Reese v. Harper, 8836
Decision Date | 05 September 1958 |
Docket Number | No. 8836,8836 |
Citation | 329 P.2d 410,8 Utah 2d 119 |
Parties | d 119 A. L. REESE, Plaintiff and Appellant, v. Thomas R. HARPER, Defendant and Respondent. |
Court | Utah Supreme Court |
Preston & Harris, Logan, for appellant.
Sherma Hansen, Brigham City, Olson & Calderwood, Logan, for respondent.
A. L. Reese sued Thomas R. Harper for $1,500 as a real estate commission for attempting to sell Harper's farm. A jury made findings adverse to plaintiff, and judgment was entered accordingly, from which he appeals.
The problem of concern here is the nature and extent of the duty a real estate agent owes to his principal, and whether plaintiff discharged it.
Mr. Reese is a licensed real estate broker, doing business as Atlas Realty Company in Logan, Utah. He contacted Mr. Harper and procured him to list for sale his dry farm of 700 acres in Hansel Valley in western Box Elder County. The listing authorized Reese to find a buyer at $45,000 or such other price as might be agreed upon. Five days later Reese proposed to Harper a deal with one Ezra J. Zollinger for $30,000. Reese presented to Harper a document entitled 'Receipt and Agreement to Purchase' (hereinafter called Receipt). The latter looked it over cursorily and signed.
In view of the contentions of the parties, discussed below, these facts are of critical importance: the figure $30,000, representing the purchase price, was filled in the printed form by hand; also on a separate line, noticeably separated from the other lines of fine print in the document were the words: 'Encumbrances, except None'; the word 'None' was also in handwriting. Due to such fact, and that the handwriting is much larger than the fine print of the document, the eye can pick out the $30,000 and the line with the words 'Encumbrances, except None,' much easier than the other parts thereof.
Thereafter a contract of sale and escrow agreement were prepared and presented to Mr. and Mrs. Harper. By it they were to receive $30,000 but out of it they were required to pay the encumbrances on the property, including a mortgage balance of $8,500, and some crop mortgages, the exact amount of which is not shown in the record. The Harpers contend that the obligations aggregated substantially $15,000 and the trial court so found. Just what the evidence will support as to encumbrances above the $8,500 mortgage is not of controlling importance. The Harpers' version of the proposed transaction, which was accepted by the jury and the trial court, was that Mr. Harper had understood that they would receive $30,000 net for their property, and that the purchaser would assume and pay the encumbrances. This would give them somewhere reasonably near the $45,000 they were asking; whereas if they had to pay the encumbrances out of the $30,000, they would get less than half the $45,000 at which Reese procured the listing. Defendant points out that the Receipt, particularly the parts referred to above, readily gives an impression consistent with their understanding.
The plaintiff Reese argues that the Receipt, properly read and understood, is clearly an offer to sell the farm for $30,000 free of encumbrances, as provided in the proposed contract which the Harpers refused to sign; that Harper is therefore bound to pay the commission on the deal because Reese procured Zollinger as a ready, willing and able purchaser upon the terms Harper had agreed to. Mr. Reese further avers that as between him and Harper, their dealings were at arm's length; that he was under no particular duty to coddle and 'spoonfeed' Harper; that inasmuch as the latter had ample opportunity to read the Receipt and thereafter voluntarily signed it, he is precluded from questioning its contents and is bound by it.
The above contention is sound as between people dealing with each other under usual circumstances. But the relationship of real estate agent and client makes the situation quite different. The agent is issued a license and permitted to hold himself out to the public as qualified by training and experience to render a specialized service in the field of real estate transactions. There rests upon him the responsibility of honestly and fairly representing the interests of those who engage his services, and upon failing to do so his license may be revoked. 1 Accordingly, persons who entrust their business to such agents are entitled to repose some degree of confidence that they will be loyal to such trust and that they will, with reasonable diligence and in good faith, represent the interests of their clients. Unless the law demands this standard, instead of being the badge of competence and integrity it is supposed to be, the license would serve only as a foil to lure the unsuspecting public in to be duped by people more skilled and experienced in such affairs than are they, when they would be better off taking care of such business for themselves.
Because of the specialized service the real estate broker offers in acting as an agent for his client there arises a fiduciary relationship between them; 2 it is incumbent upon him to apply his abilities and knowledge to the advantage of the man he serves; and to make full disclosure of all facts which his principal should know in transacting the business. 3 Failure to discharge such duty with reasonable diligence and care precludes his recovery for the service he purports to be rendering.
In Reich v. Christopulos 4 the broker had informed his principal that he had a check for $5,000, intimating that it was an outright down payment on the transaction;...
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