Opinion
No. 70-695
Decided May 16, 1972.
Action for commission allegedly due real estate broker. Under instructions authorizing quantum meruit recovery, jury awarded plaintiff $3,625. Defendant appealed.
Reversed
1. BROKERS — Services — Contract Implied — Certain Circumstances — Limitation — Expectation of Compensation — Recipient. Although a contract of employment entitling a real estate broker to compensation for his services may, under certain circumstances, be implied from the facts of a particular case, this rule is subject to the limitation that the services of the broker must have been performed under such circumstances as to give the recipient thereof some reason to think they are not gratuitous, nor performed for some other person, but with the expectation of compensation from the recipient.
2. Action for Commission — Failure to Prove — Plaintiff — Expected Payment — Defendant — Fatal — Existence — Implied Contract. In action by real estate broker for commission allegedly due her in connection with sale of farm, plaintiff's failure to prove that she expected payment from defendant-farm owner is fatal to her claim of the existence of an implied contract with defendant.
Appeal from the District Court of Arapahoe County, Honorable Robert F. Kelley, Judge.
Ashen and Fogel, George T. Ashen, Stephen B. Schuyler, for plaintiff-appellee.
Houtchens, Houtchens and Dooley, John H. Dooley, for defendant-appellant.
This is an action brought by Alice M. Chambers, a real estate broker, to recover a commission alleged to be due her from Raymond H. Shivers. In her complaint, plaintiff demanded a commission of $8,250. The jury, under instructions authorizing a recovery upon a quantum meruit theory, awarded her $3,625. Defendant has appealed the judgment entered on the verdict.
The issue on appeal is whether the verdict is supported by the evidence. We hold that the evidence is insufficient to enable plaintiff to recover and reverse the judgment.
On March 7, 1967, the defendant owned a dairy farm in Weld County, Colorado. On that date, he entered into an exclusive listing agreement with Scott Realty Co. of Fort Collins, Colorado. The listing agreement was for a term of ninety days.
Plaintiff, an independent real estate broker, had two prospects, Robbins and Nelson, who were interested in purchasing a dairy farm. In the course of her efforts to find a farm for Robbins and Nelson, the plaintiff learned that defendant's farm was for sale.
On or about May 1, 1967, plaintiff and the prospective buyers inspected the defendant's farm. Later the same week, plaintiff and the prospective buyers again visited the farm and discussed with defendant the terms for the sale and purchase of the farm. As a result of these discussions, the plaintiff prepared a proposed contract of sale on a printed form in common use by real estate brokers. This document was signed by Robbins and Nelson as purchasers, bears the stamp "Chambers Realty" as agent, and the notation "In cooperation with Bobbitt Realty, Inc. George Zimbelman, Salesman." Zimbelman died before the trial, and the record does not disclose what interest, if any, Zimbelman or Bobbitt Realty, Inc., had in the transaction.
Nelson and Robbins were unable to obtain sufficient financing to enable them to purchase the farm, and they conducted further negotiations with the defendant which resulted in the execution of a lease option agreement on May 18, 1967. Nelson and Robbins then took possession of the premises, and in January of 1970, they exercised their option and purchased defendant's farm.
Plaintiff did not discuss a commission with defendant before the execution of the lease option agreement. After plaintiff learned that Nelson and Robbins were in possession of the farm, she asked defendant about a commission. He did not agree to pay her a commission but told her that he would pay a commission to the broker to whom it was owed. The defendant subsequently paid a commission to Scott Realty Co.
A broker who participates in a transaction resulting in the sale of property without authorization from the seller to act as his agent is not entitled to a commission from the seller. Geier v. Howells, 47 Colo. 345, 107 P. 255; Merrill v. Lathan, 8 Colo. App. 263, 45 P. 524. The broker's right to remuneration for his service must be predicated on contractual relations existing between himself and the person against whom the alleged right is sought to be enforced. Johns v. Ambrose-Williams Co., 136 Colo. 390, 317 P.2d 897; Klipfel v. Bowes, 108 Colo. 583, 120 P.2d 959; and Castner v. Richardson, 18 Colo. 496, 33 P. 163.
Plaintiff concedes that she had neither a written nor an oral express contract of employment with defendant. She contends, however, that she is entitled to recover a commission on the basis of an implied contract.
Plaintiff cites Fletcher v. Garrett, 167 Colo. 60, 445 P.2d 401, and Consolidated Oil Gas, Inc. v. Roberts, 162 Colo. 149, 425 P.2d 282, as holding that a contract of employment of a real estate broker may be implied from the particular circumstances of the case. In Consolidated Oil Gas, Inc. v. Roberts, supra, the Supreme Court stated:
"It has long been the law in Colorado that a contract between a principal and his agent or broker may be oral or may even be implied from the circumstances of the case. Brewer v. Williams, 147 Colo. 146, 150, 362 P.2d 1033 (1961); Klipfel v. Bowes, 108 Colo. 583, 586, 120 P.2d 959 (1942). The circumstances from which such a contract may be implied seem to be two: first, that the broker or agent has rendered services, and is permitted to do so in such a manner as to indicate that he expected to be paid for these services; and second, that the services are beneficial to the party sought to be made liable. Schimmelpfennig v. Gaedke, 223 Minn. 542, 27 N.W.2d 416, 420 (1947); Segnitz v. Grossenbach, 158 Wis. 511, 149 N.W. 159, 160 (1914). This record shows that both of these prerequisites were present here and that an implied contract existed between the parties for defendant to pay a reasonable commission — thus creating a condition where Roberts was entitled to recover as a matter of law on a quantum meruit basis."
[1] This is a proper statement of the law applicable to the facts of that case because the evidence established that the broker rendered services to the defendant in the expectation that he would be paid by the defendant. The rule is subject to the limitation stated in Segnitz v. Grossenbach, 158 Wis. 511, 149 N.W. 159, that "the services must have been performed under such circumstances as to give the recipient thereof some reason to think they are not gratuitous, nor performed for some other person, but with the expectation of compensation from the recipient."
[2] In the present case there is a void of any evidence that plaintiff expected defendant to pay her a commission. On the contrary, plaintiff's own testimony conclusively refutes any such claim. When she discussed with defendant the possible purchase of his farm by her prospects, she knew that the farm was listed with another broker. In the proposed contract, which she submitted to defendant, she stated that she was acting in cooperation with another broker. After she learned that the defendant had transferred possession of his farm, plaintiff asked Scott Realty Co. to share its commission with her. Plaintiff's failure to prove that she expected payment from defendant is fatal to her claim of the existence of an implied contract with defendant. See Merwin v. Beardsley, 134 Conn. 212, 56 A.2d 517.
Judgment reversed with directions to dismiss the action.
CHIEF JUDGE SILVERSTEIN and JUDGE ENOCH concur.