Rexburg Realty, Inc. v. Compton

616 P.2d 245, 101 Idaho 466, 1980 Ida. LEXIS 493

• Court: Idaho Supreme Court
• Decided: August 12, 1980
• Docket: No. 13085
• Status: Published

Opinions

BAKES, Justice.

Defendant appellants Dean and Carol Compton, husband and wife, appeal from a district court judgment awarding a real estate broker commission to plaintiff respondent Rexburg Realty, Inc. We affirm.

The Comptons owned approximately 2,000 acres of farmland in Cassia County and were also tenants in common with Mr. Compton’s mother, Rita Bateman, in approximately 2,000 acres which adjoined the Compton land. These two parcels, totaling 3,947 acres, were farmed by the Comptons as a single unit.

In 1973 the Comptons discussed with neighbors the idea of selling both parcels of land. Hearing of the Comptons’ interest in selling their land, an agent for plaintiff respondent Rexburg Realty, Inc., contacted the Comptons, and the Comptons subsequently entered a written real estate broker’s employment contract authorizing Rex-burg Realty to attempt to find a buyer for the entire 3,947 acres. The agreement specified that the Comptons would accept $555,-740 for the property, with a 29% down payment. Both Mr. and Mrs. Compton signed the standard form real estate commission contract, agreeing to pay Rexburg Realty, Inc., 5% of the agreed sale price if it obtained a buyer ready, willing and able to purchase the property on the sellers’ terms. Mrs. Bateman, however, did not sign the commission agreement. The real estate agent was aware that Mrs. Bateman had an interest in part of the property and, in fact, had examined the record title to the property in order to obtain a legal description of the entire farm prior to execution of the contract by the Comptons. Dallin Reese, agent for Rexburg Realty, Inc., testified at trial that Compton had assured him that Mrs. Bateman wanted her interest in the land soid, that she usually followed her son Dean Compton’s advice in such matters, and that Compton believed there would be no problem in obtaining her signature to close a sale on the terms in the broker’s agreement. Defendant Dean Compton’s testimony generally concurred with Reese’s testimony.

Rexburg Realty subsequently obtained an offer of $550,000 with a down payment of $11,000 from Lyle Robison and James Christiansen. The Comptons agreed to the modification of the terms specified in the broker’s agreement and signed the earnest money agreement. However, sale of the property to Robison and Christiansen never was consummated because Mrs. Bateman decided she would not sell her share in the property and would not sign the earnest money agreement. The prospective buyers sued the Comptons for specific performance and were denied the relief requested in district court. The court’s denial of specific performance was affirmed on appeal. Robison v. Compton, 97 Idaho 615, 549 P.2d 274 (1976).

Rexburg Realty, Inc., demanded its commission from the Comptons for its procuring ready and willing buyers for the property despite failure of the sale to Robison and Christiansen to close. Upon the Comptons’ refusal to pay the commission, the realtor initiated this action, alleging that it had fully performed its employment agreement by obtaining an acceptable offer from Robison and Christiansen and that it was therefore entitled to its commission. The district court, hearing the case without a jury, awarded the plaintiff realtor $27,500, i. e., the 5% contract commission as applied to the $550,000 sale price specified in the parties’ earnest money agreement.¹

The Comptons bring this appeal from the district court judgment. They contend that a real estate broker’s commission agreement which is not signed by all of the owners of the property involved is not enforceable. They argue that I.C. § 9-508² requires that all co-owners of real estate sign a real estate broker’s employment contract before that agreement is enforceable by a realtor and maintain that here the broker’s failure to obtain the signature of Mrs. Bateman on the commission agreement bars enforcement of the agreement against the Comptons.

Pursuant to I.C. § 9-508 an enforceable real estate commission contract must be in writing and “signed by the owner of such real estate, or his legal, appointed and duly qualified representative.” I.C. § 9-508 is a form of statute of frauds applicable to a real estate broker employment, agreement.

“The primary purpose of I.C. § 9-508 is to prevent fraudulent or unfounded claims of brokers. This particular portion of our code relates entirely to statutes of frauds and has as its objective avoiding disputes as to whether or not an agreement in fact exists, the amount of a commission and the exclusive or non-exclusive terms of a listing agreement.” C. Forsman Real Estate Co., Inc. v. Hatch, 97 Idaho 511, 515, 547 P.2d 1116, 1120 (1976).

In Forsman it was held that a real estate broker employment agreement was “a service contract not necessarily related to the ownership of land,” 97 Idaho at 516, 547 P.2d at 1121, and that a brokerage agreement involving realty owned as community property need only be signed and executed by one spousal owner and is binding upon the signing spouse even absent the other spouse’s signature or ratification of the agreement.

Subsequent to Forsman, this Court ruled in Garfield v. Tindall, 98 Idaho 841, 573 P.2d 966 (1978), that:

“[A] co-owner of property, who has expressly or impliedly represented to the broker that he can convey the property to be sold, cannot escape personal liability under a brokerage commission contract because it was not signed by the other co-owner(s).” 98 Idaho at 843, 573 P.2d at 968.

The district court in deciding the case at bar relied upon the Forsman and Garfield cases in concluding that the parties’ agreement was enforceable against defendant appellants Dean and Carol Compton. The Garfield case specifically provides that where a co-owner of realty expressly or impliedly represents to a real estate broker that he has authority to sell property subject to the agreement, he will be liable to the broker for a sales commission upon performance of the agreement by the broker despite the failure of any other co-owner or co-owners to sign the agreement. Dallin Reese, realty agent for Rexburg Realty, and Dean Compton both testified at trial that when Reese presented the real estate broker’s employment agreement to the Comptons for their signatures, Compton told Reese that his mother, Mrs. Bateman, wanted the land sold, that she would co-operate with the Comptons in arranging a sale, and that she usually accepted Mr. Compton’s advice in business matters and would go along with his advice in this transaction. The trial transcript indicates that the parties several times discussed Mrs. Bateman’s interest in part of the property and that each time respondents were assured that she would agree to a transaction arranged by her son, Dean Compton.³

If the purpose of I.C. § 9-508 is, as stated in Forsman, to bar fraudulent or unfounded claims for a sales commission by real estate brokers, the purpose of that statute has been met here. The parties’ agreement is in writing, the property adequately described, the amount of the commission and terms of the listing are specified, and the agreement has been signed by two of the eo-owners with representations made to the broker by the signing co-owners that the contemplated transaction would be approved by the third co-owner. The record made at trial readily supports the trial court’s memorandum decision which, relying on the Garfield case, concluded that Dean Compton at least impliedly, if not expressly, represented to Rexburg Realty that he was authorized to sell the property on behalf of his mother, Mrs. Bateman. For this reason we affirm the trial court’s conclusion that the real estate broker’s agreement in this case is valid and enforceable against the Comptons. Marshall Bros., Inc. v. Geisler, 99 Idaho 734, 588 P.2d 933 (1978); Garfield v. Tindall, supra; Rogers v. Hendrix, 92 Idaho 141, 438 P.2d 653 (1968).

The trial court’s judgment is affirmed. Costs are awarded to respondent.

DONALDSON, C. J., and McFADDEN, J., concur.

1 . No contention was made by plaintiff appellants that Mrs. Bateman was liable for any part of the commission, she of course never having contracted with the plaintiffs for the procuring of a buyer for the property.

2 . “[I.C. §] 9-508. REAL ESTATE COMMISSION CONTRACTS TO BE IN WRITING. — No contract for the payment of any sum of money or thing of value, as and for a commission or reward for the finding or procuring by one person of a purchaser of real estate of another shall be valid unless the same shall be in writing, signed by the owner of such real estate, or his legal, appointed and duly qualified representative.”

3 . Dallin Reese testified on direct examination as follows:

“[W]e had talked about his mother and he had indicated to me that . . she had been interested in having him sell the property for some time because of the fact that she was nervous about him traveling so much on the highway and having to be up and down the road doing so much work up there on the farm and not actually living right there on the farm, that she would prefer for him to sell, and I had asked him, as I recall, several times to indicate or if her signature was necessary, and he said, no, that he didn’t think it would be because she had never been any problem and that she wanted him to sell and she would cooperate on the thing.”

“He told us that she was at home, and we asked him if her signature was necessary or that if we should go over there, and he indicated and told us there was no problem, that the deal would be consummated under his signature and that the only time her signature would be necessary would be in the closing and transferring of the Deed.”

Dean Compton testified similarly on direct examination:

“We talked about my mother’s signature being on the Listing. I had asked him if he thought it was necessary for Mother’s signature to be there, and he said, ‘Well, I don’t know,’ and he says, ‘What kind of relationship do you have with your mother,’ and I said, ‘Well, Mother usually goes along with what I want to do,’ but I never assured him that she would in any way. I advised him if it was necessary to get her signature on it I’m sure we could, so he said, ‘Well, I don’t think it’s necessary,’ and so he said, ‘Why don’t you go get Carol’s signature on it and bring it back,’ and that is what we did.

“Q. Was anything said about, that you and Dallin talked about, whether your mother wanted to sell the place or expressed an intention to sell the place at any time?

“A. I don’t recall. It seems like when I told him Mother usually went along, I said, ‘It has been Mother’s desire to sell the farm.’ ”