A HOTEL TRANSACTION.

Auckland Star, Volume XXXVIII, Issue 177, 26 July 1907, Page 5

A HOTEL TRANSACTION.

AGENTS CLAIM FOR COMMISSION.

A case of interest to the So.el trade was argued before Mr. C. C. Kettle, this morning, when a claim and counterclaim in respect of the sale of the Settlers' Hotel at Whangarei by Mr. Donald McLeod to Mr. E. H. White, through Wenzl Scholium, hotel broker, were brought before the Court. Mr. J. R. Reed, who appeared for Scholium, defendant in the claim, stated that the hotel in question was put into his hands for sale by Mr. McLeod. He secured a purchaser in Mr. E. H. White, who agreed to buy the hotel at' £1000 for the lease and goodwill, stock, furniture, etc., to be taken at a valuation. The total purchase price was £1836 Is Bd, and the customary commission was 5 per cent on the first £ 100 and 2_ per cent on the balance. In addition, it was a custom for the agent to act as valuer for the vendor, at a remuneration of 5 per cent for the first £200 and 2_ per cent on the balance. Scholium included in the agreement a clause that he should value for Mr. MeEeod, and after the sale had been effected, travelled from Te Teko, Bay of Plenty, in order to make the valuation. On reaching the house he found that the valuation had been done by. Mr. E. Whitehead, and he therefore claimed £20 as recompense. He also claimed commission on the total value, £ 1836, at the rates mentioned, totalling £48 Ss, his complete claim being thus £68 Bs. He had received £100 from White as a deposit, and McLeod claimed this, allowing £27 ips, the usual commission allowed to agents on such a sale. Scholium had paid into Court £3_"l2s, the difference between the amount received from White and his claim.

For plaintiff in the original claim, Mr. McGregor contended that the payment ol- £27 10s, which he admitted, being commission on the "£IOOO goodwill, lease, etc, was McLeod's full liability.

Wenzl Scholium, commission agent and hotel broker, said that in selling hotels he always received commission on the total value of goodwill, stock, and valuation, at the rate of 5 per cent for the first £100 and 2_ per cent on the remainder, except in valuation, when the commission was 5 per cent on the first £200 and 2_ per cent on the balance, with travelling expenses. He was endeavouring to sell this hotel for Mr. McLeod for some time, and when he secured a customer notified Mr. McLeod that he expected to act as valuer. Mr. McLeod replied that the hotel had been placed in Mr. Whitehead's hands, and he would do the valuing. Witness' reply was that he did not do business on those lines, and later in notifying that he had received fhe £100 deposit said. "Naturally, I value for you." He got no reply to this, and when the temporary transfer was granted went to Whangarei to make the valuation. He was told by Mr. McLeod that Mr. Whitehead was making the valuation, and on this ground he claimed £20 recompense.

By Air. McGregor: He could not swear •that a copy of the agreement between himself and White, in which he appointed himself valuer, was sent to McLeod. He claimed that without any special agreement his employment as agent included that of valuer. He claimed that he sold not merely the goodwill of the hotel, but also the stock, furniture, etc., at a valuation, and that-he -was entitled to the commission on the gross amount. He know before leaving Auckland that Whitehead was to value the stock and furniture of the hotel, but in spite of that went to Whangarei in order to assert his rights.

Wm. Mowbray, member of the firm of J. M. and JL Mowbray, hotel brokers, said that it was almost the universal custom for the agent a,cting in the sale of a hotel to value for the vendor. On sale commission was always paid on the stock and furniture, as well as on the good-will. When not doing the valuation he charged 5 per cent on the goodwill, and five per cent on the first £200 and 2_ per cent, on the balance of the stock and furniture, but if he made the sale and did the valuing he charged one commission of 5 per cent on the total amount, good-will and valuation combined. It was not once in fifty times that he sold a hotel without valuing. In the absence of explicit instructions to value stock and furniture, it was the custom to read these instructions in, the agent considering it his right to value if employed to selL He considered Mr Scholium's claim for commission in the present case very reasonable.

Mr Kettle: If you were appointed to sell a hotel, and your client told you that he had appointed another' valuer, would you consider yourself aggrieved?— Unless I was appointed by \he other side. I always put it in writing 5n the agreement. He always took it for granted that he was valuer for the vendor. He knew that there were men in Auckland who would do a valuation for a "tenner," but would not call them valuers.

Arthur Bach, licensee of the United Service Hotel, said that in selling hotels he had always paid 5 per cent on the first £200, and 2J per cent on the balance of the stock and furniture.

(Proceeding.)