, Ervin and Bledsoe, Jr., held a special meeting of the directors of defendant corporation and adopted a resolution introduced by Shelton, Jr., which (1) authorized the complete liquidation and dissolution of the corporation and (2) approved and ratified \u201cthe actions of the officers of the corporation in negotiating for the sale of the real property which the corporation owns which is located on or near East Trade Street, Charlotte, N. C., to Belk Investment Company ... for the sum of $100,000.00. . . .\u201d\nThe final meeting of the stockholders and directors of the defendant corporation was held on 1 July 1966. The minutes show that deeds for their pro rata interest in the Pegram property, which had not been sold, had been delivered to the stockholders; that after paying the debts of defendant, the balance of the $100,000.00 received from the sale of the Trade Street property \u2014 less the sum of $10,195.45 \u2014 had been distributed to the stockholders. Pending the adjudication of plaintiff\u2019s claim for the $5,000.00 commission in suit and the claim of Shelton, Sr., for $4,633.25 \u201cfor commissions from the collection of rents and handling of the corporation\u2019s property,\u201d the sum of $10,195.45 is being held by Ervin and Bledsoe in a trust account in their joint names.\nWitnesses for defendant were Joe H. Robinson, vice-president of Belk\u2019s, and Fred L. Taylor, the majority stockholder in defendant corporation.\nMr. Robinson testified: When he \u201ccame with Belk\u2019s\u201d in the fall of 1964, he was informed that Belk\u2019s wished to acquire defendant\u2019s Trade Street property. In consequence, he contacted Shelton, Sr., and told him that Belk\u2019s would pay $100,000.00 for it and that it would not pay a real estate commission on the sale. Shelton, Sr., said \u201cthat he wanted more for his property,\u201d but Robinson told him that $100,000.00 was Belk\u2019s limit. Shelton, Sr., said he would consider the offer and confer later. Hearing nothing further from him, Robinson telephoned Taylor and told him that Belk\u2019s would still pay $100,000.00 for the property; that it would buy the stock of defendant corporation or handle the transaction in any way the owners of the property preferred. Taylor told him that \u201che would personally inject himself into the matter\u201d and that he would sell his interest in the property \u201cregardless.\u201d The next event was a phone call from Ervin, who inquired if Belk\u2019s was willing to pay $100,000.00 for the property. Robinson said Yes, and thereafter the sale was concluded. Since he was familiar with the ownership of defendant corporation, Robinson did not ask Mr. Ervin whom he represented.\nMr. Taylor testified: At the 23 November 1962 meeting of defendant\u2019s directors, Shelton, Sr., said that he felt that he could sell the property to Belk\u2019s for $139,500.00 \u201cin a few months.\u201d Within six months, however, he reported to Taylor that he was not getting anywhere and asked his help. Taylor contacted Belk\u2019s Mr. Gibson Smith and, in the discussion, told him that he could acquire the property by acquiring stock in defendant corporation. Although Taylor saw Shelton, Sr., every thirty days from early 1964 until 11 January 1965, he made no further report to Taylor of any negotiations with Belk\u2019s.\nOn or about 13 February 1965, in a meeting held in Mr. Ervin\u2019s office, Taylor and the two Sheltons authorized Ervin, on behalf of defendant, to negotiate the sale of the Trade Street property with Belk\u2019s for $100,000.00. No such authority was given to plaintiff, Ervin was the only one directed to negotiate the sale, and no commission on the sale was authorized for anyone. On 15 February 1965, Mr. Bledsoe, as attorney for Taylor, wrote to Mr. Ervin giving him authority for thirty days to negotiate with Belk\u2019s the sale of the East Trade Street property \u201cin order to give Mr. Fred L. Taylor the proposed sale price of $40,000.00 for his stock in Duckworth & Shelton, Inc.\u201d\nThe next information which Taylor received about the sale was contained in a copy of a letter of 21 April 1965 which Ervin wrote to Bledsoe. Another conference was then held in Mr. Ervin\u2019s office. They \u201cdiscussed that matter pro and con. The subject of the commission to be paid to Mr. R. C. Shelton, Sr., or S & W Realty was not discussed at that meeting. Mr. Shelton got up and left the meeting. The subject of a commission was mentioned to (Taylor), in the letter referred to as plaintiff\u2019s Exhibit 2 (letter of 21 April 1965 from Ervin to Bledsoe), and (Taylor) told Mr. Ervin that (he) would not go along with the payment of a commission and that (he) would go along with the sale (only) if it were $100,000.00 net to the corporation.\u201d\nThere was never a meeting of the board of directors or the stockholders of defendant corporation in which it was agreed that plaintiff would receive a commission for selling the Trade Street property to Belk\u2019s for $100,000.00; nor was any representative of plaintiff ever authorized to offer the property to Belk\u2019s for $100,000.00. Mr.. Ervin was directed to present the offer.\nOn 14 July 1965, Taylor, as president of defendant, received a letter from Ervin threatening suit if the corporation did not immediately pay plaintiff $5,000.00 for its services \u201cin handling\u201d the sale to Belk\u2019s. At Taylor\u2019s instance, Bledsoe wrote Mr. Ervin' that the: stockholders and directors of defendant sold the property to Belk\u2019s through him and that defendant would not pay plaintiff a commission on the sale.\nDefendant\u2019s motions for nonsuit were overruled. Issues were submitted to the jury and answered as follows:\n\u201c1. Did the plaintiff and defendant enter into a contract whereby the plaintiff was to sell real property belonging to the defendant, as alleged in the complaint? Answer: Yes.\n\u201c2. If so, did the plaintiff procure a purchaser able, willing, and ready to perform at the minimum price of $116,500? Answbe: No.\n\u201c3. Was the plaintiff the procuring cause of the sale of the property? ANSWER: Yes.\n\u201c4. What amount, if any, is plaintiff entitled to recover of the defendant? Answer: $5,000.00.\u201d\nFrom the judgment entered upon the verdict, defendant appeals, assigning as error, inter alia, the failure of the court to grant its motion of nonsuit and certain portions of its charge to the jury.\nErvin, Horack & McCartha by Paul R. Ervin and William E. Underwood, Jr., for 'plaintiff appellee.\nBerry and Bledsoe by Louis A. Bledsoe, Jr., and C. Ralph Kinsey, Jr., for defendant appellant." }, "file_name": "0243-01", "first_page_order": 261, "last_page_order": 274 }