Collins v. Vickter Manor, Inc.

the corporation from depositing in the escrow “those documents necessary in order to close said escrow. ’ ’ The individual defendants did this to prevent closing of the escrow and to permit the corporation and themselves to profit by a sale to others. Engle, president and managing officer of the corporation, had power, on behalf of the corporation, either to complete the sale or to prevent its completion, and he, joined by Vickter, caused the corporation to send written notice of withdrawal from escrow on or about November 19, 1954.

The allegations of the complaint, with the incorporated deposit receipt, sufficiently state the following cause of action against defendant corporation: The corporation employed plaintiffs to procure a purchaser; plaintiffs procured a purchaser ready, able, and willing to buy on terms sufficiently expressed in the deposit receipt; the corporation “approve[d] and agree[d] to” those terms; the deposit receipt appears to satisfy the statute of frauds as a written and signed memorandum of the corporation’s agreement to pay plaintiffs $3,000 for their services (Civ. Code, § 1624, par. 5; Code Civ. Proc., § 1973, par. 5); the corporation breached its agreement to pay plaintiffs’ commission. The right of the brokers to their commission is not, on the facts here alleged, defeated by the failure of the parties to consummate the transaction. (See Meyer v. Selggio (1947), 80 Cal.App.2d 161 , 164 [4] [ 181 P.2d 690 ].)

Defendants rely on Lawrence Block Co. v. Palston (1954), 123 Cal.App.2d 300 , 305-306 [ 266 P.2d 856 ], It is there correctly determined that “To entitle a broker to a commission for a sale of real property it must be established that in pursuance of his contract and within the time specified therein, he found a purchaser ready, able, and willing to buy on the terms and conditions specified in the contract of employment, or, if the exact terms are not specified in his contract, upon terms satisfactory and acceptable to his employer.” However, defendants assert, the only right of plaintiffs to recover a commission grows out of the written deposit receipt between the buyer and seller, and therefore the following statement in the Block Company case is controlling: “Where the only agreement to pay a broker a commission is contained in the contract between his principal and the customer, the broker’s right to compensation is dependent upon performance of that contract.” But this statement does not indiscriminately control every three-party

writing signed by the broker, his principal, and the customer. Such a three-party writing may unequivocally specify, or where uncertain may be construed or shown by extrinsic evidence to mean, that the broker has fully performed the duties of his employment and earned his commission by having obtained a buyer ready, able, and willing to proceed with a purchase in accord with those terms of the writing which define the seller’s offer—the offer for which the seller employed the broker to produce a qualified acceptor. Where the deposit receipt is subject to such interpretation, recovery of the commission is not prima facie precluded by those decisions which refuse to allow recovery because the broker did not fully perform the terms of his contract. Manifestly a different case is presented if by the terms of the employment contract the broker’s right to commission is expressly, or by established implication, made dependent upon the consummation of a contract between his principal and the prospective customer. (See Lawrence Block Co. v. Palston (1954), supra, 123 Cal.App.2d 300 ; Frederick v. Curtright (1955), 137 Cal.App.2d 610 , 614-615 [ 290 P.2d 875 ]; Ridgway v. Chase (1954), 122 Cal.App.2d 840 , 847, 850 [8] [ 265 P.2d 603 ] ; Love v. Gulyas (1948), 87 Cal.App.2d 608 , 613 [ 197 P.2d 405 ].)

Even if we assume that the agreement between plaintiff brokers and defendant corporation can properly be construed to mean that plaintiffs were not to receive their commission until consummation of a final agreement between the corporation and the buyer, the judgment appealed from cannot be affirmed. The order sustaining the general demurrer is untenable because the complaint alleges (and the demurrer admits) facts from which, under the established liberal rules of construction (see Code Civ. Proc., § 452; Faulkner v. California Toll Bridge Authority (1953), 40 Cal.2d 317 , 328 [5] [ 253 P.2d 659 ]; Mix v. Yoakum (1927), 200 Cal. 681 , 687 [11] [ 254 P. 557 ]), we must infer that plaintiffs and the buyer did everything which the agreement required of them and that consummation was prevented solely by the arbitrary refusal of defendant corporation and its officers to proceed with the transaction. In these circumstances, the defendants will not be allowed to take advantage of their own remissness to defeat plaintiff’s recovery. (See Coulter v. Howard (1927), 203 Cal. 17 , 23 [3] [ 262 P. 751 ]; Richardson v. Walter Land Co. (1953), 118 Cal.App.2d 459 , 464 [4] [ 258 P.2d 42 ].)

Defendants additionally argue that the complaint fails to

state any cause of action because, they say, the deposit receipt is not an enforceable contract between buyer and seller but rather gives the buyer the unilateral right, in his uncontrolled discretion, to refuse to buy if he is not satisfied as to soil compaction report and maps (see provisions of deposit receipt quoted ante, p. 878-879). This argument is neither controlling nor correct. As already indicated, plaintiffs’ right to a commission is not necessarily dependent upon even the execution of a binding contract of purchase and sale. With particular reference to defendants’ argument, the right to a commission is not (on the record here) dependent upon Grayson’s being satisfied with the soil compaction report which the corporation agrees to furnish or upon Grayson’s approval of the “contour map and filing map.”

Furthermore, if the provisions as to soil compaction report and maps were contained in an otherwise enforceable contract to buy and sell, those provisions would not make the buyer’s obligation illusory; the buyer could not withdraw from the contract at his pleasure. (Cf. Shortell v. Evans-Ferguson Corp. (1929), 98 Cal.App. 650 , 659 et seq. [5, 6] [ 277 P. 519 ]; 12 Cal.Jur.2d 317, § 114.) A contractual provision for performance to the satisfaction of one of the parties ordinarily calls for such performance as would be satisfactory to a reasonable person. (Thomas Haverty Co. v. Jones (1921), 185 Cal. 285 , 296 [7] [ 197 P. 105 ].) If acceptance or rejection of the soil compaction report and maps were dependent on the buyer’s uncontrolled caprice, then he would be the sole judge of his own satisfaction and could withdraw from the contract without regard to the reasonableness of his decision. (Tiffany v. Pacific Sewer Pipe Co. (1919), 180 Cal. 700 , 702-704 [ 182 P. 428 , 6 A.L.R. 1493 ].) But where the question is whether an agreed performance will satisfy a requirement of commercial value or quality, operative fitness or mechanical ability, the party to whom such performance is tendered is not justified in claiming arbitrarily, unreasonably, or capriciously that he is not satisfied, in order to evade liability. (Thomas Haverty Co. v. Jones (1921), supra, 185 Cal. 285 , 296 [7] ; Tiffany v. Pacific Sewer Pipe Co. (1919), supra, 180 Cal. 700 , 702-704 [1]; Melton v. Story (1931), 113 Cal.App. 609 , 613 [ 298 P. 1032 ].) A standard for the soil compaction report is stated in the deposit receipt (a report “from a reliable testing firm such as D.

meet reasonable standards for the commercial purpose of subdivision. In these circumstances, the buyer could not evade liability by mere arbitrary rejection of the report and maps.

As hereinabove stated, counts five and six undertake to plead causes of action against the individual defendants Engle and Vickter for the tort described (in Speegle v. Board of Fire Underwriters (1946), 29 Cal.2d 34 , 39 [2] [ 172 P.2d 867 ]) as “Intentional and unjustifiable interference with contractual relations.” It is established that one who, without legal justification, intentionally induces a third person not to perform a contract with another, is liable to the other for the ensuing damage. (Imperial Ice Co. v. Rossier (1941), 18 Cal.2d 33 , 35 [1] [ 112 P.2d 631 ].)

Plaintiffs have alleged the existence of a valid contract and an intentional unjustified interference with it by the individual defendants which caused defendant corporation to breach such contract to plaintiffs’ damage Whether or not Engle and Vickter were privileged to cause the corporation to discontinue its relations with plaintiffs, in the belief that such a course of action was in the best interests of the corporation, is a matter of defense, to be decided by a resolution of the factual issues presumptively involved. Their right, if any, to such privilege, does not affirmatively appear on the face of the complaint.

For the reasons above stated, the judgment is reversed and the cause remanded with directions to overrule the general demurrer and entertain further proceedings not inconsistent with the views hereinabove expressed.

Gibson, C. J., Shenk, J., Carter, J., Traynor, J., Spence, J., and McComb, J., concurred.