Yrisarri v. Wallis

418 P.2d 852, 76 N.M. 776
CourtNew Mexico Supreme Court
DecidedAugust 29, 1966
Docket7932
StatusPublished
Cited by30 cases

This text of 418 P.2d 852 (Yrisarri v. Wallis) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Yrisarri v. Wallis, 418 P.2d 852, 76 N.M. 776 (N.M. 1966).

Opinion

OPINION

WOOD, Judge, Court of Appeals.

This appeal involves á real estate brokerage agreement.

Defendant, by written agreement, authorized plaintiffs to act as defendant’s 'exclusive agent in negotiating a lease of ■defendant’s real estate with a motel chain. Defendant agreed to pay a commission of 5% of the total lease price, plus 3% sales tax on the commission, at the time of closing.

A lease between defendant and the motel chain was entered for a term of 54 years with a firm minimum rental of $669,250.00. Subsequently, the lease was rescinded due to a problem in connection with defendant’s' title. There is no issue 'concerning the rescission.

Plaintiffs sued defendant for $34,466.38, this being the amount of the commission and sales tax. Defendant claimed that no commission was due. The trial court found that the written agreement was orally modified to provide that the commission was to be paid at the rate of $50.00 per month for the lifetime of the lease and entered judgment accordingly. The trial court further found that this modification was neither reduced to writing nor signed ’ by the defendant.

" Both parties • are dissatisfied with the trial court’s judgment. Defendant claims that by the oral modification the commission was to be paid out of the proceeds of the lease. Since the lease was rescinded there were no proceeds. Thus defendant claims there is no commission to be paid. Plaintiffs by cross-appeal claim that under our statute, there cannot be an oral modification of the written agreement and therefore the commission provided for in the written agreement is due and payable.

Our statute is § 70-1-43, N.M.S.A. 1953, and reads:

“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. No such agreement or employment shall be considered exclusive unless specifically so stated therein.”

Defendant argues that his employment of plaintiffs was to negotiate a lease, that a lease for a term of years is personal property and that § 70-1-43, N.M.S.A. 1953, does not apply to personal property. State ex rel. Truitt v. District Court of Ninth Judicial Dist., Curry County, 44 N.M. 16, 96 P.2d 710, 126 A.L.R. 651, held that a lease of real estate was personalty. However, the court also stated that “a leasehold for a term of years is an interest in land.” While the lease is personalty, the leasehold estate is an interest in land.

During the life of the lease, the interest of the lessee in the leasehold is, for practical purposes, equivalent to absolute ownership. Tri-Bullion Corp. v. American Smelting & Refining Co., 58 N.M. 787, 277 P.2d 293. When the owner, of real estate engages a broker to negotiate a lease of that real estate for a term of years the transaction is the sale of an “interest in or concerning” land. Hannan Real Estate Exch. v. Traub, 217 Mich. 162, 185 N.W. 706. Therefore § 70-1-43, N.M.S.A. 1953, applies to the commission arrangements between the parties.

Plaintiffs contend that parol evidence is not admissible to vary the terms of an unambiguous contract, relying on Woodson v. Lee, 73 N.M. 425, 389 P.2d 196. The terms of the written listing agreement are not challenged and no claim is made that the terms are ambiguous. Maine v. Garvin, 76 N.M. 546, 417 P.2d 40, opinion issued July 18, 1966, applied the parol evidence rule to a real estate brokerage agreement. In Maine it was stated:

“* * * We consider the parol evidence rule to be fully applicable together with' all the exceptions recognized in connection with any other writing. Parol evidence may not be received when its purpose and effect is to contradict, vary, modify, or add to a written agreement, but is generally admissible to supply terms not in the written contract, to explain ambiguities in the written agreement, or to show fraud, misrepresentations, or mistake. t- * *»

The terms of the written listing agreement are not challenged and no claim-is made that the terms are ambiguous. Nor is there a claim of fraud, misrepresentation or mistake. The parol evidence rule would apply if the oral evidence were offered to vary the written agreement to pay a commission.

Defendant contends that oral evidence is admissible to show a subsequent modification of the written agreement to pay a commission. He contends that the parol evidence rule is not applicable when the oral modification pertains to events subsequent in time to the initial agreement, relying on Driver-Miller Plumbing, Inc. v. Fromm, 72 N.M. 117, 381 P.2d 53; and Michelson v. House, 54 N.M. 197, 218 P.2d 861. Under certain conditions, oral modifications subsequent in time to the initial written agreement have been approved. See Yucca Mining & Petrol. Co. v. Howard C. Phillips Oil Co., 69 N.M. 281, 365 P.2d 925; Provencio v. Price, 57 N.M. 40, 253 P.2d 582.

However, none of the above cases dealt with the issue in this case, which is whether parol evidence is admissible under § 70-1-43, N.M.S.A. 1953, to show an agreement different from the initial written agreement. This issue was raised, but not decided, in Taylor v. Unger, 65 N.M. 3, 330 P.2d 965.

The following cases dealt with attempted modification of written agreements for sale of real estate on the basis of subsequent events. Weldon v. Greer, 29 Ariz. 383, 241 P. 957; Rice Lands & Products Co. v. Blevins, 61 Cal.App. 536, 215 P. 402; Parks v. Underwood, 280 S.W.2d 320 (Tex.Civ.App.1955). In each of these cases the oral modification based on subsequent events was denied because the oral modification pertained to a'hd would vary the terms of the written agreement.

Franke v. Blair Realty Co., 119 Ohio St. 338, 164 N.E. 353, states:

“The contract attempted to be avoided by oral agreement was a definite contract signed by the defendant that he would pay a commission if the property was sold 'before the expiration of the agreement.’ The oral agreement was a new contract affecting the time of performance, and, by substituting a new time of performance, varied an essential term of the written contract.

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Bluebook (online)
418 P.2d 852, 76 N.M. 776, Counsel Stack Legal Research, https://law.counselstack.com/opinion/yrisarri-v-wallis-nm-1966.