Forbis v. Honeycutt, 122

• Decision Date: 06 January 1981
• Docket Number: No. 122,122
• Court: North Carolina Supreme Court
• Parties: Clinton S. FORBIS, Jr. and wife, Nancy M. Forbis v. Gerald Douglas HONEYCUTT and wife, Patricia Arrowood Honeycutt.

Page 240

273 S.E.2d 240

301 N.C. 699

Clinton S. FORBIS, Jr. and wife, Nancy M. Forbis v. Gerald Douglas HONEYCUTT and wife, Patricia Arrowood Honeycutt.

No. 122.

Supreme Court of North Carolina.

Jan. 6, 1981.

Forbis & Grossman by Steven A. Grossman, Kannapolis, for plaintiffs-appellants.

Carroll & Scarbrough by James E. Scarbrough, Concord, for defendants-appellees.

Atty. Gen. Rufus L. Edmisten by Asst. Atty. Gen. Harry H. Harkins, Jr., Raleigh, for the North Carolina Real Estate Licensing Board, amicus curiae.

CARLTON, Justice.

Plaintiffs bring this action seeking specific performance of an exclusive listing contract for certain real property. In their complaint, plaintiffs allege that defendants are the owners of the property, and that on or about 13 July 1979 the defendants signed an exclusive listing agreement whereby the land was listed for sale with Kiser Beaver Real Estate, Inc.

Plaintiffs further allege that they executed a written offer to purchase the property for the price quoted in the listing agreement, and delivered that offer to Kiser Beaver Real Estate, Inc., together with earnest money of $600.00. Plaintiffs sold their home in anticipation of buying the subject real property from the defendants. Plaintiffs also stand ready, willing and able to fulfill the terms of their offer, but defendants refuse to convey the property. Plaintiffs pray that defendants be required to execute a general warranty deed to them conveying the subject property.

Defendants answered, alleging as a first defense that plaintiffs' complaint failed to state a claim upon which relief could be granted. Subsequently, defendants filed a separate motion to dismiss under G.S. 1A-1, Rule 12(b)(6) which, following a hearing, was granted by the trial court. Plaintiffs appealed to the Court of Appeals and that court affirmed the trial court.

The procedural issue presented is whether the trial court properly allowed the motion to dismiss pursuant to Rule 12(b)(6), N.C. Rules of Civil Procedure. The test on a motion to dismiss for failure to state a claim upon which relief can be granted is whether the pleading is legally sufficient. 11 Strong, N.C. Index 3d, Rules of Civil Procedure § 12 (1978). A complaint may be dismissed on motion filed under Rule 12(b)(6) if it is clearly without merit; such lack of merit may consist of an absence of law to support a claim of the sort made, absence of fact sufficient to make a good claim, or the disclosure of some fact which will necessarily defeat the claim. Hodges v. Wellons, 9 N.C.App. 152, 175 S.E.2d 690 (1970). For the purpose of a motion to dismiss, the allegations of the complaint are treated as true. Smith v. Ford Motor Co., 289 N.C. 71, 221 S.E.2d 282 (1976). A complaint is sufficient to withstand a motion to dismiss where no insurmountable bar to recovery on the claim alleged appears on the face of the complaint and where allegations contained therein are sufficient to give a defendant notice of the nature and basis of plaintiffs' claim so as to enable him to answer and prepare for trial. Industries, Inc. v. Construction Co., 42 N.C.App. 259, 257 S.E.2d 50 (1979).

Turning to the question whether plaintiffs' complaint states a claim upon which relief can be granted against defendants, we agree with the Court of Appeals that the dispositive substantive question is whether the listing agreement vested in the real estate agent the authority to enter into a contract binding on defendants to convey the subject property. If it did, plaintiffs' pleadings are "legally sufficient" to proceed to trial. If it did not, there appears "an absence of law to support a claim of the sort made" and "an insurmountable bar to recovery" appears on the face of the complaint.

We join the majority of jurisdictions and hold that a real estate listing agreement such as the one in question here does not confer on the real estate agent authority to enter into a contract binding the owners to convey.

The key provisions of the listing agreement here are as follows:

The Owner hereby gives to the Agent the exclusive right to sell the property hereinafter listed at the price and upon the terms set forth below or at such other price as the parties hereto may agree upon. This listing contract shall continue until midnight, the last hour of 13 October 1979.

Property to be sold: 1616 Longbow Drive, Kannapolis, North Carolina 28081

Sale Price: Sixty two thousand five hundred dollars Dollars ($62,500.00).

If the property is sold, leased, transferred or exchanged by the Owner or by any other party before the expiration of this listing, at any terms accepted by the Owner or within three months thereafter to any purchaser with whom the Agent of Owner negotiated during the listing, or if a ready, willing and able purchaser is procured, the Owner agrees to pay the Agent's commission. The Agent's commission for his services shall be SIX per cent (6.0%) of the gross sales price.

It is understood and agreed that if the property is sold during the period set forth herein, Owner will execute and deliver a fee simple deed with the usual covenants of warranty, subject only to current ad valorem taxes (which are to be prorated on the calendar year basis to the date of closing the transaction), existing easements, rights-of-way, and restrictive covenants, if any, and the following encumbrances, (if none, so state).

1st Mortgage Citizens S & L, Kannapolis Bal. 24,500.00 Payment 266.00 PIT 9% loan

Owner agrees to give a purchaser possession of the property by at the time of final settlement.

The Owner agrees to enter into contract of sale with and to convey said property by good and sufficient deed with usual warranties to such ready, willing and able purchaser for the price and on the terms and conditions herein stated: or if the stated price cannot be...