Court Opinion

ID: 7814150
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:29:08.437425+00
Date Added: 2024-06-11T16:30:33.402951
License: Public Domain

Ed. F. McFaddin, Justice (dissenting). The majority holds that the Harrisons, as the landowners, are liable for a real estate commission claimed by the broker (United Farm Agency and Butterworth), even though the sale of the property was consummated several months after the expiration of the broker’s contract. From that holding I dissent. It is my view that the broker is not entitled to any commission in this case, because (a) the sale was not made within the time stated in the broker’s contract of employment; (b) the owners are not accused of bad faith; and (c) the owners did no act to extend or waive the time limit set out in the broker’s contract of employment. On January 14, 1950, the owners (Mr. and Mrs. Harrison) listed the farm for sale with the broker, and signed a contract (on forms provided by the broker),1 which provided in part: “I grant you the right to procure a purchaser, ready, able and willing to buy said property . . .”, at the designated price, and “I agree that this contract shall remain in effect for a period of one year, and that when terminated there shall be no charge for expenses, commissions, or otherwise against me. However, if within 90 days after termination I sell the property to a purchaser procured through you or your representative, I will immediately pay you the full commission . . The contract was dated January 14, 1950. The year expired January 13, 1951, and the 90 days thereafter expired on April 13, 1951. The sale herein was not made until September 13, 1951, which was 5 months after the year and 90 days provided in the contract. All of the activities of the broker were conducted by Butterworth. He showed the farm to Mr. Vanadore, who was at that time unwilling to buy, but wished to rent the farm with an option to purchase. Accordingly, on November 15, 1950, Harrison signed such a contract with Vanadore, leasing the farm for one year at a rental of $500.00 cash, and giving Vanadore one year in which, to exercise the option to purchase. Butterworth delivered the $500.00 rental money to Harrison, without claiming any commission. No further effort was made by the broker to sell the farm to anyone, and no request was made for a renewal of the contract with the Harrisons. When Vanadore exercised his option on September 13, 1951, the papers were prepared and the trade completed without any services on the part of the broker. The Harrisons did nothing to impliedly extend the broker’s contract, or to waive the time limit which the broker had placed in the contract. In allowing the broker to recover in this case, the majority of this Court is saying that if a broker, who has a time limit for completing a sale, can inveigle the owner into leasing the property for any length of time under a contract containing an option for the lessee to buy, then the land owner must pay the broker the commission on the sale if the lessee ever exercises the option. I cannot agree with such holding. The broker’s contract in this case stated that he would not be entitled to a fee for a sale of the property unless he produced — within the year and 90 days- — a purchaser ready, able and willing to buy; and it is admitted that within that period of time, the broker did not produce such a purchaser. In McCurry v. Hawkins, 83 Ark. 202, 103 S. W. 600, we held that when the broker’s contract of employment stipulated that the sale should be made within a limited time, the broker was not entitled to his commission if he failed to produce a buyer within the time stated. Likewise, in Murray v. Miller, 112 Ark. 227, 166 S. W. 536, we find this language : “According to the undisputed evidence in this case, the appellant has not shown himself entitled to a commission, and the Court was correct in giving a peremptory instruction. This is so on two distinct grounds. In the first place, appellant’s authority was limited to a specified time, and the rule is that under a contract thus limited the agent must produce a purchaser ‘ready, Filling and able’ to purchase within the time specified. If he fails to do that, he is not entitled to a commission, even though a sale is subsequently made by the ovmer to a purchaser who had negotiated with the agent. Brown v. Mason, 155 Cal. 155, 99 P. 867, 21 L. R. A., N. S., 328. This is, of course, subject to the rule that the owner must act in good faith and not hinder or interfere with the agent in his effort to make a sale during the period of the contract. Good faith on the part of the owner is the test of his liability, under a contract thus limited, unless the agent produces a purchaser within the time limited in the contract. The Addressograph Co. v. The Office Appliance Co., 106 Ark. 536, 153 S. W. 804; Greenspann v. Miller, 111 Ark. 190, 163 S. W. 776.” In American Law Institute’s Restatement of the Law of Agency, in § 446, the holdings are summarized in this language: “An agent whose compensation is conditional upon his performance of specified services or his accomplishment of a specified result within a specified time is not entitled to the agreed compensation unless he renders the services or achieves the result within such time, except where the principal, in bad faith, has prevented him from doing so. ’ ’ As previously stated, there is no claim that the Harrisons acted in bad faith in this case. Furthermore, in the discussion following said § 446 of the Restatement, this appears: “If, after the time limit has expired, the broker continues his efforts with the seeming approval of the principal who, by his conduct, appears to recognize the agency as subsisting, it may be inferred either that the principal has extended the time within which he is willing to pay the stated commission or that the principal agrees to pay the broker a reasonable compensation (not necessarily the amount previously offered) for subsequent successful efforts of the broker. But the mere fact that the broker continues his efforts to the knowledge of the principal is not enough to warrant this interference, nor is it sufficient that the principal himself re-opens negotiations with a customer previously found by the broker. ’ ’ The last sentence covers the situation here. Many cases involving similar situations are collected in the Annotation in 26 A. L. R. 784, entitled, “Broker’s right to commission as affected by failure to consummate sale within time limited by terms of employment”. The rule is well established, and I regard the present holding as a departure from well established cases.  . The rule that a written contract is to he strictly construed against the writer applies to a real estate broker’s contract, as well as any other contract. See Peebles v. Sneed, 207 Ark. 1, 179 S. W. 2d 156.