Olson v. Penkert, 37239--40

CourtSupreme Court of Minnesota (US)
Writing for the CourtNELSON; A broker
Citation90 N.W.2d 193,252 Minn. 334
PartiesWalter OLSON, Appellant-Respondent, v. R. A. PENKERT, Respondent-Appellant.
Docket NumberNo. 37239--40,37239--40
Decision Date09 May 1958

Page 193

90 N.W.2d 193
252 Minn. 334
Walter OLSON, Appellant-Respondent,
R. A. PENKERT, Respondent-Appellant.
No. 37239--40.
Supreme Court of Minnesota.
May 9, 1958.

Page 195

Syllabus by the Court

[252 MINN 334] 1. In the absence of a special agreement, a real estate broker employed to find a purchaser for property at a particular price earns his commission when he produces a purchaser ready, willing, and able to purchase at the price and on the terms fixed by the seller. He is entitled to his commission when he has performed all that he undertook to perform, but this rule, of necessity, depends on the agreement of the parties.

2. A real estate broker whose employment to sell property is for no definite term is entitled to a fair and reasonable opportunity to perform his obligation, and if this be granted, the right of the principal to terminate his authority is absolute and unrestricted, provided that he does not terminate the employment in bad faith and as a mere device to escape the payment of the broker's commission. The question whether the owner has acted in good faith in terminating the broker's employment to sell is a jury question.

3. A broker is always bound to make a full and fair disclosure to his principal of all facts within his knowledge affecting the rights or interests of the principal in the sale. If he acts in bad faith or commits a fraud upon his principal, he will forfeit his right to compensation. This rule is based upon the requirement that a broker owes

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the utmost good faith and loyalty to his principal.

[252 MINN 335] 4. The rule is well established that, if the efforts of the broker are rendered a failure by the fault of the employer, the broker does not lose his commission. This rule is based upon the familiar principle that no one can avail himself of the nonperformance of a condition precedent who has himself occasioned its nonperformance.

5. To maintain a claim for his commission, a broker must either show that he has procured a purchaser at the stipulated price and in accordance with the employment terms or that the defendant has deprived him of the opportunity to do so without cause while the privilege lasted.

6. The great weight of authority is that, unless the broker and his employer have expressly stipulated to the contrary, the broker is entitled to his compensation upon the completion of the negotiations which he undertook, irrespective of whether or not the contract negotiated is actually consummated or whether the failure to complete the contract is due to the default or refusal of the employer or to that of the party procured by the broker, so long as the failure to carry it through is not due to any fault of the broker or so long as he has not been guilty of fraud or bad faith.

7. The broker's right to compensation depends upon a performance of stipulations and conditions of the contract of agency, and the broker must act strictly according to the authority conferred upon him by the principal.

8. On the record in the instant case defendant's good faith in terminating the authority of his broker was for the jury, and the question of the plaintiff's good faith, in acting in behalf of the owner as his agent, likewise presented a jury question.

9. Plaintiff made no objection to the jury charge; he did not seasonably and adequately comply with Rule 51, Rules of Civil Procedure, in stating the grounds upon which he relied for a new trial [252 MINN 336] by distinctly and adequately setting forth wherein the court had erred as to fundamental law or controlling principle. The grounds as stated below cannot be enlarged on appeal, and therefore, under the circumstances the trial court's charge, even though erroneous, became the law of the case by which the sufficiency of the evidence to support the verdict is determined.

10. Since plaintiff assented to the entire jury charge and made no seasonable and adequate presentation of errors in the instructions with respect to fundamental law or controlling principle, we must apply the rule, well established by the decisions of this state, that judgment notwithstanding the verdict will never be granted for errors in either law or procedure committed at the trial.

Olson & Nelson, Litchfield, for appellant-respondent.

H. R. Pfeiffer, Olivia, for respondent-appellant.

NELSON, Justice.

Action by Walter Olson, a real estate broker, to recover a commission of $2,000 alleged to be due from Dr. R. A. Penkert as owner and principal under an oral agency listing. Plaintiff claims that he rendered services as a broker at the request of defendant in the sale of certain land in Meeker County, Minnesota, between the months of May and October 1955.

Defendant denies that he owes plaintiff a commission. He claims that plaintiff volunteered to find him a buyer for his farm; that he advised plaintiff at the time that he had the farm listed for sale with F. E. Rooney, a real estate broker at Grove City, Minnesota, but told plaintiff that if he found someone who he thought was definitely interested in buying the farm he

Page 197

was to come down and see him and talk [252 MINN 337] about it. Defendant informed plaintiff that the specified commission under the Rooney listing was $1,000, and that the sum was the limit of what he would pay in the event of a sale.

Without further communication between the parties modifying the oral listing, the plaintiff on September 19, 1955, presented to defendant an offer to purchase his farm signed by one Edwin F. Mino, in the form of a receipt which plaintiff had signed acknowledging the payment to him of $4,000 by the prospective purchaser. It purported to contain an offer to purchase the farm for $40,000, $10,000 of which was to be paid in cash and the balance on 'Cont. For Deed.' This receipt was introduced in evidence at the trial as exhibit A and received without objection. No specified commission had so far been agreed upon. Plaintiff brought this receipt to defendant's home at Hector and asked the defendant to sign it. Defendant asked plaintiff what his commission would be, and plaintiff replied that it would be $2,000. Defendant informed plaintiff that he would not pay a commission in that amount. Defendant inquired whether plaintiff would accept lesser sums, but plaintiff insisted that he wanted $2,000. He urged the defendant, however, to sign Mino's offer as shown by the receipt, stating that he was sure that they would be able to get together on the amount of the commission in the event of sale. Defendant testified that solely upon plaintiff's representation and in reliance thereon he signed the receipt.

The next evening on September 20, 1955, defendant called the plaintiff by telephone and advised him that, unless he was willing to accept a broker's commission in the sum of $800 in the event of a sale to Mino, he should not bring those people up from Iowa for the reasons that it would be of no use and meant going to a lot of trouble; if he was not agreeable to accepting a commission of $800, he should forget it. Defendant testified, 'Olson agreed that he would bring the people up and he would accept the $800 as his fee.'

Plaintiff brought the Minos to Hector and presented them to the defendant on the next day, September 21, 1955. Plaintiff and the Minos met with defendant at the office of William Sutor, attorney, where, after agreeing upon terms, a contract for deed was prepared and signed by buyer and seller. Before any delivery of the contract was effected [252 MINN 338] by defendant, plaintiff again told the defendant that his commission would have to be $2,000. Defendant rejected plaintiff's demand for a commission in that amount, refused to complete the deal, and withheld delivery of the contract. The Minos were informed of the commission dispute and of defendant's reasons for withholding delivery of the contract. He advised them the deal was being called off. The Minos did not object but indicated that they did not want to get mixed up in any trouble. They withdrew as purchasers without any later renewal of negotiations.

Mr. Sutor, called as a witness by defendant, testified that after the defendant left the office to obtain his wife's signature to the contract for deed he presented a commission agreement for $800 to plaintiff for signature; that plaintiff refused to sign; that upon his recounting to plaintiff the commission arrangement made over the telephone on the night before plaintiff replied that that was the agreement at one time but that now that the 'Doc' is getting his full price, he should get 5 percent. When defendant returned he offered to get on with the deal and pay the plaintiff his commission of $800 but the plaintiff insisted he wanted $2,000, whereupon Sutor suggested that they call it a day. No delivery was made of either the original or any duplicate of the contracts for deed. The contract for deed was later declared null and void by court order.

Plaintiff testified that defendant had told him that he could work on selling the farm; that nothing was said about a commission;

Page 198

and on cross-examination he added that the defendant had never promised to sell the farm to a buyer the plaintiff might find but that he would sell if the buyer was acceptable and provided that Mr. Rooney had not found a buyer for it. He further testified that they met later in Litchfield when defendant inquired whether he had done anything in regard to the sale of the farm; that he informed the defendant that he had advertised it and had shown it to several people and that he was trying to find a buyer; that there was no further conversation relating to the listing at that time. He testified that when he went to the defendant's house on the evening of September 19 and exhibited to him the receipt described as exhibit A which defendant later signed that [252 MINN 339] evening, the matter of commission came up for discussion; that the defendant stated to him he...

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