Court Opinion

ID: 9772966
Source: CourtListenerOpinion
Date Created: 2023-08-29 17:34:05.45362+00
Date Added: 2024-06-11T07:29:15.264839
License: Public Domain

John I. Purtle, Justice, dissenting. I disagree with the majority on two issues. I believe that the 10% commission should have been shared with the other joint venturers and that all of the joint venturers should have been charged for the lots they purchased. Although this Court has not directly ruled on the question of whether members of a joint venture may collect a commission at the expense of the other members, without full disclosure, the decided weight of authority favors rejection of a fee to a member or members of the joint venture at the expense of other members. Toney v. Haskins, 7 Ark. App. 98, 644 S.W.2d 622 (1983); Humburq v. Lotz, 4 Cal. App. 438, 88 P. 510 (1906). When appellant, who owned 50% of the joint venture, submitted the offer to purchase there was nothing in the offer to suggest payment of a commission to anyone. After the original seller agreed to the offer the real estate agents, part owners of the joint venture, wrote on the bottom of the offer and acceptance that a 10% commission would be paid. The majority opinion agrees that an undisclosed commission should not be allowed. I do not think the commission was disclosed. There was no evidence to indicate that the realtors who were joint venturers were to receive a commission. The commission of $41,415.00 was paid out of the $ 120,000.00 which thej oint venturers paid at the time of the closing of the transaction. It is obvious that the joint venturers would have been required to pay out $41,415.00 less had the realtors not received a commission. The fact that several members later agreed to approve the commission is not enough to bind the 50% ownership which never did ratify the commission. The second point of my disagreement involves the purchase of lots by individual members of the joint venture. Appellant purchased 3 lots and several other members purchased one or more lots. The record reveals that appellant told the joint venturers that if they wanted to buy lots they could wait and pay for their lots out of profits which were expected to be received by the venturer. All of the joint venture members who purchased lots except two signed a contract which stated, “Interest accruing at the rate of 8%. Principal and interest payable from distribution of profits from joint venture, or as otherwise agreed.” The instrument also contained the statement, “Buyer agreed that he is not relying on any oral representation of seller or his agents.” The same contracts and statements were sent to Ralph Cotham and Frank Lyon. Neither party returned the contract. The contract described the particular lot which the parties were interested in. Thereafter annual statements were sent to all of the parties who had indicated an intent to purchase a lot. The financial statements identified each purchaser by name and showed the date of purchase, the price agreed to and the amount of interest accrue to date. The statement ending on December 31, 1979, clearly revealed the names of the purchasers and the amount of interest accrued until that time. Statements were sent for 1980 and 1981, which also revealed the purchasers’ names and the amount of interest accrued. Not one of the joint venturers called to object to the amount charged against them on the statements. On August 13, 1982, after the joint venture had paid its indebtedness, appellant caused the accountant to compute the distribution the investors would receive if the money on hand were used to pay off the lots they were charged with. The appellant, who purchased 3 joint venture lots, was charged with the same rate of interest as were the others. In accordance with this accounting procedure appellant sent a check to Ralph Cotham for $23,021.04; Sam Strauss, $11,510.52; $13,758.24 to Bill Floyd; and $16,710.20 to Fred Selz. Appellant did not receive a distribution but applied a credit to his account which would reduce his note to the joint venture to a balance of $7,560.17. It was after these checks were received that the controversy arose. I cannot understand where there was any evidence to support the trial court’s findings that the debts of the members of the joint venture are not due in accordance with the terms of the purchase contract but will only be due if they elect to purchase these lots after the project is completed. All of the testimony clearly established that the members were to be charged interest from the date they agreed to purchase the lot. In fact to allow them to select a lot after the project is completed will be impossible for the reason that no lots will be available. Finally, appellant’s exhibits 18 and 19, copies of the contracts sent to Cotham and Lyon, should have been admitted as relevant evidence on the question whether they had purchased the lots. This was prejudicial error so far as I am concerned. I would affirm in part and reverse in part and remand the case to the trial court with directions to disallow the 10% commission and to charge all the purchasers of the lots with 8% interest from date of purchase, just as appellant charged himself.