Adams v. Thompson

529 P.2d 1234, 87 N.M. 113
CourtNew Mexico Court of Appeals
DecidedNovember 13, 1974
Docket1435
StatusPublished
Cited by17 cases

This text of 529 P.2d 1234 (Adams v. Thompson) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Adams v. Thompson, 529 P.2d 1234, 87 N.M. 113 (N.M. Ct. App. 1974).

Opinion

OPINION

HENDLEY, Judge.

Defendants, sellers, appeal from a judgment in favor of plaintiff, broker. We reverse.

Plaintiff and defendants entered into an exclusive listing agreement for six months commencing on March 15, 1972 and providing for a 5% real estate commission and a tax of 4% on said commission. The trial court found as facts that:

“4. The written listing of plaintiff expired by its terms on September 15, 1972. Following expiration of the listing, an extension of the listing was sought by plaintiff. No written extension of the listing was made. Defendant Roy Thompson verbally authorized plaintiff to continue to show the ranch, on a non-exclusive basis, and subject to his prior approval of prospective purchasers.
“5. Pursuant to the verbal arrangement, the plaintiff did produce as a prospective purchaser Harding Burris, a person not previously known to defendants as a prospective purchaser, and who was approved by defendants as a prospective purchaser.
“6. Plaintiff showed the ranch to Johnny Lieb, son-in-law of Harding Burris. Thereafter defendant Roy B. Thompson concluded an agreement for sale of the ranch to Harding Burris upon direct negotiation with the purchaser. Plaintiff was present at the time of preparation and execution of the contract of sale of the property to Harding Burris.
“7. During the course of the negotiations on December 27, 1972, and at all times prior thereto, the Defendant Thompson at no time denied that Wayne Adams was entitled to a real estate commission, nor did he ever inform Wayne Adams, or Wilma Davis, Mr. Adams’ representative, of the fact that he did not plan to pay them their five per cent (5%) commission as set forth in their listing agreement.
“8. On the morning of December 28, 1972, Thompson, Harding Burris and Wayne Adams met in the law office of Mr. Skarda, and at that time, Mr. Skarda was requested, on behalf of Thompson, to prepare the sales contract, which sales contract is the sales contract described as Exhibit ‘A’ to Plaintiff’s Complaint, and which Contract contains specifically the following language, as shown in paragraph number 8:
‘Sellers agree to pay a commission on this sale to Wayne Adams of Roswell, New Mexico, and to hold Buyer free, clear and harmless therefrom.’
“9. Paragraph number 8 in the Sales Contract is a ratification of the oral extension of the listing agreement given by Defendant Thompson to Adams.”

Defendants contend that plaintiff was not the procuring cause of the sale. The question of procuring cause is one of fact and an agent will be held to be the procuring cause when the sale is traced to his introduction of the purchaser to the seller. Wilson v. Sewell, 50 N.M. 121, 171 P.2d 647 (1946). The trial court found that the plaintiff did produce as a prospective purchaser Harding Burris, a person not previously known to defendants as a prospective purchaser. There is substantial evidence in the record to support this finding. See Williams v. Engler, 46 N.M. 454, 131 P.2d 267 (1942). Defendants also contend that there was no evidence of an oral extension of the listing agreement. There is also substantial evidence in the record to support that finding. See Williams v. Engler, supra. Thus, if the agreement is valid and enforceable, plaintiff is entitled to his commission.

Section 70-1-43, N.M.S.A.1953 (Repl. Vol. 10, pt. 2, 1961) states:

“ . . . Any agreement entered into subsequent to the first day of July, 1949, authorizing or employing an agent or broker to purchase or sell lands, tenements, or hereditaments or any interest in or concerning them, for a commission or other compensation, shall be void unless the agreement, or some memorandum or note thereof shall be in writing and signed by the person to be charged therewith, or some other person thereunto by him lawfully authorized. . : . ”

The issue is whether paragraph 8 of the sales contract was a ratification of a post-expiration oral extension of the written listing agreement. It is settled law that ratification as a principle is applicable only to contracts which are voidable, not void. Dunn v. Hite, 27 N.M. 53, 195 P. 1078 (1921); Gross-Kelly & Co. v. Bibo, 19 N.M. 495, 145 P. 480 (1914).

First, the statute, § 70-1-43, supra, expressly states that realty brokerage agreements not in writing are void.

Second, principles of statutory construction indicate a legislative intent to make such agreements void. The English Statute of Frauds and Perjuries (29 Car. II, c. 3) has been adopted in New Mexico. Childers v. Talbott, 4 N.M. (Gild.) 336, 16 P. 275 (1888); Ades v. Supreme Lodge Order of Ahepa, 51 N.M. 164, 181 P.2d 161 (1947). Section 4 of the original statute, which is still in force, uses the words “no action shall be brought.” These words have been held to effect only the enforceability and not the validity of contracts not satisfying the statute, 3 Williston, 3rd Ed. by Jaeger, Contracts § 527 (1960). The legislature, having used the word “void” in contrast to the words of the original statute, has thereby shown an intention that non-complying brokerage contracts should be treated differently than non-complying contracts for an interest in realty or contracts not to be performed within a year. The latter types are merely unenforceable while the former is null and void.

Third, the case law supports this interpretation. It has been held that an oral modification of a brokerage agreement subsequent to the written agreement is void. Yrisarri v. Wallis, 76 N.M. 776, 418 P.2d 852 (1966).

Plaintiff relies heavily on Landers v. Board of Education of Town of Hot Springs, 45 N.M. 446, 116 P.2d 690 (1941), for the proposition that void contracts are capable of ratification in New Mexico. There, a teacher was hired by the individual members of a school board by a contract not adopted at a meeting. The court held the contract invalid but also held that the board later ratified it. Landers v. Board of Education of Town of Hot Springs, supra, is distinguishable on the basis that the problem therein was that the individual board members lacked capacity to bind the school district. Their power to employ teachers emanated only from officially convened sessions of a quorum of the board. Where one party lacks capacity, the modern view is to hold the contract voidable and not void. See generally 2 Williston, Contracts, Chapters 9, 10 and 11 (1960).

In addition, the case law decided with reference to the English Statute of Frauds, adopted as part of our common law, indicates that oral agreements in the manner of the instant one should not be upheld. As § 70-1 — 43, supra, is an extension of the Statute of Frauds, Harris v. Dunn, 55 N.M.

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Bluebook (online)
529 P.2d 1234, 87 N.M. 113, Counsel Stack Legal Research, https://law.counselstack.com/opinion/adams-v-thompson-nmctapp-1974.