Title: Harrin v. Brown Realty Co.
Citation: 226 Kan. 453, 602 P.2d 79
Docket Number: 49,893
State: Kansas
Issuer: Kansas Supreme Court
Date: October 27, 1979

226 Kan. 453 (1979)
602 P.2d 79
WILLIAM R. HARRIN et al., Appellees,
v.
BROWN REALTY COMPANY, INC., Appellant.
No. 49,893

Supreme Court of Kansas.
Opinion filed October 27, 1979.
Thomas V. Murray, of Barber, Emerson, Six, Springer &amp; Zinn, of Lawrence, argued the cause and was on the brief for the appellant.
Rod L. Richardson, of Wallace, Saunders, Austin, Brown &amp; Enochs, of Overland Park, argued the cause and was on the brief for the appellee.
The opinion of the court was delivered by
McFARLAND, J.:
This is an action between plaintiff sellers and defendant real estate company to determine whether the real estate company is entitled to a partial commission on a real estate transaction in which the purchaser defaulted between the time of the execution of the contract and the time of closing specified in the contract. The trial court held in favor of the plaintiff sellers and defendant real estate company appeals.
*454 The trial court's findings of fact are not challenged on appeal, and all are supported either by substantial competent evidence or the stipulations of the parties. They are, accordingly, conclusive on appeal and are set forth fully herein in lieu of a factual summary.
"Findings of fact
The action herein was commenced by the sellers to recover the $3,000.00 in dispute.
The trial court's conclusions of law are as follows:
To avoid confusion, all references herein to the parties, the purchaser, and the broker will be by the same designations used by the trial court; that is, plaintiff, defendant, Newell, and Good, respectively. For clarification, Good is the broker and is also *456 president of defendant corporation. The parties treat Good and defendant as one and the same as far as the issues herein are concerned, and we will take that position also.
The defendant, as previously stated, does not challenge the findings of fact of the trial court. It does, however, challenge the trial court's application of the law to those facts. Defendant contends the trial court erred in failing to conclude:
1. That Winkelman v. Allen, 214 Kan. 22, 519 P.2d 1377 (1974), was not controlling, under the facts of this case;
2. That acts of plaintiff, after the execution of the contract, but prior to the contractual date of closing, legally constituted a partial closing or a partial early consummation of the transaction; and
3. That acts of plaintiff after execution of the contract estopped him from seeking return of the $3,000.00.
Defendant's three claims of error are so interrelated that it is impossible to separate them in this opinion. In support of each of these contentions, defendant relies on the following facts:
1. Plaintiff's request to Good for disbursement of the purchaser's $15,000.00 which was being held in escrow;
2. The receipt by plaintiff of $12,000.00 of such funds;
3. Plaintiff's permitting $3,000.00 of said funds to remain in defendant's possession;
4. Plaintiff's allowance to Newell of full possession of the premises rather than the partial possession authorized by the contract; and
5. The failure of plaintiff to make demand for return of the $3,000.00 for more than four months after the $12,000.00 disbursement of the funds to plaintiff.
In Winkelman, this court held:
*457 Defendant stipulated that Newell was financially unable to perform the contract (on the date of closing specified in the contract). There is no contention that Newell's failure to complete the contract was the result of the wrongful act or interference by plaintiff. The trial court concluded that, under the holding in Winkelman, defendant was not entitled to a commission. Defendant does not challenge Winkelman, but contends plaintiff's acts, above listed, make the holding in Winkelman inapplicable to this case.
In essence, defendant is asserting that plaintiff is estopped by his conduct from relying on the law as set forth in Winkelman. In the alternative, defendant contends this same conduct resulted in a partial consummation of the contract or a partial closing and, accordingly, a partial commission was earned.
Before proceeding further, let us look at K.S.A. 58-3022 (in the form in effect at times material hereto), which provided:
....
Section (a) of said statute requires that funds not belonging to the broker be maintained in a separate trust account. The $15,000.00 was being held in escrow by the broker. The money belonged to the purchaser. Defendant is claiming estoppel against plaintiff because defendant and seller divvied up the purchaser's earnest money which was to be held in escrow until the contractual closing. The trial court found that the retained $3,000.00 was to be held to apply toward the commission.
*458 Section (b) requires the broker to deliver a detailed closing statement to the seller and a statement to the buyer at the time of the consummation of the transaction. Defendant claims plaintiff's acts constituted a partial closing of the transaction, but no allegation is made that any "partial" closing statements were prepared or delivered.
Defendant cites no authority for his concept of "partial closing," but contends that Winkelman created the need for the rule. Defendant states that prior to Winkelman it would have been entitled to the full commission because a contract had been signed. See Collopy v. Stevenson, 125 Kan. 703, 265 Pac. 1098 (1928). This court in Winkelman, 214 Kan. at 38, quotes Ellsworth Dobbs, Inc. v. Johnson, 50 N.J. 528, 548-549, 236 A.2d 843, 30 A.L.R.3d 1370 (1967):
We recognize no theory of "partial closing." If defendant had shown that plaintiff and defendant subsequently entered into a valid contract which altered the terms of the original contract as to closing and commission, then defendant's right to a commission would be under the new contractual agreement. The "partial closing" theory, accordingly, is not a separate legal concept.
Defendant argues the delivery of full possession of the real estate prior to contractual date of closing created equitable rights of ownership in the purchaser. The purchaser is not a party to this action. Whatever legal rights which may have accrued to the purchaser, as to either party hereto, by the acts of the parties, are not issues in this action. The uncontroverted evidence is to the effect that delivery of full possession of the real estate in advance of closing was done at the request of Newell and was acceded to by plaintiff as an accommodation to Newell. The record is devoid of any evidence that plaintiff, defendant, Good, or Newell intended that this early full possession would operate to alter any rights or obligations among the group.
This is not the place for a definitive discussion of equitable estoppel. Basically, however, the application of the doctrine involves an assertion of rights inconsistent with past conduct, *459 silence by those who ought to speak, or situations wherein it would be unconscionable to permit a person to maintain a position inconsistent with one in which he has acquiesced. See Bowen, Administrator v. Lewis, 198 Kan. 706, 712-713, 426 P.2d 244 (1967); and Schiffelbein v. Sisters of Charity of Leavenworth, 190 Kan. 278, 281-282, 374 P.2d 42 (1962), for a full discussion of the doctrine of equitable estoppel or quasi-estoppel.
Defendant engaged in highly questionable conduct by agreeing to disburse the escrow funds without prior authorization by the purchaser who was the owner of the funds. After the agreement to disburse had been made, defendant notified the purchaser of same, but only because a stop-payment order had been issued on purchaser's $15,000.00 check. Defendant called the purchaser and said:
After receipt of the call, Newell made the check good. In essence, defendant directed Newell to make the check good, so defendant could live up to its prior agreement with plaintiff.
Defendant has not shown that the court erred in failing to apply the doctrine of equitable estoppel.
The question of when and how a real estate agent or broker becomes entitled to a commission depends upon his contract. Parties may by contract condition the payment of a broker's commission upon prescribed events or contingencies and for division of the earnest money in case of forfeiture because of the default of the purchaser. McIntosh v. Frisinger, 507 S.W.2d 419 (Mo. App. 1974).
Defendant's attorney drew the original contract which was silent as to commission, although provisions could easily have been inserted therein delineating commission to be paid upon failure to consummate the contract. If defendant believed, subsequent to the execution of the contract between plaintiff and Newell, that the broker and plaintiff had agreed to a partial commission being earned prior to the contractual closing date, a contract to such effect could have been prepared and signed by the affected parties.
The trial court found the parties to this action assumed the *460 "sale would go through," and therein lies the basic cause of the parties' problems. There was no agreement or discussion between the parties as to a "Plan B" relative to a commission if the sale did not go through. The burden is on defendant to show its right to a commission. See Winkelman v. Allen, 214 Kan. 22.
We conclude the trial court did not err in (1) its application of Winkelman to the facts herein; (2) failing to invoke the doctrine of equitable estoppel; and (3) failing to conclude that the transaction had been partially consummated or partially closed.
No error having been shown, the judgment is affirmed.
FROMME, J., not participating.