First National Bank & Trust Co. v. McNatt
232 S.E.2d 356, 1977 Ga. App. LEXIS 1731, 141 Ga.App. 6 (1977)
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Rule of Law:
A real estate broker is entitled to a commission if they are the procuring cause of a sale, which occurs when they introduce a willing and able buyer who subsequently purchases the property from the seller, even if the final sale is negotiated directly between the parties. A plaintiff may also recover the reasonable value of their services under a quantum meruit theory if the defendant accepted and benefited from those services.
Facts:
- First National Bank & Trust Company, a co-executor of the T. Q. Vann estate, contacted real estate broker Ed McNatt to sell a tract of land.
- The bank told McNatt the estate was to receive a net price of $50,000 for the land, and McNatt's commission would be any amount above that.
- The other co-executor, Mrs. T. Q. Vann, was not involved in this agreement with McNatt.
- McNatt contacted a potential buyer, Bobby Bedgood, and offered him the property for $60,000, later suggesting he could get it for $55,000.
- While McNatt was still negotiating with him, Bedgood purchased the property directly from the bank for $50,000.
- The bank then refused to pay McNatt a commission for the sale.
Procedural Posture:
- Ed McNatt sued First National Bank & Trust Company in a trial court to recover a real estate broker's commission.
- A jury rendered a verdict in favor of McNatt in the amount of $4,585.
- The bank (defendant) filed a motion for a new trial, which the trial court denied.
- The bank (appellant) appealed the judgment to the Georgia Court of Appeals.
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Issue:
Is a real estate broker entitled to a commission when he introduces a willing and able buyer to the seller, and the buyer later purchases the property directly from the seller, even if an express contract is not proven or fully performed?
Opinions:
Majority - McMurray, Judge
Yes. A real estate broker earns a commission if they are the procuring cause which culminated in the sale. The evidence supported a finding that McNatt was the procuring cause because he found a buyer, Bedgood, who was willing and able to buy and was presented to the seller, and who later did purchase the property from the seller. The court also held that even if the jury rejected the specific oral contract, McNatt could still recover under a quantum meruit theory. When one party renders valuable services that another party accepts and benefits from, a promise is implied to pay the reasonable value of those services. Since McNatt's efforts led to the sale that benefited the estate, he was entitled to be compensated for the value of his services.
Analysis:
This decision reinforces the procuring cause doctrine, which protects real estate brokers from sellers who might circumvent a commission by closing a deal directly with a buyer introduced by the broker. It establishes that the broker's crucial contribution is making the initial connection that leads to the sale, not necessarily negotiating the final terms. The case also affirms the utility of quantum meruit as an alternative theory of recovery, ensuring that a party who provides a valuable service is compensated even when the terms of an express contract are in dispute. This provides an equitable safety net in commission-based service agreements.
