Rodgers v. Baughman

• Decision Date: 21 December 1983
• Docket Number: No. 68847,68847
• Citation: 342 N.W.2d 801
• Parties: Stanley C. RODGERS d/b/a Rodgers Real Estate, Appellant, v. Harold C. BAUGHMAN and Gladys M. Baughman, Husband and Wife; and Levelcrest Farms, Inc., A Corporation, Appellees.
• Court: Iowa Supreme Court

Page 801

342 N.W.2d 801

Stanley C. RODGERS d/b/a Rodgers Real Estate, Appellant, v. Harold C. BAUGHMAN and Gladys M. Baughman, Husband and Wife; and Levelcrest Farms, Inc., A Corporation, Appellees.

No. 68847.

Supreme Court of Iowa.

Dec. 21, 1983.

Vern M. Ball, Bloomfield, for appellant.

Robert A. Hutchinson and David C. Craig of Brown, Winick, Graves, Donnelly & Baskerville, Des Moines, for appellees.

Considered en banc.

McCORMICK, Justice.

Plaintiff Stanley C. Rodgers is a real estate broker who brought this action to recover a real estate commission of $87,500 from defendants Harold C. Baughman, Gladys M. Baughman, Levelcrest Farms, Inc., and William C. Sherman. At the conclusion of plaintiff's evidence in a bench trial, the trial court sustained defendants' motion for directed verdict, which we treat as a motion to dismiss. Plaintiff contends the court erred in sustaining the motion except as to Sherman. Because we find no merit in the three grounds upon which the motion was sustained as to the other defendants, we reverse and remand.

In sustaining the motion, the trial court held that the listing agreement did not comply with rule 700-1.23 of the Iowa Administrative Code, Sherman did not comply with a condition precedent to the sale, and plaintiff failed to adduce substantial evidence that the defendant corporation had obtained authority to sell the real estate in compliance with Iowa Code section 496A.76 (1981).

We review the evidence in the light most favorable to the party against whom the motion was sustained. The movant is considered to have admitted the truth of all evidence offered by the adversary and every favorable inference that fairly and reasonably may be deduced from it. Brown v. Ellison, 304 N.W.2d 197, 202 (Iowa 1981). An order sustaining such a motion rests on legal grounds and does not find facts. Henschel v. Hawkeye-Security Insurance Co., 178 N.W.2d 409, 414 (Iowa 1970). Sustention is warranted only when the evidence is insufficient as a matter of law to permit the adverse party to recover. Roth v. Headlee, 238 Iowa 1340, 1343, 29 N.W.2d 923, 924 (1947). We will summarize the relevant evidence in the light most favorable to plaintiff.

Harold C. Baughman and his wife Gladys owned and operated a farm in Davis County consisting of 787 acres. In the late 1970's they conveyed 777 acres of the farm to Levelcrest, Inc., a corporation of which they have always been the sole officers and directors and for which Harold has always acted. The corporation issued 100,000 shares of stock, 42,675 to each of the Baughmans and 14,650 to their children and to charities. At the time of the events in the present case, the Baughmans thus owned ten acres of the farm in joint tenancy and the corporation owned the remainder.

Dwight Blasi is a salesman for Rodgers. In February 1981 Blasi contacted the Baughmans about listing the farm and obtained a listing from them in May. Blasi signed the listing for Rodgers and Harold signed it for himself, his wife and the corporation. Harold's agency relationship was not shown in the listing agreement. He was identified under his signature only as "Owner."

The farm was described in the listing as:

787 acres M/L 90% tillable. A top Davis Co. farm. 3 houses, 5 barns. 2 Harvestores 25 X 65 & 20 X 50--12,000 bu. grain. Cattle feeding set up with feed house & auger. 120' bunk. 50,000 bu. grain storage with drying floors & blowers. 20 h.p. 2 blowers on 48 ft. 7 ring. 1 blower on 36 ft. 8 ring bin. Good machine shed 54 X 72'. Good modern 2 story houses. Good heating system, hot waterheat. Rural water. All outside fences good. This farm is in a high state of fertility.

Additional details were shown concerning features of one of the homes on the property. Baughmans did not own any other Davis County farm. The listing called for a five percent commission if the Rodgers firm procured a purchaser for the farm. The land was listed for $2,000,000.

Blasi subsequently obtained an offer from Sherman to purchase the farm for $1,725,000. Defendants accepted his offer, which was contingent on Sherman being able to sell a farm he owned by July 2, 1981. A purchase agreement between the sellers and buyer was executed on June 12, 1981. The sellers were shown as the Baughmans and Levelcrest Farms, Inc. The property was described in the purchase contract as "787 acres in Cleveland Twp.," and the Baughmans signed as sellers. Sherman signed as buyer.

On July 1, 1981, Sherman had not sold his farm but nevertheless was ready, willing and able to carry out the purchase. Defendants refused to go through with it, however, and Sherman brought an action for specific performance which he later dismissed without prejudice. When defendants refused to pay Rodgers a commission, he brought the present action.

This appeal by plaintiff followed the court's dismissal of the case on defendants' motion at the close of plaintiff's case-in-chief. We now examine the merits of the three grounds relied on by the court in its ruling.

I. Sufficiency of the listing. The trial court found the listing agreement did not comply with a rule of the real estate commission requiring listing agreements to be in a certain written form:

All listing agreements shall be in writing, properly identifying the property and containing all of the terms and conditions under which the property is to be sold, including the price, the commission to be paid, the signatures of all parties concerned and a definite expiration date. It shall contain no provision requiring a party signing the listing to notify the broker of his intention to cancel the listing after such definite expiration date.

700 I.A.C. § 1.23. We upheld the authority of the commission to adopt this rule in Milholin v. Vorhies, 320 N.W.2d 552, 554 (Iowa 1982). We must now determine the effect of the rule in the facts of this case.

Defendants contend the listing agreement was deficient in two respects, one in the adequacy of the description of the real estate and the other in the adequacy of the signatures. The rule requires a listing "properly identifying the property" and the signatures of "all parties concerned."

In Milholin, this court said the commission rule is analogous to a statute of frauds. Id. at 554. The court endorsed a statement of the Vermont Supreme Court characterizing an almost identical rule:

Ostensibly, the purpose of this rule is for the protection of the public to establish fair dealings between parties, standardize the procedure and practices in the real estate business and to prevent fraud. Its purpose is similar to that of the statute of frauds, which, ... "is to prevent a party from being compelled, by oral and perhaps false testimony to be held responsible for a contract he claims he never made."

Green Mountain Realty, Inc. v. Fish, 133 Vt. 296, 299, 336 A.2d 187, 189 (1975). The effect of the rule "is not to invalidate oral listing agreements but to make them unenforceable upon proper objection." Milholin, 320 N.W.2d at 554.

As with a statute, we seek to ascertain and give effect to the intent of the drafters of the rule. We construe it liberally "to promote its objects and assist the parties in obtaining justice." Iowa Code § 4.2 (1983). We believe that like a statute of frauds the rule is intended to be available as a shield and not a sword. See Warder & Lee Elevator, Inc. v. Britten, 274 N.W.2d 339, 342 (Iowa 1979).

A property description is sufficient to satisfy a general statute of frauds if it meets the following standard:

The land must be so described that it can be identified with reasonable certainty. The writing must disclose a description which is itself definite and certain or it must furnish the means or key by which the description may be made certain and identified with its location on the ground. In other words the contract, note, or memorandum is insufficient where parol evidence is necessary to supply the description, or part thereof, to determine and define the subject matter, and to show the intention and agreement of the parties as to the subject matter; and it is sufficient as regards subject matter where it furnishes a sufficient foundation for the admission of extrinsic evidence to apply the description and by means of such evidence the particular tract of land which is the subject matter of the agreement may be identified and located to the exclusion of all others.

37 C.J.S. Frauds, Statute of § 184, at 670 (1943). Statutes requiring listing agreements to be in writing are usually no more specific than a general statute of frauds in stating the requisites for a description. The question of specificity is left for judicial determination. See Annot., 30 A.L.R.3d 935, 941 (1970).

Rule 700-1.23 requires a writing "properly identifying the property." An identification is thus sufficient if it is "proper," but the rule does not specify what constitutes a proper identification of the property. We believe the commission intended that the general statute of frauds standard be applied. We therefore conclude that, as with a general statute of frauds, a description properly identifies the property where it furnishes a sufficient foundation for the admission of extrinsic evidence to apply the description and by means of such evidence the particular tract of land which is the subject matter of the agreement may be identified and located to the exclusion of all others.

Other courts have applied that standard in upholding the sufficiency of various descriptions in listing agreements. See, e.g., Needham v. Abbott Kinney Co., 217 Cal. 72, 76, 17 P.2d 109, 110 (1932); Shields &amp Co. v. Green, 100 Idaho 879, 882, 606 P.2d 983, 986 (1980); Gantt v. Harper, 86 Mont. 69, 74, 281 P. 915, 916-17 (1929); Henderson v. Lemke, 60 Or. 363, 366, 119 P. 482, 483 (1911); Pickett v. Bishop, 148 Tex. 207, 209-10, 223 S.W.2d 222, 223-24 (1949); Johnson v. Allen, 108 Utah 148, 156-58, 158 P.2d 134, 138-39 (1945).

Under that...