Title: Management Clearing, Inc. v. Vance

State: arizona

Issuer: Arizona Supreme Court

Document:

106 Ariz. 95 (1970) 471 P.2d 707 MANAGEMENT CLEARING, INC., an Arizona corporation, Appellant, v. James R. VANCE and Frances L. Vance, husband and wife, Appellees. No. 10004-PR. Supreme Court of Arizona, In Banc. July 9, 1970. Sheldon Mitchell and A. Alexander Katz, Phoenix, for appellant. Perry & Smith, by Ralph G. Smith, Jr., Phoenix, for appellees. McFARLAND, Justice: This case is before us on a request for review of the decision of the Court of Appeals, Division One. 11 Ariz. App. 390, 464 P.2d 977. The decision of the Court of Appeals is vacated. Management Clearing, Inc., an Arizona corporation hereinafter referred to as broker sued James R. Vance and Frances L. Vance, his wife hereinafter referred to as defendants for a brokerage commission on an exclusive listing of their property with the broker for a period of three months. The listing was on a 15-unit apartment complex on East Colter in Phoenix, which was the community property of the defendants. The broker submitted a purchase contract under the terms of the listing agreement with the exception of an additional clause which was typewritten on the printed form which stated: If a real estate broker procures a purchaser ready, willing and able to purchase *96 according to the terms of the listing agreement between the broker and the seller, and the latter refuses to enter into a contract of sale with the purchaser the broker is entitled to his commission. Diamond Realty v. Haydis, 88 Ariz. 326, 356 P.2d 643. The first question is whether an offer to buy "subject to an inspection and approval of the interiors" complies with the requirements of a ready, able and willing buyer which would entitle the broker to commission. In Diamond Realty v. Haydis, supra, the terms of the purchase contract and receipt were conditioned upon two events: In deciding whether the broker was entitled to his commission under these conditions, we said: In Blaine v. Stinger, 79 Ariz. 376, 290 P.2d 732, the purchaser's contract provided in part that: In passing upon this situation, we said: In Trimmer v. Ludtke, 105 Ariz. 260, 462 P.2d 809, the defendants executed "an open listing agreement" with the plaintiff broker for the sale of their property. The broker produced a prospective buyer, and a "purchase contract and receipt" was executed by the prospective buyer. This contract and receipt provided that the property was to be "subject to new mortgage to buyers satisfaction." In passing upon the question as to whether the broker was entitled to his commission, we said: The circumstances in the instant case fall within the principles of an offer presented by a broker and a prospective buyer being conditional in that it is made subject to the buyer's inspection and approval of the interiors of the apartments. The buyer, in his deposition, stated: Vance stated, in his deposition, regarding the prospective buyer's offer, as follows: The acceptance of the buyer which contained the wording "this offer is subject to inspection and approval of interiors" was a conditional acceptance, and since it was not binding upon the buyer, it did not meet the requirements necessary for a broker to recover a commission. Diamond Realty v. Haydis, supra; Blaine v. Stinger, supra; Trimmer v. Ludtke, supra. The broker contends that the defendants waived the inspection and approval, and therefore the broker was entitled to recover the commission. The questions were submitted to the court upon the pleadings and the depositions of James R. Vance and the prospective buyer, John Walek. Vance testified that the representatives of the broker had called him in regard to a couple of offers sometime about the week of the 20th of October, neither of which was suitable as it was for too long a term and too tough on the buyer, in his opinion that he told them at the time in looking it over it looked to be too harsh and that he wanted to refinance the building and make a little better deal for both a prospective buyer and himself that it was after this that he got a call, after the 20th of October, in regard to a potential buyer. He testified as follows: He further testified that he did not see the proposed escrow instructions or a copy thereof until it was mailed by the broker's attorney. In this regard he stated: Vance testified in regard to the last proposal: "We never got into the details of it. * * *" However, he testified that the Xerox copy was mailed by defendant's counsel prior to the expiration of the ninety days, and upon question by the broker's counsel he stated: Also, he further testified that he had never refused inspection to any one that the broker never asked him for permission for the buyer to inspect the building; that during the time of the listing: There is no conflict in the evidence or the record that no request was made by the buyer or the broker for permission for the buyer to inspect the premises; that the buyer drove by the premises several times but did not ask the defendants for permission to inspect the interiors; that at no time did the defendants refuse the broker or the prospective buyer such permission. It would have been necessary for the defendants to have refused to permit the inspection in order to create a waiver of the defense that the buyer's offer was conditional and he was not, therefore, ready, willing, and able. There was no refusal to permit an inspection. It was for the broker to find a prospective buyer ready, willing, and able to purchase the property as set forth in the listing agreement without conditions. If the broker expected to bind the defendants it would have to comply fully. It was part of its job to see that the buyer inspected the premises, or at least request permission from the defendants to inspect the premises before it can say that it has fully complied with the listing agreement. The defendants, according to the record, did not know what the conditions were until they received the proposed contract sent to them by the broker's attorneys on November 12, 1968, just before suit was brought on November 15, 1968. While the sending of the written contract which contained the condition gave the defendants notice as to what was in the contract, it cannot be said that it constituted a waiver during the 3-day period before the suit was brought. *100 The broker, in his Memorandum in Opposition to the Motion for Summary Judgment, contended that: However, there was no question of fact for the trial court because the clause was a condition of the buyer which was inserted by the broker on behalf of the buyer. This condition the seller could not waive, which distinguishes this case from those cited in the broker's brief in regard to conditions the seller could waive and thereby make a binding contract. The defendants could not make a binding contract which they could enforce by accepting the buyer's conditional offer. Furthermore, in the instant case, there was no request to make an inspection nor did the seller refuse to permit an inspection. In view of our holding that the instant case must be reversed on these grounds, it is unnecessary for this Court to pass on the question of the authority of the husband to bind the community, by his signature alone, under the facts of this case. The decision of the Court of Appeals is vacated, and the Order of the Superior Court granting defendant's Motion for Summary Judgment is affirmed. LOCKWOOD, C.J., STRUCKMEYER, V.C.J., and UDALL and HAYS, JJ., concur.