Ernst v. Ganahl — 166 Cal. 493

Majority

p. 493

[L. A. No. 3233.

Department One.

December 9, 1913.]

H. P. ERNST, Appellant, v. FIDEL GANAHL, Respondent.

Headnote

Broker—Exchange of Lands—Failure to Find Customer—Termination of Contract—Evidence—Findings.—In an action to recover a commission alleged to be due the plaintiff for services rendered by him as a broker in connection with an exchange of the defendant’s land, the evidence is held sufficient to sustain the findings that the plaintiff’s contract was one to furnish a customer for the defendant’s land, and that it did not create an exclusive agency; that the plaintiff did not furnish a customer; that while the defendant did make an exchange of his land, the same was not negotiated or effected by the plaintiff, and that prior thereto the authority conferred by the contract was terminated by the defendant, in entire good faith, and the contract was abandoned by the plaintiff.

Ib.—Termination of Contract at Will of Parties.—A contract whereby an owner of land agrees to pay a broker a specified commission in case he furnishes a customer for the property, which does not specify any time for its duration, may be terminated at will by either party; subject only to the ordinary requirements of good faith.

Id.—Broker’s Bight to Commission—Producing Customer.—Under such a contract it is essential to entitle the broker to his commission, that he should furnish, during the life of the contract, a customer ready, able, and willing to take the property upon terms satisfactory to the owner.

Id.—Failure of Broker to Produce Customer—Termination of Contract by Owner—Exchange Subsequently Effected With Person Introduced by Broker—Good Faith of Owner.—If the broker to effect an exchange, without any fault on the part of the owner, fails to produce any satisfactory proposition from a prospective customer during the life of the contract, and the owner, in entire good faith and with the acquiescence of the broker, terminates all relations between them, he may subsequently, upon new and independent negotiations through other parties, conclude an exchange with the same purchaser, without incurring any liability to the original broker.

Ib.—Identity of Contract Sued on—Contract Prepared by Broker to Negotiate for Prospective Purchaser—Bes Gestae.—In an action by a broker to recover a commission alleged to be due him for effecting an exchange of land for the defendant, in which the plaintiff claimed to have been acting under a particular written authorization from the defendant, and the latter that he was acting under an entirely different one, a writing prepared by the plaintiff,

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without the knowledge of the defendant, at the time, as claimed by him, the defendant’s authorization was executed, empowering him on behalf of the prospective purchaser to negotiate the exchange, is not a part of the res gestae of the transaction between, plaintiff and the defendant, and is inadmissible in proof of the identity of the contract sued on.

APPEAL from a judgment of the Superior Court of Los Angeles County and from an order refusing a new trial. Frank G. Finlayson, Judge.

The facts are stated in the opinion of the court.

Tanner, Taft & Odell, and Tanner, Odell, Odell & Taft, for Appellant.

Seward A. Simons, for Respondent.

This is an action brought by plaintiff to recover two thousand dollars, alleged to be due him from defendant for services alleged to have been rendered by him in connection with an exchange of certain real properties by defendant and one C. C. Kohlmeier. The complaint alleged a written contract on the part of defendant, given on or about June 18, 1908, authorizing plaintiff to sell certain of his real property for one hundred and fifty thousand dollars, “or to exchange the same for other property which would be accepted by defendant,” and in which defendant agreed that if the property was sold by or through the efforts of plaintiff, or to any. one whom plaintiff should produce who should purchase the same or should make an exchange therefor, he would pay plaintiff a commission of two thous- and dollars. It was further alleged that plaintiff produced said Kohlmeier, and negotiated- an exchange of properties between the latter and defendant, which was consummated on or about September 10, 1908. By his answer, defendant denied the contract alleged; alleged that the agreement between them was one by which he agreed to pay plaintiff two thousand dollars’ commission in case he furnished him a customer for the premises referred to for the sum of one hundred and fifty thousand dollars, the agency not being an exclusive one; denied that plaintiff produced Kohlmeier as

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a purchaser or one who would exchange, and denied that plaintiff negotiated an exchange with Kohlmeier. He further alleged that plaintiff failed to procure any purchaser for his premises or to effect any exchange thereof, and that on or about August 29,. 1908, he notified defendant of his inability to so do, and that by mutual consent the agency was terminated.

The trial court found that the agreement between plaintiff and defendant was one executed July 6, 1908, and that the same was as follows:

“Los Angeles, Cal., July 6, 1908.

“I hereby agree to pay H. P. Ernst two thousand (2000) dollars commission in ease he furnishes me a customer for my property number 936 and 940 So. Hill St. being 75x153 for the sum of one hundred and fifty thousand dollars. It is understood that this is not an exclusive agency.

“F. Ganahl.”

It further found that on August 26, 1908, defendant revoked and withdrew the authority conferred by said contract, and, at said time, on the demand of the defendant, plaintiff surrendered and returned said contract to defendant, and plaintiff abandoned the same. It further found that plaintiff never furnished defendant a customer for the property, and never negotiated an exchange with Kohlmeier, and that while defendant on or about September 10, 1908, did make an exchange of his said property with Kohlmeier, said exchange was not negotiated or effected by plaintiff.

Upon these findings judgment was given that plaintiff take nothing. This is an appeal by plaintiff from such judgment and from an order denying his motion for a new trial.

The suggestion that the findings do not support the judgment is not well based. It is distinctly found that plaintiff never furnished defendant a customer for his premises, and never negotiated an exchange of the property with Kohlmeier. The contract found was one to furnish a customer, which the court found was never done by plaintiff. The findings further completely negatived the allegation of the complaint in so far as any services in connection with an exchange with said properties are concerned. They further show a termination of the authority of plaintiff, and a surrender and abandonment of the contract by him. We do not

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see how the effect of these findings is at all impaired by the finding that plaintiff did not conduct any negotiations with Kohlmeier for an exchange after August 25, 1908. Even if we assume that it must be implied from this that he did conduct negotiations with Kohlmeier prior to August 25, 1908, that fact alone would not impair the effect of the other findings. And the same is true of the fact found that an exchange was effected between defendant and Kohlmeier on or about September 10, 1908, which exchange was not negotiated or effected by plaintiff.

Upon the question as to the contract in fact entered into, plaintiff contended that it was one made and dated June 20, 1908, by which defendant appointed plaintiff his agent to sell his Hill Street property in Los Angeles for one hundred and fifty thousand dollars, and that such contract contained the following provision,' viz.: “And jn case said Ernst produces a buyer for cash or exchange, that I may accept a sale of, I agree to pay him a commission of $2000.00.” According to plaintiff, there was no provision in this contract to the effect that the agency was not an exclusive one. Defendant’s claim was that the contract was the one found by the trial court. It cannot be doubted that there was sufficient evidence to support the conclusion of the trial court in this regard. It is, of course, needless to say that. the amount of credence to be given to witnesses is exclusively a question for the trial court.

It cannot be claimed, in view of the evidence, that plaintiff ever furnished a customer for defendant’s property who offered the sum of one hundred and fifty thousand dollars therefor, or any other sum of money. The agreement found by the court was on its face, of course, one contemplating simply a sale of the property for one hundred and fifty thousand dollars, nothing being stated therein looking to a possible exchange. Nor can it be questioned that there was evi- - dence sufficient to support a conclusion that on August 26, 1908, no arrangement for a .sale or exchange having been negotiated or agreed upon, plaintiff and defendant had an interview in which defendant declared their relations in the matter at an end, and demanded the return of his authorizations, two in number, the second being an' authorization for an exchange with Kohlmeier upon certain specified condi

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tions, given subsequent to July 6, 1908, for a specified term, which had expired. Plaintiff then gave defendant an envelope, which he subsequently found contained only the authorization for the exchange. On August 29, 1908, according to his testimony, defendant again saw plaintiff and insisted upon the return of the authorization of July 6, 1908, and the same was delivered to him. Plaintiff did nothing in the way of attempting to dispose of defendant’s property after August 26, 1908, apparently entirely acquiescing in defendant’s revocation of authority. The finding of the trial court as to revocation of authority by defendant and abandonment of the matter by the plaintiff is sufficiently supported by evidence.

Unless, then, by reason of the facts in relation to the Kohlmeier exchange, plaintiff was entitled to a commission under his contract, it is clear that all the findings essential to support the judgment in favor of defendant are sufficiently sustained by the evidence. In view of the findings the evidence must be considered in the light most favorable to defendant. The evidence being so considered it must be concluded that there was no proposition dn the part of defendant for negotiations looking for an exchange of his property for Kohlmeier’s, until after July 6, 1908. Kohlmeier’s property consisted of a ranch in Orange County, with certain personal property, which he was willing to sell for one hundred thousand dollars. Defendant’s Hill Street property in Los Angeles was valued at one hundred and fifty thousand dollars by defendant, and was subject to a mortgage for thirty-five thousand dollars. According to the evidence of defendant, nothing was said about a possible exchange with Kohlmeier until after July 6, 1908. On July 7, 1908, plaintiff introduced Kohlmeier to defendant. A possible exchange of properties was suggested and defendant examined the Kohlmeier property. Certain propositions for an exchange were made by defendant through plaintiff. The first proposition was that an exchange be made upon a basis of one hundred and fifty thousand dollars for defendant’s property, and one hundred thousand dollars for Kohlmeier’s property, Kohlmeier to convey his property to defendant and to pay defendant fifteen thousand dollars, and to receive in return a deed of defendant’s property subject to the thirty-five

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thousand dollar mortgage. Kohlmeier absolutely declined to consider the proposition. Another proposition was made by defendant, under which he was to receive from Kohlmeier only five thousand dollars in cash, and the Kohlmeier property, in return for his property, subject to the mortgage. A written agreement was given to plaintiff by defendant authorizing such an exchange, a time limit of five days being specified therein. This was subsequently extended at plaintiff’s request for three days, expiring August 25, 1908. This proposition was also declined by Kohlmeier, and on August 26th plaintiff so informed defendant. He further informed him that Kohlmeier would, not make the trade, and that he found the mortgage “too big.” Thereupon followed the termination of all relations between plaintiff and defendant in the matter, to which we have already referred. Defendant acted in good faith in this regard, believing that no exchange satisfactory to him could be made with Kohlmeier. There was evidence to the effect that Kohlmeier never made any proposition to accept for his ranch defendant’s property subject to the thirty-five thousand dollar mortgage. Subsequent to August 26th,'the firm of Meyer'& Johnson, which had had business transactions with defendant, sought authority from him to take up the matter of a proposed exchange with Kohlmeier, and they were authorized to see what they could do in the matter. They enlisted the aid of one Waterman, a friend of Mr. and Mrs. Kohlmeier. The proposition of a trade of the Hill Street property, subject to the thirty-five thousand dollar .mortgage, for Kohlmeier’s property, and five thousand dollars cash was again made through Waterman, and declined, Kohlmeier especially objecting on account of the mortgage which was to soon fall due, which he feared he might not be able to take care of. After this, Waterman induced Kohlmeier to accept a proposition for an even exchange of the Hill Street property subject to the thirty-five thousand dollar mortgage, for the Kohlmeier property, with the understanding expressed in the agreement that if Kohlmeier was unable to renew the mortgage for the whole thirty-five thousand dollars when it fell due, defendant would loan him fifteen thousand dollars thereof to assist him in taking care of it. Upon this basis the exchange was effected, and such exchange was wholly due to the efforts of Meyer & Johnson and Waterman.

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There was no had faith on the part of defendant. Of course, there was evidence opposed to the statements we have made. We repeat that we must take the evidence in the light most favorable to defendant. So taking it, we must assume the facts as to the Kohlmeier matter to be as above stated, for there is substantial evidence to that effect.

Upon these facts we can see no warrant for the claim that plaintiff was entitled to a commission under his contract, on the theory that he furnished a customer, even if we assume that the contract would include the case of an exchange of properties. The contract not specifying its duration, either party was at liberty to terminate it at will, subject only to the ordinary requirements of good faith. (See Sibbald v. Bethlehem etc. Co., 83 N. Y. 378 , 384, 385, [ 38 Am. Rep. 441 ].) We have seen that there was enough in the evidence to support a conclusion that there was no bad faith in the matter. It was essential to plaintiff’s success under his contract and his right to any commission thereunder, that he should furnish, during the life of the contract, a customer ready, able, and willing to take defendant’s property upon terms satisfactory to the latter. We do not understand that there is any dissent in the authorities in this state on this proposition, where the contract is substantially like the one here involved. This question is fully discussed and the authorities reviewed in the opinion of Mr. Justice Melvin in Brown v. Mason, 155 Cal. 155 , [ 12 L. R. A. (N. S.) 328 , 99 Pac. 867 ]. (See, also, Roper v. Rosenfeld, 145 Cal. 677 , 678, [ 79 Pac. 354 ] ; Sibbald v. Bethlehem etc. Co., 83 N. Y. 378 , [ 38 Am. Rep. 441 ].) What we have already said shows that it cannot be held by an appellate court, in the face of the findings in the trial court, that plaintiff fulfilled these requirements. We must take the case as one where the broker, without any fault on the part of the owner, failed to produce any satisfactory proposition, or even any proposition, from another during the life of the contract, and where the owner acting in entire good faith terminated all relations between himself and the broker, the broker acquiescing therein. That subsequently, upon new and independent negotiations through other parties, an exchange between the same parties was effected, cannot affect the question. (See Brown v. Mason, 155 Cal. 155 , [ 12 L. R. A. (N. S.) 328 , 99 Pac. 867 ]; Sibbald v. Bethlehem etc. Co., 83

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N. Y. 378 , [ 38 Am. Rep. 441 ].) Plaintiff’s contention in this behalf is necessarily based upon an assumption of bad faith on the part of the defendant in the matter of the termination of the relations between himself and plaintiff, an assumption that, as we have seen, we cannot make in view of the evidence and findings.

Complaint is made that the trial court erred in refusing to admit in evidence a written authorization from Kohlmeier to plaintiff dated June 20, 1908, for the sale of his ranch property for one hundred thousand dollars, and providing that in case that plaintiff furnished him a buyer, “either for cash or for exchange, that I may accept a sale of,” Kohlmeier would pay a specified commission to plaintiff. Plaintiff claimed on the trial that this authorization was substantially similar in terms to the one testified to have been given him by defendant on or about June 20, 1908, which had been returned to defendant in August, 1908. He further claimed that the two forms were prepared by him at the same time, for the purpose of obtaining the necessary authorizations from both defendant and Kohlmeier for negotiations for an exchange. The real effort of plaintiff in this connection was to show that the authorization in fact given to plaintiff was the one testified by him to have been given, rather than the one testified to by defendant as having been given. We are of the opinion that it was not admissible for any such purpose. According to plaintiff’s testimony, it was a separate and a distinct matter from the alleged contract of defendant, having no connection therewith except that plaintiff prepared the two at about the same time, with a view in his own mind of obtaining authorizations from both defendant and Kohlmeier. They were not signed’ at the same time, and there was nothing to indicate that defendant had any knowledge of the Kohlmeier authorization. In no proper sense of the term can it be said to be a part of the res gestae in so far as any transaction between plaintiff and defendant is concerned. It was simply another distinct paper prepared by plaintiff himself, in what was really another distinct matter, and was entirely collateral and extrinsic to the matter under investigation. It was correctly conceded by the learned trial judge that the paper might be used by plaintiff if necessary to refresh his memory as to the contents of the Ganahl contract. But this would

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not entitle hip. to put it in evidence over the objection of the adverse party. Plaintiff did testify positively and absolutely as to the contents of the contract between himself and defendant.

No other matter suggested in the briefs requires notice.

The judgment and order denying a new trial are affirmed.

Sloss, J., and Shaw, J., concurred.

Cases cited

Sibbald v. Bethlehem Iron Co. 83 N. Y. 378 N.Y. 1881-01-18 at 384, 385 p. 499
Brown v. Mason 155 Cal. 155 Cal. 1909-01-19 p. 499