Williamson v. United Farm Agency of Alabama, Inc.

• Decision Date: 17 July 1981
• Citation: 401 So.2d 759
• Parties: R. Y. WILLIAMSON v. UNITED FARM AGENCY OF ALABAMA, INC. 79-298.
• Court: Alabama Supreme Court

Page 759

401 So.2d 759

R. Y. WILLIAMSON v. UNITED FARM AGENCY OF ALABAMA, INC.

79-298.

Supreme Court of Alabama.

July 17, 1981.

George G. Lynn of Cabaniss, Johnston, Gardner, Dumas & O'Neal, Birmingham and Allen Edward Cook of Cook & Cook, Andalusia, for appellant.

Earl V. Johnson and Abner Powell, III of Powell & Powell, Andalusia, for appellee.

ALMON, Justice.

This is an appeal from a judgment which awarded a real estate sales commission to United Farm Agency of Alabama, Inc. Motions for judgment notwithstanding the verdict and, in the alternative, new trial, were denied:

R. Y. Williamson was the owner of a motel located in Andalusia, Alabama. In 1975, he entered into an exclusive listing agreement with United to sell the motel. Under the terms of the listing agreement Williamson was obligated to pay United a ten percent commission if the motel was sold by United or anyone else during the ensuing year at the stated price and terms, or at any other price or terms acceptable to Williamson.

Several weeks before the listing agreement expired on July 18, 1976, Joe Sanders began working at the motel so that he could familiarize himself with the business. Two days prior to the expiration of the listing agreement Sanders paid Williamson $10,000.00 and executed the following instrument:

TO WHOM IT MAY CONCERN

As of July 16, 1976, Joe R. Sanders assumes full management of the Town Line Motel, 29 By Pass West, Andalusia, Alabama 36420. In this, the above assumes total expense necessary for upkeep and operation of said business; this includes maintenance of all properties, labor, utilities, taxes, and insurance. In addition to this, Joe R. Sanders agrees to pay R. Y. Williamson or Faustine V. Williamson $3,262.12 on the 16th of each month for twelve consecutive months following the above date.

In the event that both R. Y. Williamson and Faustine V. Williamson should die, each monthly payment for the balance of this contract and for 228 additional consecutive payments is to be divided equally between Richard Dwayne Williamson and Brenda Juline Williamson.

In the event that Joe R. Sanders should die before the expiration of this contract, his wife, Doris Sanders, may elect to continue this contract or to receive $10,000.00 plus accumulated money in excess of 8% interest on a selling price if a sale had been made.

/s/ Joe R. Sanders

Joe R. Sanders

/s/ R. Y. Williamson

R. Y. Williamson

/s/ Notary

Williamson never delivered, and Sanders never demanded, a deed to the motel or surrounding property. United neither procured Sanders as a prospective purchaser nor participated in the execution of the Sanders-Williamson agreement.

Sanders took possession of the property on July 16, 1976, and continued to operate the motel until October of 1978, when Mr. and Mrs. Patel entered into negotiations with Williamson to purchase the motel. As the negotiations progressed, Sanders filed a suit against Williamson in which he alleged that Williamson was threatening to breach his contract to sell the property to Sanders by negotiating with the Patels. Through a series of agreements, Sanders acquiesced in the sale to the Patels in exchange for $55,000.00 of the $80,000.00 down payment from the Patels to Williamson and a $75,000.00 mortgage from the Patels payable to Sanders. Williamson, not Sanders, then executed a deed to the Patels.

After the sale to the Patels had been completed, United sued Williamson to recover its ten percent commission due on the alleged sale to Sanders. Upon trial, the jury returned a verdict in favor of United in the amount of $48,000.00 (10% commission plus interest). Williamson then appealed to this Court.

The pertinent provisions of the United-Williamson exclusive listing agreement state:

(C) I agree to pay you forthwith as commission 10% of the selling price when a purchaser is procured through you, or your representative, at the stated price and terms, or at any other price and terms acceptable to me.

(D) By this agreement I give you the sole and exclusive right to sell the property described herein. If said property is sold during the term of this agreement at a price and upon terms acceptable to me to a purchaser procured by me or through agencies other than yours or by any other party whomsoever, I agree to pay you forthwith the amount of commission provided in clause (C).

The general rule applicable to broker contracts of this nature is that, "(a)s between a landowner and a real estate broker, an agreement of the latter to sell the former's property usually means to negotiate for sale by finding a purchaser ready, willing and able to consummate the transaction." De Briere v. Yeend Bros. Realty Co., 204 Ala. 647, 648, 86 So. 528 (1920) (citations omitted). Ordinarily the sale is deemed to be "constructively consummated insofar as the broker's right to a commission is concerned" when the broker procures a ready, willing and able purchaser, Foote v. Moore, 342 So.2d 906 (Ala.1977), even though the sale is never consummated. Brown v. Robinson, 354 So.2d 272 (Ala.1978); Alabama Fuel Sales Co., Inc. v. Vulcan Energy Resources Corp., 339 So.2d 1007 (Ala.1976); Guillote v. Pope & Quint, Inc., 349 So.2d 62 (Ala.Civ.App.1977). Although these general rules govern the rights and duties of the parties under clause (C) of the United-Williamson contract, they do not control this case because United did not procure Sanders as a purchaser of the property.

The operation of clause (D) is at issue in the present case. That clause provides that United would be entitled to its commission in the event the property was "sold" by Williamson or any other party during the term of the contract. This implies that something more than mere negotiations with a ready, willing and able purchaser must transpire before United would have earned its commission. By this clause, the parties conditioned United's right to recover its commission upon the completion of a contract of sale. Therefore, United cannot recover its commission in this action under clause (D) unless Williamson actually agreed to sell the property to Sanders. See Shook v. Davis-Day Timber Co., Inc., 331 So.2d 667 (Ala.1976); Eldorado Coal Co. v. Rust & Shelburne, 202 Ala. 625, 81 So. 567 (1919).

Williamson contends the trial judge erred by denying his motions for directed verdict, motion for judgment notwithstanding the verdict and, in the alternative, new trial. In support of this position he argues that the Sanders-Williamson agreement is, on its face, not a contract of sale and, further that it fails to constitute such an agreement because it does not contain the requisites of a valid contract for the sale or alienation of real property. He therefore contends that the jury could not have, as a matter of law, concluded that he sold the motel to Sanders. We disagree.

We note at the outset that this is not a case where a party to an oral contract to convey real property seeks specific performance of that agreement. Nor is this a case where reliance is placed upon one document as singular and conclusive proof of a contract of sale. We also note that the Statute of Frauds, Code 1975, § 8-9-2, was not raised as a defense to this alleged contract. Thus, the requirement of a writing imposed by the Statute of Frauds is waived. Jim Walter Corp. v. Knodel, 281 Ala. 173, 200 So.2d 473 (1967). It is therefore of no consequence in this case that the alleged contract of sale is partially based upon oral agreements.

Williamson contends the written agreement upon which United relies constitutes a "net lease." United, on the other hand, argues that this document, coupled with the testimony of several witnesses that Sanders purchased the motel from Williamson, is evidence that the motel property was...