Perkins v. Willacy

¶1OPINION

¶2Appellee brought this action to recover a broker’s commission of $1,000 for having produced purchasers ready, willing and able to buy real property belonging to the appellants. The trial court entered judgment for appellee and appellants brought this appeal.

¶3The appellants are husband and wife. LaFaye Perkins had signed an Exclusive Listing Agreement granting to appellee the sole and exclusive right to sell appellants’ property for $10,000, and promising to pay appellee the sum of $1,000 in the event appellee produced a purchaser ready, willing and able to buy the property. The agreement was not signed by Norman Perkins. The court concluded that Norman Perkins was bound by the agreement because his wife, LaFaye Perkins, had the apparent authority to act as his agent, or because he was estopped to deny the existence of such agency.

¶4The question presented is whether the evidence supports a finding that such an agency relationship existed. Our consideration of that question is limited to determining whether the trial court’s finding that LaFaye Perkins was her husband’s agent was clearly erroneous. We shall hold that there was clear error only if on the entire evidence we are left with the definite and firm conviction that the court’s finding was a mistake.1

¶5Apparent authority to do an act “is created as to a third person by written or spoken words or any other conduct of the principal which, reasonably interpreted, causes the third person to believe that the principal consents to have the act done on his behalf by the person purporting to act for him.”2 There were no such words or conduct in this case. A salesman for appel-lee, Kenneth Gain, testified that appellants had expressed an interest in looking at a three-bedroom house that appellee had listed for sale, and that at that time they indicated to Gain that “they were going to buy another house and then sell their own house” • — ■ that “they had to get a larger place,” that “they weren’t exactly sure whether they’d buy a house first and then sell it or if they’d sell the house first and then buy, but they indicated that they had to get a larger place.” When Gain was asked whether he had any reason to know that LaFaye Perkins had no authority to list the property for her husband, he answered: “No … I assume she did because they both talked about selling it.” Later Gain was asked by the court:

Concerning Norman R. Perkins, did he ever discuss the matter with you, the matter of the sale and the terms and the goods that they would be willing to sell? *143Did he, personally, ever discuss that with you?

¶6Gain replied:

No, I never discussed the actual terms with him. He just discussed that he wanted to sell the property and that she — she said that she would call him that morning before she signed the listing and he agreed to the terms and the commission. So I assumed it was okay with him.

¶7What Gain testified Norman Perkins said to him is not enough, in our opinion, to have caused appellee to believe that Perkins consented to have the sale of appellants’ home done on his behalf by his wife. All that Perkins did so far as ap-pellee was concerned was to express a general interest in selling appellants’ house and buying another one. Such interest never reached the point of definiteness so as to lead appellee to believe reasonably that Perkins had made a decision to sell the family home and that appellee was to act as the broker for the sale. Nothing was said by Perkins to appellee as to when the home was to be sold, the price that it was to be sold for, the amount of the broker’s commission, or any other arrangements relating to such sale. The words and conduct of Norman Perkins fell short of creating apparent authority in his wife to act on his behalf in selling the home. The trial court was mistaken in finding that such apparent authority existed. Such a finding was clearly erroneous.

¶8It is true that Gain testified that when he dealt with LaFaye Perkins for the sale of appellants’ property she told him at the time she signed the listing agreement that she had called her husband, who was out of town, and that “he said it was okay to go ahead,” and that “he agreed to the terms and the commission.” But this would not create, as to appellee, apparent authority for Perkins’ wife to act as his agent, because what Perkins purportedly said was said to his wife and not to appel-lee. As the Restatement (Second) of Agency points out:

Apparent authority is created by the same method as that which creates authority, except that the manifestation of the principal is to the third person rather than to the agent. For apparent authority there is the basic requirement that the principal be responsible for the information which comes to the mind of the third person, similar to the requirement for the creation of authority that the principal be responsible for the information which comes to the agent. [Emphasis added.]3

¶9We also hold that there was clear error in the trial court’s finding that an agency by estoppel existed. On this theory Perkins would be bound by his wife’s signing of the listing agreement only if it were shown that appellee had changed his position because of his belief that the transaction was entered into by LaFaye Perkins for her husband, and that Perkins had intentionally or carelessly caused such belief or, knowing of such belief and that ap-pellee might change his position because of it, did not take reasonable steps to notify appellee of the facts.4 No such showing was made. Perkins neither said nor did anything which reasonably would have caused appellee to believe that when La-Faye Perkins signed the listing agreement she was doing so not only for herself but as agent for her husband.

¶10Finally, the fact that Norman and LaFaye Perkins are husband and wife is of no particular significance as respects the creation of an agency relationship. “Neither husband nor wife by virtue of the relation has- power to act as agent for the other.”5 It may be true that the marital relation is of such a nature that “circumstances which in the case of strangers would not indicate the creation of authority or apparent authority may indicate *144it in the case of husband ánd wife.”6 Thus, a wife may be found to have authority to transact all of her husband’s business affairs where he has habitually permitted the wife to attend to some of his business matters.7 But that is not the situation here. There is no showing that LaFaye Perkins habitually attended to business matters of her husband, Norman Perkins.

¶11The judgment must be reversed as to appellant, Norman Perkins. However, as to appellant LaFaye Perkins the judgment must be affirmed. It must be borne in mind that LaFaye Perkins entered into an agreement with appellee. What is involved here, in addition to the question as to agency, is the right of appellee to proceed with his agreement on the assumption that LaFaye Perkins would be able to make her title good and procure her husband’s joinder when the sale took place. If this assumption was reasonable, then appellee had no duty to approach Norman Perkins for his consent in order to hold LaFaye Perkins liable for appellee’s commission.8 We hold that such an assumption was reasonable because there is nothing in the record which would indicate that appellee knew or should have known that Norman Perkins would not join in the sale, and LaFaye Perkins by her representations to appellee made it reasonable for the latter to assume thát she had obtained or' would obtain her husband’s joinder in the sale.

¶12As to appellant Norman Perkins, the judgment is reversed and the case remanded to the Superior Court with directions to set aside the judgment and to enter judgment for appellant Norman Perkins. As to appellant LaFaye Perkins, the judgment' is affirmed.