Court Opinion

ID: 5172960
Source: CourtListenerOpinion
Date Created: 2022-01-02 05:09:48.200554+00
Date Added: 2024-06-11T08:26:09.956519
License: Public Domain

BEEBE, Judge Pro Tem.,
dissenting:
I conceive that the decision of this Court in Garfield v. Tindall, 98 Idaho 841, 573 P.2d 966 (1978), and C. Forsman Real Estate Co., Inc. v. Hatch, 97 Idaho 511, 547 P.2d 1116 (1976), stand for the proposition that any person with an interest in property in which another has an interest may singly enter into a brokerage commission contract which, if in writing and signed by him, will satisfy the provisions of I.C. § 9-508. The rationale of those decisions is that such an agreement is one for personal services of the broker and not necessarily related to the ownership of the land. Forsman, a case involving community property directly so holds; in Garfield such holding is not that clearcut although it is arguable that such is the holding of the Court. In this interpretation of the statute, Justice McQuade in his dissenting opinion in Forsman stated, “[W]e invite brokers to accumulate promises from the unknowing when there is no real expectation that a sale will result.” 97 Idaho at 518, 547 P.2d at 1123.
Real estate brokers are a licensed profession in the State of Idaho and a degree of expertise in property matters is required. A broker, as a generality, has been said to occupy a fiduciary relationship with an owner contracting for his services.1 Brokers customarily draw legal documents for execution by the owner they represent and a buyer they find in consummating their employment of finding a buyer ready, willing, and able to purchase. In the case at bar, the broker located buyers, prepared and caused to be executed by his contracting owners and such buyers an earnest money agreement, and thereafter delivered the same. The document constituted a final and relatively complicated real estate agreement.
The true protection for the unknowing when there is no real expectation a sale will result which concerned Justice McQuade lies not in the interpretation he would have urged of I.C. § 9-508, i. e., to require thereunder that all persons having an interest in listed property join in the listing agreement with the broker; for even then a listing owner could decline to sell and frustrate the expectation of sale by the other listing owner. The protection lies in the other laws applicable. In this the law recognizes the obvious purpose of the owner who lists real estate for sale by the broker to be that a sale will result. As between the owner and the broker, so long as it is consistent with the broker’s duties to the owner, the broker’s interest is to earn a commission.
An owner who does not wholly own the property that is to be sold has a defect in his title. A broker, even though his contractual obligation is only to find a purchaser ready, willing and able to purchase the property, is not entitled to a commission when the sale is not consummated for failure of the owner to make good title if the broker knew of such defect in the title. It is also the law that if such broker with knowledge of the defect in the title has had the owner’s express or implied representation that the owner can convey the property that is to be sold, the broker is entitled to *470his commission.2 See Garfield v. Tindall, supra.
The employment contract between appellants and respondent is on an official employment contract form used by the Idaho Association of Realtors. It provided appellants would pay respondent a commission of five percent for finding a buyer ready, willing and able to purchase the property at the price and on the terms listed, or other terms and price appellants may accept.
The earnest money agreement contained a selling price which was less than the price listed and other somewhat different terms. As aforesaid, it constituted, with its numerous attachments, a complete and final agreement of sale and purchase of the property, and it was submitted to appellants for acceptance and execution and was finally delivered by the broker to the buyers. The delivery resulted in a lawsuit between the buyers and the sellers when Mrs. Bateman, who owned an interest in some of the property and was not a contracting party, refused to convey. See Robison v. Compton, 97 Idaho 615, 549 P.2d 274 (1976).
It was what occurred concerning the earnest money agreement that I consider crucial to this case; not only because any commission under the brokerage contract would be payable only perforce acceptance by execution of the earnest money agreement since the price and terms differed from the listing price, but also because of the known title defect which was further discussed between appellants and respondent at that point. In my opinion, the validity of the earnest money agreement was expressly conditioned upon execution thereof by Mrs. Bateman.
It is not disputed but what respondent knew that appellant Dean Compton’s mother had an interest in the property at or near the time of the listing or shortly thereafter. Discussions between appellants and respondent’s agents were had. The trial court’s findings were:
“Now the plaintiff knew from the outset that the mother had an interest in the property, but Dean Compton assured plaintiff there’d be no problems: ‘She will go along with it; she wants to sell,’ or words to that effect.”
The trial court expressly found agency was not an issue between appellants or either of them, and the mother of appellant Dean Compton. The record is devoid of any evidence of actual authority.
The trial court concluded Forsman and Garfield controlled his decision — no specific conclusion otherwise. The majority infers, *471from the trial court’s reference to Garfield, the conclusion to have been as follows:
“That Dean Compton at least impliedly, if not expressly, represented to Rexburg Realty that he was authorized to sell the property on behalf of his mother, Mrs. Bateman.” Ante at 247, 248.
I cannot agree that Dean Compton’s statements that his mother would go along with the sale because she wanted to sell and usually went along with what he did, amounted to a representation that he was authorized to sell the property on behalf of his mother, or could be characterized in any manner as an “assurance,” in its sense of certainty, that the property could be conveyed. See Eastern Oklahoma Land & Cattle Co. v. Dorris, 549 P.2d 78 (Okl. 1976). The trial court viewed the statements as an assurance to respondent “there’d be no problems” (with Mrs. Bateman) and likely concluded respondent was entitled to rely thereon, in effect, attributing to appellant a direction to respondent to “forget that problem; go find a buyer at the price and terms listed.” The court concluded that whether or not a sale took place, appellants undertook potential liability for a commission.
The matter of Mrs. Bateman signing the earnest money agreement, (a rather innocuous name for this particularly complicated agreement of sale and purchase) was discussed at the time it was submitted for acceptance by appellants.
Respondent’s agent, Ross Reese, testified on direct examination:
“Q. On that occasion, Mr. Reese, did Mr. Compton tell you that was a condition associated with the Earnest Money Agreement that had to be met before he would go through with it, namely, the signature of his mother?
A. On the occasion of the Earnest Money Agreement?
Q. That’s correct.
A. Okay. At the time we obtained the Earnest Money Agreement, it was late in the evening. They had met us at the airport and picked us up, and they were very cordial people, and I became very attached to Mrs. Compton that evening. I’d better clarify that.
Q. Would you like to explain that since it’s a part of the record?
A. I was impressed. They were very sincere and very nice people. I appreciated them very much. We visited considerably about the offer in attempting to make it satisfactory to them. I explained very carefully at that time that one of the parties that was purchasing was a very good friend of mine, and so I took special care to disclose the facts and make sure that everything in it was as they wanted it, and that was one of the reasons for the counteroffers is to clear up and clarify and clean up the offer as it was so it would not be any problem anywhere. The question when they did finally accept it and everything else, we did discuss their mother, and it was late at night, and I was under the impression and told by Mr. Compton that was not an issue and there would not be a problem on the thing. He did not discourage us for going over to see her. She lived at a nearby community, I couldn’t tell you which one at this time, but it was not at any point indicated that this was going to be a problem, so we said all right. I don’t like to get between families, and I didn’t know what the arrangements were between he and his mother. I was informed previously that he had been running the farm, selling the crops, and operating as if he was in total control.”
Respondent’s agent, Dallin Reese, testified on direct examination:
“Q. Now, on that occasion was there any conversation between you and the Comptons, including your brother Ross Reese, concerning Mrs. Rita Bateman Compton, who you had discussed earlier, had a partial interest in some of the land?
A. Yes, we discussed it several times that evening, also as to what her position would be in the closing of the Real Estate Contract and the consummation of the sale.
Q. And do you remember the manner or nature in which that conversation *472arose and the substance of that conversation?
A. As I recall, we asked specifically if the Comptons felt like that her signature was needed on the Purchase Agreement, and we were given the indication that—
MR. BEDKE: To which we object. He is testifying concerning her conclusion he was given an indication. I think the procedure is for him to relate to the best of his ability what was said, not his conclusion of what was said.
THE COURT: Yes. The objection will be sustained. We’ll take our first morning recess at this time.
THE COURT: You may continue.
Q. Now, Mr. Reese, we are continuing with the direct examination that we were pursuing prior to the recess. Now, on that occasion when you and Ross Reese were meeting with Mr. and Mrs. Compton at their home in the evening time, as you testified, did Mr. Compton say anything about the requirement of his mother signing that Earnest Money Agreement?
A. No.
Q. Was it discussed?
A. Yes.
Q. Do you remember who discussed it?
A. Ross discussed it with Mr. Compton.
Q. And do you remember whether or not there was any agreement at that time to obtain the signature of Rita Compton Bateman?
MR. BEDKE: To which we object. That calls for a conclusion.
THE COURT: Yes, it does, I will have to sustain.
Q. Was the subject discussed as to whether or not Mrs. Bateman’s signature should be on the Earnest Money Agreement?
A. Yes.
Q. And did you participate in that discussion?
A. Yes, some.
Q. And what was the nature of that discussion?
A. Well, the nature of the discussion was that we were assured that she would be no problem.
Q. And who gave you this assurance?
A. Mr. Compton.
MR. BEDKE: To which we object. It calls for a conclusion or paraphrasing of the conversation, and I feel that the procedure is that he relate his best recollection what was said and the conclusion would have to be drawn by the Court.
THE COURT: I think that would be proper.
Q. Do you recall what was said, Mr. Reese?
A. Yes, it was discussed and, as we mentioned, the subject of Rita B. Compton was brought up and discussed, and we were given the assurance—
MR. BEDKE: To which we object again unless he testifies what was said.
THE COURT: What was told to you and by whom?
Q. Do you remember who told you, and first what was told to you and who told it to you?
A. Well, Mr. Compton told us that Rita B. Compton would be no problem in securing a release of title to transfer the property and that her signature was not necessary on the Receipt and Agreement to Purchase.”
Dallin Reese testified on cross-examination:
“Q. Okay. Now, at the time of the signing of this Exhibit 2, this Earnest Money Agreement, you stated there was a discussion about whether or not Mrs. Bateman should sign; is that correct?
A. Yes.
Q. Who brought that up?
A. I think Ross did.
Q. And you had some, at least Rex-burg Realty had some concern whether or not Mrs. Bateman would go along with this arrangement?
A. Yes, we had a concern.
Q. Well, do you know where Mrs. Bateman was at that time?
A. Only what came out in the discussion that she was at her home.
*473Q. And what did Mr. Compton tell you about where Mrs. Bateman was?
A. He told us that she was at home, and we asked him if her signature was necessary or that if we should go over there, and he indicated and told us there was no problem, that the deal would be consummated under his signature and that the only time her signature would be necessary would be in the closing and transferring of the Deed.
Q. Isn’t it true, Mr. Reese, that Mr. Compton said that his mother lives just a short distance and you could go up and see her if you wanted to?
A. No.
Q. Do you know where she lived?
A. No, not exactly, no.
Q. Did he ever tell you not to bother his mother about the sale?
A. No.”
On direct examination, Dean Compton testified:
“Q. Would you state to your best recollection what was said and by whom?
A. We talked about it, and Mr. Ross Reese — that is the first time I ever met Mr. Ross Reese — talked about the Agreement. He showed us what was the offer and what the terms were and what the prices were and how much was to be paid down, and we looked it over and there was a minor change we wanted to make pertaining to some scrap iron that was around the shed. We may have deleted a few words in this regard and initialed it. I initialed it. Mr. Ross Reese talked to us at length about what we could do with our money after the sale in way of an investment and so forth and tried to give us some counsel and whatnot of what we could do in this regard, and then we signed the Agreement. I signed it and my wife signed it. It was already signed by Mr. Robison and Mr. Christiansen. And then when they were about to leave, it was in the late afternoon, it was not evening then, I don’t believe, and then the question came up about my mother and her interest in the farm and her signature being required on this, and I made the offer distinctly to them, I said, “My mother lives up here in Elwood, which is about 15 or 16 miles from here,” and I said, “if you would like, we can get in our car and we will go up and get her signature on this,” and they discussed it and then said, “Well, I don’t think it is necessary,” and they made the decision not to go see my mother, and I made an offer to take them up, and so they left then with the Earnest Money Agreement, and I took them back to the airport.”
On cross-examination, Dean Compton testified:
“Q. Now, Mr. Compton, knowing there had been a couple of changes to the Earnest Agreement, why did you not insist that the provision be made in there that would nullify the Contract if your mother’s signature was not obtained?
A. Well', this isn’t' the Earnest Money Agreement.
Q. Yes, this is the Earnest Money Agreement, Mr. Compton.
A. Excuse me, I was thinking — well, I don’t know why I didn’t. Why didn’t the realtors insist on it. I never thought about it.
Q. You have heard the realtors testify that they relied on your assurances from you, did they not, that your mother’s signature was not necessary?
A. And you heard me testify that we' offered to take them up to my mother’s to get her signature.
Q. Was there some reason why you didn’t insist on them going?
A. Yes, because they said, “Well, maybe it’s not necessary. Let’s not bother.”
Q. Did they say maybe it’s not necessary?
A. I don’t recall if those are the exact words, but they made the decision; we made the offer.
Q. At the time you testified that you offered to take Ross and Dallin Reese to you mother’s home to obtain her signa*474ture, did they give you a reason for not wanting to go to your mother’s home to obtain her signature?
A. I think they wanted to get home before dark in the airplane and didn’t want to take the time.
Q. Isn’t it true it was already dark?
A. I don’t think it was.
Q. Do you remember what time of day it was?
A. Five years ago ... I don’t think it was dark, but I don’t remember the time or hour, no.
Q. How far away was your mother’s home from yours?
A. Fifteen or sixteen miles.
Q. They told you they wanted to get home before dark?
A. I believe that is what their reason was for deciding not to go up.”
Carol Compton, on direct examination, testified:
“Q. And do you recall any conversations concerning your mother-in-law signing the papers?
A. Yes, I can remember it was mentioned. We brought it up, and Dean wondered.
Q. Well, would you relate to your best recollection what was said relative to that subject?
A. I can't remember exactly, but I know at the time Dean said, “Now, do you think we need Mother’s signature? She just lives up here about 15 miles, and we can drive up and get it if you think we should have it.”
Q. And was there any reply made to that?
A. Well, I can’t remember just what it was, but they didn’t say, yes, to go get it.
Q. Was there any attempt made to go, or did they even start to go?
A. I thought they said they wanted to get home before dark.”
Following the Compton’s testimony, Ross Reese was recalled. On direct, he testified:
“Q. You have heard both Mr. and Mrs. Compton testify that an offer was made to you to drive you to Dean’s mother’s home to sign the Earnest Money Agreement. Did they in fact make such an offer?
A. Absolutely not. It was late at night, and there was no inference at all we could go to his mother’s place at all that night.
Q. Was the subject of his mother’s signature on the Earnest Money Agreement discussed?
A. Yes.
Q. And you earlier testified on the stand as to his assurance that it was not necessary?
A. That is correct. The time statements are verifiable if I had access to them and the flight plan filed with the Flight Service.”
Dallin Reese was recalled and on cross-examination, testified:
“Q. Mr. Reese, do you recall that Mr. Compton made a suggestion at that time that you were discussing the signing of the Earnest Money Agreement? Do you recall anything said about going up to Elwood and contacting his mother?
A. Something may have been said then at that time to go up there to Elwood and contact his mother. I don’t recall the exact conversation as to how it went and as to what the final decision was and even as to who made the final decision in that regard.
Q. But you do recall something said about going up to Elwood to get his mother’s signature at that time?
A. Well, I recall that we talked about his mother’s signature being on the Receipt and Agreement to Purchase and discussed the matter considerably at some length.
Q. And do you also recall that there was a conversation that she lived at Elwood, approximately 15 miles away, and could be contacted?
A. I recall now, since you mentioned Elwood, that is where she lived, yes.
Q. And do you recall that was mentioned, that she could have been contacted to sign the Agreement?
*475A. If it would have been necessary, if we had all parties agreed it was necessary. That possibly was so.
Q. I believe that’s all.”
Dallin Reese on redirect examination testified:
“Q. Mr. Reese, did Mr. Compton tell you it was necessary to get his mother’s signature?
A. No.
Q. Did he at any time ever tell you it was necessary to obtain his mother’s signature before that deal could go through?
A. I think the only time that it was ever indicated that his mother’s signature would be necessary on any documents was when the final draft of the Contracts were drawn and the closing process was taken care of. He indicated to us and to me that she wanted to sell, that she would go along with his decision in any regard, as to how and the terms and everything, but that her only involvement, unless we insisted, or something to that effect, would be at the time of the closing.
Q. Isn’t it true based on your knowledge, being in the real estate business and based on your knowledge of the Idaho Real Estate Law that the only time that she would have to sign to convey is when the final Contract or Deeds were signed?
A. Yes.
Q. And is that the reason that you were not concerned about it?
A. Well, that was one of the reasons, yes.
Q. Was the other reason because he assured you that she would go along with what he recommended?
A. Yes.
Q. And isn’t it true that those assurances were given to you at the time that the Listing Agreement was signed and then they were given to you again at the time that the Earnest Money Agreement was signed?'
A. Yes.
Q. And isn’t that the reason you proceeded to solicit or seek prospective purchasers and do what you did to find these buyers, who were ready, willing, and able to purchase?
A. Yes.” (Emphasis added.)
Here, then, is the statement of the agent of respondent that Mrs. Bateman’s signature was specified as necessary “when the final draft of the contracts were drawn and the closing process was taken care of.” The earnest money agreement was in form the final draft of the contract. Mrs. Bateman’s signature may have been an express condition of its validity. If so, the agreement should not have been considered valid, or ever delivered as final to the buyers.
Any admission of a party is not to be disregarded unless explained. In this case, the attempted explanation of the statement merely showed a lack of understanding of the import of the agreement itself.
It cannot be determined from the trial court’s finding of fact that the trial court addressed the issue of whether Comptons required Mrs. Bateman’s signature on the earnest money agreement as a condition of its finality. If so, no acceptance of the buyer’s terms took place. See C. Forsman Real Estate Co. v. Hatch, 97 Idaho 511, 517, 547 P.2d 1116 (1976).
The cause should be remanded, with appropriate direction for further findings of fact and conclusions of law.

. Mallory v. Watt, 100 Idaho 119, 594 P.2d 629 (1979); Cooke v. Iverson, 94 Idaho 929, 500 P.2d 830 (1972); Giese v. Tarp, 92 Idaho 243, 440 P.2d 521 (1968); Rogers v. Hendrix, 92 Idaho 141, 438 P.2d 653 (1968).

. 12 Am.Jur.2d, Brokers, Sec. 201, reads as follows:
“In the absence of a stipulation to the contrary in the contract between the broker and his principal, it is the accepted general rule that the former is entitled to his commissions if, acting in good faith, he procures a purchaser willing, able, and ready to take the property upon the terms offered by the principal, although the contract is rescinded or the sale otherwise fails because of a defect in the principal’s title, of which the broker had no notice. Thus, where a person contracts with a broker to sell property which he does not own, his subsequent failure to perfect a title which will enable him to complete the sale does not affect his liability to the broker. Likewise, a person who has employed a broker to sell his property cannot avoid liability for commissions on the ground that he is unable to complete the transaction because his spouse refuses to join in the contract of sale, or deed, where the broker has procured a customer ready, able, and willing to purchase the property. And a broker has been held entitled to recover commissions from the seller notwithstanding the sale was not consummated and the broker returned the deposit to the purchaser, where the sale was not consummated for failure of the owner to make a good title. The general rule has been held applicable to a broker employed to effect an exchange of property and to a broker employed to secure a loan.
The general rule rests upon the theory that the broker, in the absence of notice to the contrary, is entitled to act upon the assumption that the principal has a marketable title. It has been held not to be the broker’s duty to inquire as to the existence of a defect, and a fortiori, where an owner assures the broker that title is good or that he will obtain good title, the broker has a right to rely on the assurance. The presumption that the principal has marketable title is not conclusive, however. It may be waived by the acts of the parties, and where the facts are inconsistent therewith, it will not be implied.” (Footnotes omitted.)