Moody Investments, Inc. v. Baldwin
| Decision Date | 13 May 1988 |
| Docket Number | No. 60982,60982 |
| Citation | 12 Kan.App.2d 686,754 P.2d 810 |
| Parties | MOODY INVESTMENTS, INC., Appellee, v. Miles Edward BALDWIN and Irene S. Baldwin, Appellants. |
| Court | Kansas Court of Appeals |
Syllabus by the Court
1. The general rule is that a real estate agent or broker is entitled to a commission if (a) a buyer is produced who is able, ready, and willing to purchase upon the proffered terms or upon terms acceptable to the principal, and (b) the agent or broker is the efficient and procuring cause of a consummated deal. The latter is subject to a qualification where failure in completion of the contract, or closing title, results from the wrongful act or interference of the principal.
2. The term "able" in the general rule that entitles a real estate agent or broker to a commission if a buyer is produced who is able, ready, and willing to purchase upon the proffered terms or upon terms acceptable to the principal, in the context of the rule, means more than mere mental competence to make a contract or physical ability to sign it. The term "able" refers to the financial ability of the broker-produced purchaser to complete the transaction.
3. Under the facts of this case, where the contract of sale was executed, the down payment was paid, and monthly installment payments were paid for years, the deal was consummated. The subsequent failure of the purchaser to make all of the installment payments did not amount to a failure to consummate the transaction which would absolutely negate the broker's entitlement to the commission.
4. Under the facts of this case, it is determined that the broker is entitled to the commission when the commission is payable by the purchaser out of monthly installment payments and, after a lengthy period of performance, the purchaser defaults, the seller forecloses, and the remainder due on the contract to the seller is paid by a third party following redemption.
Tim Connell of Connell & Connell, El Dorado, for appellants.
Ronald J. Wilkinson, Wichita, for appellee.
Before BRISCOE, P.J., and BRAZIL and DAVIS, JJ.
In an action brought by Moody Investments, Inc., to recover a real estate commission, the trial court on cross-motions for summary judgment granted Moody summary judgment against Miles Edward Baldwin and Irene S. Baldwin. The Baldwins appeal.
The facts of this case are not in dispute. The El Dorado Motel in El Dorado, Kansas, originally owned by Nola Wierson, was sold on contract to Fred and Lauretta VanDenberg in 1963. The VanDenbergs in turn sold it on contract to the Baldwins in 1965. The sale which resulted in the present dispute occurred in 1973 when the Baldwins sold the motel to Ronald and Pauline Jacobson and Moody acted as the real estate agent.
On August 27, 1973, the Baldwins and the Jacobsons signed a form real estate purchase agreement which provided: "Seller to pay Broker fee as agreed." Moody also signed the contract. On October 31, 1973, the Baldwins entered into a formal real estate contract to sell the property to the Jacobsons. The contract provided for the Jacobsons to pay $2,970 a month to the escrow agent until the purchase price was paid in full. The contract also included the following provision:
A closing statement was prepared which provided that $23,700 was owed to Moody, "Subject to Escrow Contract." A commission agreement had also been prepared on September 27, 1973, which provided:
"Baldwins and Moody agreement on commission on sale of El Dorado Motel is that $23,700.00 is to be amortized in formal contract at same term and interest rate and paid to Moody from monthly payment made to the escrow agent."
The agreement was signed by M.J. Moody and Miles Baldwin.
On June 15, 1978, the Patels purchased the motel from the Jacobsons, assuming the Jacobsons' contract with the Baldwins. Once the Patels signed the agreement to buy the motel and took over its operation, the payments to the Baldwins became sporadic, finally stopping altogether on February 28, 1986. The Baldwins were at this time the record owners, the Wierson and VanDenberg contracts having been paid. The Jacobsons apparently filed for bankruptcy during this period and the trustee abandoned their interest in the property.
The Baldwins then filed a foreclosure action against the Jacobsons and the Patels and within that action asserted the default provision of the contract between the Baldwins and the Patels. The Baldwins were granted foreclosure and awarded a money judgment for the balance owed under the real estate contract. Neither the petition filed by the Baldwins nor the judgment entered are included in the record. A sheriff's sale was held on August 1, 1986, at which the Baldwins bid in the amount of the judgment plus taxes and other expenses and received a certificate of purchase. The Patels subsequently paid the Baldwins the entire balance owed and the Baldwins surrendered the certificate of purchase to the Patels.
On December 8, 1986, Moody filed the present action against the Baldwins to recover the balance of the commission owed to Moody under the contract between Moody and the Baldwins. After receiving motions for summary judgment from both parties and hearing argument, the court entered summary judgment in favor of Moody. Following the court's ruling from the bench, counsel for the Baldwins raised the issue of an alleged written agreement
between Moody and the Baldwins which the Baldwins' counsel discovered after the Baldwins' answer was filed. The court held that, since the agreement was not mentioned in the pleadings, the order of summary judgment disposed of all issues in the pleadings. The Baldwins subsequently filed a motion for leave of court to amend their answer, which was denied.
Summary judgment is proper when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. When summary judgment is challenged on appeal, an appellate court must read the record in the light most favorable to the party who defended against the motion for summary judgment. Richardson v. Northwest Central Pipeline Co., 241 Kan. 752, 756, 740 P.2d 1083 (1987).
The Baldwins argue under the facts of this case the trial court erred in granting summary judgment to the broker Moody. The Baldwins argue any time there is a default by the buyer in the terms of a contract, which results in the sale of the real estate not being consummated, any further obligation to pay the broker's commission is terminated. They contend that, due to the failure to make installment payments, default, and foreclosure, the contract was not completed. This argument was not made to the trial court.
As a general rule, issues asserted for the first time on appeal are improper for appellate review. However, if a newly asserted issue involves only a legal question arising on proved or admitted facts which will be finally determinative of the case, or if consideration is necessary to serve the ends of justice or to preventing a denial of fundamental rights, an appellate court may consider the issue even though not considered by the trial court. State v. Baker, 11 Kan.App.2d 4, 9, 711 P.2d 759 (1985), rev. denied 238 Kan. 878 (1986). The issue presented by the Baldwins concerns a question of law which would be finally determinative of the case. If the rule suggested by the Baldwins applies, Moody would not be entitled to the commission as a matter of law. The facts from which the issue arises are agreed to by the parties. Therefore, although not raised below, the issue will be considered.
In support of their argument that subsequent default on the installment payments bars recovery of the commission, the Baldwins cite Ellsworth Dobbs, Inc. v. Johnson, 50 N.J. 528, 236 A.2d 843 (1967). In Johnson, the court held that a broker's right to a commission comes about only when the buyer performs in accordance with the contract. The buyer and seller executed a contract in which the buyer agreed to make three payments before the closing date. The buyer failed to make the final payment and, on the closing date, admitted he was financially unable to perform. The court stated that "the true test of a willing buyer is not met when he signs an agreement to purchase; it is demonstrated at the time of closing of title, and if he unjustifiably refuses or is unable financially to perform then, the broker has not produced a willing buyer." Johnson, 50 N.J. at 548-49, 236 A.2d 843.
The Baldwins fail to point out that the Johnson rule was adopted by the Kansas Supreme Court in Winkelman v. Allen, 214 Kan. 22, 519 P.2d 1377 (1974):
...
To continue reading
Request your trial
-
Premier Realty, LLC v. I.T.J. Inv., Inc.
...merely refers to the financial ability of the broker-produced purchaser to complete the transaction.'" Moody Investments, Inc. v. Baldwin, 12 Kan.App.2d 686, 690, 754 P.2d 810, rev. denied 243 Kan. 779 (1988) (quoting Winkelman v. Allen, 214 Kan. 22, Syl. ¶ 4, 519 P.2d 1377 [1974]). In Mood......
-
Mills v. City of Overland Park
...299, 301-02, 461 P.2d 770 (1969); Brick v. City of Wichita, 195 Kan. 206, Syl. p 1, 403 P.2d 964 (1965); Moody Investments, Inc. v. Baldwin, 12 Kan.App.2d 686, 688-89, 754 P.2d 810, rev. denied 243 Kan. 779 (1988); K.S.A.1991 Supp. If factual issues do exist, they must be material to the ca......