Opinion
No. 70-225.
June 16, 1970. Rehearing Denied July 2, 1970. Certiorari Denied September 25, 1970.
1. Appeal and Error 931(1), 1010(1).
Reviewing court must search record for evidence most favorable to prevailing party, but must reverse where record cannot support trial court's findings.
2. Brokers 13
Authority of real estate broker to act for his principal is a limited one and its extent must be derived strictly from contract, although contract may be oral or implied from circumstances.
3. Brokers 9
Implied contract arising from broker's introduction of prospective buyers lapsed where, two days after agreement, parties understood that buyers did not intend to enter negotiations for any property at that time and sellers refused to enter into exclusive listing contract with broker.
4. Brokers 54
To be entitled to commission, real estate broker must produce person ready, willing, and able to purchase on owner's terms within lifetime of contract under which he acts.
5. Brokers 50
Broker was not entitled to commission from sellers although there had been implied agreement that sellers would pay commission if broker's clients agreed to purchase as result of broker's introduction, where implied agreement lapsed through understanding that buyers did not intend to purchase any property until broker sold their house and when sellers refused to enter into listing contract, and buyers eight weeks later negotiated with sellers.
6. Brokers 51
Mere fact that broker had introduced prospective buyers to sellers while he had contract with sellers was insufficient to entitle him to commission where buyers returned after contract had expired and broker did nothing further to effect sale.
Broker's action for commission. The District Court, Jefferson County, George G. Priest, J., rendered judgment for plaintiff, and defendants appealed. The Court of Appeals, Silverstein, C. J., held that broker was not entitled to commission from sellers although there had been implied agreement that sellers would pay commission if broker's clients agreed to purchase as result of broker's introduction, where implied agreement lapsed through understanding that buyers did not intend to purchase any property until broker sold their house and when sellers refused to enter into listing contract, and buyers eight weeks later negotiated with sellers.
Reversed and remanded with directions.
Supreme Court No. 23416.
Tinsley, Frantz Heady, Mansur Tinsley, Albert T. Frantz, Lakewood, for plaintiffs in error.
Calvert Calvert, David R. Calvert, Aurora, for defendant in error.
This case was originally filed in the Supreme Court of the State of Colorado and subsequently transferred to the Court of Appeals under authority vested in the Supreme Court.
This is an action brought by James Hickam (Hickam), a licensed real estate broker, to obtain a commission allegedly owed under an oral contract relative to the sale of property owned by Mr. and Mrs.
Rohs owned and occupied a residence west of Denver in April of 1966 and had sought unsuccessfully for several months to sell it through a sign placed on the property. On April 14th, he was informed by a neighbor that Hickam had a client interested in buying mountain property. Rohs telephoned Hickam that same day and advised him that the Rohs property was for sale. Hickam immediately arranged a meeting between Rohs and his clients, Mr. and Mrs. Lynch, for that same evening.
As arranged, the Lynches stopped briefly by the Rohs property on the evening of the 14th after viewing another place in the same neighborhood, but they informed Rohs that they were not interested in purchasing any property until their own house was sold by Hickam, who had an exclusive listing on it. The Lynches also told Hickam separately that they were dissatisfied with certain features of the Rohs property and were not interested in pursuing the matter further.
On April 16th, Hickam visited the Rohs property and attempted unsuccessfully to obtain an exclusive listing on it. Rohs told him that he intended to do without the services of a real estate broker. From that date to June 16, Hickam had no further contacts of any kind with Rohs.
Around May 30th, Hickam found the eventual purchaser of the Lynches' property. The Lynches, who had since April 14th looked at many other places without Hickam's assistance, thereupon contacted Rohs directly to ascertain if his property was still for sale. Informed that it was, they reached agreement and gave Rohs a down payment for it on June 8th. Hickam learned of the sale from one of his employees and demanded a commission from Rohs on June 16th for his introduction of the buyer to the seller. Rohs refused and this suit was filed.
After a trial without a jury, the trial court found that Hickam's act of introduction had been the "predominating effective cause" of the transaction between Rohs and the Lynches and entered judgment for Hickam in the full amount of his claim.
Rohs asserts that the trial court erred in finding that Hickam was the procuring cause of the transaction because the evidence fails to show that the Lynches were ready, willing and able to enter into negotiations at the time of Hickam's introduction, and that this state of the evidence is fatal to Hickam's claim for a commission. We agree.
In reviewing the findings of the trial court, we are bound to search the record for that evidence which is most favorable to the prevailing party below. Adler v. Adler, 167 Colo. —, 445 P.2d 906. When the record cannot support the court's findings, however, we must reverse the judgment.
The authority of a real estate broker to act for his principal is a limited one, and its extent must be derived strictly from a contract between them, although such contract may be oral or implied from particular circumstances. Brewer v. Williams, 147 Colo. 146, 362 P.2d 1033.
When read in the light most favorable to Hickam, the evidence in the record before us supports a finding that an implied contract arose between Rohs and Hickam on April 14th and that, by its terms, Rohs agreed to pay Hickam a commission if Hickam's clients, the Lynches, agreed to purchase Rohs' property as a direct consequence of Hickam's introduction. By April 16th, however, both parties to this agreement understood that the Lynches did not intend to enter negotiations for any property at that time and, upon Rohs' refusal to enter into an exclusive listing contract with Hickam, the implied agreement of April 14th lapsed. When the Lynches contacted Rohs directly eight weeks later to negotiate the purchase of his property no contractual relation existed between Rohs and Hickam.
[4, 5] To be entitled to a commission, a real estate broker must produce a person ready, willing, and able to purchase on the owner's terms within the lifetime of the contract under which he acts. Dunklee v. Shepherd, 145 Colo. 197, 358 P.2d 25. It is undisputed that the Lynches were neither ready nor willing to purchase the Rohs property between April 14th and 16th, and they clearly stated to Rohs that they would not be ready or able to buy any house until their own house was sold. Since Hickam had an exclusive listing on their property, he knew better than anyone that their conditions had not yet been met, and that they were not ready, willing nor able to purchase the Rohs property.
Hickam claims a commission, however, solely on the basis that he introduced the Lynches to Rohs while he had a contract with Rohs and that this act by itself is sufficient when the prospective purchaser returns after the agency contract has expired to close the purchase with the owner. We cannot agree. Unless the contract between the broker and seller to sell property provides otherwise, and in the absence of any fraud or collusion on the part of the seller, a broker must not only introduce the eventual buyer to the owner but "must play an active role in concluding the sale in order to qualify as the predominating or effective cause of the sale". Kern v. Lewis, Colo., 472 P.2d 713 announced to-day by this court. Accord, Heady v. Tom-linson, 134 Colo. 33, 299 P.2d 120. No fraud or collusion is present in this case. The evidence is undisputed that after arranging the meeting of the parties and being advised that the Lynches were not interested in the property, Hickam did nothing further to effect a sale. He therefore is not entitled to a commission.
The judgment is reversed and the cause remanded with directions to dismiss the complaint.
DWYER and ENOCH, JJ., concur.