Case ID: wash_54/html/0521-01.html
Source: Caselaw Access Project
Author: {"author": "Chadwick, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

[No. 7345.
    
      En Banc.
    
    August 26, 1909.]
    W. S. McCrea et al., Respondents, v. Walter Ogden et al., Appellants.
      
    
    Frauds, Statute of — Sale of Real Estate — Memorandum—Sufficiency — Contract for Commissions — Brokers. The words “Commission to be paid when 2d payment is made to M. & M., $625,” after the signature of a vendor at the foot of a contract to purchase real estate, is not a sufficient memorandum of the agreement, within Laws 1905, p. 110, providing that an agreement for a broker’s commission on the sale of real estate shall he void unless the contract or some note or memorandum thereof shall be in writing, and signed by the party to be charged therewith, or some person thereunto by him lawfully authorized (overruling, on rehearing, Id., 50 Wash. 495).
    Appeal from a judgment of the superior court for Spokane county, Poindexter, J., entered March 25, 1908, in favor of the plaintiffs, upon overruling a demurrer to the complaint, in an action on contract.
    Reversed.
    
      Post, Avery & Higgins, for appellants.
    
      Hanson & Williams, for respondents.
    
      
      Reported in 103 Pac. 788.
    
   On Rehearing.

Chadwick, J.

The statute of frauds, governing contracts for commissions for buying or selling real estate, is as follows:

“In the following cases, specified in this section, any agreement, contract and promise shall be void, unless such agreement, contract or promise, or some note or memorandum thereof, be in writing, and signed by the party to be charged therewith, or by some person thereunto by him lawfully authorized, that is to say: . . . (5) An agreement authorizing ,an employee, an agent or broker, to sell or purchase real estate for compensation or a commission.”

In the former opinion (50 Wash. 495, 97 Pac. 503), after quoting the memorandum relied on, “Commission to be paid when 2d payment is made to McCrea & Merryweather $625,” and a part of the second amended complaint, in which the completion of the sale is alleged, and that it was brought about by the efforts of respondents, it is said:

“Appellants contend that the transaction is within the statute of frauds governing contracts to pay for services for buying or selling real estate, as set forth in the Laws of 1905, page 110; that the words at the end of the contract do not constitute a compliance with the statute mentioned. We think they do constitute a substantial compliance. These words show the fact that a commission was to be paid, when it was to be paid, to whom it was to be paid, and the amount that was to be paid. But it is urged by appellants that it does not state who was to pay this commission. With the contract before him, we cannot see how it would not be clear to any one that the intention was that the signers of the contract, the vendors, should pay this commission. It is true that a purchaser sometimes pays a commission, but this is the exception and not the rule. When we speak about a real estate sale and a commission being paid, we ordinarily understand, unless there is specific mention to the contrary, that it is the vendor who pays the commission. This contract was signed by the vendors only, and we think there could be no possible mistake or misunderstanding as to who was to pay the commission that is provided for in this memorandum.”

It is also said: “The statute in question does not require the agreement to be in writing.”

Upon rehearing, a majority of the court are unable to concur in these conclusions. To sustain them the court must assume, as it seems to have assumed in the original opinion, that because, as it is said, the seller most frequently pays the commission, the unsigned memorandum binds the appellants to pay the commission in this case. The court seems to have unwittingly supplied the requirement of the statute by quoting and relying upon a part of the complaint. Whether the seller most frequently pays the commission in a real estate transaction may or may not be so. But, whatever the fact may be, it is something with which the court can have nothing whatever to do. It is enough for us to know that either the purchaser or seller may contract to pay the commission, and we cannot look beyond the contract itself to fix the liability, for the law has said that the contract must be in writing. We cannot assume that some one is liable and, in the absence of a recital to the contrary, presume that the seller is to be bound. The statute quoted requires certainty, to the end that frauds and impositions may be prevented, and its application cannot be arrested because in a given case — as for instance in this one — the broker has probably rendered an honest service for which he should in good conscience be paid.

There is nothing in the contract to show who respondents’ principals were. The contract is in an ordinary form. The Ogdens agreed to sell and Conroy agreed to buy and, although “signed by the vendors only,” the principal contract was “made” by both parties; and if we are to presume anything in the teeth of the statute of frauds, it would seem that the court should have assumed that the contract was mutually beneficial and bound both parties to pay the commission. But the purpose of the law was to remove all doubt, and in doing so no injustice was done the broker, for it is always within his power to make the contract or memorandum certain in every particular, including the party to be bound, which, notwithstanding the expression in the former opinion to the contrary, we regard as the first essential of the law; which element, if proven in this case, would necessitate a resort to parol testimony. In Forland v. Boyum, 53 Wash. 421, 102 Pac. 34, following Foote v. Robbins, 50 Wash. 277, 97 Pac. 103, and Keith v. Smith, 46 Wash. 131, 89 Pac. 473, in construing this same statute, we held that the terms of the contract must appear from the writing itself, and that parol testimony could not be received to ascertain the amount agreed on as a commission. In Mead v. White, 53 Wash. 638, 102 Pac. 753, the court said, in construing a contract involving the principles here presented:

“In order to hold the respondents to any liability, the court would be required to create a contract, either by construction or by parol evidence. There is no language in the contract to warrant the former, and the latter is within the prohibition of the statute.”

It would seem to follow as an inevitable conclusion that parol testimony should not be received for the purpose of identifying the party to be charged, when the statute has said that his promise to pay shall be in writing and signed by him.

A majority of the court believing that this case falls within the rule of the cases just cited, the former opinion is overruled, and the case remanded with instructions to the lower court to sustain the demurrer to the second amended complaint.

Rudkin, C. J., Fullerton, Gose, Crow, and Parker, JJ., concur.