Award Realty, Inc. v. Copeland - 698 S.W.2d 337 (Tenn. 1985)

Rule:

Agents customarily serve as intermediaries between buyers and sellers and their services ordinarily consist of communicating offers back and forth between the parties, accompanying prospective buyers desiring to inspect or view the premises involved, negotiating the terms of the sale, and sometimes assisting the buyer in arranging for financing of the transaction. However, this activity on the part of the agent, absent an agreement or special circumstances, does not create an agency relationship between the real estate broker and the purchaser.

Facts:

J.D. Silver, a broker employer by the plaintiff Award Realty, Inc., introduced the defendant seller to a prospective buyer. After some negotiations, the buyer and seller entered into an agreement for the sale of the property. The seller also signed an agreement to pay a real estate sales commission to the brokerage firm. Shortly after the sales contract was executed, the defendant called Silver and advised him that he was having second thoughts about selling, and that his wife had refused to execute the deed. Defendant did not attend the closing, which was set at a lending establishment where the buyers had made arrangements to finance the balance of the purchase price. The present action was filed when defendant failed to pay the $15,000.00 agreed upon as a commission. The trial court ruled in favor of the plaintiff, and awarded a judgment of $15,000.00. The Court of Appeals reversed, finding that the plaintiff, without the knowledge and consent of the parties, was the agent of both the seller and purchaser.

Issue:

Was the appellate court’s finding of “dual agency” supported by the evidence, thereby warranting the reversal of the decision of the trial court awarding judgment in favor of the plaintiff?

Answer:

No.

Conclusion:

On appeal, the Court reversed the appellate court's judgment and held that the finding of a "dual agency" was not supported by the evidence. The Court found no evidence that the brokerage firm negotiated for the property with the defendant in the buyer's interest. The transaction was found to be a typical real estate transaction, wherein an agent was employed to sell the owner's real estate. Further, the knowledge of the broker's firm that the property was jointly owned by the seller and his wife did not defeat its right to the commission. The  Court stated that a broker's right to a commission under an agreement with the seller could not be defeated by the refusal of the seller's wife to join in the conveyance.