Title: Maine v. Garvin

State: new-mexico

Issuer: New Mexico Supreme Court

Document:

417 P.2d 40 (1966) 76 N.M. 546 Thomas S. MAINE, Plaintiff-Appellee, v. William D. GARVIN, Defendant-Appellant. No. 7743. Supreme Court of New Mexico. July 18, 1966. Benjamin F. Sherman, Deming, for appellant. Schaber & Arthur, Deming, LaFel E. Oman, Las Cruces, for appellee. MOISE, Justice. Plaintiff-appellee filed this action against defendant-appellant to recover a commission *41 of $6,250.00 which arose by virtue of employment of plaintiff as a real estate broker to sell the Butterfield Stage Motel located in Deming, New Mexico, and owned by defendant, for which the defendant agreed to pay plaintiff a real estate commission of 5% of the sale price of the property. Defendant, by his answer, admitted the employment of plaintiff as alleged by him, but denied plaintiff's further allegations that through plaintiff's efforts the defendant had sold the property for $125,000.00, whereby the commission sued for became due. Defendant asserted additional defenses that the complaint failed to state a cause of action; that no sale had been made, but rather a trade for a farm near Artesia, New Mexico, which resulted from fraudulent representations by plaintiff of the value and saleability of the farm. By cross-complaint, defendant sought damages from plaintiff for false and fraudulent representations allegedly made by plaintiff while serving in a fiduciary capacity as defendant's agent in connection with the trade of defendant's motel for the farm near Artesia. All allegations of misconduct were denied by plaintiff. A trial was had to a jury resulting in a verdict in favor of plaintiff for $5,250.00. Certain motions were filed by defendant and overruled, following which judgment in favor of plaintiff was entered on the verdict, and defendant appeals. We set forth the pertinent facts as briefly as possible. Defendant, an experienced farmer, was the owner of the motel in Deming, but desired to sell it. In July, 1962, he listed it for sale with plaintiff. This listing expired. Thereafter, in November, a Mr. Parnell of Artesia contacted defendant concerning a deal for the motel and defendant priced it at $105,000.00 for cash. Upon learning that Mr. Parnell owned a farm and might possibly be interested in trading, defendant advised him that on a trade, the price for the motel would be $125,000.00. Defendant contacted plaintiff, told him of Mr. Parnell's interest and requested plaintiff's assistance in effecting a deal. This was about November 19, 1962, at which time defendant signed a new listing agreement with plaintiff, wherein a price of "$105,000.00 cash" was set forth and the following language appears: Omitting the details of the negotiations which followed, suffice it to say that plaintiff undertook to assist in the transaction, traveled to Artesia with defendant and an employee of plaintiff, made some inquiries concerning value of the farm, which information was transmitted to defendant, and performed some other services in connection with the transaction. On December 11, 1962, after defendant had looked over the property and had inquired as to values of farm land in the Artesia area, a contract for exchange of the motel for the farm was signed by the parties. The deal was completed but, shortly thereafter, defendant sold the farm to a Mr. Hudson for $82,000.00, or for $51,000.00 less than he alleges plaintiff falsely and fraudulently represented the farm to be worth, which amount he claims he lost and seeks to recover in his cross-complaint. Aside from the allegations of misrepresentation of value, defendant also complained that plaintiff falsely had represented that a purchaser for the farm property, at a price of $125,000.00, was at hand. A copy of the listing agreement was not attached to the complaint, and defendant's first point relied on for reversal asserts error in admitting the agreement into evidence over his objection. Also, defendant asserts that the court erred in allowing parol evidence to vary a written agreement; in not sustaining a *42 motion for a directed verdict at the close of plaintiff's case for failure to prove the amount of commission due as a result of a trade; and, for errors in certain instructions given by the court to the jury. As already noted, objection was made to the introduction of the written agreement, which objection was overruled. Defendant's first point claims error in the ruling. Although defendant asserts that plaintiff made no motion to be permitted to amend by attaching the writing to his complaint, the record does disclose a motion to amend the complaint "to comply with all the proof, and to plead the written contract." In our view of this point, Kleeman v. Fogerson, 74 N.M. 688, 397 P.2d 716, supplies a complete answer adverse to defendant. We there had under consideration the proper application of Rule 9(k) (§ 21-1-1(9) (k), N.M.S.A. 1953) when considered in relation to Rule 15(b) (§ 21-1-1(15) (b), N.M.S.A. 1953). Everything considered, under the rules announced in Kleeman v. Fogerson, supra, there was no reversible error in the court's ruling. Additionally, we take note of the admission by defendant that he had agreed to pay plaintiff 5% of the sale price of the property in the event of the sale by plaintiff of the property. The only remaining question would be one of whether the contract as alleged and proved had been performed. This is generally the thrust of defendant's second point wherein error is claimed through allowing introduction of evidence to vary the terms of a written instrument. Although the argument is specifically directed at the actual written listing contract introduced into evidence over defendant's objection, the contention is generally to the effect that a trade or exchange is not a sale. We must determine if an "exchange" is within the terms of plaintiff's employment agreement to "sell" and to be paid a commission of "5% of the sale price," or if parol evidence is admissible to explain the language used in the agreement or in the actual writing. Defendant cites a number of cases holding that "sale" in a commission contract does not contemplate an "exchange," and that such words are not ambiguous so as to permit parol evidence to explain them. This is the general effect of McFadden v. Pyne, 46 Colo. 319, 104 P. 491. However, none of the other cases cited by defendant can be considered as authority to support the rule. On the other hand, we note our decision in Taylor v. Unger, 65 N.M. 3, 330 P.2d 965, from which we quote the following which would appear to clearly align this court in support of a rule contra to McFadden v. Pyne, supra: In addition, we would note cases supporting plaintiff's position and contrary to McFadden v. Pyne, supra. Moore v. Borgfeldt, 96 Cal. App. 306, 273 P. 1114; Blackburn v. Bozo, 82 Utah 556, 26 P.2d *43 542; Jones v. Hollander, 130 A. 451, 3 N.J. Misc. 973; McKinney v. City of Abilene (Tex.Civ.App. 1952) 250 S.W.2d 924; Nichols v. Pendley (Mo. App. 1960) 331 S.W.2d 673; Hammons v. English, 129 Or. 511, 277 P. 823. We want no misunderstanding concerning the rules governing the admissibility of parol evidence in connection with written listing agreements. We consider the parol evidence rule to be fully applicable together with all the exceptions recognized in connection with any other writing. Parol evidence may not be received when its purpose and effect is to contradict, vary, modify, or add to a written agreement, but is generally admissible to supply terms not in the written contract, to explain ambiguities in the written agreement, or to show fraud, misrepresentations, or mistake. See Harp v. Gourley, 68 N.M. 162, 359 P.2d 942; note 38 A.L.R.2d 542. We see no error in the court's ruling that the parol evidence was admissible. Defendant argues that since plaintiff had not succeeded in selling the motel, defendant employed plaintiff as his agent to determine the value and saleability of the Artesia farm with the understanding that if defendant made a deal whereby he acquired the farm plaintiff was to be given a listing on the farm and a commission if and when he sold it. It is clear that defendant's position was fully presented to the jury together with that of plaintiff, and it is evident that the jury believed plaintiff's version. We find no reversible error in the court's ruling on the admissibility of evidence. Defendant next complains that the court erred in overuling his motion for a directed verdict at the close of plaintiff's case because of a failure of proof as to the amount of commission to which plaintiff was entitled in view of an exchange instead of a sale. It is defendant's position that the statement, "Price $105,000.00 cash" provides no basis for computing a commission in the event of exchange. Reliance is placed on the language in 12 C.J.S. Brokers § 79 c, p. 174, as follows: It is asserted that there is no evidence to establish the actual value of the farm received in exchange as being $105,000.00. We have no quarrel with the general rule as stated in the quotation above. Our difficulty arises in the application defendant would have us make of it. The facts here disclose an even trade by defendant of property on which he placed a $105,000.00 cash value, or $125,000.00 trade value, for 134 acres of land on which the owner placed a value of $1,000.00 per acre, or a total of $134,000.00. We assume this figure was a "trade" value as distinguished from a cash value. The evidence of defendant in this regard should be sufficient to establish the value of the property received in exchange. This is true even though defendant argues that he was misled as to the true value and this is the basis for his counterclaim. The fact remains that he placed an actual cash value on his motel, and agreed to and completed an even exchange for a farm. We fail to see wherein more proof on the part of plaintiff was needed to establish a value on the farm received in trade. First National Bank in Dallas v. Smith (Tex.Civ.App. 1940) 141 S.W.2d 735. There was nothing to prevent defendant from attempting to show that the actual value of the farm was less than $105,000.00, Reel v. Oravetz, 279 Pa. 147, 123 A. 679, and, as a matter of fact, much evidence was introduced by him to this effect, but to no avail with the jury. We see nothing contrary to our conclusion in Van Leeuwen v. Huffaker, 78 Utah 521, 5 P.2d 714; Scott v. Wood (Tex.Civ.App. 1940) 145 S.W.2d 260; or in Story v. Conn (Tex.Civ.App. 1930) 27 S.W.2d 909. In his fourth point defendant complains that the court erred in a number of *44 instructions given by it, and in its failure to adopt certain instructions requested by defendant. As we understand the defendant's arguments, his principal complaint arises out of the fact that the court instructed the jury that defendant, in order to have a valid defense on the grounds of fraud, or to prevail on his counterclaim on the same grounds, must have acted as a reasonable man in relying on representations of plaintiff, whereas, defendant contends that since the relationship between them was fiduciary in its nature, defendant had an absolute right to rely on statements of fact made by his agent, and the only question to be determined was whether or not he did in fact rely thereon. Instructions 12 and 15, as given by the court, were as follows: Unquestionably, these instructions advised the jury that defendant was entitled to rely on advice and information given him by plaintiff only if a reasonable person would do so, in the light of all the facts and circumstances present. In so instructing, the court clearly fell into error. The rule applicable in determining the right of an agent to recover compensation from his principal differs from that which is applied when fraud is claimed as between a vendor and purchaser, as in Berrendo Irr. F. Co. v. Jacobs, 23 N.M. 290, 168 P. 483; Bell v. Lammon, 51 N.M. 113, 179 P.2d 757; Viramontes v. Fox, 65 N.M. 275, 335 P.2d 1071. See also, Sauter v. St. Michael's College, 70 N.M. 380, 374 P.2d 134. The difference between the situation present in these cases and that being considered *45 by us was recognized by this court in Canfield v. With, 35 N.M. 420, 299 P. 351, a case in which a real estate agent was attempting to collect a commission from his principal, and in which the principal claimed the value of property taken in trade was materially less than the agent represented it to be. We there said: There follow a number of quotations of the applicable rule taken from texts and cases in other jurisdiction. Of these, Wiruth v. Lashmett, 82 Neb. 375, 117 N.W. 887, and Pratt v. Allegan Circuit Judge, 177 Mich. 558, 143 N.W. 890, are particularly persuasive. See also, Security State Bank of Pearsall v. Burton (Tex.Civ.App. 1928) 10 S.W.2d 201, and Wright v. Bennett, 150 Ark. 154, 233 S.W. 1089. For a present-day statement of the rule, see 2 Restatement, Agency, § 469. In our recent decision in Iriart v. Johnson, 75 N.M. 745, 411 P.2d 226, we recognized the relationship between a broker and his principal as being one of "great trust and confidence," and that the broker must "exercise the utmost good faith toward his principal throughout the entire transaction." From all the foregoing, we are clear that the instructions as framed did not properly explain defendant's rights in the premises. We do not overlook the fact that the court gave instructions 20 and 21, both requested by defendant, as follows: We agree with defendant that the giving of these instructions could not overcome the errors in instructions 12 and 15. As a matter of fact, they are, in effect, in conflict. Under such circumstances, we cannot say defendant was not prejudiced. Compare Archuleta v. Jacobs, 43 N.M. 425, 94 P.2d 706; Pape v. Ingram, 69 N.M. 32, 363 P.2d 1029. Plaintiff, to avoid the effect of the error, argues that no proper instruction was submitted, and no proper objection made to the instructions given. An examination, both of defendant's requested instructions and his objections to those given, satisfies us that the trial court was sufficiently alerted to the issue being asserted, under the rule as explained in Baros v. Kazmierczwk, 68 N.M. 421, 362 P.2d 798. We do not consider it necessary, in the light of the foregoing, to discuss other defects claimed to be present in the instructions. *46 The cause is reversed and remanded, with instructions to grant a new trial, and proceed in a manner not inconsistent herewith. It is so ordered. CARMODY, C.J., and COMPTON, J., concur.