Manry v. Selph

A written agreement between the owner of property and a real-estate agent, providing that the agent shall receive a commission of 5% on the selling price, if he sells the property at a stipulated price or if the owner sells it at any price during the term of the agency, may be set aside by the parties before a sale has been made in a subsequent oral agreement in which the owner reduces the original selling price and the agent reduces the commission. The original contract was executory and could be rescinded by a subsequent oral agreement based upon the mutual promises of each of the parties thereto.

DECIDED OCTOBER 22, 1948. J. T. Selph, a real-estate agent, sued E. W. Manry for $350 as commission of 5% on the sale of certain property of the defendant at $7000. The suit was based on a written agreement addressed to Selph and signed by Manry, reciting in part that, "For and in consideration of one ($1.00) dollar," and Selph's efforts to secure a purchaser of the property, he was appointed exclusive agent to sell the property for "$8000 cash, about $1600 loan," and provided further that, "in case the said property is sold within said time or in event it is sold by myself, . . within the time above specified, I agree to pay you 5% . . commission on the price sold for." The agreement was dated February 13 and continued until March 15, 1948.

The petition alleged that on March 9, 1948, the plaintiff procured F. B. Meigs as a buyer for said property, and that the defendant sold the same to Meigs on said date for $7000, conveying the property to Meigs by warranty deed; that all the purchase-price had been paid by Meigs to the defendant, and that the plaintiff was entitled to his commission of 5% or $350, which the defendant had failed and refused to pay.

The defendant filed an answer, in which he admitted the making of the contract with the plaintiff, but denied that he owed the plaintiff the amount claimed by him. The answer then set out the following allegations: "3. Defendant shows that prior to March 9, 1948, plaintiff and defendant agreed orally to terminate the contract, as set out in plaintiff's petition, and made a new agreement, which was to be binding upon both parties, which was as follows: In consideration of the defendant reducing the sales price of the property from $8000 to $7000, that the plaintiff was to reduce his commission from five percent to a flat fee of $200, and that both parties accepted the new agreement in lieu of the original contract. 4. Defendant shows that pursuant to said new agreement, F. B. Meigs was contacted by the defendant and a sale was made on March 9, 1948, to F. B. Meigs as a buyer for said property at and for the sum of $7000, and the said property was conveyed to said F. B. Meigs by warranty deed." The answer admitted an indebtedness by the defendant to the plaintiff of $200, based on the alleged new agreement, and set up that said amount had been offered to the plaintiff and was paid into court as a continuing tender; and alleged that the new agreement between the parties was a complete contract based upon a valid consideration, and that the original contract sued upon was at an end when the new contract was made.

The plaintiff demurred to the answer, on the grounds that it set forth no defense, and sought to vary and add to the written contract by parol, and showed no consideration to the plaintiff for the alleged new contract. The court sustained the demurrer and struck the answer, and directed a verdict for the plaintiff after the introduction of evidence in support of the allegations of the petition. The defendant excepted to the ruling striking his answer, and to the verdict directed by the court and the judgment entered thereon. While we recognize the rule that parol evidence is inadmissible generally to contradict or vary the terms of a valid written instrument (Code, § 38-501), and that "An entirely different contract from that evidenced by a writing can not be pleaded or proved by parol as a substitute for that embodied in such writing" (Feingold v. McDonald Mortgage Realty Co.,166 Ga. 838, 145 S.E. 90), and that a novation, to be valid, must be supported by some new consideration (Code, § 20-115;Garvin v. Worthington Pump Machinery Corp., 62 Ga. App. 240,8 S.E.2d 589; Alexander Film Co. v. Brittain, 63 Ga. App. 384,11 S.E.2d 66), we do not think that these principles are applicable to this case.

It appears here that the plaintiff had an agreement under which he could sell the property at $8000, and thereby earn a commission of 5%, and also that, if the owner sold the property himself within the time specified, he would pay the plaintiff 5% commission on the selling price. The plaintiff did not find a purchaser ready, able, and willing to buy, and who actually offered to buy at $8000, the terms stipulated by the owner, so as to establish his right to the commission, under the Code, § 4-213; but he did procure a purchaser to whom the defendant sold for $7000 during the term of the agency, and would be entitled to 5% commission on that sum unless the original contract had been set aside by a new agreement between the parties. The answer of the defendant, which was stricken on demurrer, alleged that before the sale was made he and the plaintiff made a new contract under which the defendant reduced the selling price to $7000 and the plaintiff reduced his commission to $200. We see no reason why the parties could not make such new agreement. The original contract was still in an executory state, and the plaintiff had not earned the 5% commission at the time the new agreement was alleged to have been made. It may be that the seller would not have been willing to sell the property at the reduced price without a reduction in the commission.

We think that this case comes under the ruling inCrutchfield v. Dailey, 98 Ga. 462 (25 S.E. 526), as follows: "No consideration is essential to the rescission of a simple executory contract, that is, one which has not been acted upon, other than a mutual agreement of the parties that it shall no longer bind either of them. The consideration on the part of each is the other's renunciation." In Pope v. Thompson, 157 Ga. 891, 896 (122 S.E. 604), the court said: "While a valid executed contract can not be discharged by a simple agreement, but only by performance, by release under seal, or by an accord and satisfaction, one that is executory, that is, one that has not been acted upon, may be discharged by an agreement of the parties that it shall no longer bind either of them. The consideration on the part of each is the other's renunciation." In Shoup v. Elliot, 192 Ga. 858, 861 (16 S.E.2d 857), it was held that parties may by mutual consent abandon a contract so as to make it not thereafter binding, citing Eaves v. Cherokee Iron Co., 73 Ga. 459(3), and also that this principle has been applied to an executory contract for the sale of land, citing Manley v. Underwood,27 Ga. App. 822 (110 S.E. 49). "A rescission of the contract by consent, or a release by the other contracting party, is a complete defense." Code, § 20-905. "A promise of another is a good consideration for a promise." § 20-304. See also Daniel v.Burson, 16 Ga. App. 39, 40 (84 S.E. 490), holding that the parties to the contract, if they saw fit, had a right to rescind the contract of sale; and if they did so, the rescission was a conclusive answer to any effort on the part of the plaintiff to collect the note which had been given for the purchase of a mare.

We think that the answer filed by the defendant was a sufficient plea of rescission, based upon a sufficient consideration, and entitled the defendant to the right to have a jury pass upon the merits thereof. Under this view of the case, it follows that the court erred in striking the answer of the defendant, and in directing the verdict for the plaintiff and entering judgment thereon.

Judgment reversed. Sutton, C. J., and Felton, J., concur.