Johnston v. Smith, 32578

• Decision Date: 30 October 1953
• Docket Number: No. 32578,32578
• Citation: 262 P.2d 530,43 Wn.2d 603
• Court: Washington Supreme Court
• Parties: JOHNSTON, v. SMITH et al.

Page 603

43 Wn.2d 603

262 P.2d 530

JOHNSTON, v. SMITH et al.

No. 32578.

Supreme Court of Washington, Department 1.

Oct. 30, 1953.

Gose, Williams & Ennis, Walla Walla, for appellants.

Harley W. Allen, Walla Walla, for respondent.

OLSON, Justice.

This appeal by defendants from a judgment against them for the balance due on a real-estate broker's commission, requires us to construe the contract upon which plaintiff recovered.

Prior to July 3, 1952, defendants orally employed plaintiff to sell certain real estate in Klickitat county, Washington. They agreed to pay him a commission of five per cent of the sale price. He procured Ross E. Crow and wife as purchasers, and, on July 3, 1952, an exchange agreement was entered into by plaintiff, defendants, and Crows.

This document expressed Crows' agreement to purchase defendants' property for $85,000, less encumbrances which Crows agreed to assume. This price was to be paid by the conveyance to defendants of certain property in Oregon owned by Crows, valued for the purpose of the exchange at $33,500, less an encumbrance of $18,500 which defendants agreed to assume, and by the payment of the balance, less encumbrances, in cash, on or before October 1, 1952. It provided, among other things, for delivery of deeds and closing of the transaction, and contained the following provision:

'And in consideration of the mutual promises herein contained it is further agreed that should either party hereto fail to perform and carry out his part of this agreement, such party, so failing, shall pay all of the brokers' commission below provided for, this promise being made directly for said brokers' benefit.

'The undersigned brokers agree to aid and assist in consummating the foregoing exchange.'

Below the signatures of all of the parties, including plaintiff, the following appeared:

'It hereby ratify and confirm the employment of Ralph A. Johnston, real estate broker, to procure a purchaser for my property above described and in consideration of services performed by said broker in negotiating and bringing about the foregoing sale, hereby agree to pay said broker forthwith a commission of $4250.00

'[signed] Richard B. Smith

'[signed] Leone H. Smith'

By similar language, Crows agreed to pay plaintiff forthwith a commission of $1,675 for the sale of their property.

July 15, 1952, defendants and Crows signed a contract prepared by an attorney in Walla Walla, expressing their agreement for the sale in the terms of the exchange agreement, and also providing for the delivery of possession of the respective properties for the preparation of the land for the 1953 crop, and other details. This contract was acknowledged by all parties to it.

By a deed dated July 9, 1952 (prepared and delivered before the contract was drawn, to expedite the transaction while the parties were waiting for the return from vacation of the attorney who drew the contract), Crows conveyed their Oregon property to defendants, who sold it for over $15,000 above encumbrances to a purchaser found by plaintiff. This sum, less expenses of the sale, was paid to defendants.

Crows did not further perform their agreement, and defendants forfeited the contract and retained the proceeds of the sale of the Oregon property. They had paid plaintiff the sum of $1,750, computed as one defendant's share, or one half, of the commission due plaintiff on $70,000. The defendant who made this payment testified that the balance of all of the commission on $85,000 for the Klickitat property, was to be due when the Crow ranch in Oregon was sold.

Defendants now contend that, under the quoted language of their agreement with plaintiff, they do not owe him any brokerage for the sale of their Klickitat property because the transaction was not consummated.

The written agreement for plaintiff's commission was based upon an oral contract of employment, and is an enforcible agreement to pay for his past services as a real-estate broker. Richey v. Bolton, 1943, 18 Wash.2d 522, 527, 140 P.2d 253; Ellingsen v. Landre, 1952, 40 Wash.2d 116, 119, 241 P.2d 207, and case cited. Defendants contend that its terms take this case out of the general rule that a broker is entitled to his commission when he produces a purchaser who is ready, able and willing to purchase upon the terms required by, or satisfactory to, the owner. See Bloom v. Christensen, 1943, 18 Wash.2d 137, 142, 138 P.2d 655, and cases cited. They assert that plaintiff agreed to do more than this general rule requires, and that the parties specified a condition precedent to the collection of his commission, that is, the consummation of the exchange agreement.

We cannot agree with defendants' conclusion. Aside from defendants' direct promise to pay the commission, set forth in a quoted paragraph of the agreement, and construing the document most strongly against plaintiff, who prepared it, the transaction was consummated, in so far as it concerned plaintiff and defendants, when defendants and Crows executed their contract for deed. It is not disputed that this was a valid and enforcible contract. Defendants accepted it and proceeded to act upon it. When they did so, they were precluded from raising any question regarding the ability of the purchaser to perform. Largent v....