Opinion
No. 311.
Argued March 5, 1974. —
Decided April 2, 1974.
APPEAL from a judgment of the circuit court for Milwaukee county: WILLIAM R. MOSER, Circuit Judge. Affirmed.
For the appellant there was a brief and oral argument by Phillip J. Markey of Milwaukee.
For the respondent there was a brief by Pfannerstill, Camp Tyson of Wauwatosa, and oral argument by Richard F. Tyson.
This is an action to collect a real estate broker's commission.
On October 20, 1965, the plaintiff-respondent, H. H. Winston, d/b/a H. H. Winston Company, a licensed real estate broker, and the defendant-appellant entered into an exclusive listing contract to sell property known as the Henry Kromke farm, located in Grafton, Wisconsin.
This action resulted from a conflict arising between H. H. Winston and S. R. Minkin as to a commission of $5,240 allegedly due under the real estate listing contract.
At the time the property was listed, a farmhouse located on the property was being leased on a month-to-month tenancy and the land was leased on an annual basis. The listing contract failed to mention said leases. In May, 1966, the defendant entered into an extended lease of the property in question with Marvin Rathke for a period of five years. The existence of this lease was not revealed to the plaintiff.
On March 9, 1967, Winston procured a purchaser for the sum of $65,500, subject only to the termination of the month-to-month lease then believed to be in existence and the acceptability of tests of subsoil conditions, water table conditions and other subterranean conditions which were to be taken. This offer to purchase was accepted by the owners of the property, S. R. Minkin and Bernice Minkin, his wife, Reuben Katz and Marcia M. Katz, his wife. On March 14, 1967, an amended offer was submitted by the purchaser — said amended offer being drafted by the purchaser's attorney. The amended offer varied from its predecessor only as to the furnishing an extended abstract and was subsequently accepted by the above-described owners.
The amended offer provided that:
"Time is of the essence hereto with respect to occupancy . . . It is understood the premises are now occupied by a tenant on a month to month basis as to residence, and as to farm land — is leased. However, farm land lease shall be terminated and tenant's rights extinguished prior to closing or this offer shall be null and void and all monies paid hereunder returned to Buyer."
Additionally, the amended offer was conditioned as follows:
". . ., this offer is expressly contingent upon Buyer having the right to go upon the subject premises with such equipment and personnel as Buyer deems necessary to make tests of subsoil conditions, water table conditions and other subterranean conditions, . . . This offer is further expressly contingent upon Buyer's officers being satisfied with the results of said tests. In the event said results are not satisfactory to Buyer's officers, then this offer shall be null and void and all monies paid hereunder shall be returned to Buyer. The foregoing contingency shall be removed on or before May 1, 1967 or this offer shall be null and void and all monies paid hereunder returned to Buyer."
Within a few weeks after the acceptance of the amended offer, the purchaser attempted to make the soil tests on the property in question but was unsuccessful in his attempts because of resistance encountered from the tenant. Further attempts at gaining permission to take tests desired by the purchaser and to terminate the enforceable five-year lease failed. As a result of these occurrences the purchaser, on April 4, 1967, canceled the contract for sale and asked for return of his earnest money.
The action was commenced on January 24, 1968, to recover $5,240 allegedly due on the real estate listing contract. The action was tried to a jury. Following a verdict in favor of the plaintiff on August 30, 1972, the trial court, upon motions after verdict, found the jury's finding as to damages to be in error and entered judgment in favor of the plaintiff. Defendant appeals.
Two issues are presented on appeal:
1. Whether or not the listing contract, signed by but one of the co-owners of said property, is in compliance with sec. 240.10, Stats., and enforceable.
2. Whether the plaintiff procured a buyer ready, willing and able to purchase upon the terms specified by the owner in the listing contract or acceptable to him.
Compliance with sec. 240.10, Stats
. The defendant contends that the listing contract was not in compliance with sec. 240.10, Stats., and unenforceable in that it was signed by but one of the co-owners of the property. This contention is without merit.Sec. 240.10, Stats., is an extension of the statute of frauds and was designed to prohibit recovery for services rendered in the absence of a written agreement.
Thorp Sales Corp. v. Lease (1971), 53 Wis.2d 195, 191 N.W.2d 885.
"240.10 Real estate agency contracts. (1) Every contract to pay a commission to a real estate agent or broker or to any other person for selling or buying real estate shall be void unless such contract or note or memorandum thereof describing such real estate, expressing the price for which the same may be sold or purchased, the commission to be paid and the period during which the agent or broker shall procure a buyer or seller, be in writing and be subscribed by the person agreeing to pay such commission."
Its purpose was to protect the public from dishonest real estate agents. It was not the purpose of the law to govern the legal relationships of joint owners of property, agents, corporate officers or partners.
Hilboldt v. Wisconsin Real Estate Brokers' Board (1965), 28 Wis.2d 474, 484, 137 N.W.2d 482.
Genske v. Leutner (1926), 191 Wis. 125, 210 N.W. 369.
Thorp Sales Corp. v. Lease, supra.
Grieb Erickson, Inc. v. Estberg (1925), 186 Wis. 174, 202 N.W. 331.
Roberts v. Goodlad (1918), 167 Wis. 318, 166 N.W. 646.
The real estate listing contract is but an employment contract between the broker and an individual who agrees to pay his commission. Its validity merely rests upon a written instrument describing the property, the price and commission to be paid, the period of its existence and signed by the person who agrees to pay the commission. There is no need that all the owners of the property join in such an instrument. In fact, the person subscribing thereto need not even be an owner of the property.
Buroff v. Bergmann (1919), 170 Wis. 316, 174 N.W. 901; Mikkelson v. Faber (1928), 195 Wis. 64, 217 N.W. 702.
In the instant action, the jury found that there existed a valid real estate listing contract between the parties herein. We think there is ample credible evidence to support such a finding. The signing of the contract by but one of the co-owners of the property involved is sufficient to bind the subscriber thereto to payment of the commission previously agreed to. Performance of services
. The defendant next contends that the plaintiff failed to perform the required services of procuring a purchaser and thus defendant was not liable for payment of the commission.This court has held that a broker, employed to "procure a purchaser" for real estate, has earned his commission when he produces a person ready, willing and able to purchase upon the terms specified by the owner in the listing contract. The right to commission arises when there is a meeting of the minds of the principal and the customer produced by the broker. The listing contract whereby the broker contracts to "procure a purchaser" does not require final consummation of the sale.
Peter M. Chalik Associates v. Hermes (1972), 56 Wis.2d 151, 157, 201 N.W.2d 514.
Wauwatosa Realty Co. v. Paar (1956), 274 Wis. 7, 14, 15, 79 N.W.2d 125.
Id. at page 15.
Generally it is stated that when a real estate broker procures a purchaser and a valid and enforceable contract is entered into between them the commission for procuring a purchaser is earned, even though the purchaser may later default.
"The courts are practically unanimous in holding that a broker employed to sell or exchange lands earns his commission, unless the contract of employment contains a stipulation to the contrary, when a customer and the employer enter into a valid and binding contract for the sale or the exchange of lands."
Kruger v. Wesner (1956), 274 Wis. 40, 44, 79 N.W.2d 354.
The defendant contends that a "meeting of the minds" or a "valid and binding contract for the purchase of real estate" is required to establish the broker's right to a commission and that the instant offer which the buyer accepted was illusory and unenforceable therefore, the plaintiff has not procured a purchaser so as to become eligible for his commission. We do not agree.
Initially it must be remembered that the jury concluded that the plaintiff procured a purchaser for the real estate in question. Such a finding is supported by the credible evidence. The effecting of a valid and binding contract is but an indicia of the fact that a purchaser has been procured. There is no requirement that a sale be consummated. Wauwatosa Realty Co. v. Paar, supra.
"In the absence of any express stipulation requiring the broker to procure a binding written contract from the customer in order to be entitled to his commission, most of the courts have considered it unnecessary to a complete performance on the part of the broker that he procure such a contract, provided that the surrounding circumstances are such that the employer is in a position to execute it himself . . . ."
12 Am. Jur. 2d, Brokers, p. 934, sec. 192.
Even if it were required that the plaintiff-broker procure a binding contract between the defendant and the purchaser, such a requirement would not have avoided liability on the part of defendant.
The plaintiff's successful completion of a sale of the real estate in question was defeated through the actions of the defendant and his tenant in prohibiting the further testing of the real estate and failing to terminate the enforceable five-year lease thereof.
". . . [I]t would be manifestly unjust that the principal could avoid paying a commission fairly earned if by his own fault or misconduct or wrongful neglect he has prevented the consummation of his contract with the buyer, and the courts will not sanction such injustice."
Dean v. Wendeberg (1921), 175 Wis. 513, 515, 516, 185 N.W. 514.
The defendant also argued that the trial court erred in failing to submit the defendant's requested questions to the special verdict of the jury. We do not agree. Framing the special verdict is the duty of the trial court which has considerable discretion. The special verdict in the present case properly framed the questions in terms of ultimate fact and it was not error to refuse to incorporate the defendant's requested questions in the special verdict.
Williams v. Williams (1933), 210 Wis. 304, 246 N.W. 322; Henrikson v. Maryland Casualty Co. (1958), 3 Wis.2d 379, 88 N.W.2d 729.
By the Court. — Judgment affirmed.