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Bishop v. Norell

Supreme Court of Arizona

June 30, 1960

William W. BISHOP, Appellant,
A. W. NORELL, doing business as Al Norell Company Realtors, Appellee.

Page 1023

[88 Ariz. 149] C. A. Muecke and Darrell R. Parker, Phoenix, for appellant.

Lewis, Roca, Scoville, Beauchamp & Linton and Joseph E. McGarry, Phoenix, for appellee.

JOHNSON, Justice.

Appeal by defendant-seller from a summary judgment entered in plaintiff's action to recover a brokerage commission allegedly earned by virtue of an open listing agreement between plaintiff and defendant.

The instant matter was consolidated below with a companion case, Young v. Bishop, 88 Ariz. 140, 353 P.2d 1017, which was an action by a group of buyers to enforce specific performance of an alleged contract of sale with the present defendantseller. While it arose out of the same transaction involved in that case, the present controversy presents an issue basically distinct from that in the specific performance case, hence, an independent analysis of the facts and the law applicable to the facts, is requisite.

The undisputed facts appear to be these: plaintiff, a licensed real estate broker, on January 16, 1956, received from defendant an open listing, in the form of mimeographed or lithographed sheets, to sell real property owned by the defendant and located in Maricopa County. With respect to the material terms of sale, the listing provided for a purchase price of $50,000 to be paid [88 Ariz. 150] in three installments in the proportion of $14,500 payable not later than the close of escrow, $17,750 to be paid on August 1, 1956 and a like amount due August 1, 1957. An interest rate of 4 1/2 per cent per annum was specified for deferred payments from the date of escrow instructions. The listing stipulated that a sale of the realty should be handled through escrow in the Phoenix Title & Trust Company according to the customary escrow instructions used by said firm; furthermore, plaintiff as broker

Page 1024

was authorized to accept from any purchaser the sum of $1,000 as earnest money, which sum together with the balance making up the required payment of $14,500 was to be deposited with the aforementioned title company in escrow. The listing provided for a five per cent brokerage commission on the sale price. At the conclusion of the listing appeared the following information in mechanical print:

'W. W. Bishop Owner

382 North Second Avenue

Phoenix, Arizona'

It is to be noted that the listing contained a description of the land to be sold.

Plaintiff thereafter located a syndicate of buyers, who appeared as plaintiffs in the companion case, No. 6602, and we next find that the escrow agreement of January 16, 1956, referred to in the companion case, was executed between the parties. The escrow agreement, which was signed by defendant and plaintiff herein, particularized the method and terms of payment of plaintiff's five per cent commission and in addition spelled out the terms of an alleged contract of sale between the buying syndicate and defendant. In material part, the escrow agreement acknowledged the sale price of $50,000 and detailed the terms of payment as follows: a deposit of $1,000 as earnest money in escrow to be followed by another deposit of $7,750 upon seller's compliance with escrow; thereafter three installments of $13,750 at an annual interest rate of 4 1/2 per cent, payments to begin one year after the close of escrow. By the express terms of the initial escrow agreement completion of the escrow was predicated and conditioned upon the formulation of certain supplemental trust escrow instructions, the nature of which is not material to the disposition of this appeal. Suffice it to say, these supplemental instructions were not fully consummated and the deal fell through, as a result of which the specific performance action and this action were instituted.

In essence, plaintiff, in support of the judgment, contends that when a broker produces a purchaser ready, willing and able to purchase according to the terms of a listing agreement given to the broker by the seller, he had earned his commission even though a final consummated sale might fail because of the fault of the seller. As proof of the assertion that he provided a [88 Ariz. 151] ready, willing and able buyer upon the terms of the listing, plaintiff points to the terms of sale contained in the signed escrow agreement as being sufficiently identical to those set forth in the original open listing. Defendant, on the other hand, contends that the open listing was not 'signed' by him as required by the statutes and that, therefore, the statute of frauds bars consideration of the open listing agreement in action by the plaintiff to recover a brokerage commission. Therefore, this argument continues, there is left in evidence only one writing signed by him, to wit, the escrow agreement; and while this agreement provides for a commission in favor of plaintiff, it also contemplates the execution of certain supplemental escrow instructions which have never been executed, nor has defendant been in default thereunder, nor has an agreement of sale ever been executed, and that being so, defendant concludes, plaintiff has failed to establish his right to the commission in a manner satisfactory to the affirmance of the summary judgment granted in his favor.

At the outset, we note that it is the law in this jurisdiction that no action shall be brought in any court upon an agreement authorizing or employing an agent or broker to sell real property for compensation or a commission unless the promise or agreement upon which the action is brought, or some memorandum thereof, is in writing and signed by the party to be charged, or by some person by him thereunto lawfully authorized. A.R.S. § 44-101, subparagraph 7; Mallamo v. Hartman,70 Ariz. 294, 219 P.2d 1039. The issue is raised at bar whether the attachment to paper of the seller's ...

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