Wight v. Brown , 77 Ga. App. 375 ( 1948 )

1. A custom may not be shown to be a part of an unambiguous contract when such custom is inconsistent with or contrary to the express or necessarily implied terms of the contract.

2. The facts alleged in the defendant's answer do not show a right in the defendant to recover from the plaintiff 50% of the commissions earned by the plaintiff on the sale of real estate which had been listed with the defendant at a time when the plaintiff was employed by the defendant as a salesman, there being no allegations of breach of trust, duty or confidence on the part of the plaintiff, the sale by the plaintiff having been made after the termination of the agency.

DECIDED JULY 8, 1948. Downing Brown sued Ward Wight to recover certain commissions allegedly due him under a contract of employment. The contract is as follows: "This agreement made and entered into this 18th day of May, 1943, between Ward Wight ____, party of the first part, and Downing Brown, party of the second part, agrees as follows: 1. Second party will take charge of, supervise, and operate said rental department of the first party's business, devoting thereto a percentage of his time sufficient to keep said rental department operating properly. In consideration of this effort, second party will receive one hundred ($100.00) dollars per month salary. 2. Said Downing Brown shall devote the balance of his effort to selling and leasing of business properties and other real-estate business. All commissions earned shall be divided 50% to party of the first part and 50% to party of the second part. 3. [Not material to the consideration of the question involved.] 4. Either party of this agreement can terminate this contract at any time by giving sixty days written notice of his intention to so cancel to the other party. In the event of the cancellation of this contract by the first party, then said Brown, party of the second part, shall be entitled to receive his full 50% of commissions, as collected, on leases or rental contracts originated or negotiated by him. 5. In event of cancellation of this agreement by second party, then second party shall be entitled to 40% of the total commissions or fees, as collected, on all rental contracts originated or negotiated by him. In the event of cancellation of this contract by party of the second part, he shall have an interest in only the first renewal of any leases originated or negotiated by him. 6. [Not material to issue.]" The plaintiff amended his petition to include amounts allegedly due plaintiff up to March 26, 1948, allowing two credits claimed by the defendant in his answer about which there was no dispute. The defendant amended his answer, which, as amended, alleged in substance (omitting references to matters as to which no issues are raised): that prior to the time when the plaintiff left the employ of the defendant, the plaintiff, in company with other agents employed by the defendant had attempted to sell property, particularly described, to the Hunter Wholesale and Manufacturing Company, and had received an offer from that company and that the properties were subsequently sold to said company, from which sale the plaintiff collected a commission of $3280, of which $1640 is due the defendant; that the defendant, prior to the time the sales were closed, notified the seller that he expected him to pay a commission to the defendant, but the defendant believes the plaintiff induced the seller to pay him the full commission; that these sales were property that was listed with the defendant while the plaintiff was employed by the defendant, and negotiations for the sale thereof to the purchasers were commenced by the plaintiff prior to the date the plaintiff terminated his employment with the defendant, and that the defendant is entitled to one-half the commissions collected by the plaintiff on such sales under the terms of the contract between the parties; that the plaintiff was enabled to make such sales by reason of listing of property secured by the defendant and by use of the facilities of the defendant, and by use of confidential information obtained through the plaintiff's connection with the defendant; that the plaintiff had previously been employed by another real-estate broker, and was fully cognizant of the customs and usages in Atlanta applicable to real-estate contracts between brokers and salesmen. Paragraph nineteen of the amended answer alleged: "Defendant further alleges that at the time plaintiff was employed by defendant, plaintiff was an experienced real-estate salesman, and plaintiff informed defendant that he had certain transactions outstanding on which negotiations had commenced prior to his employment by defendant; and that if any such transactions were closed, defendant would not share in the commissions on such transactions because plaintiff would be required to account therefor to his former employer; and such employment contract between plaintiff and defendant was entered into with full knowledge on the part of both parties thereto that any incomplete transactions would not be covered by contract of employment between plaintiff and defendant, but would be controlled by the custom and usage incident to the real-estate business in Atlanta, Georgia. Defendant alleges that such custom and usage was in contemplation of the parties when contract between plaintiff and defendant was entered into in this case; and under such custom and usage defendant alleges that plaintiff is indebted to defendant in the sum of $1640 as defendant's share of commissions collected by plaintiff on sales referred to." The plaintiff demurred to the answer as amended among others, on the grounds that allegations that negotiations were commenced by the plaintiff prior to the date the plaintiff terminated his employment with the defendant are vague and indefinite and do not show just what the negotiations consisted of nor when and how they commenced nor how far they progressed nor whether or not they had terminated; on the grounds that the allegation that the plaintiff was enabled to make such sales by reason of listing of property secured by the defendant, and by use of the facilities of the defendant, and by use of confidential information obtained through the plaintiff's connection with the defendant were conclusions, that the facilities of the defendant were not set out or described and the confidential information was not set out; and on the grounds that paragraph nineteen states conclusions, that the allegations therein attempted to vary the terms of an unambiguous contract and that the alleged custom or usage was incompatible with and repugnant to the valid unambiguous contract between the plaintiff and the defendant. The court sustained these demurrers to the answer. Verdict and judgment were entered for the plaintiff for the amount alleged by the plaintiff to be due under the contract, less agreed credits. The defendant excepts to the final judgment and the sustaining of the demurrers to his answer dealing with the defendant's counterclaim for commissions allegedly due by plaintiff on sale transactions begun by the plaintiff while employed by the defendant and completed after the termination of his contract of employment by the defendant. 1. The court did not err in striking that part of the answer which sought to plead a custom as to incompleted transactions. The contract provides that all commissions earned should be divided equally between the parties. This provision covers commissions earned on rentals and sales. The contract covers expressly the subject of what commission each party is entitled to after the termination of the contract. This provision covers commissions solely on leases or rental contracts originated by the salesman, and provides no commissions for sales under any circumstances, whether earned or originated by the salesman. Since the subject-matter of commissions after the termination of the contract is expressly covered by the contract, the inclusion of specific commissions excludes commissions of all kinds which are not expressed. It follows that a custom may not be shown to be a part of an unambiguous contract when the custom is inconsistent with or contrary to the express or necessarily implied terms of the contract. Penn Mutual Life Ins. Co. v.Blount, 33 Ga. App. 642 (127 S.E. 892), and cases cited. This part of the answer was also defective in that it did not define with a greater degree of definiteness the meaning of "incompleted transactions" and did not allege that the negotiations for the sales were going on when the plaintiff was relieved from the contract.

2. "It may be generally stated that one having completed his office as agent or in good faith severed his relationship is free to begin negotiations on his own behalf and may operate adversely to the interests of his former principal as fully as any other individual. Due to the previous trust relationship, however, such subsequent transactions will be subjected to a rigorous examination to see that the former agent did not abuse his position of trust and influence, or in any way fail in his attitude as agent during the agency. An agent will not be permitted to terminate an agency in order to take advantage of his principal's condition or to profit by information resulting from his agency." 3 C. J. S., p. 28, § 146. See, in this connection, Stein v. National LifeAssn., 105 Ga. 821 (32 S.E. 615, 46 L.R.A. 150); 23 A.L.R. 423. One allegation, omitted from the statement of facts, is that the defendant suggested to the plaintiff that there were certain pending deals, not in contract form, on which the plaintiff had worked, and that it would be necessary to agree on such matters so that if sales were subsequently made the commission could be shared, but that the plaintiff denied that there were any such deals, and the defendant specifically alleged that there were such deals pending at the time the plaintiff severed his connection with the defendant. There are no allegations in the answer taking the case out of the general rule that when an agent severs his relationship in good faith he is free to negotiate on his own behalf. There is no allegation of bad faith. There is no allegation as to when the plaintiff began the negotiations for the sales while he was agent of the defendant. There is no allegation that these particular negotiations were in progress at the time the plaintiff withdrew from the agency. The allegation that some deals were pending is not an allegation that these particular deals were pending. There is no allegation that the plaintiff failed in any way to discharge his duties of trust and fidelity during the agency. There is no allegation that the plaintiff prevented the defendant from pursuing the effort to make the sale after the termination of the agency. The reverse is true because it is alleged that the defendant notified the purchasers before the sale was made by the plaintiff that he would expect a commission if the plaintiff made the sale. The listing of the property with the defendant was not an exclusive listing, presumably, as this is not alleged and the claim is not against the owner for violation of an exclusive listing contract. The mere fact that the property was for sale by reason of his employment would not alone be sufficient to establish a liability under the facts of the case and that fact is the only one alleged with sufficient particularity insofar as using confidential information and facilities is concerned. The case of Byrne v. Barrett, 268 N.Y. 199 (197 N.E. 217, 100 A.L.R. 680), cited by defendant, is clearly distinguishable from the case at bar on the facts. In that case the agent was the managing partner in the venture in question and was under duty of making full disclosure of the status of pending negotiations which he did not do. He lead his principals to believe that certain proposals were and would be unfruitful. He did not acquaint them fully with the status of the matter and give them the informed choice whether they would surrender the matter to him or compete with him on even terms. The case of Visigraph Typewriter Mfg. Co. v. S. Spiro Mfg. Co. (1923), 122 Misc. 852 (204 N. Y. Supp. 813), also turns on the failure of the agent to make full and fair disclosure of facts connected with the agency which were known to him and not to his principal.

The court did not err in sustaining the demurrers to the answer and in rendering final judgment for the plaintiff.

Judgment affirmed. Sutton, C. J., and Parker, J., concur.