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Smirlock v. Potomac Development Corp.

Decided: June 8, 1964.

SMIRLOCK, ETC.
v.
POTOMAC DEVELOPMENT CORPORATION



Appeal from the Circuit Court for Montgomery County (MOORMAN, J.).

The cause was argued before Brune, C.J., and Hammond, Horney, Marbury and Sybert, JJ.

Brune

BRUNE, C.J., delivered the opinion of the Court.

The principal question in this case is whether a real estate broker licensed in another State, but not licensed in Maryland and not holding a "single transaction" power of attorney, who seeks employment in this State for the sale and lease back of property situated in this State, and who conducts negotiations

here (followed up later elsewhere), with a prospective purchaser which result in an agreement for the sale of the property and its lease back to the seller, may recover, under our laws relating to real estate brokers, a broker's commission for his services, pursuant to an agreement for the payment thereof made in this State. The Circuit Court for Montgomery County (Moorman, J.) held that he could not, and the broker appealed. We think that the holding of the trial court was correct. Accordingly, we find it unnecessary to consider the issue raised by the seller as to whether an agreement had actually been reached upon terms approved by it. Likewise, rulings on evidentiary matters and upon a proffer which the appellant attempted to make become of no importance, since they could not affect the result.

The negotiations were initiated by a real estate broker named Graef, who is licensed in New York and who is not a party to this suit. After discussing with Dr. Solomon, the President of Potomac Development Corporation (Potomac), the appellee, Potomac's need for financing in connection with a real estate project which it owned in Montgomery County, Graef got in touch with the appellant, Smirlock, and Smirlock's agent, Leibler, in New York. As a result, Leibler came to Potomac's office in Maryland in December, 1960, for a conference and the next day brought into another conference at Potomac's office, a prospective purchaser. An agreement, at least in general outline, for the sale of the property to this prospect and its lease back to Potomac was arrived at during this conference, and a memorandum of its terms was made by counsel for Potomac, who was one of those present. This memorandum was not signed by anyone. Also at one of these conferences in Maryland, Potomac's president agreed to a commission of $50,000 to Smirlock for his services in connection with the sale and lease back. Several weeks later there were further negotiations between the parties in New York, but no contract was ever executed. There were a number of letters subsequently from Smirlock to Dr. Solomon which, in general, insisted that an agreement had been made and that it should be carried out. (Copies of most of these were admitted in evidence; two were excluded.) Smirlock and Leibler were each licensed as a real

estate broker in New York. Neither was, at the time of the negotiations, licensed as a real estate broker or salesman under Maryland law, and neither had a power of attorney from Potomac, such as is described in § 212(f) of Art. 56 of the Maryland Code (1957), infra.

The pertinent statutory provisions are contained in Art. 56 of the Code (1957) under the subtitle "Real Estate Brokers," and citations will be simply by reference to their section numbers, without repeating the Code Article.

§ 212 (a) includes within the meaning of the term "Real estate broker"

"any person * * * who for another and for a fee * * *, sells, purchases, exchanges, leases, [or] rents * * * real estate or who attempts * * * by verbal solicitation, advertisement or otherwise to perform any such function * * *."

§ 212 (b) defines a "Real estate salesman" as meaning "any person licensed to perform on behalf of any licensed real estate broker any act or acts authorized by this ...


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