Reich v. Christopulos

• Decision Date: 16 April 1953
• Docket Number: No. 7903,7903
• Parties: REICH et ux. v. CHRISTOPULOS et al.
• Court: Utah Supreme Court

Page 238

256 P.2d 238

123 Utah 137

REICH et ux. v. CHRISTOPULOS et al.

No. 7903.

Supreme Court of Utah.

April 16, 1953.

Gaylen S. Young, Salt Lake City, for appellant.

Rawlings, Wallace, Black, Roberts & Black, Dwight L. King, Robert Murray Stewart, Salt Lake City, for respondent.

CROCKETT, Justice.

This suit arose as a consequence of George B. Christopulos' repudiation of an arrangement to purchase the Prescott Apartments in Salt Lake City from Harry A. Reich and his wife. The Reiches' complaint asked for an adjudication of rights in the transaction, naming Christopulos and his wife, Roy M. Hill (the broker who procured the deal) and his firm, the Salt Lake Real Estate and Investment Company, as defendants. Hill and his company counterclaimed for a commission on the transaction. This appeal challenges only that portion of the judgment below which denied Hill recovery from the Reiches on his counterclaim. All other issues are at rest, having been determined adversely to the plaintiffs by the trial court and no appeal being taken therefrom.

The plaintiffs Reich listed the apartments for sale at an asking price of $147,000 with Wright-Worthlin Company, realtors, which had the effect of permitting sale under 'multiple listing' by any member of the Salt Lake Real Estate Board of which Hill's firm was a member. The sales agency (listing) contract, which was Hill's authority for acting, reads in part:

'* * * if you find a buyer who is ready, able and willing to buy said property * * * at said price and terms, or any other price or terms to which I may agree in writing * * *, I agree to pay you the Salt Lake Real Estate Board commission on such sale. * * *'

'In the event that a prospective purchaser makes a deposit or part payment * * * and thereafter forfeits same or any part thereof, you are hereby authorized, in my name or otherwise, to declare such forfeiture, and to retain so much of said sum as would equal your commission if such sale had been fully consummated.'

Mr. Hill got Mr. Christopulos to make in the form of the usual 'earnest money receipt and agreement' a signed offer to the Reiches of $105,000. The agreement recited the receipt of the $5,000 'to secure and apply on the purchase price,' required a further down payment of $25,000 on or before September 1, 1951 and $800 a month thereafter and includes the following stipulation:

'In the event the purchaser fails to pay the balance of said purchase price or complete said purchase as herein provided, the amounts paid hereon shall, at the option of the seller, be retained as liquidated and agreed damages.'

The agreement was signed on Thursday, August 9, by Christopulos who gave Hill a check for $5,000, on the top of which he wrote, 'This check deposited and cashed if we close the deal for the apts.' He asked Hill not to cash it for 'a day or two' until he could transfer money from another bank to cover, to which Hill agreed.

Hill then took this offer to the Reiches. They were somewhat hesitant, for various reasons, including the fact that they wanted a higher down payment. Hill patted his chest pocket and said, 'I have got $5,000 on the transaction' but did not disclose the information about holding the check. The Reiches accepted the offer and signed the earnest money agreement.

Mr. Hill held the check and proceeded with having the abstract brought up to date and attending to other details necessary for the execution of the real estate contract. The evidence shows that on Sunday the Christopuloses heard certain derogatory statements concerning the deal and the property and learned that the Reiches had paid only $85,000 for it just two years before. On Monday, Christopulos saw his attorney about either getting out of the deal or beating the price down. An order to stop payment on the check was given to the bank first thing Tuesday morning. The next day, Wednesday the 15th, a notice of rescission was served upon Mr. Hill, as agent for the Reiches, and a copy sent them by registered mail; it recited several reasons for so doing. The record bears out, however, that such 'reasons' were likely but excuses, the real reason being that because of the information given him, Christopulos had become dissatisfied with the bargain.

On August 31, 1951, this action was commenced against Christopulos in the names of the Reiches. After further contacting Christopulos and being told that he would not go through with the deal, the Reiches sold the apartments through another realtor for the sum of $114,000, $9,000 higher than Christopulos had agreed to pay. Thereafter, an amended complaint was filed adding Hill and his company as parties defendant. Hill filed a counterclaim for his commission of 5%, totaling $5,250, claiming that he had fully performed his duties as a realtor in that he had procured a ready, willing and able buyer, who had signed a binding contract.

The trial court found that the representation that a $5,000 down payment had been made was a material inducement to the Reiches in accepting the proposal, that they would not have done so had they known the facts and further that the Christopuloses had sufficient ground for rescission because of certain unauthorized false representations about the property made to them by Hill. Accordingly, he dismissed Hill's counterclaim. From this order, Hill appeals, attacking only the ruling denying him recovery of his commission from the Reiches.

This case does not present a fact situation analogous to that of Ogden Savings & Trust v. Blakely ¹ wherein we upheld the lower court's allowance of commission to a broker-plaintiff. That decision was bottomed upon the proposition that the broker had produced a 'ready, willing and able buyer,' who had entered into an agreement to purchase even though he later repudiated it. There was no reason shown why he was not bound to perform. It was held that the broker...