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Boutelle v. Chrislaw

Supreme Court of Wisconsin
May 9, 1967
150 N.W.2d 486 (Wis. 1967)


In Boutelle v. Chrislaw (1967), 34 Wis.2d 665, 673, 150 N.W.2d 486, this court stated it is "... not bound by a finding of the trial court which is based upon undisputed evidence when that finding is essentially a conclusion of law...."

Summary of this case from Browndale International v. Board of Adjustment


April 10, 1967. —

May 9, 1967.

APPEAL from a judgment of the county court of Rock county: MARK J. FARNUM, Judge. Reversed.

For the appellant there was a brief by Mary L. Dooley of Janesville, attorney, and Lloyd J. Paust of Columbus, of counsel, and oral argument by Miss Dooley.

For the respondent there was a brief by Grutzner Jaeckle of Beloit, and oral argument by Gerald W. Jaeckle.

This is an action to collect a real-estate broker's commission. Earl S. Boutelle, the broker, claims that, under the terms of a listing contract, he procured a purchaser of the Wallace Chrislaw farm. Chrislaw, the defendant, takes the position that the alleged purchaser was unable to meet the terms of the contract because he could not furnish the cash purchase price prior to the listing contract's expiration date.

The plaintiff and defendant entered into a listing contract on July 30, 1964. Subsequently, on November 12, 1964, the parties terminated the contract and substituted one providing a sales price of $100,000. The listing contract was executed on a form provided by the broker Boutelle. The form was No. WB-10, as approved by the Wisconsin real estate brokers' board. On this form the following paragraph appears:

"We will sell property on the following terms: Cash, Land Contract, Mortgage (Delete Terms Not Applying), Terms of Contract or Mortgage, Cash Down Payment . . . . . . $. . . . . . Balance . . . . . . Years @ Int . . . . . .%. Principal payments . . . . . . or other acceptable terms: . . . . . ."

At the direction of Chrislaw, Boutelle struck out the inapplicable words so that the paragraph reads:

"We will sell property on the following terms: Cash, or other acceptable terms."

Another paragraph of the agreement provided:

"If a sale or exchange is made or a purchaser procured by the Broker, by the undersigned Seller, or by any other person, at the price and upon the terms specified herein, or at any other terms and price accepted by the undersigned Seller, during the term of this contract, or if sold or exchanged within six (6) months after the termination of same to anyone with whom the Broker negotiated during the term of this contract and whose name the Broker has submitted to Seller in writing prior to the expiration date of this contract, the Seller agrees to pay Broker a commission of Six per cent (6%) of the sale price."

The contract further stated:

"This listing contract shall be effective from Nov. 12, 1964, and this listing contract shall terminate on January 31, 1965."

On January 6, 1965, Boutelle, hereinafter referred to as the broker, procured an offer from Mr. and Mrs. C. Donald Pope to purchase the Chrislaw farm for $95,000. The Pope offer provided that the transaction would be closed on February 15, 1965. Chrislaw rejected this offer, stating that it did not comply with what he had instructed the broker under the terms of the listing contract. The next day the broker submitted a new offer from the Popes. This offer conformed with the specified purchase price of $100,000, was accompanied by $1,000 earnest money, but contained the same provision in respect to closing, i.e., February 15, 1965. The defendant Chrislaw testified that he rejected this offer also because it did not conform to the listing contract. He stated at trial that he told the broker:

". . . we had to have the money, cash money, before our contract expired, according to the terms of the contract."

On January 20, 1965, the broker secured a final offer from the Popes. Upon the basis of this offer broker Boutelle claims that he secured a purchaser, thus entitling him to be paid a commission. This offer provided for a purchase price of $100,000. Five thousand dollars was submitted as earnest money, with the remaining balance of $95,000 to be paid in cash. It provided that the transaction would be closed:

". . . at the office of Boutelle's, Beloit, Wisconsin or at office of Buyer's mortgagee, if any, on or before February 15, 1965, or at such other time and place as may be designated in writing by the parties hereto."

This final offer was communicated by the broker to Chrislaw on either January 20 or 22, 1965. As evidence of Pope's financial ability, the broker shortly thereafter showed Chrislaw $27,000 in cashiers' checks and deposit records of $10,000 and an assurance that the balance of $63,000 would be secured by a mortgage from the Prudential Insurance Company. Chrislaw testified that he refused to sign this contract because it was not acceptable. He stated:

" A. Here you have got earnest money, $5,000.00. My contract didn't call for anything like that. It says, Balance, $95,000.00. My contract calls for $100,000 cash, as any banker would see cash as a certified check or bank money order or cash. We understand what cash is. It don't say anything about something like that, so I said, `Get the money and I guess we'll go along.'"

Also on adverse examination, the defendant testified:

" Q. And is it correct that you informed Mr. Boutelle that you would not sign the offer to purchase unless the $100,000.00 was stacked in $20 bills on your kitchen table? A. Well, I said I'd take cash, $20 bills or cashier's check, or bank money order, or something I recognized.

" Q. In other words, you wanted to see the money on the table or — strike that. You wanted to see the money before you signed any papers? A. Well, I don't remember if that's just exactly the way it was or not. I told him, `Put the money up' and I'll give him a deed. That's all he needed, a deed and abstract, I could furnish it."

It is undisputed that the broker attempted on several occasions thereafter to secure Chrislaw's signature on the offer to purchase. The plaintiff testified that the only reason the defendant gave for refusing to sign the acceptance of the offer was that the cash was not to be immediately forthcoming according to the terms of the contract prior to its expiration.

The broker claims that he showed Chrislaw a telegram dated January 27th from the Prudential Insurance Company stating, "Pope loan approved as submitted." The record does not conclusively show when this telegram was displayed to Chrislaw. Nevertheless, Chrislaw refused to sign. It is undisputed that prior to the time of the listing contract's expiration the defendant made it clear that he wanted to receive the entire purchase price in cash or the equivalent of cash before the contract expired. He did not want to see deposit slips and cashiers checks for only a part of the purchase price or to be assured that he would receive the total amount of $100,000 on February 15th, two weeks after the listing contract expired. He took the position that he was, prior to January 31st, prepared to execute a deed and submit an abstract upon the production of the money. As he put it, "I told Mr. Boutelle bring the money and we'd complete the deal."

The Pope offer was withdrawn, and on February 17, 1965, the broker commenced an action alleging that he had performed his part of the contract and that he had secured a cash offer from a ready, willing, and able purchaser but that "the defendant . . . wrongfully refused to sell his farm, in violation of his contract with the plaintiff." The defendant denied liability, claiming that no offer conforming with the requirements of the listing contract was ever submitted to him.

The trial court in an extensive memorandum opinion found for the plaintiff and concluded that the plaintiff broker had in fact procured a ready, willing, and able buyer and that, although Chrislaw felt that he was entitled to all his money by January 31, 1965, he was incorrect and that it was unreasonable for him to expect payment by that time. The trial judge stated:

". . . in view of the type and magnitude of the undertaking and the other facts and circumstances of the case, the date of February 15, 1965, was reasonable and the time allowed for the closing was a reasonable time and that any objection that the Defendant may have had to such time was waived by him by virtue of his conduct in simply insisting on the money by January 31, 1965, rather than making specific objection of a realistic nature to the time of closing."

This was a trial to the court. A finding of fact made by a trial judge will not be set aside upon appeal unless it is contrary to the great weight and clear preponderance of the evidence. Kirchen v. Gottschalk (1965), 26 Wis.2d 123, 126, 131 N.W.2d 885. However, this court is not bound by a finding of the trial court which is based upon undisputed evidence when that finding is essentially a conclusion of law. Pederson v. First Nat. Bank (1966), 31 Wis.2d 648, 654, 143 N.W.2d 425; Vogt, Inc., v. International Brotherhood (1955), 270 Wis. 315, 321i, 71 N.W.2d 359, 74 N.W.2d 749.

In the instant case, the undisputed facts show that the broker, within the period limited by the contract, found a purchaser who, though not having the cash in hand or available to pay the purchase price within the term of the contract, did have the credit standing and financial resources to pay the full purchase price by February 15th. The trial judge therefore concluded that the broker had "procured a purchaser" as required by the contract. This is a conclusion of law, and this court may review the undisputed evidence upon which this conclusion is based and reexamine that conclusion.

The question posed by this appeal is whether the broker so complied with the terms of the listing contract that he is entitled to his commission. This court follows the generally accepted rule that:

"A broker employed to `procure a purchaser' for real estate is entitled to his commission when he produces a person ready, willing, and able to purchase upon the terms specified by the owner in the brokerage contract." Niske v. Nackman (1956), 273 Wis. 69, 75, 76 N.W.2d 591.

We have stated in Kaufman v. La Crosse Theaters Co. (1945), 248 Wis. 43, 50, 20 N.W.2d 562, that:

"It is elementary that a proposed acceptor must be ready, able, and willing to go through with the deal within the time limited."

In this case the proposed purchase offer was made within the time limited. The proposed "offer to purchase," however, was not that the cash be delivered during the time stipulated in the contract, but on February 15th, somewhat more than two weeks later. The testimony reveals that the intent of the purchaser was to supply the full amount of the cash on that date upon the tendering of the deed. The question on this appeal is therefore limited to whether in this type of transaction, where the seller insists upon the terms of his listing contract, the cash must actually be paid over and the deal consummated within the listing period if the broker is to collect his commission.

The broker takes the position that all that is required is that there be a purchaser within the period who is ready and willing to close the transaction and who is able at a later date to pay over the cash without resort to some other type of credit arrangement involving the seller. The plaintiff broker went so far as to testify that an offer would be a cash offer even though a proposed purchaser were not able to actually pay over the money until ten months after the expiration of a listing contract.

The law of Wisconsin, however, is that the purchaser must be

". . . able to command the necessary money to close the deal on reasonable notice, or within the time limited by the vendor, if a time be limited." McCabe v. Jones (1910), 141 Wis. 540, 543, 124 N.W. 486.

There is, of course, no doubt that, had the vendor accepted the offer to purchase, the proposal of the purchaser would have ripened into a new contract — a contract to purchase — and the vendor would have been bound by it. Here, however, it was not accepted, and for the broker to earn his commission, he must have complied with the terms of the listing contract within the time limited.

We conclude that under these circumstances it was the broker's duty to produce a purchaser who was ready, willing, and able to consummate the deal before the listing contract expired. It is not enough that the purchaser have the potential of consummating the deal within a reasonably short time. He must not only be ready and willing, but have the present ability to pay. The general rule is in accord with this conclusion. Corpus Juris Secundum states:

"Each of the words `ready,' `willing,' and `able' expresses an idea that the others do not convey. All three of these elements must exist in the customer, in order to entitle the broker to his commissions. It is not sufficient that the customer is ready and willing, but he must also have the ability to carry out the loan, sale, purchase, or exchange; neither is it sufficient that he has the ability to purchase; he must be ready and willing to do so; nor is it sufficient that he is able, ready, and willing, but on terms different from those prescribed by the owner. . . .

To be able to make an immediate cash payment or deposit, a purchaser or lessee must, of course, have money; and it is not sufficient that he has property on which it can be raised or out of which it can be made; but, where he is able to pay cash, it is immaterial whether he had the money originally, borrowed it, or acquired part of it from another person on an understanding that such person is to have an interest in the land purchased." 12 C.J.S., Brokers, p. 192, sec. 85.

An annotation at 18 A.L.R.2d 376, 382, notes:

"The view prevails that if the authorization of the broker is for a cash sale, the broker does not earn his commission by merely producing a purchaser who seeks time in which to obtain the purchase price or desires to make deferred payments."

Restatement 2d, Agency, p. 351, sec. 446, follows a similar rationale:

"An agent whose compensation is conditional upon his performance of specified services or his accomplishment of a specified result within a specified time is not entitled to the agreed compensation unless he renders the services or achieves the result within such time, unless the principal, in bad faith, has prevented him from doing so."

The comment to this section, supra, page 352, provides the observation:

"The rule is applied most frequently to promises to pay compensation to brokers in consideration for the production by the broker of a customer within a specified time. The usual interpretation of such an agreement is that the broker is to receive his' commission only if he produces a customer able, ready, and willing to meet the principal's terms within the specified time, and hence no commission is payable to a broker for producing a prospective customer within the specified time if the latter does not come to an agreement with the principal until after the specified time, unless the principal has agreed with the broker to extend the time or in bad faith prolongs negotiations. The broker can protect himself by requiring an agreement that he is to receive his compensation if he produces a customer who enters into negotiations with the principal within the specified time and subsequently completes the transaction."

Based upon these general principles, we conclude that the term "cash" as it appeared in the listing contract required the payment of such cash during the lifetime of the contract. Leaving out the extraneous portions of the listing contract, it provides that:

"If. . . a purchaser [is procured] by the Broker . . . at the price and upon the terms specified herein . . . during the term of this contract. . . the Seller agrees to pay Broker a commission . . . ."

Another section setting forth the terms merely says, "We will sell property on the following terms: Cash, or other acceptable terms." Reading these two sections together, it can well be argued that, on the face of the document, the terms require payment in full during the period of the contract. This is the position of the appellant. On the other hand, it can be argued, as does the respondent, that the plain meaning of the clause is merely to find a purchaser during the term of the contract who it appears will reasonably be able at a later date to make the payments required by the contract.

It is apparent that both positions are to some degree supportable from the very words of the contract. While we are inclined to agree with the interpretation placed upon the phraseology by the appellant Chrislaw, we cannot say that the contract is unambiguous.

It is established in this court that:

"The listing agreement having been a printed form supplied by the plaintiff broker, the same must be most strongly construed against the broker in case of any ambiguity or doubt. 12 Am. Jur., Contracts, p. 795, sec. 252; 17 C.J.S., Contracts, p. 751, sec. 324." Dunn Stringer Investment Co. v. Krauss (1953), 264 Wis. 615, 619, 60 N.W.2d 346. See also Nordale Realty Co. v. Hanel (1947), 251 Wis. 136, 141, 28 N.W.2d 245; E. M. Boerke, Inc., v. Williams (1965), 28 Wis.2d 627, 634, 137 N.W.2d 489.

The facts of this case indicate that the printed form for the listing contract was supplied by the broker's salesman and the strikeouts and interlineations were made by the salesman and should be construed against the scrivener of the contract. We, therefore, are obliged to construe this contract to require that the purchaser pay cash within the lifetime of the contract and not merely be one who seeks time in which to obtain the purchase price. This contract made no provision for the possibility of any closing date after the expiration of the listing contract and if this hiatus in the contract required that a subsequent date was to be negotiated, the terms of such negotiations were completely within the control of the seller. We have held:

"It is also settled that when the principal has furnished the broker with only part of the terms with an understanding that further details are subject to negotiation between the principal and the prospective buyer the principal may terminate such negotiations without liability to the broker." Nordale Realty Co. v. Hanel, supra, at page 138; Henschell v. J. L. Gates Land Co. (1911), 146 Wis. 140, 131 N.W. 423; Grinde v. Chipman (1921), 175 Wis. 376, 378, 185 N.W. 288.

Am. Jur. notes on this subject:

"Where the listing agreement fails to fix the terms for the sale or exchange of property, or specifies only part of the terms with the understanding that further details are subject to negotiation between the principal and the customer, the principal has been held free to terminate the negotiations without liability to the broker. Moreover, in such a case the broker may be denied compensation unless he produced a customer ready, able, and willing to buy on such terms as the principal may require, or as he accepts, or unless the principal and the customer reach a definitive oral or written agreement." 12 Am.Jur.2d, Brokers, p. 929, sec. 187.

There is no evidence that the vendor's refusal to negotiate further on a closing date is evidence of bad faith which might, in some circumstances, exonerate the broker from the above rule. The offer upon which the broker makes his claim for commission was submitted at the very end of the listing contract's term. There was evidence that the defendant indicated from the very outset that he needed his money promptly to set up a new farming operation in a southern state. In view of these facts and his adamant refusal from the time of the first offer to accept a later closing date, it cannot be said that the record supports a finding of bad faith.

The plaintiff also argues that, if there are discrepancies between a listing contract and an offer to purchase, the seller waives the discrepancy if he remains silent or objects on other grounds. This position finds support as a matter of law in the decided cases of this jurisdiction. Moss v. Warns (1944), 245 Wis. 587, 591, 15 N.W.2d 786; 12 C.J.S., Brokers, p. 224, sec. 95.

No doubt, any variance of any materiality had to be called to the broker's attention by the vendor or, under the law of this state, it could be deemed waived. However, a review of the record in this case indicates that the seller Chrislaw, once he had received an offer that agreed in price with his asking figure, vehemently and colorfully insisted that he wanted to "have the money, cash money, before our contract expired, according to the terms of the contract" and that he wanted $100,000 on his kitchen table.

The trial judge concluded that the insistence of Chrislaw in receiving the money prior to the termination of the contract was unreasonable. However, he based that determination upon his conclusion that, as a matter of law, Chrislaw was not entitled to the cash prior to the termination of the contract. With this legal conclusion we disagree. We therefore cannot conclude, based upon the facts of this case, that Chrislaw's conduct was unreasonable. While many sellers might well have been satisfied to wait only a short period of time to consummate a real-estate transaction involving $100,000, Chrislaw had the right to stand upon his contract as penned by the real-estate broker. Had the broker foreseen, as well he might have, that there was the possibility that a potential purchaser might be unable to close the transaction during the life of the contract, he could have provided for such exigency by an express provision of the contract were such a provision agreeable to the vendor. However, as this contract was drafted, we conclude that the purchaser, in order to qualify as a purchaser for cash, should have been ready, willing, and able to make payment in full before the listing contract expired.

By the Court. — Judgment reversed.

I do not read the listing contract as requiring the cash sale to be consummated within the listing period. I think such a sale is made upon the acceptance of the offer and the offer should have been accepted. It was within the terms of the listing and the trial court was correct in holding that the sale could be closed within a reasonable time after the expiration of the listing. The majority view that a cash sale under an ordinary real-estate listing contract must be consummated within the listing period is neither realistic nor in keeping with real-estate practice. The cash sale means the seller will receive cash and will not be required to finance even a part of the purchase price by the acceptance of a mortgage or other security. Whether a sale is cash or not, the closing details take time.

Summaries of

Boutelle v. Chrislaw

Supreme Court of Wisconsin
May 9, 1967
150 N.W.2d 486 (Wis. 1967)

In Boutelle v. Chrislaw (1967), 34 Wis.2d 665, 673, 150 N.W.2d 486, this court stated it is "... not bound by a finding of the trial court which is based upon undisputed evidence when that finding is essentially a conclusion of law...."

Summary of this case from Browndale International v. Board of Adjustment
Case details for

Boutelle v. Chrislaw

Case Details

Full title:BOUTELLE, d/b/a BOUTELLE AGENCY, Respondent, v. CHRISLAW, Appellant

Court:Supreme Court of Wisconsin

Date published: May 9, 1967


150 N.W.2d 486 (Wis. 1967)
150 N.W.2d 486

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