Record Realty, Inc. v. Hull

• Decision Date: 19 July 1976
• Docket Number: No. 3005--I,3005--I
• Citation: 552 P.2d 191,15 Wn.App. 826
• Parties: RECORD REALTY, INC., and Genesee, Inc., Respondents, v. Clair HULL and Elsie Hull, his wife, Appellants.
• Court: Washington Court of Appeals

Page 826

15 Wn.App. 826

552 P.2d 191

RECORD REALTY, INC., and Genesee, Inc., Respondents, v. Clair HULL and Elsie Hull, his wife, Appellants.

No. 3005--I.

Court of Appeals of Washington, Division 1.

July 19, 1976.

D. Scott Sandelin, Seattle, for appellants.

Franco, Asia, Bensussen & Coe, Harold B. Coe, Laurence B. Finegold, Seattle, for respondents.

CALLOW, Judge.

The plaintiffs brought this action to recover a real estate broker's commission claimed due on an exclusive multiple listing contract which stated that the plaintiffs were to receive a commission if they provided the defendants with a 'ready, able and willing' buyer. The trial court entered judgment for the plaintiffs and the defendants appeal.

Findings of fact as entered by the trial court stated in pertinent part:

3. On the 5th day of October, 1971 defendants, husband and wife, executed an exclusive multiple listing contract with GENESEE, INC. for the sale of real property in the sum of $28,500. allowing terms of either F.H.A., V.A., CONVENTIONAL or ASSUMPTION OF MORTGAGE. The agreement was to expire February 5, 1972. The exclusive multiple listing contract required the plaintiff GENESEE INC. to use its best efforts to find a purchaser and seller granted GENESEE, INC. the sole and exclusive right to sell said property and agreed to pay a commission of 7%, the cost of employment of an attorney to enforce any of the terms of the agreement if a ready, able and willing purchaser was made available. (Exhibit 1).

Thereafter, Plaintiff GENESEE, INC. commenced advertising defendant's property by newspaper, placing a sign upon the premises, received inquiries and showed the property to prospective purchasers.

4. On or about the 21st day of December, 1971 plaintiff corporations presented to defendants an Earnest Money Receipt and Agreement from a ready, able and willing purchaser which in all respects complied with the terms and conditions of the multiple listing contract. (Earnest Money--Exhibit 3.)

5. Upon presentation by the plaintiffs to the defendant, of the Earnest Money Receipt and Agreement, (Exhibit 3), defendants refused to sell said property; defendant husband stating that he had decided not to sell the property regardless of any offer presented.

6. Plaintiffs having done all that was required of them have earned their commission.

The cause is before us on a short record. CAROA 34(4). The statement of facts contains only the testimony of a sales person for the plaintiff, one Sharen Carrell, while the judgment entered by the trial court reflects that three other persons also testified. The plaintiff broker did not propose any amendments to the statement of facts. Therefore, it is deemed to have been agreed to. CAROA 36. The trial court certified that

the matters and proceedings embodied in the foregoing statement of facts are matters and proceedings occurring in said cause and that the same are hereby made a part of the record therein, and all exhibits will be attached.

I do further certify that the same contains all the material facts, matters and proceedings heretofore occurring in said cause and not already a part of the record therein.

The defendant, to bring the matter before us on a short record, filed a Concise Statement of Points on Appeal. CAROA 34(4). Only one of the points on appeal recited is now urged. It reads as follows:

The trial Court erred in entering judgment for plaintiffs because two conditions precedent had not been proved:

1) That the buyer (Burback) was Able to purchase the property . . .

In a letter dated June 1, 1973, an exhibit admitted as part of the record, plaintiff's counsel wrote to the plaintiff stating in part:

Our key witness, Tom Burback, is no longer in the area. . . .

The law requires us to prove that the Broker had a buyer who was ready, willing and Able to make the purchase. Without Burbacks testimony the ability remains in question.

A broker is entitled to his commission if he provides the seller with a buyer who is 'ready, willing, and able' to purchase the property. Burt v. Heikkala, 44 Wash.2d 52, 265 P.2d 280 (1954); Johnston v. Smith, 43 Wash.2d 603, 262 P.2d 530 (1953); Spencer v. Houtt, 29 Wash.2d 252, 186 P.2d 613 (1947); Haynes v. John Davis & Co., 22 Wash.2d 474, 156 P.2d 659 (1945); Best v. Kelley, 22 Wash.2d 257, 155 P.2d 794, 156 A.L.R. 1387 (1945); Bloom v. Christensen, 18 Wash.2d 137, 138 P.2d 655 (1943); 12 Am.Jur.2d Brokers § 183 (1964, Supp.1975). The term 'able' buyer refers to a purchaser who is financially able to command the necessary funds to complete the purchase within the time allowed by the offer. As stated in 12 C.J.S. Brokers § 85b. at 193 (1938):

(O)rdinarily the word 'able,' as used in connection with a purchaser . . ., refers to his financial ability. Furthermore, the financial ability required of a customer, to entitle the broker producing him to a commission, is his ability to meet the terms of the sale . . .

Aside from immediate cash payments, the ability of a purchaser is not to be judged exclusively with reference to money in his possession or to his credit in a bank; consideration should also be given to his assets, credit, financial rating, enforceable agreements for loans, and anything else indicating ability or lack of ability on his part to command the requisite funds at the required time.

(Footnotes omitted.) See Potter v. Ridge Realty Corp., 28 Conn.Supp. 304, 259 A.2d 758 (Super.Ct.1969); Chanton v. Drucker, 299 So.2d 145 (Fla.Dist.Ct.App.1974); William C. Bender & Co. v. Tritz, 338 Ill.App. 661, 88 N.E.2d 519 (1949); Campbell v. Fowler, 214 Kan. 491, 520 P.2d 1285 (1974); Winkelman v. Allen, 214 Kan. 22, 519 P.2d 1377 (1974); Shell Oil Co. v. Kapler, 235 Minn. 292, 50 N.W.2d 707 (1951); Walton v. Hudson, 82 Ohio App. 330, 79 N.E.2d 921 (1947); Peter M. Chalik & Associates v. Hermes, 56 Wis.2d 151, 201 N.W.2d 514 (1972); Annot., 1 A.L.R. 528 (1919); 12 Am.Jur.2d Brokers § 184 (1964, Supp.1975). As observed in Shell Oil Co. v. Kapler, supra:

Generally speaking, a purchaser is financially ready and able to buy: (1) If he has the needed cash in hand, or (2) if he is personally possessed of assets--which in part may consist of the property to be purchased--and a credit rating which enable him with reasonable certainty to command the requisite funds at the required tome, or (3) if he has definitely arranged to raise the necessary money--or as much thereof as he is unable to supply personally--by obtaining a Binding commitment for a loan to him for that purpose By a financially able third party, irrespective of whether such loan be secured in part by the property to be purchased.

(Footnotes omitted.) 235 Minn. at 298, 50 N.W.2d at 712.

A broker who sues for his commission has the burden of proving that he has fulfilled all conditions precedent to the duty of the seller to pay, including the condition that he has produced an 'able' buyer. Brown v. Grimm, 258 Or. 55, 481 P.2d 63 (1971); Henry Broderick, Inc. v. Baker, 151 Wash. 1, 274 P. 722 (1929). The broker submits that the record establishes 'sufficient evidence of the buyer's financial position.' We do not agree. The evidence presented showed that the prospective buyer was newly employed as a used car salesman, having recently moved into the area from another city. There was no showing of the assets or income of the prospective buyer, no credit report was secured, and no loan application was submitted. An exhibit was admitted which reflects that the prospective purchaser apparently purchased another house after the transaction in question fell through. However, that exhibit does not contain any evidence of the purchase price of the second house or substantiate in any way that the prospective purchaser was able to finance the purchase of a home within the price range of the seller's house. Peter M. Chalik & Associates v. Hermes, supra. ¹

The plaintiff brokers contend, however, that when, as in this case, the seller repudiates the exclusive listing agreement by stating he has decided not to sell the property regardless of the offer presented, the seller is estopped from defending an action on the ground that this condition has not been satisfied. We disagree. To recover, the broker must show that he did perform or could have performed had the contract not been repudiated. Were it not so, a broker could recover for full performance when no performance whatsoever had been given. The broker must show that the condition could have occurred had its performance not been prevented by the seller. Restatement of Contracts § 295 (1932). See Abbott v. Floyd, 136 Cal.App. 365, 28 P.2d 929 (1934); 12 Am.Jur.2d Brokers § 200 (1964). The applicable rule is stated in 3A A. Corbin, Contracts § 768 at 546--47 (1951).

A very commonly recurring illustration of prevention of the fulfillment of a condition precedent to the duty of a promisor to pay money is to be found in the law of agency, such prevention being sometimes privileged and sometimes not. A land owner lists his property with a broker for sale, promising to pay a commission for the service of producing a purchaser able and willing to buy on terms satisfactory to the owner. The production of such a purchaser and an expression of mutual agreement between him and the owner are express conditions precedent to the owner's duty to pay the commission. If the owner, contrary to his understanding with the broker, prevents the fulfilment of these conditions by wrongfully refusing to convey after having agreed on terms, an action can be maintained by the broker without such fulfilment. His judgment will be for the full amount of the promised commission, less any expense that he has saved by reason of the owner's breach, If he can show, that but for the owner's action he could and would have fulfilled the conditions.

(Footnote omitted. Italics ours.) See Harding v. Rock, 60 Wash.2d 292, 373 P.2d 784 (1962); White & Bollard, Inc. v. Goodenow, 58 Wash.2d 180, 361...