Johnson v. Allen

• Decision Date: 20 April 1945
• Docket Number: 6779
• Citation: 158 P.2d 134,108 Utah 148
• Court: Utah Supreme Court
• Parties: JOHNSON v. ALLEN

158 P.2d 134

108 Utah 148

JOHNSON v. ALLEN

No. 6779

Supreme Court of Utah

April 20, 1945

Appeal from District Court, First District, Cache County Marriner M. Morrison, Judge.

Action by H. B. Johnson against H. H. Allen, also known as H. H Allen, Jr., to recover a real estate broker's commission allegedly earned under a written contract. Judgment for the plaintiff, and the defendant appeals.

Judgment affirmed.

M C. Harris, of Logan, and P. M. Condie, of Preston, Idaho, for appellant.

L. E. Nelson, of Logan, and A. L. Merrill, of Pocatello, Idaho, for respondent.

Wolfe, Justice. Larson, C. J., and McDonough and Turner, JJ., concur. Wade, Justice, concurring.

OPINION

Wolfe, Justice.

Action on a written contract to recover a real estate broker's commission alleged to have been earned under the terms of the contract but not paid. After a jury trial the court entered a money judgment in favor of the plaintiff and the defendant prosecuted this appeal.

On May 20, 1943, the defendant, H. H. Allen, was the owner of several tracts of land located near Swan Lake, Idaho. The defendant, desiring to sell part of this land signed and delivered to the plaintiff the following listing contract which insofar as material here provided:

"Logan, Utah. Date: May 20, 1943

"In consideration of your agreement to list the property described on the reverse side of this contract and to use your efforts to find a purchaser, I hereby grant you the exclusive right for six months from date hereof, and thereafter until you receive from me a 15 day written notice terminating this agreement, to sell said property at the price and terms stated hereon, or at such other price, terms or exchange to which I may agree.

"If said property is sold before the expiration of this agreement by myself or by any other persons, I agree to pay to you the regular commission of 5%, or if it is sold within three months after such expiration to any person to whom you have previously offered it, I agree to pay to you the commission as above stated.

"Dated at Logan, Utah

May 20, 1943

"Accepted May 20, 1943

H. H. Allen, Owner."

(Reverse Side of Contract)

"Date: May 20, 1943

"1. No. . . . . .

"2. Size 1000 acres Lot . . . . Block . . . . .

"3. Plat or Sub-Division: All land on Ranch including Cattle Range for 103 head.

"4. Location: Swan Lake, Idaho. Between . . . . and . . . . .

"5. Owner: H. H. Allen. Address . . . . Phones: Res. . . . .

Bus. . . . .

"6. Price: $ 60,000.00 Cash $ 30,000.00 Bal. to be arranged Including Interest . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

"10. Amount of Mortgage, Federal Loan.

"11. Will consider exchange for . . . . Including all cattle, 15 head brood sows, and all equipment and machinery.

"12. Remarks: Excluding buildings used for sheep.

"Signed: H. H. Allen."

It is shown by the uncontradicted evidence that the plaintiff immediately after the signing of the listing contract diligently went about his duties thereunder in an attempt to find a purchaser; that within the six month period stipulated in the listing contract the defendant sold approximately 1000 acres of land near Swan Lake, Idaho for a price in excess of $ 60,000; that defendant had not prior to said sale or at all given plaintiff 15 days' written notice that the listing contract was terminated; and that defendant refused to pay the plaintiff his commission as provided in said contract. On conflicting evidence the jury found that the listing contract was signed by the defendant, Allen, on May 20, 1943, in Logan, Utah. This must also be considered by us as an established fact.

By way of defense the defendant contended (1) that the plaintiff fraudulently induced defendant to sign said listing contract under the misrepresentation that the listing was for only 60 days; (2) that plaintiff in taking said listing contract and performing his duties thereunder was acting as a real estate broker in the State of Idaho in violation of various Idaho statutes that required a real estate broker to procure a license and expressly made such a license a prerequisite to the recovery of a commission for services rendered as a real estate broker; (3) that the listing contract was within the Statute of Frauds and was void thereunder because the land listed in the contract was not described with sufficient particularity; (4) that the contract was void because the land, under Idaho law, was the community property of the defendant, Allen, and his wife, and that the wife had not signed the listing contract.

The trial court ruled that as a matter of law there was not sufficient evidence of fraud to go to the jury. The remaining issues of fact were submitted to the jury by special interrogatories. The jury answered that the listing contract was made in Utah; that the plaintiff had on or about September 2, 1943, buyers able, willing and ready to buy the land and that within the six months period from date of contract defendant sold the land listed in the contract. Upon this special verdict the court entered judgment for the plaintiff, and thus ruled against defendant on all the foregoing contentions.

The defendant on this appeal first contends that the trial court erred in taking the issue of fraud from the jury. The only fraud claimed is that the plaintiff induced the defendant to sign the listing contract by misrepresenting that the listing was for only sixty days when in fact it specified six months. The evidence was in dispute concerning the place and time of the signing of the contract. The defendant stated that it was signed at his home in Swan Lake and that his wife and a daughter were there at the time. Both the wife and daughter testified that at that time the plaintiff told the defendant that the contract was only for sixty days. Defendant also testified that he was told that it was a sixty day listing and that he would not have signed it had he known it specified six months.

In support of the trial court's action in taking the issue of fraud from the jury the plaintiff points to the fact that the contract was short and could have been easily read; that the defendant had plenty of time to read it; and that there was no artifice or trick to prevent him from reading it. It is fundamental that before any one can have relief from a claimed fraud he must show not only that he relied on the misrepresentation but also that he had the right to rely on it. Stuck et al. v. Delta Land & Water Co., 63 Utah 495, 227 P. 791; Carbon County v. Draper, 84 Mont. 413, 276 P. 667.

It is on the grounds of unjustifiable reliance that courts deny relief to those who, relying on representations as to contents, sign written contracts without reading them. As a general proposition courts have adhered to the theory that one sui juris in possession of all his faculties and dealing at arms length is not permitted by the law to rely exclusively upon the representations of the other contracting party as to the contents of a written contract. Courts look for something said or done which would be reasonably calculated to disarm a reasonably prudent person so that he would sign the contract without reading it and in the absence of some act or artifice in inducing the other part to refrain from reading the contract relief from the fraud is often denied. This general rule is stated in Kelley v. Salt Lake Transportation Co., 100 Utah 436, 116 P. 2d 383, and Brown v. Union Pac. R. Co., 76 Utah 475, 290 P. 759. See also Kreate v. Miller, 226 Ky. 444, 11 S.W.2d 99; Kaiser v. Nummerdor, 120 Wis. 234, 97 N.W. 932; Andrus v. St. Louis Smelting & Refining Co., 130 U.S. 643, 9 S.Ct. 645, 32 L.Ed. 1054; Williams v. Williams, 220 N.C. 806, 18 S.E.2d 364; Cooley on Torts, 3d Ed., p. 933.

It is at first blush disturbing that a person may defend against fraud by stating "You should not have trusted or believed me" or "Had you not been so gullible you would not have been deceived." The law will seldom allow the plea of contributory negligence to a wilful wrong. Indeed Williston states that the modern trend

"is certainly toward the doctrine that negligence in trusting in a misrepresentation will not excuse positive wilful fraud or deprive the defrauded person of his remedy." Williston on Contracts, Rev. Ed., Vol. 5, Sec. 1516, p. 4231.

As noted by Cooley in his book, supra,

"There is no inflexible rule to this effect [that a person failing to read a contract before signing it will be denied relief] and it would be a reproach to the law if there were. The ways of fraud are indefinite in their diversity, and if into any one of them all the law refuses to follow for the rescue of victims, it will be in the direction of that one that fraudulent devices will specially tend. It can never be either wise or safe to mark out specific boundaries within which they shall have impunity; but each case must be considered on its own facts, and every case will have peculiarities of its own, by which it may be judged." See also Brown v. Union Pac. R. Co., 76 Utah 475, 290 P. 759, to the same effect.

The better view seems to be that a person will be given relief from fraud even though he failed to read the contract before signing if he was by some act or artifice induced to refrain from reading it, or if because of the circumstances he was justified in relying on the representations made. See Williston on Contracts, Rev. Ed p. 4234; Daily Telegram Co. of Long Beach v. Long Beach Press Pub. Co., 133 Cal.App. 140, 23 P. 2d 833; Hanscom v. Drullard, 79 Cal. 234, 237, 21 P. 736, 737. In the latter case it is noted

"A man may perhaps be able to discover for himself what he ought to know if left to his own devices, but where he is induced by the artifice of...