Olsen v. Spomer

COUGHLIN, J. This is an appeal from a judgment in an action upon a contract between real estate agents respecting the division of a commission.

The defendant and respondent, E. A. Strout Western Realty Agency, Inc., a corporation, sued as Strout Realty, was a licensed real estate agent holding a valid and enforceable listing agreement from a prospective seller by the name of Rose, which provided for the payment of a $5,000 commission ; the plaintiffs and appellants, Olsen and Tyler, also were real estate agents; and between them it was agreed orally that the plaintiffs would cooperate with the defendant in obtaining a purchaser of the property listed by Rose, and would receive a share of the commission derived from a sale to a purchaser produced by them, although the extent of that share was not then agreed upon. Thereafter, the plaintiffs produced a buyer who agreed to buy the property in question upon the terms prescribed; and executed escrow instructions accordingly; but the prospective seller, Rose, refused to proceed with the sale. In the interim, and immediately prior to the time when the proposed buyer made his offer to purchase, it was agreed that the commission should be “split” as follows: $1,500 to the plaintiff Tyler, $1,500 to the plaintiff Olsen and $2,000 to the defendant Strout Realty. In due course, the defendant made a demand upon its client Rose for the full $5,000 commission. Rose refused to comply with this demand; employed an attorney to represent him; and indicated his intention to resist any proceeding to force him to sell or to pay the commission, but offered to compromise the commission claim for $2,500 providing releases were obtained from all parties, including the prospective purchaser. The defendant recommended that the plaintiffs accept this compromise; the plaintiffs rejected this recommendation; urged the defendant to sue Rose for the full commission; and offered to pay their share of the expense of such a suit; but the defendant refused to sue. Subsequently, Rose withdrew his offer of compromise and no part of the commission has been paid.

The plaintiffs brought this action against the defendant, alleging common counts for services rendered, to recover $3,000, viz., $1,500 for each plaintiff. The trial court found the facts to be as related above and concluded that, under the agreement in question, the plaintiffs were entitled to share only in a commission actually received by the defendant. [102]Judgment in favor of the defendant followed. The plaintiffs appeal, contending that the defendants not only agreed to “split” the commission received from the sale of the listed property to a purchaser procured by them, but also agreed to sue the prospective seller for the commission in the event he failed to pay the same.