Boulevard Plaza Corp. v. Campbell

Decision Date02 January 1959
Docket NumberNo. 37571,37571
Citation254 Minn. 123,94 N.W.2d 273
PartiesBOULEVARD PLAZA CORPORATION, Appellant, v. Kenneth R. CAMPBELL, Respondent.
CourtMinnesota Supreme Court

Syllabus by the Court

1. A real estate broker, or agent, is bound at all times to act solely for the benefit of his principal in all matters connected with the agency. He is therefore in duty bound to communicate to his principal all facts of which he has knowledge which might affect the principal's rights or interests.

2. In case of double employment without the knowledge of the principal, the principal may void the transaction unless he has consented to or acquiesced therein, without showing any injury or any intent to deceive. Under such circumstances rescission remains at all times the principal's absolute right.

3. We apply the rule here which prevents the agent or trustee from acting for himself, in a matter where his interests would conflict with his duty, and from acting for another whose interest is adverse to that of the principal.

4. An agent in the sale of real estate may not sell to himself without the knowledge of the owner whom he represents. The inflexible rule, founded on public policy, is that such a transaction shall not be permitted to stand against the principal unless it appears that with full knowledge of all the facts he either previously consented to or subsequently ratified it.

5. M.S.A. § 559.21, which provides a statutory method for termination of contract of sale, does not prevent the purchaser's abandonment of the contract and neither does it provide the exclusive remedy of the vendor for a breach of the contract terms.

6. Section 559.21 is cumulative and not exclusive to the extent of ruling out the vendor's right of action against a defaulting vendee for specific performance on the one hand, or on the other, for a judicial determination of the contract.

7. Where one party to the purchase agreement gives notice to the other that he will not perform it, acquiescence in this by the other party (not being in possession) by a comparatively brief delay in enforcing his right by an appeal to the courts will be a bar.

8. We have followed and applied the rule in this state that those who desire to secure the aid of equity in enforcing the performance of contracts must show themselves prompt, ready, and eager to perform them and abide by them.

9. When either party to a purchase agreement fails or refuses to claim or act under or pursuant to its terms and provisions for such a length of time as to give the impression that such party has waived or abandoned the sale or purchase, and more especially when the circumstances justify the belief that such party's intention was to perform the contract only in case it suited that party's interest, such party or litigant will necessarily forfeit all claim to equity.

10. While the assignment by the vendee of the purchase agreement created a privity of estate between plaintiff and defendant, it did not create a privity of contract, and in the absence of an assumption or agreement on the part of the plaintiff, to pay the unpaid purchase price, he assumed no personal liability therefor to the defendant.

11. The burden is on the plaintiff in the instant case to show that there is no substantial evidence reasonably tending to sustain the trial court's findings.

Silver, Goff, Ryan, Wallace & Newcome, Allen, H. Aaron, St. Paul, for appellant.

Daniel F. Foley, Minneapolis, for respondent.

NELSON, Justice.

This appeal is from a judgment entered pursuant to findings in favor of defendant after denial of plaintiff's motion to amend the findings. There was no motion for a new trial.

Defendant, Kenneth R. Campbell, as vendor, and one Atwood Cranston, as vendee, entered into a purchase agreement dated March 10, 1953, for the sale of a tract of land located in Hennepin County, said tract being a part of outlot 15, as shown on the plat of Wayzata. By the terms thereof, the purchase price of $4,500 was to be paid as follows: $500 down, $1,000 payable on or before May 1, 1953, and the balance of $3,000 payable by executing a purchase money first mortgage payable $500 plus interest semiannually commencing November 1, 1953, final payment to become due May 1, 1956.

The vendor warranted:

'* * * that the premises to be conveyed are zoned commercial and that a building permit will be granted upon proper application for the construction of a retail store or restaurant building thereon; also there shall be no building or other restrictions against same.'

The vendor agreed to pay all annual taxes and assessments then due, and the purchaser agreed to accept a deed to the premises subject to annual taxes and assessments payable in 1954.

It was further agreed:

'Vendor shall furnish within 10 days from the date hereof an Abstract of Title, certified to date, or an owner's duplicate Torrens Certificate of Registered Title, showing good and marketable title in Vendor. Vendee shall have the term of 40 days after the receipt of same in which to examine the same, but in no case later than May 1st, 1953. If title shall be not marketable and Vendee shall so notify Vendor by written notice within the period above specified for Vendee's examination, then Vendor shall have the term of an additional 10 days after receipt of said notice, but in no case later than May 1st, 1953, in which to make the same marketable at his own expense. If title shall be not marketable or not so made within the granted term, then this agreement may, at purchaser's option, be null and void and the above receipted earnest money shall be refunded to Vendee. Failure to notify Vendor in writing within the time specified for examination of title by Vendee of defects or flaws in the said title shall constitute acceptance by Vendee of the said title. If title shall be marketable or so made within the granted term and Vendee shall refuse to accept the same and pay the additional monies and perform the covenants of this agreement, as herein set forth, then the above receipted monies may be retained by Vendor, without such retention affecting the rights of either party to enforce the specific performance of this agreement, of which time is of the essence.' (Italics supplied.)

The foregoing contract remained unrecorded and was later assigned by Atwood Cranston and his wife to the plaintiff, Boulevard Plaza Corporation. The assignment was in the following form:

'We hereby assign the attached purchase agreement to Boulevard Plaza Corporation.

'Atwood Cranston

Pauline Cranston'

It was neither dated, witnessed, nor acknowledged; it referred to no specific property or contract; it did not impose upon the assignee personal liability for the unpaid purchase price by an assumption and agreement to pay the balance of the purchase price according to the contract terms.

At the time of the execution of the purchase agreement, defendant also signed a letter which was delivered with a copy of the agreement to Douglas Rees Associates, Inc., a company which had undertaken to represent defendant as his real estate agent. The letter read as follows:

'March 10, 1953

'Douglas Rees Associates, Inc.

718 Second Avenue South

Minneapolis 2, Minnesota

'Gentlemen:

'My acceptance of the offer from Atwood-Cranston for the purchase of my Wayzata property is conditioned on the understanding that the extent of my liability under the warranty regarding the commercial zoning and use of the property shall be to return any money paid to me on account of this purchase if the property shall not be so zoned or if the purchaser shall be unable to secure the building permit, in which case I shall receive back a Quit-Claim Deed.

'My acceptance is further conditioned on the understanding that you shall determine within six months whether you can use the property for the purposes you intend.

'Very truly yours,

Kenneth Campbell'

The closing date under the contract terms was May 1, 1953. It does not appear that plaintiff ever claimed that the zoning referred to in the contract was not proper or that the vendee was unable to secure a building permit for the premises. While it appears to have been understood that the purchaser would have the immediate right to conduct soil tests, no satisfactory reason has been shown why such soil tests were not conducted prior to the time of the scheduled closing on May 1, 1953. It appears that the defendant owned the land in question, but that a Torrens certificate of title for that land had been issued in the name of his father, who had in turn executed and delivered to the defendant an unrecorded quitclaim deed to the land, both of which instruments defendant turned over to Douglas Rees Associates, Inc., at their offices on March 10, 1953, as proof of title and to enable the purchaser to take the necessary steps to have the title examined. The record indicates that a written title opinion was later delivered to plaintiff by an attorney of its own selection on July 8, 1953, but no copy thereof was ever furnished to defendant. Neither Cranston, the plaintiff, nor the corporation acting as agent for the defendant raised any question as to marketable title. There was no offer to place the title opinion in evidence at the trial. The record fails to disclose any objection to the title.

The record indicates that during the times important to this action Douglas Rees Associates, Inc., the name of which was subsequently changed to Ress-Thomson-Scroggins, Inc., had listed defendant's tract of land for sale and at all times assumed to act as his sales agent and broker. The owners of the stock in the corporation were: Douglas Rees, Richard Thomson, and Maurice Scroggins. They were all active in the brokerage agency, but defendant dealt with Thomson and Scroggins.

The Boulevard Plaza Corporation was organized by Maurice Scroggins, in about 1948. Its offices became located in the same suite with those occupied by Douglas Rees...

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    ...144 U.S. at 237, 12 S.Ct. 632; Dakota County HRA v. Blackwell, 602 N.W.2d 243, 244 (Minn.1999) (citing Boulevard Plaza Corp. v. Campbell, 254 Minn. 123, 136, 94 N.W.2d 273, 284 (1959)). An agreement will be enforced "where the specified thing or act contracted for, and not mere pecuniary co......
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