Court Opinion

ID: 9552779
Source: CourtListenerOpinion
Date Created: 2023-08-07 19:16:36.796277+00
Date Added: 2024-06-11T15:28:57.206069
License: Public Domain

UDALL, Justice
(dissenting).
I dissent for the reason that as I construe the record in the instant case the facts do not disclose such bad faith or gross misconduct on the part of the broker as to disentitle him to compensation.
There is no disagreement between us as to the high standard which the law prescribes must be maintained in dealings between an agent and his principal. The majority opinion cites the following text statements: 2 Am.Jur., Agency, Sec. 299; Restatement of the Law of Agency, Sec. 469, to which I might add 8 Am.Jur., Brokers, Sec. 142 and 12 C.J.S., Brokers, § 69. See also Baird v. Madsen, 57 Cal.App.2d 465, 134 P.2d 885, 891. The difficulty comes in applying the law to the facts of this case.
The great majority of the reported cases denying a brokerage fee involve instances where (1) the agent acts adversely for the purpose of securing a secret profit for himself or otherwise advancing his own welfare at the expense of that of his employer; (2) an agent disclosing the necessitous circumstances of his principal; (3) the agent is guilty of fraud or dishonesty in the transaction of his agency; (4) his conduct is disobedient or constitutes a wilful and deliberate breach of his contract of service; or (5) where he withholds information from his principal which it is his duty to disclose. The California case of Mitchell v. Gould, supra, relied upon by the majority for the reversal falls under this last classification. The broker whose instructions were to procure a short term lease, had obtained a ten-year lease which information he withheld from his principal at the same time informing the prospective tenant that a long term (15-year) lease could be obtained, and such a lease was later entered into. Certainly under such circumstances the bad faith of the broker was such that he had forfeited *262his right to compensation. I submit, However, that the facts before us do not place the conduct of this broker within any of the prohibitions above enumerated and I have been unable to find a single case where the courts have denied compensation under a factual situation comparable to that presented by this record.
Two of the other cases referred to in Mitchell v. Gould, supra, are also readily distinguishable. In Alford v. Creagh, 7 Ala. App. 358, 62 So. 254, there was underhanded dealing on the part of the broker by his endeavoring to buy the property for h'is own benefit. In the case of Harvey v. Lindsay, 117 Mich. 267, 75 N. W. 627, 629, the decision turned upon the refusal of the trial Court to direct a verdict for the defendants, the appellate court concluded “We are not satisfied that bad faith was conclusively proven.” The judgment allowing the broker’s fee was therefore affirmed.
An analysis of the ‘ testimony before us, when taken as it must be in the light most favorable to a sustaining of the judgment, shows but four questionable matters. First, the agent advised his principal, before the Pours came onto the scene, that in his opinion the listed sales price of $9500 was excessive. This statement was made after repeated efforts to sell to others at the list price had failed. I can see nothing improper in this. Second, the agent advised Pour (the ultimate purchaser whom he had procured) that his principal, the owner, then had on his desk 'for acceptance or rejection an offer of $8,250 which offer, in his opinion, the seller would not accept. There may have been some impropriety in this disclosure of his principal’s business but I cannot read into this slip such gross misconduct as to warrant denying him compensation. Third, complaint is made that the broker failed to exert his best efforts to effect a sale to the Pours at the list price of $9500. In my opinion there is no merit to this contention because it is clear that the broker did advise the prospective purchasers that the owner’s asking price was $9500 and it further appears that appellant perfected the sale with the Pours the evening of the first day they were contacted and before the broker’s salesman had an opportunity to keep an appointment for the following day at 1:00 p. m., when he was to show them the property in question. It is unthinkable to believe that any purchaser would buy property without first seeing it. The majority evidently do not base the reversal upon any of these derelictions so finally we consider what is urged as the broker’s most serious breach of duty to act in good faith and for the interest of the appellant, to wit, his unauthorized statement that the owner might accept less than the list price. To keep the record straight I quote from the cross-examination of salesman Tom Kolouch:
“Q. And you also told them at that time that you were pretty sure if they *263would offer $8500 for the property that they would get it? A. I told them they might try $8500. I didn’t tell them for sure they would get it because I wasn’t setting a price on the other man’s property. Q. And you, told them if they would offer $8500 that they might get the property? A. They might have, yes. Q. And there wasn’t anything said at that time about their offering $9500 for the property? A. I told them the price was $9500 on our list.” and the following is Mr. Pour’s version of the matter: “Q. He told you to go out there and offer $8500 for the property? A. No, he told me it was listed for more, but he didn’t think this offer would go through, and if I met somewhere in between I might get it.”
In a somewhat parallel situation the Court of Appeals of Louisiana had this to say:
“Finally, the defendant contends that, at all events, the plaintiff should not be permitted to recover in this case because she has been guilty of a breach of trust. In support of this contention, he points to an allegation in plaintiff’s petition in which she asserts that, when Dr. Riera first offered to purchase the property for $6,000, she advised him that the contract price was $8,000 but that she thought she could induce the defendant to accept $6,500 for it. It is said that, since the property was listed with plaintiff for $8,000, it was obviously her duty to obtain that price if possible and that when she informed Dr. Riera that she thought her client might be willing to take $6,500, she became unfaithful to her trust.
“The point is not well taken. Plaintiff was employed to sell the property for $8,000 or ‘any less amount that may be agreed upon hereafter.’ The defendant was not injured by plaintiff’s statement to Dr. Riera since he has specifically ratified her representation by subsequently selling the property for $6,500. It should be borne in mind that plaintiff had no right, under the agency contract, to effect a sale for less than the list price of $8,000 and that all offers had to be submitted to the defendant for his approval and consent. Her statement to Dr. Riera was no more than an attempt to bring the parties together and have them agree upon a price satisfactory to both.” (Emphasis supplied.) Wolf v. Casamento, La.App., 185 So. 537, 539.
In effect, as I view it, all the appellee intended by his statements to the Pours was to hold their interest in the property until he could show it to them and the parties could be brought together. I understand it to be the law that the ultimate duty of the broker toward his principal is to procure a purchaser ready, willing and able to purchase upon terms agreed upon by the owner and the purchaser. How then can it be said that the effort of the broker in the instant case in attempting to interest a purchaser and *264bring the purchaser and owner together by stating that the property might possibly be purchased for less than the quoted price (something which every prospective purchaser would be justified in assuming and which is a hope in the mind of every buyer) amounted to a breach of his duty to act for his principal’s best interest? Will not the court’s opinion be construed as holding that if a broker states to a purchaser or even indicates in any manner that property might be acquired for less than the listed price his right to a commission is thereby forfeited? If such be the declared law of this state it will certainly give a wide avenue of escape to unscrupulous realty owners from paying what is justly owed to agents who have been the immediate and efficient cause of the sale of their property.
It would be a most naive purchaser who would not know or assume without being told that the owner of realty might sell for less than the original asking price. In my opinion this broker’s conduct does not disclose such bad faith or gross misconduct on his part as to warrant a forfeiture of all right to a commission. Particularly is this true where, as here, it is shown that the owner primarily refused to pay the usual 5% commission and thus brought on the lawsuit, because the broker would not agree to split the fee with him. Certainly the appellee was the procuring cause of the sale to the Pours as he put them in touch with the owners. The case was fairly tried to a jury and by their verdict it is apparent they found no evidence of bad faith or gross misconduct on the part of appellee. To me it seems erroneous for this court to now declare that the conduct heretofore enumerated, as a matter of law is such as to warrant denying all compensation to the broker.
I would affirm the judgment as entered by the learned trial court.