Case Name: Darrell Moss et al., Appellants, v. Warren E. Vadman et al., Respondents, Sharon L. Moss et al., Appellants
Court: Washington Supreme Court
Jurisdiction: Washington
Decision Date: 1969-12-18
Citations: 77 Wash. 2d 396
Docket Number: No. 41083
Parties: Darrell Moss et al., Appellants, v. Warren E. Vadman et al., Respondents, Sharon L. Moss et al., Appellants.
Judges: 
Reporter: Washington Reports
Volume: 77
Pages: 396–412

Head Matter:
[No. 41083.
En Banc.
December 18, 1969.]
Darrell Moss et al., Appellants, v. Warren E. Vadman et al., Respondents, Sharon L. Moss et al., Appellants.
Perkins, Coie, Stone, Olsen & Williams and Theodore J. Collins, for appellants.
Brodie, Fristoe & Taylor, E. Robert Fristoe, O’Leary, Meyer & O’Leary, and Ernest L. Meyer, for respondents.
Reported in 463 P.2d 159.

Opinion:
Finley, J.
This action was brought by the plaintiffs, Darrell Moss and Robert Robbins (partners who bought and sold real estate) against Warren Vadman (their accountant who also advised them from time to time on their real estate transactions). Their complaint was that he had failed to assign to them an option to purchase 1,163.30 acres of land referred to herein as the Mottman tract. The option was obtained by Vadman under circumstances and conditions hereinafter described.
This particular property had a special value in 1966, it being large enough to be an acceptable site for the campus of a new 4-year college which it was believed the 1967 legislature would establish in Thurston County. Title to the property was in Mottman Mercantile Company, a corporation owned by the members of the Mottman family.
Vadman assigned the option to Richard Swanson, James Swanson and James Whisler, who were also made parties defendant in this action. They in turn assigned the option to a corporation owned by them, and that corporation subsequently exercised the option, bought the property, and expended substantial amounts in its development. That corporation (Evergreen Park, Inc.) was also made a party defendant.
The plaintiffs, alleging violation of Vadman's duties to them as their agent, sought a judgment against him for an amount somewhat less than the amount of the finder's fee he received from the Swansons and Whisler (hereinafter called the Swanson-Whisler group). The plaintiffs also sought to establish an interest in the Mottman tract on the theory of a constructive trust, and filed a lis pendens based on that claim. In the alternative they sought to recover the profit which they would have obtained had the option been assigned to them.
The trial corut dismissed the action on the basis of its conclusions that Vadman was not the agent of the plaintiffs in procuring the option; that he breached no fiduciary relationship in assigning the option to the Swanson-Whisler group; and that consequently no constructive trust was established. From that dismissal, the plaintiffs have appealed.
We feel that the case turns on the issue of whether there was a breach of a fiduciary relationship between the plaintiffs and the defendant Vadman.
A detailed presentation of. the facts, is necessary for an adequate understanding of that issue. Many of the facts are stipulated as part of a pretrial order, others are hotly contested, as are some of the inferences drawn by the trial court from the facts.
Vadman was also the accountant for the Mottman Mercantile Company, as well as for some individual members of the Mottman family. We will'refer to the corporation and the members of the family collectively as the Mott-mans, except where differentiation may be important. Based upon the knowledge Vadman had acquired of the Mottmans, he suggested to the plaintiffs in November or December 1965, that the Mottmans might be willing to accept 1,000,000 dollars for the tract of land here in question. The plaintiffs in March 1966, authorized Vadman to offer $5,000 for a 1-year option to purchase the tract for $1,000,000. It was agreed that Vadman was to receive a 2 per cent finder's fee if he was successful in acquiring the option and if the option was sold or exercised by them within the year. It was understood that the option would be taken in Vadman's name, and that the identity of Moss and Robbins was not to be disclosed to the Mottmans.
This offer was not acceptable to the Mottmans, either as to purchase price or as to the amount to be paid for the option, but because of the interest shown they commissioned Mr. Hubert Hoffman to make a study of the property to determine its value.
The trial court's findings of fact cover quite concisely what followed thereafter.
On July 16, 1966, Mr. George Mottman, Mr. Hoffman and the defendant Vadman met at the store operated by Mottman Mercantile Company and tentatively agreed upon a price of $1,160,000.00 [ ] for the tract and $60,000.00 for a one year option, and planned for a stockholders meeting later to obtain stockholder approval thereto.
Finding of fact 12.
On July 18, 1966, the defendant Vadman reported to Plaintiffs the price and that Mottman would probably give an option for a year for $60,000.00.
Finding of fact 13.
The defendant Vadman was sick from July 21 to August 7, 1966, and the Mottmans delayed the stockholders' meeting until August 8th so that he could be present. At the meeting on August 8, 1966, the Mottmans orally agreed to give the defendant Vadman an "Option" to the end of August. The defendant Vadman informed Mott-mans that he was dealing with some undisclosed interested parties (plaintiffs) and that they were to have until the end of August to raise the $60,000.00. The defendant Vadman told Mottmans that he was also interested, and if the undisclosed parties then interested did not raise the money, he would find others, and it was agreed that he, Vadman, would have an additional day for himself or until September 1,1966, at 5:00 P.M.
Finding of fact 14.
That on or about August 8, 1966, plaintiffs were informed that they would have to the end of the month (August 31, 1966) to obtain from Vadman an assignment of his option right upon the payment of $60,000.00 for the option and a Finder's Fee of 2%. Later, on the evening of August 31, 1966, on a phone call from the plaintiffs, the defendant Vadman extended the time to 10:00 A.M., September 1,1966.
Finding of fact 15.
At this point, we interrupt our quotation of the trial court's findings to point out that the finding (No. 14) that Vadman had the day of September 1 for himself is a crucial finding in the case. The plaintiffs at all times have contended that their understanding was that they had until '5 p.m. on September 1, 1966 to raise the $60,000. We, therefore, amplify finding No. 14 by the testimony of the defendant Vadman as to what transpired at the August 8 meeting.
Vadman testified that the Mottmans were pushing for immediate payment of the $60,000 and suggested first 2 days and then 10 days for payment; that he, endeavoring to get more time for the plaintiffs, suggested a month, but that the Mottmans would not agree to an extension beyond the end of the month (August). Vadman then phoned Moss to ask if he and Robbins were interested in those terms, i.e., $60,000 by the end of August. Advised that they were, Vadman went back to the meeting and said, "I will take the option until the end of the month." It was shortly thereafter that he interjected the idea of an extra day for himself into the discussion, saying that if his parties could not raise the $60,000 by the end of August, he would raise it himself.
We accept the trial court's finding based on the substantial though uncorroborated testimony that the plaintiffs were advised they had until the end of August (1966) to raise the $60,000, and that Vadman had an extra day (i.e., until 5 p.m. on September 1, 1966) to raise that amount if the plaintiffs failed.
In their quest for the $60,000, the plaintiffs contacted the Swanson-Whisler group in the latter part of August.
We turn again to the findings as made by the trial court.
On August 24, 1966, the defendant Richard Swanson began dealing with the plaintiffs regarding the option and in what proportions they would contribute and who would have control. After serveral meetings they failed to agree. On August 29, 1966, the defendant Richard Swanson contacted the defendant Vadman and learned that plaintiffs had until the end of August to perform. On August 30, 1966, Richard Swanson informed the defendant Vadman that his group would put up option money and pay a finders' fee if plaintiffs did not. On the evening of August 31, 1966, the defendant Vadman told the defendant Richard Swanson that he had given plaintiffs until 9:00 or 10:00 A.M. on September 1, 1966 within which to produce the $60,000.00. On the morning of September 1, 1966, at 10:00 o'clock A.M., plaintiffs had not complied and the defendant Vadman accepted the Swanson-Whisler offer.
Finding of fact 17.
Richard Yeager, of Shelton, Washington, was on the local four-year college committee and was interested in recommending a location for the new college. On August 30, 1966, he talked with plaintiffs about their option and found that it was oral, and concluded the "price" on the property was right, but the terms were poor. Later on August 31, 1966, he called defendant Vadman to verify that he had heard from the plaintiffs, and on the evening of August 31, without further contacting plaintiffs, he decided to put up the money. He talked with some of his acquaintances and on the morning of September 1, 1966, obtained funds from different ones and at about 11:30 A.M. obtained from the Bank a Manager's Check for $60,000.00 and left it with Vadman's secretary to take up the option, although plaintiffs did not know until about noon that day that Yeager had actually concluded to raise the $60,000.00 or that he had attempted to actually put up the money for the option. Further, Yeager made no agreement with Vadman regarding the finder's fee.
Finding of fact 18.
That at a meeting which started at 2:00 P.M. on September 1, 1966, the option was signed by the Mottman Mercantile Company to the defendant Warren Vadman and delivered to him, and later, (July 27, 1967) transferred by him to the defendants Swanson and Whisler when an obligation was given to him evidencing a finder's fee of $25,000.00 less $1100.00 paid for attorney's fee, leaving a balance payable to him of $23,900.00.
Finding of fact 19.
The quoted findings by the trial court and our interpolations in the narrative for purposes of clarification are all supported by substantial evidence.
We are satisfied that had the plaintiffs produced the $60,000 required for the option during the month of August 1966, or even during the extension of time given them, the option would have been assigned to them; and that failing to produce the $60,000 by that time, they had no further right to the option and no interest in the property.
It is conceded that the $60,000 could not possibly have been produced by Mr. Yeager until sometime after 11:30 a.m. on September 1, at which time he secured a bank manager's check in that amount. That tender was not within the time limit, and we do not need to determine whether it was actually made on behalf of the plaintiffs or of himself.
The trial court concluded that, on the basis of the facts as found, Vadman was not an agent of the plaintiffs and that there was no fiduciary relationship, and that when the plaintiffs failed to produce $60,000 by the end of August, or within the extension accorded to them, Vadman was at liberty to deal with the Swanson-Whisler group.
With these conclusions we are in accord. If there was an agency between the plaintiffs and Vadman, and we do not believe there was, it was for the limited purpose of presenting the original offer made by the plaintiffs to the Mott-mans. When that offer was rejected, the agency, if any, terminated.
After the August 8th meeting (referred to in finding No. 14 previously quoted) Vadman had an option (or more exactly a promise of an option) for sale, and he gave the plaintiffs a specific time and amount within which and for which they might acquire the option.
We have repeatedly held that a prerequisite of an agency is control of the agent by the principal. McCarty v. King County Medical Serv. Corp., 26 Wn.2d 660, 175 P.2d 653 (1946) and cases cited.
We have frequently cited the Restatement of Agency for the proposition that an agency relationship results from the manifestation of consent by one person that another shall act on his behalf and subject to.his control, with a correlative manifestation of consent by the other party to act on his behalf and subject to his control. Matsumura v. Eilert, 74 Wn.2d 362, 444 P.2d 806 (1968); Turnbull v. Shelton, 47 Wn.2d 70, 286 P.2d 676 (1955); Coombs v. R. D. Bodle Co., 33 Wn.2d 280, 205 P.2d 888 (1949); McCarty v. King County Medical Serv. Corp., supra. Seavy on Agency states that an agency is a consensual relation between two persons created by law by which a principal has a right to control the conduct of the agent and the agent has a power to affect the legal relations of the principal. W. Seavy on Agency § 3 (1964).
Consent and control are the essential elements of an agency. The relationship is created by law, but if no factual pattern exists which gives rise to an agency, then no agency exists despite the intent of either or both of the parties. Because of this, one may believe that he has created an agency when in fact the relationship is that of seller to buyer. Restatement (Second) of Agency § 1 (1958); Busk v. Hoard, 65 Wn.2d 126, 396 P.2d 171 (1964).
Plaintiffs apparently intended to create an agency relationship. To that end they sent Vadman a letter of authority to make an offer for the option on the Mottman tract. This might be interpreted as a manifestation of consent by plaintiffs that Vadman act for them and subject to their control. Vadman, however, had no intent to create an agency. He did not consent to the agency, and more importantly, he did not submit himself to the control of the plaintiffs as to any of his subsequent actions.
The actions of the plaintiffs and Vadman suggest the relationship of buyer and seller as between them, rather than that of principal and agent.
The burden of establishing an agency rests upon the one who asserts it. Walker v. Pacific Mobile Homes, Inc., 68 Wn.2d 347, 413 P.2d 3 (1966); Lamb v. General Associates, Inc., 60 Wn.2d 623, 374 P.2d 677 (1962). The plaintiffs did not meet this burden and the trial court's conclusion that there was no agency must stand.
Having found no agency, we need not consider the question of a breach of fiduciary relationship by Vadman, or any participation in that breach by the Swanson-Whisler group or Evergreen Park, Inc.
We have not overlooked the second, third and fourth assignments of error which present contentions that a finding of a reservation of September 1 by Vadman for his own purposes was not supported by substantial evidence. The evidence, though coming from a party, was clear and definite. The trier of facts accepted it as true. It has been stated so often as to be elementary that this court will not substitute its view on disputed facts for those of the trier of the facts where its findings are sustained by substantial evidence.
The plaintiffs, as appellants, also contend that the trial court erred in excluding from evidence a letter written by Moss to a former Olympia realtor setting out the terms of the proposed option. The motive for introducing this evidence was to show by its contents that the plaintiffs understood their deadline for tendering the $60,000 to be September 1 rather than August 31.
Moss had already testified on direct examination to all of the items set forth in the letter. The trial court did not abuse its discretion in excluding the letter on the grounds that it was cumulative. Hartman v. Port of Seattle, 63 Wn.2d 879, 389 P.2d 669 (1964); Mullin v. Builders Dev. & Fin. Serv., Inc., 62 Wn.2d 202, 381 P.2d 970 (1963). In addition, the letter would be properly excludable on the grounds that it was a self-serving declaration. W. G. Platts, Inc. v. Guess, 56 Wn.2d 143, 351 P.2d 512 (1960). The case of Hall v. American Friends Serv. Comm., Inc., 74 Wn.2d 467, 445 P.2d 616 (1968), cited by the appellants, is not in point since it dealt with letters written by a decedent to the party offering them and as such they were not self-serving declarations by a party.
Error is also assigned to the.trial court's conclusion that the plaintiffs are estopped from asserting any claim against the Swanson-Whisler group and their corporation, Ever green Park, Inc. We consider it unnecessary to discuss the issue of estoppel, it being clear that there was no misconduct on the part of the Swanson-Whisler group or their corporation, which made them liable in any way to the plaintiffs.
The judgment appealed from is affirmed.
Hunter, C. J., Weaver, Hamilton, and Hale, JJ., concur.
The names of wives of all parties have been omitted since they have no bearing on the issues discussed.
The 1967 legislature did as anticipated, and the tract continued to have this potential until December 1967 when another site was selected.
This authorization was in the form of a letter dated March 29, 1966, addressed to Vadman, and signed by the plaintiff Darrell F. Moss, which read as follows:
Please accept this letter as the authority to offer to the Mottman family for their Westside Olympia holdings, as set forth on the accompanying map,
One Million Dollars Cash ($1,000,000.00) to be paid one year from the giving of an option for which we will place on deposit Five Thousand Dollars ($5000.00).
Both the plaintiffs and Vadman were aware that the Mottmans would not be inclined to tie up their property for so long a time with parties of such limited financial means as the plaintiffs.
This was approximately $1,000 an acre.
Mr. Hubert Hoffman (the only other .person present at this meeting with the Mottman family on August 8 who testified at the trial) said that he "felt" September 1 was the deadline. He did not recall anything about the last day being reserved for Vadman.
Both the original and Restatement (Second) of Agency § 1 (1958).