Court Opinion

ID: 7821791
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:57:04.738518+00
Date Added: 2024-06-11T16:30:45.358921
License: Public Domain

Richard B. Adkisson, Chief Justice, concurring. Although I concur in the result of this decision, I must disagree with the majority’s unqualified statements that “the invalidity of the contract [for sale of land] is not material to the brokers’ right to recover their commission,” and that “the brokers would be entitled to their commission even if the description had been bad and the Whitefields had refused to sign the Offer and Acceptance for that reason,” and that “the broker earns his commission by producing a purchaser ready, willing, and able to take the property on the seller’s terms, even though no enforceable contract of sale is executed.” For authority the Court first cites Fike v. Newlin, 225 Ark. 369, 282 S.W. 2d 604 (1955). There the broker arranged a trade of properties between two of his clients, the Fikes and the Hintons, the former to be liable for the broker’s commission. The Fikes raised as one reason for the nonpayment of the commission the fact that the offer and acceptance was unenforceable for lack of the signatures of either Mrs. Hinton or Mr. Fike. Based upon the particular facts of the case the Court there correctly held that an enforceable contract was unnecessary because there was no evidence of detriment to the broker’s principals, the Fikes, who sought to unjustifiably “back out” of the sale. However, there are many cases where the “enforceable contract” element of proof by a broker is prerequisite to his recovery of a commission. The more complete statement of the rule for recovery of brokerage commissions in such cases is found in the early case of Pinkerton v. Hudson, 87 Ark. 506, 113 S.W. 35 (1908) in quoting from Lunney v. Healey, 56 Neb. 313, 76 N.W. 558, 44 L.R.A. 593 (1898): [W]here a real estate broker contracts to produce a purchaser who shall actually buy, he has performed his contract by the production of one financially able, and with whom the owner actually makes an enforceable contract of sale. The failure to carry out that contract, even if the default be that of the purchaser, does not deprive the broker of his right to commissions. (Emphasis mine) The Court went on to find the broker entitled to commissions in Pinkerton, stating: “The sale was closed, so far as appellant [broker] was concerned, when an enforceable contract of that kind [for sale of land] was executed.” (Emphasis mine) From a careful reading of Pike and Pinkerton it is apparent that to receive a commission the broker must prove (1) that he has produced a person ready, willing, and able to buy under the terms of the brokerage contract, and (2) that his efforts resulted in either a completed sale, a contract of sale susceptible of enforcement by the principal, or an incomplete sale due to the fault of the principal. The reason for this “enforceable contract” element of proof is stated in a quote from Lunney. In such case the vendor may usually enforce the specific performance of the contract, and he may in any case recover damages for the breach. In either way he gets the advantage of his bargain, and the broker has done all required of him. Such is the generally accepted view. 44 L.R.A. 593, 597. It is easy to surmise a situation where, through negligence or fraud, a broker would produce the “ready, willing, and able” buyer but include some flaw in the contract of sale, such as an inadequate description of the principal’s land, which would allow the purchaser to back out of the deal and would not allow the principal to gain the benefit of his bargain with the broker because the contract is incapable of being specifically enforced as reasoned in Lunney. This situation should signal caution in extending the rule in Fike to all unenforceable contract situations caused by the ineptness or fraud of a broker who collects his commission leaving the seller saddled with his land and in a position of having to file or defend a suit for fraud or negligence against the broker. The Reeder and Moore cases cited by the majority (in addition to Fike) both cite the “binding contract” and “enforceable contract” language in the test for when commissions become due. Here testimony indicates that the purchaser was ready, willing, and able to perform pursuant to the agreed terms regardless of the unenforceability of the contract of sale. The seller, as in Fike, refused to complete the sale thus excusing the necessity of the broker proving an enforceable land sale contract.