MacKnight v. Pansey, 78-33-A

• Decision Date: 14 March 1980
• Docket Number: No. 78-33-A,78-33-A
• Citation: 412 A.2d 236,122 R.I. 774
• Parties: Robert MacKNIGHT et al. v. Antoinette PANSEY et al. ppeal.
• Court: Rhode Island Supreme Court

Page 236

412 A.2d 236

122 R.I. 774

Robert MacKNIGHT et al. v. Antoinette PANSEY et al.

No. 78-33-Appeal.

Supreme Court of Rhode Island.

March 14, 1980.

[122 R.I. 786] Aisenberg & Dworkin, Alan T. Dworkin, Providence, for plaintiffs.

Tillinghast, Collins & Graham, Edward J. Regan, Providence, for defendants.

OPINION

WEISBERGER, Justice.

This is a civil action to enjoin the conveyance of real property from defendant Antoinette Pansey (Mrs. Pansey) to defendant Gordon D. Noonan, and to compel specific performance of an alleged prior agreement by Mrs. Pansey's agent to sell her property to the plaintiffs, Robert B. MacKnight, Jr., and Portia J. MacKnight. The plaintiffs contend that Mrs. Pansey had authorized Lionel J. Carreiro (Carreiro), a real estate agent with whom the property was listed, to sell it on her behalf. From a Superior Court judgment granting the plaintiffs' prayers for relief, the defendants appeal. ¹

Carreiro, the real estate agent, visited Mrs. Pansey on May 21, 1977, after he learned that she was interested in selling her Bristol property. Carreiro and Mrs. Pansey discussed possible price ranges and agreed to list the property at a sale price of $69,500. Mrs. Pansey then signed a standard-form multiple listing agreement, which granted to Carreiro "the exclusive right to sell" the property and guaranteed him a commission regardless of who might procure the sale. The testimony conflicts in regard to whether any of the blanks in the listing-agreement form (other than the sale price) was filled in when Mrs. Pansey affixed her signature.

On May 28, Carreiro showed the house to Mr. MacKnight, who offered to buy it for $69,500. Later that day Carreiro and the MacKnights filled out a purchase-and-sale agreement; Mr. and Mrs. MacKnight signed the agreement in the spaces reserved for "buyers" and Carreiro signed in both the "realtor" and "salesman" spaces, leaving blank the spaces marked "sellers." Mr. MacKnight gave Carreiro a check for $300 as a deposit. MacKnight understood that Carreiro was going to take the sales agreement to Mrs. Pansey for her signature. MacKnight testified that Carreiro gave him a photograph of the property and said, "I might as well give you this picture. You just bought it. You own it." Carreiro testified he told MacKnight that as soon as Mrs. Pansey signed the sales agreement, "then we would have a sale." Carreiro took the sales agreement and check to Mrs. Pansey, but she refused to sign the agreement until she had consulted her attorney.

The next day Mr. MacKnight and Carreiro met with Mrs. Pansey at her property. MacKnight and Mrs. Pansey "were getting along (with each other) very good," according to Carreiro's testimony; MacKnight stated that they discussed closing dates and financing terms. However, since Mrs. Pansey preferred to contact her attorney first, she did not sign the sales agreement on this occasion either.

On the Fourth-of-July weekend Mr. MacKnight met with Mrs. Pansey who adverted to merely "mechanical" difficulties in connection with the sale to the MacKnights. But, according to MacKnight's testimony, Mrs. Pansey told him she "ha(d) no concern because the house is yours." Thereafter both Mr. and Mrs. MacKnight made several attempts some successful some not to reach Mrs. Pansey or Carreiro by telephone. On July 25 Mr. MacKnight called Mrs. Pansey, who told him she had sold the property to defendant Gordon D. Noonan. MacKnight's $300 check to Carreiro was never cashed.

Mrs. Pansey testified that the tenor of her agreement with Carreiro was only that he might show the property for sale not sell it. She said she merely wanted some idea of what the property was worth; she wanted to keep the property in the family, perhaps through sale to her son. According to her testimony, Mrs. Pansey "positively" told MacKnight she wasn't sure whether she wanted to sell the property, and she never agreed to sell it to the MacKnights. Carreiro testified that in his opinion the property could only have been sold when Mrs. Pansey signed the sales agreement. Carreiro said he told the MacKnights that "there was no agreement" because Mrs. Pansey had not signed the sales agreement. Carreiro testified that his duty was to report offers to the seller; "it's up to them to accept it or reject it."

Sitting without a jury, the trial court heard the evidence and ruled that Mrs. Pansey, by signing the multiple listing agreement with Carreiro, had made him her agent to contract for the sale of the property. The trial court ruled that Carreiro had in fact entered into such a contract with the MacKnights. The court further found that the multiple listing agreement was "an adequate writing signed by the party to be charged" to satisfy the statute of frauds. The court enjoined the conveyance of the property to defendant Gordon D. Noonan and ordered that it be conveyed to the MacKnights.

The defendants in their appeal assert that Carreiro had no authority to sell the property on behalf of Mrs. Pansey. According to defendants, the multiple listing agreement did not create such an agency relationship as to enable Carreiro to bind Mrs. Pansey to a contract of sale; nor did Mrs. Pansey by any other action confer such authority on Carreiro, nor did Mrs. Pansey ratify any attempt by Carreiro to contract for the sale of her property. The defendants also challenge the ruling that the listing agreement satisfies the statute of frauds.

We first consider whether Carreiro had the authority to bind Mrs. Pansey to a sales agreement. The trial court found "as a fact that the document Mrs. Pansey executed for Mr. Carreiro at her home was an exclusive right to sell the real estate which she gave to Mr. Carreiro knowingly," and that "she failed to revoke the power, the exclusive right to sell which she gave to Mr. Carreiro before he had, in fact, sold it." This ruling necessarily embodies a conclusion of law that the listing agreement could by itself confer upon Carreiro the power to contract to convey the property.

We believe that this legal conclusion was not consonant with established case law in this and other jurisdictions. As we have previously ruled, an exclusive-agency listing agreement does not, by itself, give the real estate agent the power to bind his principal to a contract of sale. Winiarski v. Leon Meyer, Inc., 82 R.I. 125, 130, 106 A.2d 503, 505-06 (1954). The owner of real property who lists it with an agent generally retains the right to decide whether to accept the offers which the agent brings him. Carreiro, by bringing the sales agreement to Mrs. Pansey for her approval and signature, performed his responsibilities in full accord with the accepted practice of the real estate business and did not attempt to exceed an agent's typical function of finding ready, willing, and financially able buyers to present to the seller.

In an effort to distinguish Winiarski, the MacKnights correctly point out that that case dealt with an "exclusive-agency" contract, not an "exclusive power of sale," as is present here. The former type of agreement prevents the principal from employing another real estate agent but permits the principal to avoid the obligation to pay a broker's commission when he sells the property himself. The exclusive power of sale, on the other hand, obligates the principal to pay the agent his commission even when the principal himself finds the purchaser and consummates the sale. Zifcak v. Monroe, 105 R.I. 155, 157 n.3, 249 A.2d 893, 895 n.3 (1969); Donahue v. Reiner Co., 46 R.I. 302, 304-05, 127 A. 359, 360-61 (1925).

The distinction between these two types of agreements, however, has no bearing upon the question whether a real estate agent can bind the principal to a sales contract. It is well established that an agent with an exclusive power of sale, like one with an exclusive agency, has no implied authority to bind his principal by entering into a contract for sale of the realty, despite the presence in the listing agreement of such terms as "exclusive right to sell" or "sole and exclusive power to sell." Bernstein v. Yee Wong, 236 F.Supp. 5, 6 (D.D.C.1964) (exclusive right to sell); Solana Land Co. v. National Realty Co., 77 Ariz. 18, 25-27, 266 P.2d 739, 744-45 (1954) (authorization to sell and exclusive right to sell); Preisendorf v. Jenkins, 193 Neb. 611, 614, 228 N.W.2d 591, 593 (1975) (exclusive right to sell); Gilmour v. Simon, 37 Can.S.Ct. 422, 425 (1906) (exclusive right of sale); Walker, American Law of Real Estate Agency 34 (2d ed. 1922); Annot., 43 A.L.R.2d 1014, § 7(c) at 1022-23 (1955). Therefore, the factual distinction asserted by the MacKnights between the listing agreement in Winiarski and the present case is without legal significance. Various courts from other jurisdictions which have interpreted exclusive-power-of-sale agreements have followed the meaning given to these standard forms by the real estate business. Compare Annot., supra, with North & Ring, Real Estate: Principles and Practices 237 (5th ed. 1960). This doctrine also is consistent with the expectations of property owners who most frequently retain agents to find them willing buyers, not to make final and binding decisions on whether, on what terms, and to whom to convey. ² See generally Annot., supra.

The rule we announced in Winiarski and reiterate here does not, of course, mean that a principal cannot confer upon his agent the additional authority to bind him to a sales contract. A specially worded agency contract delineating the agent's authority in clear, express, and unequivocal terms may accomplish this result. Words or conduct apart from the listing agreement may do so as well. Such a case was Cuddigan v. List, 93 R.I. 505, 177 A.2d 195 (1962), in which an agent with a "sole and exclusive right to sell" telephoned his principal to convey a purchase offer that was below the listed price. The principal said he would accept the offer, whereupon the agent drew up a...