Title: PROPERTY BROKERS INC v LOYNING

State: montana

Issuer: Montana Supreme Court

Document:

No. 82-105 I N THE SUPREME COURT O F T H E STATE OF I L O N T A N A 1982 PROPERTY BROKERS, INC. , and VERN SCHOULTE, d/b/a SCHOULTE REALTY, P l a i n t i f f s and Appellants, P A L M E R LOYNING and ELVA LOYNING, husband and wife, Defendants and Respondents. Appeal from: District Court of t h e T h i r t e e n t h J u d i c i a l District, I n and f o r t h e County of Carbon Honorable Charles Luedke, Judge presiding. Counsel of Record: For P l a i n t i f f s : Charles E. Snyder, B i l l i n g s , Montana For Defendants: Ayers and A l t e r o w i t z ; Arthur W. Ayers, Red Lodge, Montana -- Submitted on b r i e f s : August 1 9 , 1982 Decided: December 2 , 1 9 8 2 Filed: gEc - 2 jg@ M r . J u s t i c e Gene B. Daly d e l i v e r e d t h e Opinion of t h e C o u r t . The p l a i n t i f f s , r e a l estate b r o k e r s , b r o u g h t t h i s act i o n to r e c o v e r commissions f o r t h e sale of a ranch owned by d e f e n d a n t s , t h e Loynings. Both p a r t i e s moved f o r summary judgment. The District Court of t h e T h i r t e e n t h J u d i c i a l District , Carbon County, g r a n t e d summary judgment f o r d e f e n d a n t s , and p l a i n t i f f s a p p e a l . The Loynings e n t e r e d i n t o a real estate l i s t i n g agreement w i t h one of t h e a p p e l l a n t s , P r o p e r t y B r o k e r s , I n c . , i n o r d e r to s e l l t h e i r ranch n e a r R o b e r t s , Montana. I n t h e agreement, P r o p e r t y Brokers was employed " t o s e l l o r exchange" t h e p r o p e r t y , and would r e c e i v e an 8 p e r c e n t commission under t h e f o l l o w i n g c i r c u m s t a n c e s : " I n t h e e v e n t t h a t you or any o t h e r b r o k e r s c o o p e r a t i n g w i t h you, s h a l l f i n d a buyer r e a d y and w i l l i n g to e n t e r i n t o a d e a l f o r s a i d p r i c e and terms, or such o t h e r terms and p r i c e a s I may a c c e p t , or t h a t d u r i n g your employment you s u p p l y m e w i t h name of or p l a c e m e i n c o n t a c t w i t h a buyer to or through whom a t any time w i t h i n 180 d a y s a f t e r t h e ter- m i n a t i o n of s a i d employment I may s e l l or con- v e y s a i d p r o p e r t y , I h e r e b y a g r e e t o pay you i n c a s h f o r your s e r v i c e s a commission e q u a l i n amount to 8 p e r c e n t of t h e above-stated s e l l i n g p r i c e . " The agreement w a s e n t e r e d i n t o J u n e 25, 1979, and was to e x p i r e J u n e 25, 1980. With t h e 180-day g r a c e p e r i o d , t h e b r o k e r was still e n t i t l e d to a commission i f a buyer he found purchased t h e p r o p e r t y p r i o r t o December 22, 1980. Vern S c h o u l t e , t h e o t h e r a p p e l l a n t and a b r o k e r c o o p e r a t i n g w i t h P r o p e r t y B r o k e r s , showed t h e Loyning ranch t o John and Anyce G e r h a r d t . The G e r h a r d t s and Loynings e n t e r e d i n t o a b u y / s e l l agreement on October 23, 1979. An e a r n e s t money d e p o s i t of $1,000 was g i v e n t o S c h o u l t e t o h o l d u n t i l c l o s i n g . The b u y / s e l l agreement was made e n t i r e l y c o n t i n g e n t upon t h e sale of t h e G e r h a r d t s ' p r o p e r t y n e a r Sidney, Montana. Meanwhile, t h e G e r h a r d t s would t a k e p o s s e s s i o n of t h e Loyning ranch as t e n a n t s . The b u y / s e l l agreement, i n c l u d i n g t h e tenancy provi- s i o n , was t o e x p i r e March 31, 1980. I f a n o t h e r buyer was found p r i o r t o March 31, 1980, t h e G e r h a r d t s would have seventy-two h o u r s t o f i n a l i z e t h e i r agreement. The G e r h a r d t s were not a b l e to s e l l t h e i r p r o p e r t y n e a r Sidney b e f o r e March 31, 1980, and no o t h e r buyer was found. The Loynings allowed t h e G e r h a r d t s t o s t a y a t t h e i r ranch a s t e n a n t s beyond t h e March 3 1 d e a d l i n e . O n August 6 1980, however, t h e $1,000 e a r n e s t money d e p o s i t was f o r f e i t e d . On December 31, 1980, t h e G e r h a r d t s e v e n t u a l l y s o l d t h e i r p r o p e r t y n e a r Sidney, and were then a b l e to buy t h e Loyning r a n c h . On J a n u a r y 29, 1981, t h e G e r h a r d t s f i n a l i z e d t h e purchase of t h e Loyning ranch. The o n l y i s s u e on review is whether t h e District Court e r r e d by g r a n t i n g a summary judgment t o t h e Loynings, t h e r e b y denying b r o k e r commissions t o a p p e l l a n t s . Because a p p e l l a n t s f a i l e d to s u p p l y a ready and w i l l i n g b u y e r , and because t h e s a l e of the Loyning p r o p e r t y d i d not occur w i t h i n t h e t i m e p r e s c r i b e d by t h e l i s t i n g agreement, t h e D i s t r i c t C o u r t ' s judgment must be a f f i r m e d . A r e a l e s t a t e broker is e n t i t l e d t o a commission when he has, i n pursuance of h i s employment and w i t h i n t h e t i m e s p e c i f i e d , procured a p u r c h a s e r ready, a b l e , and w i l l i n g to purchase t h e s e l l e r ' s p r o p e r t y on t h e terms and c o n d i t i o n s s p e c i f i e d i n t h e c o n t r a c t of employment. Diehl & A s s o c i a t e s , I n c . v. Houtchens ( 1 9 7 7 ) , 173 Mont. 372, 567 P.2d 930. T h i s r u l e was i n t e r p r e t e d i n Diehl to mean t h a t a broker employed t o " s e l l o r e f f e c t a s a l e " ( a s is t h e case h e r e ) does not e a r n h i s commission u n t i l the purchase p r i c e is p a i d , t i t l e is conveyed and t h e s a l e completed. The one e x c e p t i o n t o t h i s i n t e r p r e t a t i o n is t h a t a b r o k e r may s t i l l be e n t i t l e d t o a commission i f the s a l e is not completed because of wrongful a c t s o r i n t e r f e r e n c e by t h e seller. See Associated Agency of Bozeman, I n c . v . Pasha ( 1 9 8 1 ) , - -- -- . - Mont. - -- , 625 P.2d 38, 38 St.Rep. 344. Here, t h e a p p e l l a n t s simply d i d n o t meet t h e i r o b l i g a t i o n s w i t h i n t h e time p r e s c r i b e d by the l i s t i n g agreement. They d i d n o t f i n d a ready and w i l l i n g buyer nor d i d they e f f e c t a s a l e w i t h i n t h e t i m e p r e s c r i b e d . There is no claim on a p p e a l t h a t t h e sellers w r o n g f u l l y i n t e r f e r e d w i t h t h e sale. I n F l i n d e r s v. G i l b e r t ( 1 9 6 3 ) r 1 4 1 Mont. 442, 378 P.2d 385, w e noted t h a t a buyer is n e i t h e r ready n o r w i l l i n g i f t h e buyer c a n n o t make an o f f e r u n t i l he sells o t h e r p r o p e r t y . F l i n d e r s , - - - 378 P.2d a t 387. T h i s d i c t a is commensurate w i t h t h e g e n e r a l l y a c c e p t e d r u l e t h a t a buyer is f i n a n c i a l l y " a b l e " o n l y when he can command t h e n e c e s s a r y funds t o complete t h e purchase w i t h i n t h e t i m e allowed by t h e o f f e r . S e e , e g . , Record R e a l t y , I n c . v . Hull ( 1 9 7 6 ) , 1 5 Wash.App. 826, 552 P.2d 191, and cases c i t e d t h e r e i n . Here, t h e buyers were n o t f i n a n c i a l l y a b l e to purchase t h e Loyning p r o p e r t y u n t i l December 31, 1980, when they s o l d t h e i r p r o p e r t y n e a r Sidney. The b u y / s e l l agreement had e x p i r e d on March 31, 1980. The G e r h a r d t s were t h e r e a f t e r under no o b l i g a - t i o n to buy t h e Loyning p r o p e r t y i f they s o l d t h e i r p r o p e r t y i n Sidney. More i m p o r t a n t l y , t h e l i s t i n g agreement had e x p i r e d J u n e 25, 1980, and t h e 180-day g r a c e p e r i o d ended December 22, 1980. A s a g e n e r a l r u l e , c o u r t s have s t r i c t l y followed t h e t i m e l i m i t s set down i n l i s t i n g agreements. See Annot. 27 ALR2d 1348 e t s e q ; The Nebraskans, I n c . , v. Homan ( 1 9 8 0 ) , 206 Neb. 749, 294 N.W.2d 879; B r a c k e t t v. S c h a f e r ( 1 9 5 3 ) r 4 1 Wash.2d 828, 252 P.2d 294. An e x c e p t i o n may arise i f t h e surrounding c i r c u m s t a n c e s i n d i c a t e t h a t t h e t i m e p r o v i s i o n s have been waived by t h e p a r t i e s . Snyder v. Schram ( 1 9 7 6 ) r 274 O r . 539, 547 P.2d 102. Here, n o t h i n g i n t h e record s u g g e s t s such a waiver o c c u r r e d . T h e r e f o r e , i n s p i t e of t h e f a c t t h a t a p p e l l a n t S c h o u l t e i n t r o d u c e d t h e Loynings t o t h e e v e n t u a l b u y e r s , t h e a p p e l l a n t s cannot claim a commission because t h e buyers were n o t r e a d y and a b l e to make t h e p u r c h a s e , and t h e p r o p e r t y was not s o l d , u n t i l a f t e r t h e l i s t i n g agreement and t h e 180-day g r a c e p e r i o d had e x p i r e d . The District C o u r t ' s judgment / W e concur: % a e Y e , a 4 , Chief Justice