Rea v. Johnson

• Decision Date: 05 March 1925
• Docket Number: (No. 176.)
• Citation: Rea v. Johnson, 270 S.W. 1077 (Tex. App. 1925)
• Parties: REA et al. v. JOHNSON et al.
• Court: Texas Court of Appeals

270 S.W. 1077

REA et al. v. JOHNSON et al.

(No. 176.)

Court of Civil Appeals of Texas. Waco.

March 5, 1925.

Rehearing Denied April 30, 1925.

Appeal from McLennan County Court; Giles P. Lester, Judge.

Suit by H. M. Johnson and others against Oscar J. Rea and others. Judgment for plaintiffs, and defendants appeal. Affirmed.

Garrett & Sheehy, of Waco, for appellants.

Jno. B. Atkinson, of Waco, for appellees.

BARCUS, J.

Appellees instituted this suit against appellants on a note for $350. Appellants, for answer, alleged that the note was executed in payment of a real estate commission to appellees for effecting the exchange of certain real estate belonging to appellants, and alleged that in said real estate trade appellees fraudulently misrepresented the value of the land which appellants were trading for, and alleged that the note was void because appellees, as real estate agents, were claiming a commission from both sides of the real estate trade without the knowledge or consent of appellants. A trial before a jury on special issues resulted in a judgment in favor of appellees.

Appellants owned some real estate at Clifton, which they valued at $42,000 and which they traded to Bletsch & Thompson for 640 acres of land in Falls county, valued at $62,000. Appellees and a Mr. Grimland, real estate agents, represented appellants, and L. Wood of Falls county represented Bletsch & Thompson. The contract of exchange was signed in the early spring of 1923; the exact date not being given. After the contract was signed, and before the deeds were executed, appellees informed appellants that Bletsch & Thompson were to pay a commission of $1,000 and that the $1,000 commission which appellants were to pay and the $1,000 which Bletsch & Thompson were to pay were to be pooled, and that Grimland was to receive one-third, appellees one-third and Wood one-third of the $2,000; and requested appellants to take Bletsch & Thompson's note, secured by a lien on the property which they were trading, for the $1,000 Bletsch & Thompson were to pay, in order that same might be sold and the cash realized thereon at once, which appellants agreed to and did do. The sales were finally consummated and papers passed about the 1st of June, 1923. On June 28th, appellants, not having paid the $1,000 commission, by agreement of all parties, executed their three notes for the commission, making one payable to Grimland, one to Wood and one to appellees, said notes being dated June 28th, and the note sued on being payable October 1, 1923.

Appellants knew at the time they executed the deeds and closed the contract, and at the time the note in controversy was given, that the commissions paid by the respective parties had been pooled and divided between the three real estate firms. As to when the real estate agents agreed to pool their commissions, the evidence is uncertain. As we view the matter, it is, however, immaterial. A real estate broker cannot represent both parties to a real estate trade and collect commissions out of both, unless that fact is known to all parties prior to the making of the contract. Baker v. Greer (Tex. Civ. App.) 208 S. W. 755; Buck v. Woodson (Tex. Civ. App.) 209 S. W. 244.

Where a real estate broker does represent both parties and before the trade is consummated all parties learn said facts and acquiesce thereto, and after the trade is closed execute their notes to the commission broker for the agreed commission, they are estopped from denying liability by reason of the dual capacity of the broker. Hunter v. Lanius, 82 Tex. 677, 18 S. W. 201; Adams v. Overland...