Foster v. Blake Heights Corp.

• Decision Date: 27 December 1974
• Docket Number: No. 13630,13630
• Citation: 530 P.2d 815
• Parties: Lynn G. FOSTER, Plaintiff and Appellant, v. BLAKE HEIGHTS CORPORATION, Defendant and Respondent.
• Court: Utah Supreme Court

Page 815

530 P.2d 815

Lynn G. FOSTER, Plaintiff and Appellant, v. BLAKE HEIGHTS CORPORATION, Defendant and Respondent.

No. 13630.

Supreme Court of Utah.

Dec. 27, 1974.

William G. Gibbs, Clyde, Mecham & Pratt, Salt Lake City, for plaintiff and appellant.

E. J. Skeen, Salt Lake City, for defendant and respondent.

CROCKETT, Justice:

Plaintiff Lynn G. Foster, as the named purchaser, sues to compel the Blake Heights Corporation, named as seller, for specific performance of an Earnest Money Agreement on about 45 acres of unimproved land in the south part of Salt Lake County. Upon a trial to the court it remained unpersuaded of plaintiff's contention that the parties had entered into a valid contract and made findings and entered judgment accordingly.

Plaintiff appeals contending that the evidence compels findings and judgment in his favor based upon two interrelated propositions: first, that Laurence Blake, who signed as Secretary-Treasurer of Blake Heights, had ostensible authority to bind the Corporation; and second, that under the circumstances the Corporation is estopped to deny its liability under the contract.

Notwithstanding the fact that in an equity case such as this it is our prerogative to review the evidence, ¹ we ordinarily repose some confidence in the verity of the actions of the trial court; and assume that he believed those aspects of the evidence which are in accord with his findings and judgment. ²

Richard Grant, a real estate broker who had had previous dealings with Mr. Foster, reported to the latter that the Blake Heights Corporation owned the land in question and would sell it for $2,400 per acre. It is without dispute that Grant had no listing on the property from Blake Heights and that there would be no such relationship until a valid Earnest Money Agreement was executed. On July 17, 1971, Grant prepared such an agreement as an offer, which Mr. Foster signed, and then took it to Laurence Blake, Secretary-Treasurer of Blake Heights. The evidence is that Laurence Blake then stated to Grant that the offer would have to be approved by 'other members of the Corporation.'

Six days later Grant and Laurence Blake met again and the latter wrote on the Earnest Money Receipt substantial amendments to the terms of the offer, which is properly regarded as a counter-offer. His testimony is that he told Mr. Grant: 'I will sign it for Blake Heights Corporation, and I will leave a space open and wide enough for Ralph (his brother, the President) to sign and you can go find him.' It is significant that there was a space of about one inch left under the name Blake Heights Corporation, which plainly appears to be a blank for someone else to sign; then thereunder is the signature of Laurence Blake, Secretary-Treasurer. Grant then took the document to Foster, who signed his name under the words 'counter offer accepted' on the right side of the page. That same day, Grant returned it to Laurence Blake. At the bottom of the page, on the left side he wrote the words Blake Heights Corporation, and under that, Laurence Blake, Sec. and Treasurer. He said that this was to acknowledge receipt of the document.

The following week Grant met with Ralph Blake, and DeLaun Blake, President and Vice President of the Corporation, and asked them to complete the contract. Their testimony is that they refused until some further matters relating to top soil removal, right of way, easements, and management of surface waters were agreed upon and included; and that Mr. Grant assured them that these matters could be worked out. The details concerning their subsequent attempts, over several months until the following May, 1972, to work out a final contract are unnecessary to set forth here. Two facts are significant: that the objective was not accomplished; and this lawsuit was filed to enforce the Earnest Money Agreement.

The position essayed by plaintiff Foster is that he was entitled to rely upon the Earnest Money Receipt according to its terms and as executed for the Blake Heights Corporation by Laurence Blake, its Secretary-Treasurer; and that any representations concerning limitation on Laurence Blake's authority were unknown to plaintiff and therefore were not binding on him and could not adversely affect his rights.

An initial difficulty with the plaintiff's position is that even from the physical appearance of the Earnest Money Receipt it is not clear and unambiguous that Laurence Blake, who signed as Secretary-Treasurer, purported to act for the Corporation. The best view that could be taken for the plaintiff is that it is ambiguous in that regard. This permits the court to consider extraneous evidence. ³

Several observations are to be made regarding plaintiff's argument. The first is that even though it be true that Mr. Grant was eventually going to look to the seller, Blake Heights, for his commission, he was not necessarily acting solely for that Corporation in his talks with Mr. Foster. It is not always true that a broker who is negotiating a transaction must be exclusively the agent of one or the other. He may well be a 'go-between' acting for both. And where he does so, with the knowledge and consent of both, each is chargeable with notice of facts the broker acquired in...