Olsen v. Kidman

235 P.2d 510, 120 Utah 443, 1951 Utah LEXIS 225
CourtUtah Supreme Court
DecidedSeptember 18, 1951
Docket7642
StatusPublished
Cited by15 cases

This text of 235 P.2d 510 (Olsen v. Kidman) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Olsen v. Kidman, 235 P.2d 510, 120 Utah 443, 1951 Utah LEXIS 225 (Utah 1951).

Opinions

[445]*445WOLFE, Chief Justice.

The defendant Leslie J. Kidman, doing business as Perry Realty, claims that he has a valid equitable lien upon plaintiff’s real property for the amount of his commission, earned by procuring a purchaser for the property. The plaintiff contends that the lien is invalid and the filing thereof constitutes slander of title, for which this action is brought. On February 7, 1950, the plaintiff signed the listing agreement which provided:

“Perry Eealty:
“In consideration of your agreement to list the property described below, I hereby agree:
“1. To give you the exclusive right to sell or exchange at the price and terms here stated for a 'period, of 2 months from date, and to pay a commission of 5% of the total sale price.
$ ‡ ‡ ‡
“3. To pay Perry Eealty the commission on any sale or exchange if it is sold or exchanged within three months after expiration to any person to whom any memmber of Perry Realty has previously offered it; also the commission on any forfeitures.” (Italics added.)

The property was not sold within two months. On June 10, 1950, the plaintiff listed the property with Carrol Williams who sold the property on the 23rd of June to L. V. Mills, the purchaser. Mills had been contacted April 29th by the defendant. This was 22 days after the two months exclusive listing period in the agreement. Mills was interested in the Olsen property on the condition that he could sell his own place for $11,500. Defendant was unable to find a purchaser for the Mill’s place, so this transaction did not materialize. Defendant claims that Mills was his customer under clause 3 of the agreement, supra. When plaintiff failed to pay the commission, defendant filed his “Notice of Lien” for $900 in the County Recorder’s office. Mills had taken possession of the property before notice of the claimed lien was filed. Plaintiff paid a commission to Carroll Williams.

[446]*446The validity of defendant’s claim that the plaintiff owed him $900 depends upon an interpretation of clause 3 of the listing agreement, set forth above. Assuming that Mills was defendant’s customer, and that plaintiff did in fact owe the defendant $900 commission, the question thus presented is whether a real estate broker is entitled to an. equitable lien for his commission, upon property sold to a customer he has procured.

In its broadest sense and common acceptation, the word “lien” is understood and used to denote a legal claim or charge collectible out of property either real or personal, as security, for the payment of some debt or obligation. It includes every case in which personal or real property is charged with the payment of a debt. Gray v. Horne, 48 Cal. App. 2d 372, 119 P. 2d 779. Liens are primarily regarded to be created by statute. Our Utah Code Annotated, 1943, provides for: mechanics lien, 52-1-3, (construction, alteration or repair of any building or improvement upon land) ; agistor’s lien, 52-2-1, (forage supplied to livestock) ; hotelkeeper’s lien, 52-2-2, (lodging and services supplied to the traveller) ; lessor’s lien, 52-3-1, (on furniture and effects of tenant for rent due upon the premises) ; common carrier’s lien, 52-4-1, (for transporting goods) ; attorney’s lien, 6-0-40, (for services rendered) and others. No statutory provision is made for a real estate broker’s lien. These liens are codifications of the common law liens. Generally, they are based on services rendered or materials furnished by the lien claimant upon the entity on which a lien is demanded. The theory of equitable liens is based on a contract, expressed or implied which deals with or in some manner relates to specific property. To create an equitable lien by contract, it must appear that the parties intended to create a charge upon the property. The property must be designated and an intention must be shown to create a lien as distinguished from an agreement to apply the proceeds of the sale to the payment of a debt. Jones on Liens, 3d Ed., Sections 28-33, In re Friedlcmder’s [447]*447Estate, 178 Misc. 65, 32 N. Y. S. 2d 991. The instant listing agreement of the parties contains no express provisions for a lien upon the property to secure payment of the commission. The issue, therefore, is whether in this jurisdiction a lien arises in favor of the broker by implication from custom or usage in the real estate business.

The authorities dealing with the right of a real estate broker to impress a lien upon property sold by him to secure his commission are collected in Moss v. Thomas, 218 Ala. 141, 117 So. 648, 58 A. L. R. 1497 and 125 A. L. R. 921. In the case of Moss v. Sperry, 140 Fla. 301, 191 So. 531, 125 A. L. R. 909, the Supreme Court of Florida reviewed the precedent cases on the subject and held that a broker has no lien upon the property even where the broker alleged that the non-resident seller fraudulently sold the property to the broker’s customer outside the contract in order to avoid paying the commission. The court pointed out that those cases in which a lien was granted to the broker, did so on the premise that the purchaser had promised to pay the broker’s commission and therefore the broker was entitled to the protection of a vendor’s lien which equity implies to secure the payment of the purchase price after conveyance has been made, Zirkle v. Hendon, 180 Ala. 209, 60 So. 834; Francis v. Wells, 2 Colo. 660; Davis v. Huff, Tex. Civ. App., 288 S. W. 267. The court stated that

“a bill of equity filed to enforce the payment of a broker’s commission on a sale of real property, based on the theory that such unpaid commission per se is, or should be declared to be, a lien on the property sold does not, in and of itself, present any matter which would justify the exercise of equity jurisdiction.”

We adopt the Florida rule. One of the reasons for our adopting such rule is that the real estate broker, in an action for breach of contract, has an adequate remedy at law. The broker in this case drew up the listing agreement. The choice of terms was his. By filing the lien, he attempted [448]*448to shift the burden upon the plaintiff of proving what the meaning was of the additional three months clause. It became incumbent upon the plaintiff to bring his action to remove the lien so that title could be conveyed free from any encumbrances, and thereby obtain the balance of the purchase price which had been withheld by the purchaser pending reception of clear title. If a seller should deliver the deed and receive full payment, the burden of removing the lien would then become that of the purchaser. Neither of these procedures is as equitable as requiring the broker to sue the seller for the commission. The defendant broker had no lien in this case. He filed a purported lien without legal basis for doing so.

The defendant and appellant, Leslie Kidman, contends that the Utah cases and the law generally regarding slander of title require that before liability can be found the recorder of the slanderous document must have known that he asserted a false claim without any foundation or right. In Dowse v. Doris Trust Co., 116 Utah 108, 208 P. 2d 956, and in Sproul v. Parks, 116 Utah 308, 210 P.

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Olsen v. Kidman
235 P.2d 510 (Utah Supreme Court, 1951)

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Bluebook (online)
235 P.2d 510, 120 Utah 443, 1951 Utah LEXIS 225, Counsel Stack Legal Research, https://law.counselstack.com/opinion/olsen-v-kidman-utah-1951.