Glendale Realty, Inc. v. Johnson

• Decision Date: 24 April 1972
• Docket Number: No. 961--I,961--I
• Citation: 6 Wn.App. 752,495 P.2d 1375
• Parties: GLENDALE REALTY, INC., a Washington corporation, Respondent, v. Carl J. JOHNSON and Melita Johnson, his wife, d/b/a Village Realty, Defendants, Letha M. Johnson and Carl J. Johnson, her husband, Appellants.
• Court: Washington Court of Appeals

Page 752

6 Wn.App. 752

495 P.2d 1375

GLENDALE REALTY, INC., a Washington corporation, Respondent, v. Carl J. JOHNSON and Melita Johnson, his wife, d/b/a Village Realty, Defendants, Letha M. Johnson and Carl J Johnson, her husband, Appellants.

No. 961--I.

Court of Appeals of Washington, Division 1, Panel One.

April 24, 1972.

Petition for Rehearing Denied June 9, 1972.

Nickell, Quinn & Mah, Richard Mah, Jr., Seattle, for appellants (On appeal only).

Short, Cressman & Cable, Donald W. Ferrell, Seattle, for respondent.

CALLOW, Judge.

This is a contest over the division of a real estate commission earned by the sale of real property located on Bainbridge Island.

Carl Johnson, a broker, conducted business on Bainbridge Island under the assumed name of Village Realty. The appellant, Letha Johnson, no relation to him, worked as his saleswoman.

Glendale Realty, Inc., has a branch office on Mercer Island, Washington, conducted by Evelyn H. Zanner as broker. Ruth Klumb was employed there as a saleswoman.

The action is brought by Glendale Realty, Inc., to recover 40 percent of a real estate broker's commission under an oral agreement which was alleged to have been entered into during a telephone conversation between Letha M. Johnson and Evelyn Zanner.

The trial court found that Letha Johnson contacted Evelyn Zanner on August 2, 1968, and told her that Village Realty had acreage for sale on Bainbridge Island. Evelyn Zanner proposed that if Glendale Realty procured a buyer any resulting commission be divided equally. In response, Letha Johnson said she would consult her broker. Further, it was found that Letha Johnson called back the same day representing that she had consulted her broker, that he would not accept an equal division but would agree to 60 percent for the office that did the work on the transaction and 40 percent for the other office. Mrs. Zanner accepted the proposal.

On August 12, 1968, Evelyn Zanner met with Letha Johnson on Bainbridge Island; and they inspected the property together. When Mrs. Zanner returned to Mercer Island, she told her saleswoman about the opportunity; and Ruth Klumb was instrumental in bringing one Richard Nelson to the attention of Letha Johnson as a prospective customer. Mr. Nelson visited the property and asked Letha Johnson which office should handle the transaction. He worked through Village Realty upon Mrs. Johnson's assuring him that he could work through either office. The transaction was consummated, and Village Realty was paid a net commission of $8,400.

The trial court found there was clear, cogent and convincing evidence that Letha Johnson's representation that she had consulted her broker and that he would agree to a 60--40 percent commission division and her representation to the prospective buyer that a working agreement existed between Glendale Realty and Village Realty were untrue. The court concluded that Letha Johnson's statements were tortious misrepresentations and that she was liable thereon. The broker, Carl Johnson, was dismissed as a defendant on his counsel's unopposed motion for dismissal, the court finding that the broker was unaware of these representations.

Judgment on behalf of Glendale Realty for 40 percent of the commission was entered against Letha M. Johnson individually and the marital community composed of Letha M. Johnson and her husband.

The record contains substantial evidence to support the findings of the trial court. Questions of credibility are for that forum. The testimony of the witnesses other than the testimony of the two antagonists, Letha Johnson and Evelyn Zanner, as well as the circumstances surrounding the transaction, are consistent with the court's findings. Findings of fact cannot be set aside in such a situation.

RCW 19.36.010 requires an agreement authorizing or employing an agent or broker to sell or purchase real estate for compensation to be in writing. This section of the Statute of Frauds does not apply to a contract between brokers to divide commissions. Armstrong v. J. H. Webber & Co., 92 Wash. 295, 158 P. 957 (1916); Orr v. Perky Inv. Co., 65 Wash. 281, 118 P. 19 (1911); Jones v. Kehoe, 61 Wash. 422, 112 P. 497 (1911). The telephone conversations contained the requisites of a contract and were not vague, uncertain or unenforceable. The parties manifested mutual consent, the terms of performance and the consideration each was to receive. Courts should not declare a contract void for uncertainty when the intent of the parties can be ascertained. Janzen v. Phillips, 73 Wash.2d 174, 437 P.2d 189 (1968); Olson v. Balch, 63 Wash.2d 938, 389 P.2d 900 (1964).

Markov v. ABC Transfer & Storage Co., 76 Wash.2d 388, at 395, 457 P.2d at 538 (1969) held:

To recover for fraud, the following elements must be proved by clear, cogent and convincing evidence:

(1) a representation of an existing fact; (2) its materiality; (3) its falsity; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) his intent that it should be acted on by the person to whom it is made; (6) ignorance of its falsity on the part of the person to whom it is made; (7) the latter's reliance on the truth of the representation; (8) his right to rely upon it; (9) his consequent damage.

See also Baertschi v. Jordan, 68 Wash.2d 478, 413 P.2d 657 (1966); Williams v. Joslin, 65 Wash.2d 696, 399 P.2d 308 (1965). The trial court found that each of the elements had been established with the requisite degree of certainty and we concur.

An agent representing authority which exceeds his actual authority is personally responsible and liable to the party to whom he makes such an unauthorized representation if the other party justifiably relies upon the representation. Restatement (Second) of Agency §§ 329 and 330 (1958) sets forth the theories of recovery as follows:

§ 329. Agent Who Warrants Authority. A person who purports to make a contract, conveyance or representation on behalf of another who has full capacity but whom he has no power to bind, thereby becomes subject to liability to the other party thereto upon an implied warranty of authority, unless he has manifested that he does not make such warranty or the other party knows that the agent is not so authorized.

§ 330. Liability for Misrepresentation of Authority. A person who tortiously misrepresents to another that he has authority to make a contract, conveyance, or representation on behalf of a principal whom he has no power to bind, is subject to liability to the other in an action of tort for loss caused by reliance upon such misrepresentation.

Routh v. Wagner, 53 Wash.2d 347, 333 P.2d 674 (1959), followed the reasoning of the Restatement holding that an agent who exceeds his authority so that his principal is not bound will himself be liable for the damage occasioned to the other contracting party.

Both counsel rely on Ershig Sheet Metal, Inc. v. General Ins. Co.,62 Wash.2d 402, 383 P.2d 291 (1963), which quotes Restatement (Second) of Agency § 329 with approval. This was an...