Summary
In Central Realty Co. v. Clutter (1980), 62 Ohio St.2d 411, 16 O.O.3d 441, 406 N.E.2d 515, defendant seller entered into an "exclusive" listing agreement with plaintiff broker to sell defendant's farm.
Summary of this case from Anderson Hills Pediatrics, Inc. v. PeckOpinion
No. 79-1514
Decided June 25, 1980.
Contracts — Real estate listing — Entitlement to broker's commission — Extension clause, construed.
APPEAL from the Court of Appeals for Knox County.
In May of 1976, appellant, Elizabeth Jean Clutter, entered into a three-month exclusive listing contract with appellee, Central Realty Company, to sell her 175 acre farm in Morgan Township, Knox County. The agreement provided, in part, as follows:
"If you secure a purchaser for my property, or if the same is sold or exchanged during the term of this listing, or is sold within three months after the period of this listing to anyone with whom you have negotiated with respect to a sale during the period of this listing and of whom I have notice, I agree to pay you commission of 6% upon the price at which same may be sold or exchanged."
The listing price was $202,000.
During the three-month period, appellant's neighbors, the Merillats, submitted an offer through their real estate agent. Appellant counter-offered, but the Merillats did not accept. Because the listing contract was due to expire, the parties, on August 4, 1976, entered into a 30-day exclusive listing contract with the same terms as mentioned above. The listing price was reduced to $180,000.
The purchase offer was signed only by the husband, "V.E. Merillat."
The Merillats' agent worked for Carroll Biggs Realty, which was in a "50-50 coop" agreement with appellee.
On August 16, appellant accepted an offer of $160,000 from a prospective buyer. On the same day, the Merillats tendered an offer of $170,000, but it was rejected and appellant wrote on the contract "farm sold." The contract for $160,000 never resulted in a sale because the buyer was unable to obtain financing.
On September 28, 1976, after appellee's exclusive listing had expired, appellant executed another exclusive listing contract with E.J. "Jim" Owen, Realtor (Jim Owen) for the sale of the farm for $177,875. On October 9, 1976, Jim Owen, through its agent, presented appellant with an offer to purchase from the Merillats at the listing price. Appellant accepted but conditioned her acceptance upon title of the 1976 crops remaining with the seller. The Merillats accepted this counter-offer. The sale was closed in December of 1976, and a commission of $10,672.50 was to be paid to Jim Owen. The commission was not disbursed until the summer of 1977 because of the dispute which arose with appellee.
Appellee filed suit against appellant to recover its real estate commission. The Court of Common Pleas of Knox County found the extension clause to be ambiguous and denied recovery. The Court of Appeals reversed in a two-to-one decision.
The cause is now before this court pursuant to allowance of a motion to certify the record.
Messrs. Zelkowitz, Barry Cullers and Mr. Robert L. Rauzi, for appellee.
Mr. Robert M. Draper and Mr. Mark Sladoje, Jr., for appellant.
The question posed before this court is whether appellant is bound by the terms of the extension clause to pay appellee a six-percent commission. This clause states: "or is sold within three months after the period of this listing to anyone with whom you [broker] have negotiated with respect to a sale during the period of this listing and of whom I have notice, I agree to pay you a commission of 6%***."
In reviewing this clause, the trial judge found that appellee's evidence established that appellee had "negotiated" with V.E. Merillat, and that the farm was sold within three months after the expiration of the August 4th listing. On the issue of whether the clause was supposed to have effect if a sale was made by another broker or only by appellant, the judge found the clause to be ambiguous. We agree with the trial judge when he stated: "***There is a doubt which the broker could have prevented by more explicit phraseology. The extension clause simply states `or is sold' but it does not say by whom. More explicit wording would have stated `or is sold by me alone or through another broker.' The ambiguity and doubt is to be resolved against the plaintiff."
Wording such as "sold by you, or by any other agent or person, including myself" would clarify the matter.
If the appellee wished to protect itself from the possibility of a sale by another broker, it could have explicitly provided for such an event. Without specific reference to such a possibility, the clause is ambiguous. The age-old maxim of ambiguitas contra stipulatorem est (an ambiguity is resolved against the stipulator) applies to the instant cause. See Franck v. Railway Exp. Agency (1953), 159 Ohio St. 343, 345-346, and O'Neill v. German (1951), 154 Ohio St. 565, 571.
For the foregoing reason, the judgment of the Court of Appeals is reversed.
Judgment reversed.
CELEBREZZE, C.J., W. BROWN, SWEENEY and LOCHER, JJ., concur.
HERBERT, P. BROWN and HOLMES, JJ., dissent.
Since I do not find this contract to be ambiguous, I must respectfully dissent.
P. BROWN, J., concurs in the foregoing dissenting opinion.
I must respectfully dissent from the majority decision herein in that simple contract law would dictate an opposite determination by this court.
Whether or not one looks upon exclusive real estate listing contracts with favor, they are not unlawful or against public policy in this state. Here there was a lawful real estate exclusive listing contract in effect at the time of the sale of this property.
The trial court and the majority herein go off on the tangential theory that the exclusive listing contract is ambiguous in that it did not spell out with specificity that the exclusiveness of the contract would be lost in the event of a sale through another broker.
To limit this exclusive provision to only the instance of a sale by the owner during the contract period is an unreasonable distortion of the ordinary meaning of these types of contracts.
However inequitable it may finally appear where the owner is required to pay two commissions, the terms of the agreement are clear and were bargained for by the parties.
P. BROWN, J., concurs in the foregoing dissenting opinion.