Berven Co. v. Newman, 12386
| Decision Date | 15 August 1979 |
| Docket Number | No. 12386,12386 |
| Citation | 281 N.W.2d 268 |
| Parties | BERVEN COMPANY, Plaintiff and Respondent, v. Betty J. NEWMAN, Defendant and Appellant. |
| Court | South Dakota Supreme Court |
Thomas J. Green of Loucks, Oviatt, Bradshaw, Green & Schulz, Watertown, for plaintiff and respondent.
J. Douglas Austin of Austin, Hinderaker & Hackett, Watertown, for defendant and appellant.
The plaintiff-respondent, Berven Company, brought suit in Codington County against the defendant-appellant, Betty J. Newman. For convenience and clarity, the parties will be referred to as Berven Company and Newman.
Berven Company sued to recover a commission allegedly due under a contract entered into between the parties to sell Newman's real estate. The action was tried to the court and the trial judge awarded Berven Company a $12,400 commission under the theory that the parties had a valid bilateral contract. This award totaled the commission specified in the contract.
Newman owned the A & W Drive-Inn in Watertown. After her attempts at selling it proved futile, she contacted the Berven Company, a licensed real estate agency. Before the listing was entered into, the Berven Company immediately began compiling information about the A & W: they inspected the property; they acquired profit-loss statements and sales projections; they contacted A & W about franchises; and they performed other preliminary work. On the late afternoon of July 15, 1976, Newman, after consulting her attorney and one of Berven Company's realtors about the contract, signed the listing agreement. The realtor specifically explained the consequences of the exclusive right to sell provision to Newman. The pertinent portions of the contract provide:
This is a Binding Contract
For and in consideration of the mutual covenants and conditions, herein contained, Berven Company, hereinafter referred to as the "Agent", does hereby agree to use its best efforts, through its personnel, through advertising and through other brokers, which it may select, to sell the real property hereinafter described, and I (we) hereby list with said Agent, exclusively and irrevocably, the following described property, situated in the City of Watertown County of Codington State of South Dakota, to-wit:
for a gross sales price of $ One hundred sixty thousand and no/100 $160,000.00 Dollars and to accept a deposit thereof, and hold said deposit in Agent's real estate trust account until date of closing.
This Exclusive Listing Agreement shall expire and terminate as of NOON 12 o'clock P. M. on JANUARY 15, 197 6. (Defendant admitted this should have read "1977".)
I hereby agree to pay my Agent as fee TWELVE THOUSAND FOUR HUNDRED DOLLARS $ 12,400.00 of the selling price, when a purchaser is procured at the stated price and terms, or at any other price and terms acceptable to me.
In the event of any sale or exchange within the time covered by this listing, or within ninety days subsequent to the expiration of this listing agreement, to any party with whom my Agent has had contact, the terms and conditions of this agreement shall apply.
This agreement gives to my Agent the sole and exclusive right to sell the property described. If said property is sold during the term of this agreement, at a price and upon terms acceptable to me, to a purchaser procured by me or by other Agents or Agencies, or by any other party whomsoever, I agree to pay the Agent designated in this agreement, forthwith the amount of commission provided herein.
After the listing agreement was entered into, Berven Company contacted between five and seven buyers, set up a "homework kit," took approximately thirty-six snapshots, made two long-distance phone calls, talked to Newman's son about operating procedures and made inquiries regarding the transfer of this A & W franchise. This activity occurred between July 15 and July 19, 1976.
On July 19, 1976, Newman's attorney contacted the Berven Company. Newman's attorney expressed that she had procured a buyer through her own efforts and wished to cancel the contract. A letter of revocation was mailed the same day by her attorney to the Berven Company. On August 4, 1976, Newman signed a formal agreement selling the A & W for $140,000. Berven Company, relying on the terms of the exclusive listing agreement, brought suit to recover the $12,400 commission provided for in the contract.
Newman raises two issues on appeal. The first issue she presents is whether her revocation was wrongful, thus entitling Berven Company to receive the commission specified in the listing agreement. Newman maintains that in a real estate transaction such as this, the case of Beck v. Howard, 43 S.D. 179, 178 N.W. 579 (1920) is controlling. She interprets the case to say that the principal is given the power to revoke the agent's authority unless the agent has secured an option to purchase the property, in addition to securing the listing agreement. Berven Company argues that the terms of the contract militate against such an agency rule.
The second issue raised by Newman deals with whether there is consideration to support Berven Company's demand for its commission. Newman claims that Berven Company failed to perform substantial services prior to revocation causing a lack of consideration.
Newman's reliance on Beck v. Howard, supra, is misplaced. The contract in this case differs from that in Beck. In that case, "(t)he written instrument . . . merely authorize(d)s plaintiffs to sell or find a purchaser for the property, and was therefore revocable at any time before the plaintiffs had fully executed the power conferred." Beck v. Howard, 43 S.D. at 184, 178 N.W. at 581. There the court dealt with an exclusive agency situation under which the owner could sell without liability. The terms of such a listing agreement provide that for a stated period the owner will not deal through other brokers, yet he may sell the property himself without liability. Tetrick v. Sloan...
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Holiday Homes of St. John, Inc. v. Lockhart
...cases which might appear contrary to our holding, but most of them are distinguishable on their facts. For example, in Berven Co. v. Newman, 281 N.W.2d 268 (S.D.1979), the owner signed an agreement granting the broker an "exclusive right sell the property," and, after the owner sold it hers......
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Century 21 Associated Realty v. Hoffman, 17787
...the property is precluded from selling the property during the stated terms without paying the brokerage commission. Berven Co. v. Newman, 281 N.W.2d 268, 271 (S.D.1979); American Property Services v. Barringer, supra. The consideration for this bilateral contract consisted of Century 21's ......
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...5 Wash.App. 137, 485 P.2d 1005 (1971); Brown v. Miller, 45 Ill.App.3d 970, 4 Ill.Dec. 649, 360 N.E.2d 585 (1977); Berven Co. v. Newman, 281 N.W.2d 268 (S.D.1979); Blank v. Borden, supra. In addition, Mr. Jeffries admits that offers were communicated to him for the property at $2.4, $2.0 and......
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Kahler, Inc. v. Weiss, 19069
...Services, 256 N.W.2d at 889, n.1. Either party has the power to revoke, but not necessarily the right to do so. In Berven Co. v. Newman, 281 N.W.2d 268, 271 (S.D.1979), this Court found that the exercise of the seller's power to revoke, by making an unassisted sale, terminated the broker's ......