Court Opinion

ID: 5172961
Source: CourtListenerOpinion
Date Created: 2022-01-02 05:09:48.210725+00
Date Added: 2024-06-11T08:26:09.962995
License: Public Domain

BISTLINE, Justice,
dissenting.
I.
The Court’s opinion contains a factually accurate portrayal of the underlying facts which gave rise to the fee dispute until the final paragraph wherein it is stated that “the agreement has been signed by two of the co-owners with representations made to the broker by the signing co-owners that the contemplated transaction would be approved by the third co-owner.” (Emphasis added.) No representations were made that can be found in my reading of the record. Nor do I find anything to substantiate the Court’s following statement which declares that the record supports the con*476elusion “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.” This statement, like the one preceding it, is overly broad, and puts the Court in the position of not only administering the coup de grace to I.C. § 9-508, but unsettling the provisions of I.C. § 9-503 and 9-505(5) as well.
Until today I had always thought it to be the law that a man could not legally be a real property agent for his mother, or a mother be such agent for her son, “unless the authority of the agent be in writing, subscribed by the party to be charged.” In order to justify a representation of authority to act on behalf of another in regard to real property, an appointment of such agency in writing would not be just the best evidence of that fact, but indispensable.
The Court’s opinion also makes careless use of the word “authorized.” The fact is, however, that he did not have such authority, and did not represent that he did. Counsel for the Comptons states it very well in this language:
“The instant case contains no agency, either expressed or implied, and no representation whatsoever on the part of the Comptons. There is a definite difference in saying T can sign for the corporation’ and ‘Mother usually goes along with what I want.’ The former is a statement of present ability, and the latter a hope of being able to persuade.”
As it turned out, Mother Bateman did not go along with what her son wanted to do. The trial court made the specific finding: “The mother did not sign the agreement, nor was she asked to.” As to the placing of blame for the impasse which came about on her refusal to participate in the sale, the trial court’s finding is:
“Now the plaintiff (Rexburg Realty) knew from the outset that the mother had an interest in the property, but defendant Dean Compton assured plaintiff there’d be no problem: ‘She will go along with it; she wants to sell,’ or words to that effect.”
In denying a plaintiff’s motion for summary judgment the trial court ruled that the primary triable issue of fact was that raised by Compton’s affidavit:
“The court sees only one issue of fact in this case, and that issue is raised by affidavit of defendant, .
‘ * * * that the Plaintiff Realtor knew that as a condition precedent to there being a valid employment contract * * * that the consent and signature of Rita Compton Bateman was a necessary condition to the enforceability of the contract * * * . Plaintiff failed to obtain the consent and signature of Rita Compton Bate-man to the employment contract * * and as a result of such failure the employment contract * * * is not valid.’ ”
In determining the cause on the merits the trial court expressed his view that he was governed by Forsman v. Hatch, 97 Idaho 511, 547 P.2d 1116 (1976), and Garfield v. Tindall, 98 Idaho 841, 573 P.2d 966 (1978), without elaborating on how he concluded that those two cases should govern this.
Before judgment was entered the Comp-tons moved that the findings be amended to reflect:
“1. That there was no collusion among defendants and Bateman, as co-owners, to defeat the sale to the prospective buyers found by Plaintiff, Mrs. Compton’s distress at finding sale negotiations had collapsed supports this finding.
“2. That Defendant Dean Compton made no express or implied representation on behalf of Mrs. Bateman. This additional finding is consistent with evidence presented by both Plaintiff and Defendant during the trial.”
Responsive to that motion, the trial court added as additional facts found:
“The parties did not try any issue of collusion between the defendants or either of them and mother of defendant Dean Compton.
“The parties did not try any issue of agency between the defendants, or either *477of them and the mother of the defendant Dean Compton.”
The trial court offered no explanation for not making the findings requested, and suggested no reason for the rather unusual “findings” added which simply are not findings of fact. Regardless of the non-findings, it seems to be accepted in the Court’s opinion that there was no collusion on the part of the Comptons, and there was not any representation by the Comptons that Dean Compton was an agent of his mother with power to represent her in listing the farm.1 So we get down to a consideration of the legal effect of “assurances.”
As urged by the Comptons, the issue of law here is whether Compton’s “assurances”2 that his mother would go along with whatever the Comptons agreed upon precludes the applicability of I.C. § 9-508. It is beyond dispute that Compton did, and honesty, tell the real estate salesman and broker from Rexburg Realty that he expected that his mother would go along with any deal which satisfied the Comptons.
At the very most, that is all that can be said as to Compton’s “assurances.” The salesman and broker for the realty company both knew all along that Mrs. Bateman was a substantial part owner, and knew also she was not Dean Compton’s spouse — nor was she a subservient shareholder in any corporation under Compton’s dominion, but owning the farm.
Such being the case, I am wholly unable to comprehend what reasoning is behind the Court’s conclusion that Compton’s assurances rendered nugatory the provisions of I.C. § 9-508. The holding of Forsman v. Hatch, supra, was simply that Mr. Hatch, as manager of the community comprised of himself and Mrs. Hatch, could bind himself to the payment of a commission without Mrs. Hatch’s signature — notwithstanding her ownership interest in the property. In Garfield v. Tindall, supra, the ownership of the property involved was partly in the name of Tindall and his wife and the remainder in a family corporation over which Tindall either had control or actually represented that he did have control.
My concurrence in Garfield v. Tindall was gained, as to the community property, under the compulsion of Hatch, and as to the corporate property, under an estoppel theory relied upon by the trial court. Because it is apparent that the Court is now going far beyond the bounds of those two cases, it has become necessary to review those two decisions in comparison to the facts of this case.
II.
A review of the facts of this case will illustrate the kind of problem which will recur so long as I.C. § 9-508 is given the desiccated reading provided in the majority opinion. The first contact between the Comptons and the real estate broker was initiated not by the Comptons, but by the broker. Having heard that the Comptons were thinking of selling their farm, the broker approached them with the suggestion that he was an interested purchaser, and was thus able to get them to set a price on the property. Having so stimulated their interest, he then said he’d “have to see” whether he could come up with the $70,000 in cash which the Comptons said they wanted as a downpayment. He returned to say that he couldn’t come up with the cash, but announced — for the first time — that he just happened to be a real estate broker, and one who could list the property and help them sell it. By that time he had already, by independent inves*478tigation, made himself aware that Mr. Compton’s mother was a co-owner of some of the property. The broker prepared the listing agreement and gave it to Mr. Compton with the suggestion that he take it home, look it over, and have his wife sign it. There was discussion at that time of the fact that Mr. Compton’s mother also owned an interest in the property, and according to Mr. Compton he asked the broker whether his mother’s signature on the listing agreement would be necessary as well. To that question the broker only responded by asking “what kind of relationship” Mr. Compton had with his mother; when told that “she usually goes along” with what Mr. Compton wanted, and that she herself had expressed a desire to sell the property, it was the broker who told Mr. Compton her signature would not be necessary. After the earnest money agreement was presented to the'-.Comptons, and they signed it, Mr. Compton \offered to take the agreement over to his^ftiother’s house for the purpose of obtaining her signature. Again it was the broker who said that it wouldn’t be necessary to do so.
The majority declares that the result which they obtain in this case follows from Hatch. The dissent of Justice McQuade in that case, however, is far more persuasive. A recent case similar on its facts was handed down about the same time as Hatch. In Eastern Oklahoma Land & Cattle Co. v. Dorris, 549 P.2d 78 (Okl.1976), a widow contacted a broker to obtain his services in selling land belonging jointly to the widow and her five children. The broker was fully informed of the joint ownership of the land, and no promises were made by the widow that all would agree to convey. After the widow signed the listing agreement, the broker procured a buyer ready, willing, and able to purchase the property. The children, however, refused to agree to the sale, and the deal was never consummated. When the broker sued for his commission, the trial court dismissed the complaint, which dismissal was affirmed on appeal:
“The broker has a right to presume that his principal owns land or is authorized to make a sale thereof when it is listed with the broker. We agree this is the general rule. However, an exception to the rule exists where a broker employed to sell real property knows, or should know, that the one employing him will be unable to give a good title or that one having an interest in the property will not join in the sale. If a real estate broker, at the time he makes a contract with the vendor for the sale of his real property knows of any defects in the owner’s title, or is aware of facts sufficient to put a reasonably prudent person on inquiry which, if followed with reasonable diligence would advise him of any such defect, the broker is not entitled to recover a commission if the sale fails because of the defect. Best v. Kelly, 22 Wash.2d 257, 155 P.2d 794, 156 A.L.R. 1387 (1945). . . .
“The applicable rule in such cases is set forth in Stevenson & Tomm v. Barnes, 274 P.2d 531, 534 (Okl.1954), in which the court said:
“ ‘It is essential to the broker’s right to commissions where the transaction in question fails of consummation because of a defect in, or absence of, title, that he himself is not at fault and that he does not have knowledge or notice of the defect in, or absence of, title at the time of finding the customer.’ ” Id. at 80.
III.
Justice McQuade in his dissent in Forsman v. Hatch, with both acumen and vision prophesized that the majority’s holding in that case would “invite brokers to accumulate promises of commissions from the unknowing when there is no real expectation that a sale will ever result.” 97 Idaho at 518, 547 P.2d at 1123. The emphasis supplied is my own. There is much to be said for that of which he adequately forewarned:
“The majority opinion protects the realtor against the owner of real property, even though the former is in most instances more knowledgeable and expert than the latter. The majority opinion does nothing to safeguard against the *479possibility of a broker generating a fee by persuading one spouse, unschooled in business matters, to sign a brokerage contract, which the other spouse might never had agreed to.” Id. at 518, 547 P.2d at 1123.
Justice McQuade also had a better grasp on the Idaho law of community property than did the other members of the Court wherein he pointed out that under our theory neither husband nor wife can say as against the other that “I own it.” Nor can either point to an undivided interest and say that such is his or hers. The key word describing each spouse’s interest, back in law school at least, was “moiety,” which was equated with the proposition “that the interests of the husband and wife in the community property are present, equal, and existing interests during, the marriage itself.” deFuniak and Vaughn, Principles of Community Property, 2d ed. § 105, p. 261-62.
Such was exactly what Justice McQuade wrote, and its truth is unassailable. There is only one owner of community real property in Idaho, and that one owner is the husband and wife who own it.
A case footnoted by Justice McQuade is very suggestive. Anderson v. Idaho Mutual Benefit Ass’n, 77 Idaho 373, 292 P.2d 760 (1956), although it did not involve real property, did involve the management of and disposition of community property. As I read that case, it stands for the proposition that one spouse acting alone is not authorized to give away community property.
The Forsman v. Hatch majority, however, would say to the contrary. But such a view presents real problems. Assume, for example, that a husband decides to sell the community property ranch for $500,000, but the wife says no. The husband, notwithstanding the wife’s refusal, can go right ahead and list it for that price, agree to give a 10% commission of $50,000, and the community assets are then quickly reduced by $50,-000 — all in the face of the wife’s objection. That to my mind is a windfall to the broker, and a windfall is a gift. Nothing precludes the husband from listing the farm with four brokers on the same terms. If all find buyers, the wife sees the community assets reduced by $200,000. And, of course, a disgruntled husband (and now with the law changed as it is, the wife as well) may very well be possessed of an intent to defraud his wife, or force her into a quick sale in contemplation of divorce. He could be in cahoots with a broker, or with a buyer, and the wife never the wiser. I.C. § 9-508 more likely had for its purposes the protection of wives against ill-starred arrangements with real estate brokers, than it did to bar fraudulent claims of brokers.
It is Forsman v. Hatch which should be discarded, rather than I.C. § 9-508.
IV.
The precise holding of Garfield v. Tindall, and so declared, was simply:
“We hold that a co-owner of property, who has expressly or impliedly represented to the broker that he can convey the property to be sold, cannot escape personal liability under a brokerage commission contract because it was not signed by the other co-owner(s).” 98 Idaho at 843, 573 P.2d at 968 (Emphasis added.)
I have with much deliberation emphasized the word “represented” and with good reason. Such is the key word in our holding in that case. Without that word appearing, and knowledge of that which it signifies, I would not have concurred.
Representation, falsely made, or made under circumstances constructively leading to a false representation, is, of course, an essential element in the doctrine of estoppel. Recently in Tommerup v. Albertson’s, Inc., 101 Idaho 1, 607 P.2d 1055 (February, 1980), the court quoted from Bjornstad v. Perry, 92 Idaho 402, 443 P.2d 999 (1968):
“Equitable estoppel generally requires that a false representation or concealment of a material fact be made with actual or constructive knowledge of the true state of facts; that the party to whom the false representation was made was without knowledge or the means of acquiring knowledge of the real facts; that the false representation was made *480with the intent that it be acted upon, and that the party to whom it was made relied and acted upon it to his prejudice. 92 Idaho at 405, 443 P.2d 1002.” Tommerup, 101 Idaho at 5, 607 P.2d at 1059. (Emphasis added.)
As the text American Jurisprudence states it:
“The doctrine of estoppel is based upon the grounds of public policy, fair dealing, good faith, and justice, and its purpose is to forbid one to speak against his own act, representations, or commitments to the injury of one to whom they were directed and who reasonably relied thereon. The doctrine of estoppel springs from equitable principles and the equities in the case. It is designed to aid the law in the administration of justice where without its aid injustice might result.” 28 Am.Jur.2d at 629 Estoppel and Waiver §28.
Black’s Law Dictionary, 5th ed., defines “representation” in contract law as:
“A statement express or implied made by one of two contracting parties to the other, before or at the time of making the contract, in regard to some past or existing fact, circumstance, or state of facts pertinent to the contract, which is influential in bringing about the agreement.”
A thorough review of Garfield v. Tindall does produce the statement, at p. 842 of 98 Idaho, at p. 967 of 573 P.2d that “Tindall assured Clark that the corporate ownership presented no problems.” Other than that, the word “assured” or the word “assurance” does not appear in the opinion; that language is clearly not the language of the specific holding of the case. The words “assured” and “assurance” are not words of legal significance other than in insurance law. Black’s, p. 113. As used in the Garfield v. Tindall opinion I see only that the Court was not careful to say that Tindall represented his then present ownership and control of the corporate interest in the property, and that he was, as a matter of existing fact, in a position to see to it that the corporation would issue the requisite deed. The “assured” language in Garfield v. Tindall was merely the author’s choice in presenting the reader with a shorthand summary of the factual background of the transaction.
That this is so is borne out by resort to the appeal record in that case. The trial court decision was not based upon any “assurances” as to what the corporation might or might not do in the future, but on “representations.” Citing an annotation found in 156 A.L.R. 1398, 1400, the trial court wrote:
“A property owner is obligated to act in good faith toward his broker and the broker should not be prevented from or deprived of the opportunity of consummating the sale on account of the conduct of the principal. Accordingly, a broker is entitled to rely on the representations of the party signing the agreement that he has the title or can get the title prior to closing.”
Citing 12 Am.Jur.2d Brokers, § 194, p. 936, the trial court further wrote in his carefully worded decision:
“It is the general rule that unless the broker and his employer have stipulated to the contrary, the broker is entitled to his compensation upon the completion of the negotiations in question, irrespective of whether the contract negotiated was actually consummated or whether the failure to complete the contract was due to the default or refusal of the employer or to that of the party procured by the broker, so long as the failure to carry it through to a successful completion is not due to any fault of the broker.”
But, added the court, citing 10 A.L.R.3d at 665:
“Thus, it is generally held that where the owner of the property is unable to convey full title, and that therefore the eventual sale does not come about and this is no way the fault of the broker, the broker may nonetheless recover the commission.”
The trial court simply concluded that it was the owner, Tindall, who made the representation as to his ability to produce a deed, and that the broker was in no way at fault. Obviously the broker would ordinari*481ly not be expected to have any knowledge of the corporate structure.
It is also to be noted that the court there placed no reliance on Forsman v. Hatch, the opinion in that case having not been handed down prior to trial and judgment in Garfield v. Tindall. The court did, and correctly, resort to general principles of estoppel as found in the A.L.R. annotations and Am. Jur.2d.
V.
Although the trial court in the case at bench ruled in favor of Rexburg Realty solely on the supposed applicability of the two cases just discussed, it is of interest that both parties in their briefs in this Court place substantial reliance on the general statements of the law found in Am.Jur.2d. Each party quotes an identical passage from 12 Am.Jur.2d Brokers, § 201 at 944:
“ ‘§ 201. Defect in principal’s title.
“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. . . . ’ (Emphasis added)”
The brief of Rexburg Realty continues the passage with a further statement that a broker not knowing of a defect is not bound to inquire, and suggests that there exists a presumption, in favor of the broker, that the owner does have marketable title.
However, such is not this case. As Comp-tons point out, Rexburg Realty knew of the title problem both by its own independent inquiry, and from the Comptons. They cited us to a recent Oklahoma case precisely in point, and discussed above in Part II.
The issue in this case narrows down to a placing of fault, which the court below apparently did not consider, feeling itself bound by what was said in Forsman v. Hatch and Garfield v. Tindall. The authorities make it quite clear that any fault on the part of the broker precludes him from recovering.
In considering fault it is appropriate to consider both the backgrounds of the respective parties and the relationship entered into by a listing agreement for the sale of real property. Once the listing is signed, the broker is the owner’s agent and held to a high fiduciary standard. It seems inconceivable to me that a state-licensed broker or his salesman is not also held to that same standard in obtaining the listing agreement. The Court today takes a step backward from those tenets of law which hold real estate brokers to a fiduciary standard in relationship to their clients; brokers will be permitted to collect commissions from owners regardless of the owner’s lack of understanding as to his obligation for the commission on signing the listing agreement. This case well illustrates why the fiduciary standard should be continued. It is inequitable that an experienced real estate broker, undeniably aware of potential problems in the way of an ultimate sale of the property listed, should be permitted to collect $27,000 from a party who was totally unaware that liability might be incurred regardless of result. A better rule of law would require a broker to be as careful of explanation in obtaining signatures from the uninformed as are district judges required to be in accepting guilty pleas.3
*482The entire flavor of the testimony brought out, or attempted to be brought out, by Rexburg Realty was that its broker and salesman were told real estate law by the Comptons — the farmers supposedly telling the licensed experts in their own field— that the signature of co-owner Mrs. Bate-man was not necessary. The same people nevertheless did tell Mr. Compton that he would have to obtain his wife’s signature. It does seem a bit ludicrous. In actuality, the record shows that Comptons, did nothing or said nothing to dissuade Rexburg Realty from obtaining Mrs. Bateman’s signature. I am in total agreement with that which Judge Beebe, Justice Pro Tern., has written, other than my ultimate conclusion is that the judgment should be reversed and the action dismissed.

. Rexburg Realty opens its argument with the assertion that “The facts in this case are abundantly clear and the only question to be resolved by the Court is one of Law.”

. As far as “assuring” Rexburg Realty goes, however, not even their salesman or broker testified that Compton used this particular language. On the contrary these witnesses testified only that Compton told them that his mother usually went along with what he decided, and also that she had expressed some desire that he sell the farm to make it easier on him. Thereafter, it was only in the leading and conclusionary questions of counsel for Rexburg Realty that any use was made of the words “assured” or “assurances.”

. The following questions were asked and answers given on Rexburg Realty’s cross-examination of Mr. Compton:
“Q (By Mr. Jolley) In other words, we are talking about your signing an Agreement to pay 28,000 or $27,500, which is a lot of money, in other words. Did it cross your mind as to the importance of including something in either one of the two Agreements that we have talked about?
“A I was certainly aware all the time that if the sale was made that we would have to pay a commission to the realtors.
“Q Are you aware of the language in the court that says if they find a buyer irrespective of their sale you are obligated to pay a commission?
“A I don’t think I was fully aware of that when I signed the Listing. 1 didn’t read the *482fine print. Mr. Dallin Reese didn’t state, ‘Be aware if you sign this you are going to owe us this much money.’ Nothing was talked about that. He said it was just five percent commission. I never thought too much more about it.”