Foltz v. Begnoche

• Decision Date: 11 June 1977
• Docket Number: No. 48225,48225
• Citation: Foltz v. Begnoche, 222 Kan. 383, 565 P.2d 592 (Kan. 1977)
• Parties: Paul E. FOLTZ and William R. Just, d/b/a Town and Country Real Estate, Appellant, v. Pat BEGNOCHE, Appellee.
• Court: Kansas Supreme Court

Page 592

565 P.2d 592

222 Kan. 383

Paul E. FOLTZ and William R. Just, d/b/a Town and Country Real Estate, Appellant, v.Pat BEGNOCHE, Appellee.

No. 48225.

Supreme Court of Kansas.

June 11, 1977.

Syllabus by the Court

1.An "exclusive agency" agreement listing real property for sale does not permit an owner to list his property with other brokers during the contractual term, but this does not prevent the owner from selling to a buyer procured on his own.

2.An "exclusive right to sell" agreement listing real property for sale forbids the owner from selling his property either by himself, or through another broker, without liability while the property is listed with the original broker.

3.Where one gives a real estate broker authority to sell his property upon terms stated but not expressly agreeing that such real estate agent shall have the exclusive right to sell, he retains the right to effect a sale personally or through another agent.

4.Doubtful and uncertain language in a written contract is construed against the party preparing the contract, for he has created the troublesome ambiguity.

5.A real estate broker seeking to create an "exclusive right to sell" in which the owner may not sell his property without paying the broker a commission, whether or not the broker procured the buyer, must do so in clear and unambiguous language within the four corners of the written brokerage contract.

6.In an appeal from the trial court's judgment that a real estate agency's "Exclusive Listing Agreement" did not give the realtors a right to a commission, when the property owner sold the property himself, the record is examined and it is held : The "Exclusive Listing Agreement" did not clearly and unambiguously waive the owner's right to sell his own property.

Charles S. Arthur, III, Arthur, Green, Arthur & Conderman, Manhattan, argued the cause, and was on the brief for appellant.

Grace A. Schroer, Manhattan, argued the cause, and was on the brief for appellee.

SCHROEDER, Justice:

This is an appeal from an order of the trial court holding that an "Exclusive Listing Agreement" prepared by a real estate agency did not give the realtors a right to a commission when the property listed was sold by the owner himself.

The only question presented on appeal is whether the "Exclusive Listing Agreement" entitled the realtors, as a matter of law, to a commission when the subject real property was sold during the listing period by the owner himself.

Pat Begnoche(defendant-appellee) owned a liquor store at 1100 Laramie, Manhattan, Kansas, which he wanted to sell.On January 16, 1975, Mr. Begnoche and Paul E. Foltz and William R.Just, d/b/a Town and Country Real Estate (plaintiffs-appellants), entered into a one-month "Exclusive Listing Agreement" drafted by Town and Country Real Estate or its agents.The agreement dated January 16, 1975, insofar as is material herein provides:

"EXCLUSIVE LISTING AGREEMENT

"In consideration of your agreement to list the following property, and to use your efforts in finding a purchaser, the undersigned owner hereby gives your agency the exclusive right until Feb 16, 1975 from date hereof, to sell BEGNOCHE LIQUOR STORE 1100 LARAMIE MANHATTAN, KS for the sum of $32,000 and upon the following terms: CASH TO SELLER If a sale or exchange is made by you during the term of this exclusive agreement at the price and upon the terms specified herein, or at any other price and terms acceptable by me, or if you produce a purchaser ready, able and willing to purchase the property, or if sold or exchanged six months after the termination hereof to anyone with whom you have negotiated concerning the property and where I have known of such negotiations or been informed of them in writing, I agree to pay you a 6% commission on the gross sale price.In the event of an exchange, which within the meaning of this contract shall be deemed a sale, you are permitted to represent and receive a 6% commission from each party."

Town and Country Real Estate produced two prospects who were unable to purchase the liquor store at the agreed cash price of $32,000.One prospect bid $30,000 which was not acceptable to Mr. Begnoche and the other had not lived in Riley County long enough to pass the requirements for an ABC liquor license.

On January 31, 1975, Mr. Begnoche contracted to sell the liquor store for $31,000 to Robert Webster, a prospect found by Mr. Begnoche.Nothing indicates Town and Country Real Estate had ever seen or talked to Mr. Webster concerning the purchase of the liquor store.The sale was closed on March 3, 1975, and Mr. Begnoche refused to pay any commission to Town and Country Real Estate or any of its agents.

The pleadings and pretrial presented but one issue to the trial court the interpretation to be given the written "Exclusive Listing Agreement."Mr. Begnoche contended the "Exclusive Listing Agreement" meant he would list the property with no other realtor, but that the agreement did not prevent him, as the owner, from selling the property without paying a commission.John Ball, Director of the Kansas Real Estate Commission, read the "Exclusive Listing Agreement."He submitted an affidavit stating the agreement's terms would permit the owner to sell his property without an obligation to pay the broker a commission.

Town and Country Real Estate contended under the "Exclusive Listing Agreement" if the liquor store was sold by anyone, including the owner, Pat Begnoche, Town and Country Real Estate was to receive a commission.Dean Toothaker, President of the Manhattan Board of Realtors and a licensed real estate broker, also read the "Exclusive Listing Agreement."He submitted an affidavit stating that he considered the terms of the agreement to give the real estate agency the exclusive right to sell the property prior to the expiration date, and did not allow anyone else, including the owner, to sell the property without paying a commission to the real estate agency.

The trial court held the contract was a listing agreement only, and it did not give the realtors an exclusive right to a commission if they were not instrumental in finding the purchaser.Appeal has been duly perfected.

The parties disagree completely as to the interpretation to be given to the "Exclusive Listing Agreement" which governs their rights and obligations.The appellants urge that the contractual language be construed to create an "exclusive right to sell," which entitles the broker to a commission even though the owner sells the property himself.The appellants argue such a construction is necessary so the real estate agent can spend the time and money necessary to sell the property without fear that it will be sold out from under him.

The appellee views the contractual language as giving rise to an "exclusive agency," which permits the owner to sell his own property if he himself procures a buyer, without liability for the broker's commission.

A distinction is frequently made between an "exclusive agency" and an "exclusive right to sell."(12 Am.Jur.2d, Brokers, Sec. 226, p. 968; and Note, Real Estate Brokers Contracts in South Carolina, 18 S.C.L.Rev. 819, 832(1966).)An "exclusive agency" agreement listing real property for sale does not permit an owner to list his property with other brokers during the contractual term, but this does not prevent the owner from selling to a buyer procured on his own, unless the broker has procured a purchaser able and willing to buy prior to such time.The only effect of such a contract is to prevent the owner from placing the property in the hands of another agent.An "exclusive right to sell" agreement listing real property for sale forbids the owner from selling his property either by himself, or through another broker, without liability while the property is listed with the original broker.(Moreno v. May Supply Company, 280 Ala. 157, 190 So.2d 710(1966);Carlsen v. Zane, 261 Cal.App.2d 399, 67 Cal.Rptr. 747(1968);Bourgoin v. Fortier, 310 A.2d 618(Maine1973);Insurance & Realty, Inc. v. Harmon,20 N.C.App. 39, 200 S.E.2d 443(1973);Zifcak v. Monroe, 105 R.I. 155, 249 A.2d 893(1969);Dorman Realty & Ins. Co., Inc. v. Stalvey, 264 S.C. 94, 212 S.E.2d 591(1975), andBaker v. Skipworth, 244 S.W.2d 299(Tex.Civ.App.1951).)

In Bourgoin v. Fortier, supra, an agreement entitled "Exclusive Listing Authorization" which gave the broker the "exclusive right of sale or exchange" was held ambiguous and not an exclusive right to sell agreement.The reverse situation was presented in Carlsen v. Zane, supra, relied upon by the appellants.There the contractual agreement gave the brokers an "exclusive and irrevocable right to sell" land but specifically provided that "owner agrees to pay . . . brokers ten per cent of the selling price in the event that during the period of the agreement . . . said property is sold or exchanged by (brokers) or any other person including owner."This was held to be an "exclusive right to sell" because it expressly forbade sale by the owner without liability.(See alsoRankin v. Miller, 179 Cal.App.2d 133, 3 Cal.Rptr. 496(1960).)Similarly Holmes v. Holik, 238 S.W.2d 260(Tex.Civ.App.1951)andBagley v. Butler, 59 Misc.2d 1029, 301 N.Y.S.2d 148(1969), clearly and unambiguously forbid sale by the owner without liability.

Kansas cases have long recognized, at least by implication, the distinction between an "exclusive agency" and an "exclusive right to sell."In Helling v. Darby, 71 Kan. 107, 79 P. 1073, andHaggart v. King, 107 Kan. 75, 190 P. 763, the real estate brokers did not have an "exclusive right to sell" the land and could not recover commissions when the land was sold by the owner.(See alsoKirshner v. Brown, 78 Kan. 531, 96 P. 848;Braniff v. Baier, 101 Kan. 117, 165 P. 816;Edwards v. Dana, 104 Kan. 266, 178 P. 407andRussell v. Combs, 108 Kan. 411, 195 P. 605.)

In Krehbiel v. Milford, 171 Kan. 302, 232 P.2d 229, the...