2023 New Mexico Statutes › Chapter 47 - Property Law › Article 1 - Conveyances and General Provisions › Section 47-1-45 - [Real estate brokerage agreements required to be in writing.]

Any agreement entered into subsequent to the first day of July, 1949, authorizing or employing an agent or broker to purchase or sell lands, tenements or hereditaments or any interest in or concerning them, for a commission or other compensation, shall be void unless the agreement, or some memorandum or note thereof shall be in writing and signed by the person to be charged therewith, or some other person thereunto by him lawfully authorized. No such agreement or employment shall be considered exclusive unless specifically so stated therein.
History:
1941 Comp., § 75-143, enacted by Laws 1949, ch. 19, § 1; 1953 Comp., § 70-1-43.
ANNOTATIONS
I. GENERAL CONSIDERATION.
Purpose of section
is to protect the owner-broker agreement to pay commissions but not to protect the brokers from themselves; therefore, this section is not applicable to agreements between brokers to share a commission.
Hapsas Realty, Inc. v. McCoun
, 1978-NMSC-037, 91 N.M. 659, 579 P.2d 785.
Section is extension of statute of frauds
and may not be used as an instrument to perpetrate a fraud.
Lindsey v. Cranfill
, 1956-NMSC-055, 61 N.M. 228, 297 P.2d 1055,
rev'd in part on other grounds
,
Carney v. McGinnis
, 1961-NMSC-006, 68 N.M. 68, 358 P.2d 694;
Harris v. Dunn
, 1951-NMSC-061, 55 N.M. 434, 234 P.2d 821.
Noncomplying brokerage contracts void.
— The legislature, having used the word "void" in contrast to the words of the original statute, has thereby shown an intention that noncomplying brokerage contracts should be treated differently than noncomplying contracts for an interest in realty or contracts not to be performed within a year; the latter types are merely unenforceable while the former is null and void.
Adams v. Thompson
, 1974-NMCA-133, 87 N.M. 113, 529 P.2d 1234, cert. denied, 87 N.M. 111, 529 P.2d 1232.
Noncomplying contract void as to all parties.
— "Any agreement" for a commission is void if the agreement does not comply with the requirements set forth in this section. This section does not say that an agreement is void only when contrary to the interest of the owner; it applies equally to all who come within its provisions.
Yrisarri v. Wallis
, 1966-NMSC-177, 76 N.M. 776, 418 P.2d 852.
Writing requirement to prevent fraudulent claims.
— This section is designed to prevent brokers from claiming commissions on transactions where they had never been authorized to sell - thus, the requirement that the same be in writing.
Carney v. McGinnis
, 1961-NMSC-006, 68 N.M. 68, 358 P.2d 694.
Section applies only to realty.
— In view of the maxim "expressio unius est exclusio alterius" this section deals with contracts relating to things of permanent nature and things capable of being inherited with land, as distinguished from personal property.
Hart v. Warder
, 1953-NMSC-003, 57 N.M. 14, 252 P.2d 515.
Section cannot be extended to embrace contracts relating to personalty.
Hart v. Warder
, 57 N.M. 14, 252 P.2d 515.
Section applies to contract to negotiate lease.
— While a lease is personalty, the leasehold estate is an interest in land; therefore, when the owner of real estate engages a broker to negotiate a lease of that real estate for a term of years the transaction is the sale of an "interest in or concerning" land. Therefore, this section applies to the commission arrangement between parties.
Yrisarri v. Wallis
, 1966-NMSC-177, 76 N.M. 776, 418 P.2d 852 (decided prior to 1991 amendment to Section 47-1-1 NMSA 1978 including leaseholds in the definition of real estate).
Broker's recovery not contingent on sale.
— It is immaterial as between the real estate brokers and owners that no enforceable contract was ever consummated between the owner and the prospective purchaser.
Carney v. McGinnis
, 1958-NMSC-001, 63 N.M. 439, 321 P.2d 626.
Broker's recovery contingent when broker not employed by buyer or seller.
— Where the binder agreement relied on by the broker did not grow out of any employment agreement between the seller and broker, there was no independent contract of employment with either the purchaser or the seller. Under such circumstances, the provision relating to the payment of a commission is not separable from the remainder of the contract, but contingent upon the consummation of the purpose for which the binder agreement was made.
Brown v. Horn
, 1962-NMSC-100, 70 N.M. 303, 373 P.2d 542.
Equitable remedy against fraud.
— This section, declaring void, unless in writing, all agreements made subsequent to July 1, 1949, employing an agent to purchase or sell real estate does not bar equitable relief against one agreeing to purchase certain land for another but in violation of his promise and understanding purchases it for himself, taking title in the name of others in an effort to conceal the fraudulent breach of his agreement.
Harris v. Dunn
, 1951-NMSC-061, 55 N.M. 434, 234 P.2d 821.
Parol contract not removed by partial performance.
— The part performance of services under a parol contract not to be performed within a year does not remove the contract from the operation of the statute of frauds.
Bosque Farms Home Ctr., Inc. v. Tabet Lumber Co.
, 1988-NMSC-027, 107 N.M. 115, 753 P.2d 894.
Conduct may cancel exclusive listing contract.
— The real estate broker, through his actions, effectively consented to cancellation of the exclusive listing agreement pursuant to the cancellation provision provided for in the written agreement between broker and seller. Cancellation of written contracts are not required to be in writing where seller, via contract, has the ability to cancel the contract.
Dave Zerwas Co. v. James Hamilton Constr. Co.
, 1994-NMSC-068, 117 N.M. 724, 876 P.2d 653.
Constructive trust available.
— Though section requires brokerage agreement to be in writing, a broker employed to purchase land under an oral contract who buys the land for himself, may be held accountable as a constructive trustee of the party by whom the broker was employed.
Harris v. Dunn
, 1951-NMSC-061, 55 N.M. 434, 234 P.2d 821.
Law reviews.
— For note, "Vendor and Purchaser - Increased Risks of Forfeiture and Malpractice Resulting from the Use of Real Estate Contracts: Albuquerque National Bank v. Albuquerque Ranch Estates, Inc.," see 15 N.M.L. Rev. 99 (1985).
Am. Jur. 2d, A.L.R. and C.J.S. references.
— 12 Am. Jur. 2d Brokers §§ 38 to 53.
12 C.J.S. Brokers §§ 121 to 124.
II. WRITTEN CONTRACT OR MEMORANDUM.
Contract entered into must be in writing
to support a recovery under this section. Nichols v. Sefcik, 66 N.M. 449, 349 P.2d 678 (1960).
Statement of compensation or commission to be paid is vital part of contract,
and unless there is some memorandum in writing stating the amount of the commission, signed by the person to be charged or his agent, the contract cannot be enforced. Carney v. McGinnis, 68 N.M. 68, 358 P.2d 694 (1961).
Statement not necessary to specify amount in contract.
— This section does not necessarily require that the amount of the commission be specifically set out in the contract itself, so long as this can be proven by some memorandum in writing, signed by the party or his agent, so as to be a protection against fraud. Carney v. McGinnis, 68 N.M. 68, 358 P.2d 694 (1961).
"Memorandum" includes all essential terms.
— Where owner's written binder contained all the essential terms and conditions of their agreement with the real estate broker, including the commission to be paid and to whom, and the instrument was signed by both, it was a "memorandum or note" meeting fully the requirements of this section. Carney v. McGinnis, 63 N.M. 439, 321 P.2d 626 (1958).
Signed statement admitting oral contract sufficient.
— Writings to be sufficient under the statute of frauds need not in themselves amount to a contract or be addressed to the other party, but are sufficient as evidence if the person to be bound signs any statement or document in which he admits that the parties made the oral contract, sufficiently stating therein its essential terms. Traub v. Nason & Childers, 57 N.M. 473, 260 P.2d 379 (1953).
Signature required.
— Where memorandum relied upon as fixing liability for broker's commission was neither signed by wife in her name nor by anyone else thereunto duly authorized, the trial court was correct in dismissing complaint as against wife. Ginn v. MacAluso, 62 N.M. 375, 310 P.2d 1034 (1957).
Signature by agent valid.
— Where memorandum relied upon as fixing liability for broker's commission is signed with the husband's name by his wife, with his express consent and direction, he alone is liable. Ginn v. MacAluso, 62 N.M. 375, 310 P.2d 1034 (1957).
Agency may be oral.
— A real estate listing is binding on the principal if the purported agent was in fact an agent for such purpose under the general law of agency, and such an agency may be created by parol or estoppel, and proven by circumstantial evidence. Kennedy v. Justus, 64 N.M. 131, 325 P.2d 716 (1958).
Collateral papers must be referred to in faulty memorandum
itself before they can become a part of it. Traub v. Nason & Childers, 57 N.M. 473, 260 P.2d 379 (1953).
Collateral papers not incorporated.
— Where one paragraph of a sales contract specified that sellers would pay a commission on the sale to a broker whose written listing agreement had expired and with whom sellers had only an oral contract, it was held that the paragraph did not operate to take the oral agreement out of the statute of frauds because it did not contain the amount of commission nor refer to the expired listing so as to incorporate it. Adams v. Thompson, 87 N.M. 113, 529 P.2d 1234 (Ct. App.), cert. denied, 87 N.M. 111, 529 P.2d 1232 (1974).
Oral contract not proved by previous writing.
— A contract wholly oral, and within the statute of frauds, may not be proved by a writing made prior to the meeting of the minds of the parties. Bosque Farms Home Ctr., Inc. v. Tabet Lumber Co., 107 N.M. 115, 753 P.2d 894 (1988).
III. MODIFICATION.
Oral evidence is inadmissible to show subsequent modification
of the written agreement. Yrisarri v. Wallis, 76 N.M. 776, 418 P.2d 852 (1966).
Extension must be written.
— The contract attempted to be voided by oral agreement was a definite contract signed by the owner that he would pay a commission if the property was sold "before the expiration of the agreement." The oral agreement was a new contract affecting the time of performance, and, by substituting a new time of performance, varied an essential term of the written contract. This new contract concerning the commission would be subject to the provisions of this section and such an agreement must be in writing. Yrisarri v. Wallis, 76 N.M. 776, 418 P.2d 852 (1966).
No ratification of oral extension.
— As this section is an extension of the statute of frauds its rationale is equally applicable here. A contract within the statute of frauds, that has expired by its terms, cannot be revived and extended by parol agreement. Thus, there could be no ratification of an oral extension of a listing agreement. Adams v. Thompson, 87 N.M. 113, 529 P.2d 1234 (Ct. App.), cert. denied, 87 N.M. 111, 529 P.2d 1232 (1974).
Acceptance of lower price not modification.
— Where the written agreement between parties provides for payment of a commission of a percentage of the "selling price" on any acceptable selling price, the completion of the sale at a lower price does not change the terms or conditions of the written agreement, and the broker is entitled to full recovery. Herrell v. Piner, 78 N.M. 664, 437 P.2d 125 (1968); Taylor v. Unger, 65 N.M. 3, 330 P.2d 965 (1958).
Price modification not exclusiveness modification.
— Fact that there was a modification of the $100,000 sale price as expressed in the written agreement does not modify the exclusiveness of the listing. Herrell v. Piner, 78 N.M. 664, 437 P.2d 125 (1968).