Rexburg Realty, Inc. v. Compton

Decision Date12 August 1980
Docket NumberNo. 13085,13085
Citation616 P.2d 245,101 Idaho 466
PartiesREXBURG REALTY, INC., an Idaho Corporation, Plaintiff-Respondent, v. Dean COMPTON and Carol B. Compton, husband and wife, Defendants-Appellants.
CourtIdaho Supreme Court

Herman E. Bedke of Nielson & Bedke, Burley, for defendants-appellants.

J. Kent Jolley, Rexburg, for plaintiff-respondent.

BAKES, Justice.

Defendant appellants Dean and Carol Compton, husband and wife, appeal from a district court judgment awarding a real estate broker commission to plaintiff respondent Rexburg Realty, Inc. We affirm.

The Comptons owned approximately 2,000 acres of farmland in Cassia County and were also tenants in common with Mr. Compton's mother, Rita Bateman, in approximately 2,000 acres which adjoined the Compton land. These two parcels, totaling 3,947 acres, were farmed by the Comptons as a single unit.

In 1973 the Comptons discussed with neighbors the idea of selling both parcels of land. Hearing of the Comptons' interest in selling their land, an agent for plaintiff respondent Rexburg Realty, Inc., contacted the Comptons, and the Comptons subsequently entered a written real estate broker's employment contract authorizing Rexburg Realty to attempt to find a buyer for the entire 3,947 acres. The agreement specified that the Comptons would accept $555,740 for the property, with a 29% down payment. Both Mr. and Mrs. Compton signed the standard form real estate commission contract, agreeing to pay Rexburg Realty, Inc., 5% of the agreed sale price if it obtained a buyer ready, willing and able to purchase the property on the sellers' terms. Mrs. Bateman, however, did not sign the commission agreement. The real estate agent was aware that Mrs. Bateman had an interest in part of the property and, in fact, had examined the record title to the property in order to obtain a legal description of the entire farm prior to execution of the contract by the Comptons. Dallin Reese, agent for Rexburg Realty, Inc., testified at trial that Compton had assured him that Mrs. Bateman wanted her interest in the land sold, that she usually followed her son Dean Compton's advice in such matters, and that Compton believed there would be no problem in obtaining her signature to close a sale on the terms in the broker's agreement. Defendant Dean Compton's testimony generally concurred with Reese's testimony.

Rexburg Realty subsequently obtained an offer of $550,000 with a down payment of $11,000 from Lyle Robison and James Christiansen. The Comptons agreed to the modification of the terms specified in the broker's agreement and signed the earnest money agreement. However, sale of the property to Robison and Christiansen never was consummated because Mrs. Bateman decided she would not sell her share in the property and would not sign the earnest money agreement. The prospective buyers sued the Comptons for specific performance and were denied the relief requested in district court. The court's denial of specific performance was affirmed on appeal. Robison v. Compton, 97 Idaho 615, 549 P.2d 274 (1976).

Rexburg Realty, Inc., demanded its commission from the Comptons for its procuring ready and willing buyers for the property despite failure of the sale to Robison and Christiansen to close. Upon the Comptons' refusal to pay the commission, the realtor initiated this action, alleging that it had fully performed its employment agreement by obtaining an acceptable offer from Robison and Christiansen and that it was therefore entitled to its commission. The district court, hearing the case without a jury, awarded the plaintiff realtor $27,500, i. e., the 5% contract commission as applied to the $550,000 sale price specified in the parties' earnest money agreement. 1

The Comptons bring this appeal from the district court judgment. They contend that a real estate broker's commission agreement which is not signed by all of the owners of the property involved is not enforceable. They argue that I.C. § 9-508 2 requires that all co-owners of real estate sign a real estate broker's employment contract before that agreement is enforceable by a realtor and maintain that here the broker's failure to obtain the signature of Mrs. Bateman on the commission agreement bars enforcement of the agreement against the Comptons.

Pursuant to I.C. § 9-508 an enforceable real estate commission contract must be in writing and "signed by the owner of such real estate, or his legal, appointed and duly qualified representative." I.C. § 9-508 is a form of statute of frauds applicable to a real estate broker employment agreement.

"The primary purpose of I.C. § 9-508 is to prevent fraudulent or unfounded claims of brokers. This particular portion of our code relates entirely to statutes of frauds and has as its objective avoiding disputes as to whether or not an agreement in fact exists, the amount of a commission and the exclusive or non-exclusive terms of a listing agreement." C. Forsman Real Estate Co., Inc. v. Hatch, 97 Idaho 511, 515, 547 P.2d 1116, 1120 (1976).

In Forsman it was held that a real estate broker employment agreement was "a service contract not necessarily related to the ownership of land," 97 Idaho at 516, 547 P.2d at 1121, and that a brokerage agreement involving realty owned as community property need only be signed and executed by one spousal owner and is binding upon the signing spouse even absent the other spouse's signature or ratification of the agreement.

Subsequent to Forsman, this Court ruled in Garfield v. Tindall, 98 Idaho 841, 573 P.2d 966 (1978), that:

"(A) co-owner of property, who has expressly or impliedly represented to the broker that he can convey the property to be sold, cannot escape personal liability under a brokerage commission contract because it was not signed by the other co-owner(s)." 98 Idaho at 843, 573 P.2d at 968.

The district court in deciding the case at bar relied upon the Forsman and Garfield cases in concluding that the parties' agreement was enforceable against defendant appellants Dean and Carol Compton. The Garfield case specifically provides that where a co-owner of realty expressly or impliedly represents to a real estate broker that he has authority to sell property subject to the agreement, he will be liable to the broker for a sales commission upon performance of the agreement by the broker despite the failure of any other co-owner or co-owners to sign the agreement. Dallin Reese, realty agent for Rexburg Realty, and Dean Compton both testified at trial that when Reese presented the real estate broker's employment agreement to the Comptons for their signatures, Compton told Reese that his mother, Mrs. Bateman, wanted the land sold, that she would co-operate with the Comptons in arranging a sale, and that she usually accepted Mr. Compton's advice in business matters and would go along with his advice in this transaction. The trial transcript indicates that the parties several times discussed Mrs. Bateman's interest in part of the property and that each time respondents were assured that she would agree to a transaction arranged by her son, Dean Compton. 3

If the purpose of I.C. § 9-508 is, as stated in Forsman, to bar fraudulent or unfounded claims for a sales commission by real estate brokers, the purpose of that statute has been met here. The parties' agreement is in writing, the property adequately described, the amount of the commission and terms of the listing are specified, and the agreement has been signed by two of the co-owners with representations made to the broker by the signing co-owners that the contemplated transaction would be approved by the third co-owner. The record made at trial readily supports the trial court's memorandum decision which, relying on the Garfield case, concluded that Dean Compton at least impliedly, if not expressly, represented to Rexburg Realty that he was authorized to sell the property on behalf of his mother, Mrs. Bateman. For this reason we affirm the trial court's conclusion that the real estate broker's agreement in this case is valid and enforceable against the Comptons. Marshall Bros., Inc. v. Geisler, 99 Idaho 734, 588 P.2d 933 (1978); Garfield v. Tindall, supra; Rogers v. Hendrix, 92 Idaho 141, 438 P.2d 653 (1968).

The trial court's judgment is affirmed. Costs are awarded to respondent.

DONALDSON, C. J., and McFADDEN, J., concur.

BEEBE, Judge Pro Tem., dissenting:

I conceive that the decision of this Court in Garfield v. Tindall, 98 Idaho 841, 573 P.2d 966 (1978), and C. Forsman Real Estate Co., Inc. v. Hatch, 97 Idaho 511, 547 P.2d 1116 (1976), stand for the proposition that any person with an interest in property in which another has an interest may singly enter into a brokerage commission contract which, if in writing and signed by him, will satisfy the provisions of I.C. § 9-508. The rationale of those decisions is that such an agreement is one for personal services of the broker and not necessarily related to the ownership of the land. Forsman, a case involving community property directly so holds; in Garfield such holding is not that clearcut although it is arguable that such is the holding of the Court. In this interpretation of the statute, Justice McQuade in his dissenting opinion in Forsman stated, "(W)e invite brokers to accumulate promises from the unknowing when there is no real expectation that a sale will result." 97 Idaho at 518, 547 P.2d at 1123.

Real estate brokers are a licensed profession in the State of Idaho and a degree of expertise in property matters is required. A broker, as a generality, has been said to occupy a fiduciary relationship with an owner contracting for his services. 1 Brokers customarily draw legal documents for execution by the owner they represent and a buyer they find in consummating their employment of finding a buyer ready, willing, and able to purchase. In the case at bar, the broker located buyers, prepared and caused to be executed by his...

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2 cases
  • McGilvray v. Farmers New World Life Ins. Co.
    • United States
    • Idaho Supreme Court
    • July 6, 2001
    ...of a failure of the express condition that the applicant provide answers to four questions in Section J. See Rexburg Realty, Inc. v. Compton, 101 Idaho 466, 616 P.2d 245 (1980). Therefore, the district court did not err in dismissing the McGilvrays' claim based upon the assertion of a contr......
  • Century 21 Quality Properties, Inc. v. Chandler
    • United States
    • Idaho Court of Appeals
    • April 6, 1982
    ...non-exclusive terms of a listing agreement. (Emphasis added) 97 Idaho at 515, 547 P.2d at 1120. See also Rexburg Realty, Inc. v. Compton, 101 Idaho 466, 467, 616 P.2d 245, 246 (1980). The fundamental purpose of I.C. § 9-508 is not served if the writing furnished by the broker and relied upo......

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