Donaldson v. LeNore, 11724
| Citation | 112 Ariz. 199,540 P.2d 671 |
| Decision Date | 23 September 1975 |
| Docket Number | No. 11724,11724 |
| Parties | Marshall C. DONALDSON, Stanley Kesselman and Veda Kesselman, husband and wife, Appellants, v. John LeNORE and Marjorie A. LeNore, husband and wife, and Geneva C. Sizemore, Appellees. |
| Court | Arizona Supreme Court |
Engdahl, Jerman, Butler & Estep, by Dean Estep, Phoenix, for appellants.
Behrens, MacLean & Jacques, by William F. Behrens, Phoenix, for appellees LeNore.
Arthur Van Haren, Jr., Phoenix, for appellee Sizemore.
Plaintiffs, assignees of a broker's real estate commission, brought suit against defendants, vendors of the subject property, to recover from defendants the balance allegedly owed on the commission. The trial court, sitting without a jury, rendered judgment in favor of the defendants, and plaintiffs appealed.
Appellants (plaintiffs) contend that the trial court erred in ruling that the real estate commission was payable only out of the payments to be received from the purchasers pursuant to the contract of sale. Appellants also contend that appellees were estopped to deny liability for the balance of the commission because of a statement sent to them by appellees' attorney.
It has become familiar law that, 'in the absence of a specific contract to the contrary, when a real estate broker has brought together the parties to a sale or exchange of real estate, and they have agreed fully on the terms and entered into a binding contract for such sale or exchange, his duties are at an end and his commission is fully earned, and it is immaterial that the parties to the contract rescind mutually or that one or the other thereof defaults and the sale or exchange is not fully effected.' Lockett v. Drake, 43 Ariz. 357, 360, 31 P.2d 499, 500 (1934); Briskman v. Del Monte Mortgage Co., 10 Ariz.App. 263, 458 P.2d 130 (1969). Ordinarily, a broker does not assume the risk of nonperformance on the part of the purchaser. Bishop v. Norell, 88 Ariz. 148, 353 P.2d 1022 (1960). The vendor retains the capacity to protect himself in this respect by stipulating in the listing agreement that the broker's right to a commission is contingent upon the consummation of the sale. Roseberry v. Heckler, 84 Ariz. 247, 326 P.2d 365 (1958). There is authority which recognizes that when the vendor's promise to pay a commission is contained solely in a contract between the vendor and the prospective purchaser of the property, the vendor is released from his promise to pay the broker's commission if the prospective purchaser fails to complete his undertaking to purchase. Lawrence Block Co. v. Palston, 123 Cal.App.2d 300, 266 P.2d 856 (1954). This view, however, appears to be limited almost exclusively to California. 74 A.L.R.2d 431, 488. Our attention is directed to Maricopa Realty & Trust Co. v. VRD Farms, Inc., 10 Ariz.App. 524, 460 P.2d 195 (1969), in which Division II of the Court of Appeals adopted the California rule. We believe that the better and majority rule is that originally pronounced by this Court in Lockett v. Drake, supra. We continue to adhere to that settled principle of law.
It has been recognized, however, that under a special contract by which commissions are made dependent upon some condition beyond that implied by the regular broker's contract, the purchaser's nonperformance is fatal to the recovery of commissions by the broker. Green v Snodgrass, 79 Ariz. 319, 289 P.2d 191 (1955); Maslin v. Rucker, 7 Ariz.App. 257, 438 P.2d 326 (1968); 12 Am.Jur.2d Brokers § 195. In the case at bar, the vendor and purchaser agreed in the acceptance to the purchase contract and receipt that the total amount of the commission, excepting $1,000.00, was to be paid pro rata from the balance of the sales contract. The acceptance provision provided, in part:
I agree . . . to pay the broker . . . as commission the sum of six per cent--payable $500.00 COE--$500.00 upon receipt of $500.00 (--) bal from contract secured at 7% Payable on prorata basis of contract total . . . (dash supplied). *
This provision, in combination with the escrow instructions, indicate the intention of the parties to restrict payment of the commission to a particular fund, I.e., escrow fund, which requires the continuing sufficiency of that fund as a condition precedent to the vendor's liability for the commission. Once monies ceased to be paid in escrow, the escrow agent was without power to execute his instructions and, consequently, the appellants' right to recover future commission payments terminated. We hold that in circumstances in which the vendor and broker expressly stipulate that the broker's right to a commission is contingent on the purchaser continuing to make payments into escrow, this provision shall govern the parties' rights.
The second issue presented for review is whether an estoppel arose against the appellees because of statements contained in a letter sent to appellants by appellees' attorney. The attorney had said, based upon investigative data as of that date, that the commission obligation was unconditional. The letter was received by the appellants eleven months subsequent to the assignment of the broker's commission and one month subsequent to the date of forfeiture. After receipt of the letter the appellants waited for payment for about six months, and, upon repudiation of the letter by appellees, appellants brought this action. The trial court held that the appellants had failed to demonstrate by clear and satisfactory proof that the appellees' attorney had full knowledge of the relevant facts pertaining to the subject matter at the time of issuing the statement and that appellants had not changed their position, or in any other manner had relied to their detriment, in response to the statement. It clearly appears that the lower court was correct in its ruling, and that the parties' legal rights had become fixed by the date of forfeiture which had occurred prior to the letter from the attorney. There is no evidence of prejudice to appellants' legal rights attributable to the statement of counsel, which it must be conceded was a statement respecting a legal proposition rather than a statement of fact. See ...
To continue reading
Request your trial
-
Melchizedek v. Holt
...with a position previously taken by him, and does not require ignorance or reliance as essential elements.” Donaldson v. LeNore, 112 Ariz. 199, 540 P.2d 671, 674 (1975); see also Sailes, 499 P.2d at 725 (“The doctrine precludes a party from asserting a claim inconsistent with a position pre......
-
Cogan v. Kidder, Mathews & Segner, Inc.
...commission until the sale closed. See Ralph Hochman & Co. v. Fort Stanwix Mfg. Co., 284 F.Supp. 995 (N.D.N.Y.1967); Donaldson v. LeNore, 112 Ariz. 199, 540 P.2d 671 (1975); Casey v. Jones, 275 Md. 203, 339 A.2d 33 (1975); Graves v. Pelican Downs, Inc., 292 So.2d 297 (La.App.1974); Wahl v. H......
-
Moody Investments, Inc. v. Baldwin
...payments, the obligation to pay the commission ceased. The Baldwins argue the agreement here is the same as that in Donaldson v. LeNore, 112 Ariz. 199, 540 P.2d 671 (1975), as it provides for payments from the escrow account to the broker. While the agreements are similar, LeNore can be dis......
-
Webb v. Tom Brown Drilling, Inc.
...with a position previously taken by him, and does not require ignorance or reliance as essential elements." Donaldson v. LeNore, 112 Ariz. 199, 540 P.2d 671, 674 (1975). The party pleading quasi-estoppel must prove that the estopped party had full knowledge of the facts. Id. Tom Brown has n......
-
Blowing Hot and Cold on the Frozen Tundra: a Review of Alaska's Quasi-estoppel Doctrine
...("Quasi-estoppel differs from other forms of estoppel in that it appeals to the conscience of the court.") (quoting Donaldson v. LeNore, 540 P.2d 671, 674 (Ariz. 1975)). [40]See In re Lampert, 896 P.2d 214, 221 n.8 (Alaska 1995) (quoting Maria v. Freitas, 832 P.2d 259, 264 (Haw. 1992)). [41......