Rogers v. Hendrix

CourtUnited States State Supreme Court of Idaho
Citation438 P.2d 653,92 Idaho 141
Docket NumberNo. 10014,10014
PartiesG. Harold ROGERS dba Emerald Realty, Plaintiff-Appellant, v. Denver HENDRIX and Eunice Hendrix, husband and wife, Defendants-Respondents.
Decision Date20 March 1968

Derr, Derr & Walters, Boise, for appellant.

Louie Gorrono, Emmett, for respondents.

McQUADE, Justice.

This is an action by a real estate broker for commission claimed due on a listing agreement or broker's employment contract between the broker and prospective sellers of a farm. The complaint alleges the broker 'secure(d) a buyer ready, willing and able to purchase said real property (the farm) under the terms and conditions specified by the defendants (sellers, a husband and wife) in said Employment contract (the listing agreement).' The action was tried before a jury which rendered verdict for the prospective sellers, and the district court entered judgment on that verdict. The judgment is reversed and the action remanded for a new trial.

May 10, 1966, appellant G. Harold Rogers, a Boise real estate broker (dba Emerald Realty), entered into an open listing agreement (real estate broker's employment contract) with respondents Denver and Eunice Hendrix, concerning sale of their forty-acre farm near Emmett, Idaho.

The agreement employed appellant 'to sell or exchange the property described hereon at the selling price and on the terms noted,' and it provided for payment of a commission (6% of 'said selling price'): 'In the event that you * * * shall find a buyer ready and willing to enter into a deal for said price and terms or such other terms and price as I may accept * * *.' The terms of sale listed in the agreement state: 'Selling price, free of encumbrances (printed): (written) $40,000.00; Terms (printed): (written) 29% down bal contract (negotiate) may consider a contract in trade. Fall possession (Sept).'

Appellant Rogers testified that before he had sought this listing, he knew Linda and Arthur Watkins of Meridian, Idaho, were interested in purchasing a farm like respondents. A few days after the listing agreement had been executed, appellant brought the Watkinses to see the property. May 14, 1966 the Watkinses executed an earnest money agreement, in which the blank spaces had been filled by appellant, offering to purchase the property according to stated terms, and as earnest money they deposited $500.00 with appellant. May 16, 1966, respondents signed this document, thereby accepting the offered terms and agreeing also to pay appellant as broker a commission of $2,400.00.

The agreement provided payment was to be:

$5,500.00 cash (plus the deposited $500.00) on or before possession date $13,600.00 'all cash subject to a mtg. 1 in that amount or more';

$20,400.00 'in the form of a land contract on the property (80 acres) buyers (previously) sold * * * payable at the rate of $250.00 per mo Incl 6% beginning Feb. 1, 1967.'

However, appellant himself acknowledged or notarized the four signatures on the earnest money agreement and, as will be presently discussed, this fact caused the trial court to reject the document when appellant offered it in evidence. Thus, the jury never saw this document.

A contract for sale of the listed property was drawn up on June 15 or 16, 1966. There is a good deal of testimony concerning this contract, but the document itself was not introduced in evidence. Apparently one of its terms provided that the Watkinses were to pay interest during the last half of 1966, on a $15,000.00 loan, 2 the proceeds of which ($13,600.00) were to be paid immediately to respondents, though respondents would not tender their farm to the Watkinses until January 1967. In any event, respondents signed the contract but the Watkinses refused. Linda Watkins testified:

'A. It didn't have in it what was supposed to be in it as far as we were concerned.

'Q. In other words, you did not agree to the terms and conditions?

'A. I didn't like that contract at all and I told you so before. I think you know that.'

June 17, 1966, a new contract was prepared. It contains two provisions of special pertinence: an express statement that Watkinses would not guarantee the covenants or payments of the $20,400.00 land contract (on their previously sold 80 acre property) which they were to assign as part payment under their agreement with respondents; and that until respondents tendered possession of the farm, they, respondents, were to pay interest on the $15,000.00 loan to be borrowed by Watkinses. This new contract was signed by Watkinses, but now respondents refused.

Appellant testified respondents' only objection to the terms of the second contract had been the interest provision. However, both respondents testified the no-guarantee clause was another reason for their non-acceptance. On cross examination, appellant's attorney asked respondent wife: 'It wasn't guaranteed in the contract that you signed before (first contract), was it?' She replied, 'I don't remember, it was on the new one that they didn't.' As mentioned above the first contract was not introduced in evidence.

Respondents had prepared a warranty deed dated June 17, 1966, to enable the Watkinses to obtain mortgage money from the Federal Land Bank. They refused to deliver it because they did not approve the second contract. Nevertheless, June 13, 1966, the loan committee of the Federal Land Bank Association of Boise had approved a $15,000.00 loan (secured by a mortgage on respondents' property) for the Watkinses. This was subject to approval by the Federal Land Bank of Spokane. That approval was given June 22, 1966. At Watkinses request, the loan application was cancelled after approval.

Appellant testified respondents' only objection to the second contract had been the interest provision. After respondents' refusal to sign the new contract, appellant himself offered first to pay part and then all of the disputed interest. Respondents still refused. Each testified that by the time when appellant offered to pay the interest they had lost trust in him and had become skeptical of the whole deal. The general feeling that appellant was trying to hurry the transaction also disillusioned respondents. They were also bothered because buyers and sellers were never personally brought together by appellant except for the day when the Watkinses first visited respondents' property. In this regard, respondents each testified appellant had offered to cut his commission by $400.00 to $2,000.00 for a quick sale.

At the time of trial, respondents still owned their forty-acre farm. There was no allegation that at the time of trial the Watkinses and respondents were still considering a sale. Indeed, Linda Watkins testified she and her husband had lost all interest in purchasing respondents' farm. Over objection to materiality, Linda Watkins also testified the failure to close the deal had caused no bad feelings between the Watkinses and respondents.

There is no dispute about the basic principle of law underlying the present action: if a broker who has contracted with a prospective seller to procure a ready, willing and able purchaser for the seller's real property presents a buyer ready, willing and able to buy on terms listed by the seller with the broker or on other terms which the seller accepts, in the absence of special conditions in the broker's employment contract, the broker is entitled to his commission. 3 The district court recognized this principle and the judge so instructed the jury. 4 But note that by this statement of general principle we do not suggest whether the seller must still pay commission if before closing the buyer becomes unable to carry out an agreed deal. 5

Appellant contends, however, that the district court committed reversible error in each of three rulings on admissibility of certain evidence:

1. Excluding the earnest money agreement;

2. Permitting respondent-husband to testify that his conversations with appellant had led him to believe the listing agreement required actual sale before a commission would be due;

3. Permitting Linda Watkins to testify that she and her husband felt no bad feelings against respondents on account of failure to reach an agreement.

In rejecting the earnest money agreement, the district court committed reversible error. The document, on which appellant himself had acknowledged or notarized the signatures, was offered in evidence to show that 'there was a possible purchaser that (sic) was ready, willing and able to purchase the premises contracted with the owners of the property.' The district judge denied admission of the document 'because it was prepared by a notary that (sic) has a definite pecuniary interest in the outcome of the lawsuit. * * * A man cannot judge his own case.' However, appellant contended, 'that while the acknowledgment may not be valid, the contents should be submitted to the jury.' Nevertheless the document was not admitted into evidence.

A contract to convey an interest in community real property must be signed by the wife and her signature must be acknowledged. 6 Respondents' listed property was community, and so if one of the parties to the sale provision of the earnest money agreement sought to enforce it as a contract of sale, the validity of its acknowledgment would be essential. But here we note that although a party directly interested in the subject matter of an instrument to convey cannot validily certify acknowledgment of signatures on the instrument, 7 it appears to be an open question whether a real estate broker who stands to receive a commission upon a conveyance of the subject matter can validly certify acknowledgment of such an instrument of conveyance. This Court has never considered the issue nor can we find any case from another jurisdiction that has determined the issue. But it is notable that in analogous situations some courts have held that an agent whose commission depends on execution of a document is not by that fact...

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21 cases
  • C. Forsman Real Estate Co., Inc. v. Hatch, 11791
    • United States
    • United States State Supreme Court of Idaho
    • 3 Marzo 1976
    ...listed property on the terms of the authorized employment contract or on the terms acceptable to the seller. Rogers v. Hendrix, 92 Idaho 141, 438 P.2d 653 (1968). See also 10 A.L.R.3d 665. Unless the employment agreement specifies to the contrary, the right to recovery is not impaired by th......
  • Gaynor v. Laverdure
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    • United States State Supreme Judicial Court of Massachusetts
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    ...writing.'2 The following decisions apply or express approval of the rule laid down in Ellsworth Dobbs, Inc. v. Johnson. Rogers v. Hendrix, 92 Idaho 141, 438 P.2d 653. Setser v. Commonwealth, Inc., 256 Or. 11, 470 P.2d 142. Brown v. Grimm, 258 Or. 55 481 P.2d 63; Staab v. Messier, 128 Vt. 38......
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    ...or enlarge the terms of the written contract. Tapper Chevrolet Co. v. Hansen, 95 Idaho 436, 510 P.2d 1091 (1973); Rogers v. Hendrix, 92 Idaho 141, 438 P.2d 653 (1968); Green v. K.S. Webster & Sons, 77 Idaho 281, 291 P.2d 864 (1955); Paurley v. Harris, 75 Idaho 112, 268 P.2d 351 (1954); Will......
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    • United States State Supreme Court of Idaho
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