Southern Idaho Realty of Twin Falls, Inc.-Century 21 v. Larry J. Hellhake & Associates, Inc.

636 P.2d 168, 102 Idaho 613, 1981 Ida. LEXIS 387

• Court: Idaho Supreme Court
• Decided: August 28, 1981
• Docket: 13401
• Status: Published

Opinions

DONALDSON, Justice.

The underlying dispute concerns the right to receive a real estate sales commission from the sale of certain real property owned by West Side Farms, a partnership. Plaintiff-appellant is Southern Idaho Realty of Twin Falls, Inc. — Century 21 (Century 21). Defendants-respondents are Larry J. Hellhake and Associates, Inc. (Hellhake) and William J. Peters. Peters worked with Hellhake in setting up the sale of the property; in trade parlance, Peters is a “listing broker” and Hellhake is a “selling broker.” West Side Farms is composed of seven partners, one of whom is Donald B. Robertson. Don Robertson also acted as a real estate agent for Century 21 at certain times in the present action.

On October 23,1978, three of the partners of West Side Farms, including the aforementioned Donald Robertson, signed a listing agreement, entitled “Exclusive Authorization and Right to Sell,” with Century 21 for the sale of partnership property. This agreement listed an expiration date of January 23, 1979, and provided for a 6% commission to be paid to Century 21 upon sale of the property within the term. Don Robertson, after signing this agreement as a partner, then signed the agreement as the agent for Century 21.

At some time subsequent to the October 23 listing agreement, respondent Hellhake became aware of the offering for sale of the West Side Farms property and upon locating a potential buyer, contacted Century 21 as regards splitting the sales commission. An agreement was not reached as to this fee splitting. Subsequently, Thomas Rudy, another partner of West Side Farms and one not a signator to the Century 21 listing agreement, gave respondent Peters a verbal listing to sell the partnership property. Thereafter, Peters and Hellhake collaborated in putting a sale together.

On November 18,1978, all of the partners of West Side Farms, Don Robertson included, signed an earnest money agreement for the sale of the partnership property. This agreement provided that Hellhake, as broker, would receive the sales commission. On the following December 27, 1978, an “Agreement of Sale” was entered into. Again, all the partners signed and provision was made for payment of the commission to Hellhake. Accordingly, the commission was paid to and retained by respondents.

Century 21 filed suit alleging interference with its rights under the listing agreement. In response to respondents’ motion and following a hearing and submission of documents, the district court dismissed Century 21’s complaint for failure to state a cause of action upon which relief could be granted. The court basically concluded that Century 21 was estopped to deny the agent status of Don Robertson and that Century 21, through Robertson’s subsequent signings of the earnest money agreement and the sales agreement, vitiated the listing agreement and released any rights of Century 21 to the sales commission. Century 21 appeals. On other grounds, we affirm.

Regardless of the merit in the district court’s theory of agency as the basis for its dismissal, we are of the opinion that another theory was present in the case which should have been addressed initially and which is dispositive of the case. It is a well-established rule that where the order of the lower court is correct but entered on a different theory, the order will be affirmed on the correct theory. Matter of Revello, 100 Idaho 829, 606 P.2d 933 (1979); Robison v. Compton, 97 Idaho 615, 549 P.2d 274 (1976); City of Weippe v. Yarno, 96 Idaho 319, 528 P.2d 201 (1974).

I.C. § 53-309, a section of Idaho’s uniform partnership law, provides in part:

“Partner agent of partnership as to partnership business. — 1. Every partner is an agent of the partnership for the purpose of its business, and the act of every partner, including the execution in the partnership name of any instrument, for apparently carrying on in the usual way the business of the partnership of which he is a member binds the partnership, unless the partner so acting has in fact no authority to act for the partnership in the particular matter, and the person with whom he is dealing has knowledge of the fact that he has no such authority.

2. An act of a partner which is not apparently for the carrying on of the business of the partnership in the usual way does not bind the partnership unless authorized by the other partners.”

In the instant case, Century 21’s amended complaint alleges as a cause of action contract interference, specifically that conduct on the part of respondents “caused a breach of said listing agreement to take place on the part of the Westside Farms partnership.” The initial question, therefore, is whether, pursuant to I.C. § 53-309, there existed a valid and binding contract. Without such contract, there can be no interference and the cause of action must fail.

We are guided in this matter by the recent case of Hodge v. Garrett, 101 Idaho 397, 614 P.2d 420 (1980), wherein this Court discussed the application of I.C. § 53-309 and the interconnected I.C. § 53-310, and held that a single partner with no actual authority could not bind the whole partnership through a unilateral act which was not in the usual business of the partnership. This Court stated that an affirmative appearance of actual authority or the conducting of partnership business in the usual way would be required before such unilateral act could be considered as binding of the partnership. While the Hodge case dealt specifically with a contract of sale of partnership land, and the instant action concerns a listing agreement, the reasoning of Hodge is instructive.

Here, as in Hodge, the underlying contract is signed by less than all of the partners. In fact, Century 21 in its amended complaint admits that only three partners signed the listing out of four (actually there were seven). Furthermore, Century 21 does not even allege that the three had authority to sign for the partnership. The defendant Hellhake, in an affidavit which was before the court at the time of the motion to dismiss, states that the listing was not signed by the partners’ wives nor by one of the partners Tom Rudy. Furthermore, he affirmatively states that Tom Rudy had not consented to such listing. The defendants’ motion to dismiss (which was treated by the court as a motion for summary judgment)¹ was “based upon the pleadings on file,” one of which was the defendants’ answer and counterclaim, which stated: “Defendant specifically denies that Westside Farms signed the listing agreement and that those three (signing) partners had authority to sign the listing . . . . ” In spite of the fact that the issue of the signing partners’ authority was clearly presented to the court by the motion to dismiss (summary judgment), the record is devoid of any evidence submitted by Century 21 that the signing partners had such authority. Because of the failure of Century 21 to controvert Hellhake’s affidavit, see I.R.C.P. 56(e), or to even plead the authority of the partners to sign on behalf of the partnership, there is no dispute in the record as to the lack of signing authority. Where it is apparent from a review of the record that there is no dispute as to a dispositive issue, summary judgment is proper. Stewart v. Hood Corp., 95 Idaho 198, 506 P.2d 95 (1973); Tofoya v. Fleming, 94 Idaho 3, 479 P.2d 483 (1971). In the face of this uncontradicted affidavit and the deficiency in the pleadings there is no dispute in the facts.

Simply put, Century 21 alleges as its sole cause of action interference with a contract. Century 21 fails, however, to show that a contract ever existed. To the contrary, the record discloses that the listing agreement was void ab initio. There was never a “meeting of the minds” between Century 21 and the whole partnership of Westside Farms either before the signing of the listing agreement or after. Thus, Century 21 has failed to establish the prima facie requirement of the existence of a contract, as must be done with the tort of interference with contract, Barlow v. International Harvester Company, 95 Idaho 881, 893, 522 P.2d 1102, 1114 (1974),² and Century 21’s cause of action must therefore fail.³ The order of the district court dismissing Century 21’s complaint for failure to state a cause of action upon which relief can be granted is therefore affirmed. Costs to respondents. No attorney fees on this appeal.

McFADDEN, BISTLINE and SHEPARD, JJ., concur.

1 . In treating the motion as a motion for summary judgment, the court specifically noted that it had “considered the pleadings, affidavits, memoranda of counsel, and other documents filed herein....” While Hellhake’s affidavit was submitted prior to the motion to dismiss, it was clearly considered by the court in granting summary judgment, and all parties were informed well in advance that it would be so considered.

2 . Barlow provides:

“A prima facie case of the tort [of interference with contract] is established where the plaintiff adduces proof of these elements: (a) the existence of a contract, (b) knowledge of the contract on the part of the defendant, (c) intentional interference causing a breach of the contract, and (d) injury to the plaintiff resulting from the breach.” Id. (citations omitted).

3 .We are not unmindful of this Court’s statement in Barlow, supra, that with the tort of interference with contract, “[protection is extended against unjustifiable interference with contract even though the contract is voidable or unenforceable in an adversary proceeding.” Id (citatations omitted). However, as was noted in Barlow, id., n. 2, the rule is otherwise with regard to contracts void ab initio. See W. L. Prosser, Handbook of the Law of Torts § 129, p. 931 (4th ed. 1971). See also Annot., 96 A.L.R.3d 1294 (1979).