Limb v. Federated Milk Producers Ass'n, No. 11543

• Court: Supreme Court of Utah
• Writing for the Court: ELLETT; CROCKETT; CALLISTER; Ellett's; Mr. Justice Ellett; Henriod
• Citation: 461 P.2d 290,23 Utah 2d 222
• Parties: d 222 A. J. LIMB, dba Limb Realty, Plaintiff and Appellant, v. FEDERATED MILK PRODUCERS ASSOCIATION, Inc., Federated Dairy Farms, Inc., and Kenneth T. Allred, Defendants and Respondents.
• Docket Number: No. 11543
• Decision Date: 12 November 1969

Page 290

461 P.2d 290 23 Utah 2d 222 A. J. LIMB, dba Limb Realty, Plaintiff and Appellant,
v.
FEDERATED MILK PRODUCERS ASSOCIATION, Inc., Federated Dairy
Farms, Inc., and Kenneth T. Allred, Defendants and
Respondents. No. 11543. Supreme Court of Utah. Nov. 12, 1969.

Page 291

[23 Utah 2d 223] Wendell P. Albes, Salt Lake City, for appellant.

Richard H. Moffat, of Moffat, Iverson, & Taylor, Salt Lake City, for respondents.

ELLETT, Justice.

The plaintiff is a real estate broker. The defendant Kenneth T. Allred on behalf of defendant Federated Milk Producers Association, Inc., signed and gave to one John Williamson a letter in the following words:

October 25, 1963

Mr. John Williamson

Salt Lake City, Utah

Dear Sir:

This is to authorize you to negotiate with clients for the purchase of 723 South State Street, Salt Lake City, Utah, those premises heretofore operated under the name of Cloverleaf Dairy. The terms are as follows:

1. The sale price and terms must be agreeable with us.

2. This authorization can be terminated by either party at any time, and will be automatically terminated should said property be sold to anyone.

3. You are only authorized to negotiate with the following persons for the sale of said property:

Side Horman

Sears Co.

Huntington-Maxwell Hardware Co.

Bonneville on the Hill K.T.A.

Capital Chev. K.T.A.

Salt Lake Transfer K.T.A.

4. In the event that there is ultimately a contract of sale or sale entered into with any of the foregoing, then and in that event, we agree to pay you a sales commission of 5% of the selling price.

FEDERATED MILK PRODUCERS ASSOCIATION, INC.

By: /s/ Kenneth T. Allred

[23 Utah 2d 224] On or about February 7, 1964, Federated Milk Producers Association, Inc., was merged with and into defendant Federated Dairy Farms, Inc.

Mr. Williamson was a real estate salesman in the office of plaintiff. Neither plaintiff nor Mr. Williamson was able to sell the listed property. On April 27, 1964,

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a letter of termination of the authority granted to Mr. Williamson was mailed to him, but because of wrong address he never received it. In his deposition Mr. Allred, who had signed the letter of authority, said that he phoned Mr. Williamson prior to the letter of termination and advised him that such a letter was being mailed and if Mr. Williamson had any prospects, he should let Allred know, as the property was being listed with another realtor. Allred further testified that Williamson said, 'Go ahead and list the property because he (Williamson) had no further interest in it.' Mr. Williamson in his deposition stated that he would not deny the conversation but did not believe it occurred.

In May of 1964 the other realtor painted in a conspicuous place on a fence around the property a large sign about ten feet by twelve feet stating that the property was for sale by that realtor.

Almost two years later that relator induced Sears to buy the property, and the defendant paid him the regular real estate commission. This action was thereafter commenced by plaintiff and Mr. Williamson for a commission in the amount of $11,550 claimed to be due under the letter set out above. Mr. Williamson was dismissed as a party plaintiff by the court on motion of defendant. Thereafter, both parties moved for summary judgment, and that of the defendant was granted, while that of the plaintiff was denied. The plaintiff appeals from the denial of his motion for summary judgment and also from the granting of the summary judgment in favor of the defendant.

In his deposition Mr. Limb, the plaintiff, testified concerning a conversation with Mr. Williamson prior to the date of the letter written by the defendant. He stated:

He told me that he understood the property was to be for sale and he had contacted and was to contact a Mr. Allred; and we discussed the property and I told him if I could help him to let me know, on the listing.

It will be noted that the letter upon which the plaintiff relies for recovery is directed to Mr. Williamson alone, and the promise of the defendant to pay a commission is made to Mr. Williamson and not to Mr. Limb. It is apparent that Mr. Williamson got the agreement in his own name and that at that time Mr. Limb intended to assist him in the listing.

Section 61--2--10, U.C.A.1953, reads:

It shall be unlawful for any real estate salesman to accept a commission or [23 Utah 2d 225] valuable consideration for the performance of any of the acts herein specified from any person, except his employer, who must be a licensed real estate broker.

It is, therefore, evident that Mr. Williamson being only a real estate salesman could not collect a fee from the defendant and that the promise to pay him would be unenforceable. Mr. Limb attempts to substitute himself as a party and collect on a joint contract.

This is not the case of a contract made by an unauthorized agent in the name of a principal who may ratify the contract as made and thus make himself liable to the third person and also keep the benefits which a third person intended to confer upon him. There is nothing for Mr. Limb to ratify, as he is not named as a party to the letter.

Even if the contract were not void, Mr. Limb could not recover in this case. Mr. Williamson was not a broker but was attempting to act as one when he secured the letter from the defendant. A broker employed by an owner to purchase or sell real property bears a fiduciary relationship to his employer, ¹ and the applicable law is stated in 3 Am.Jur.2d, Agency, § 323, to be:

If the contract made by an agent acting for an undisclosed principal involves elements of personal trust and confidence as a consideration moving from the agent, contracting in his own name,

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to the other party to the contract, the principal, while the contract remains executory, cannot, against the resistance of the other party, enforce it, either to compel performance by the other party or to recover damages for a breach.

If the law were otherwise, a party would be deprived of his right to choose those fiduciaries with whom he wished to deal.

Before Mr. Limb could recover in this case, he himself must have had a contract in writing with the defendant. See the Statute of Frauds, Section 25--5--4(5), U.C.A.1953.

There is no disputed issue of fact in this case which would require a trial on the merits. The judgment of the trial court is, therefore, affirmed. ² Costs are awarded to the respondents.

[23 Utah 2d 226] TUCKETT, J., concurs.

CROCKETT, Chief Justice (concurring in the result).

I concur in the affirmance of the trial court's judgment by the main opinion; and also agree with the concurring opinion of Justice Callister.

CALLISTER, Justice (concurring in the result).

I concur in the result of the majority opinion, but premise my reason upon a different ground. The contract specifies that it can be terminated by either party at any time, and there is no provision as to a requirement of notice.

A requirement that notice be given will not be read into a contract providing that

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it may be terminated by either party at any time but containing no provision as to notice of termination. * * * ¹

The acts and conduct of the parties were inconsistent with the alleged continued existence of the contract, and the trial court properly granted summary judgment to defendants.

[23 Utah 2d 227] HENRIOD, Justice (dissenting).

I respectfully dissent, since I believe the main opinion quite radically has departed from elementary principles of appellate review: that the Supreme Court does not decide cases or even take cognizance of matters not raised on appeal, or raised for the first time on appeal. ¹

The main opinion sets out a letter addressed by an agent of the defendant, Federated Milk, to an agent of Limb, plaintiff real estate broker and decides the entire case on the fact that the listing letter was addressed only to Williamson,--not to Limb.

It is reflected in the record by all principals that Williamson was Limb's agent and acted in every instance as a salesman for the latter. Several conversations were had between the defendant's representatives and Limb himself as principal...