Love v. Gulyas

On December 13, 1946, plaintiff received a letter from Needles, dated December 12, stating that pursuant to a conversation he previously had with Rose, an employee of plaintiff’s, he was offering, on behalf of an undisclosed client, the sum of $20,000 for the bowling alley, and he enclosed a cheek in the sum of $750 as a deposit on the purchase price. Rose reported the offer to defendants, who refused to accept it, but stated that they would accept $22,500 instead of the $27,500 mentioned in the authorization to sell. Rose, in plaintiff’s name, signed a deposit receipt, in the usual form, stating that plaintiff had received from Needles $750 as a deposit on account of the purchase of the bowling alley for the sum of $22,500. Following the portion signed by plaintiff appears the printed words, “I agree to purchase the above described property on the terms and conditions herein stated,” and two blank lines, and the word “Purchaser.” Neither Needles nor his principal ever signed this document. There then followed a paragraph which was signed by defendants, and in which they agreed to sell “the above described property on the terms and conditions herein stated, and agree to pay the above signed broker as commission ten per cent of above purchase price. ...”

Rose phoned Needles and told him that the defendants would sell for $22,500. Needles then contacted his principal, and later phoned Rose, advising him that his client would accept the defendants’ offer to sell at $22,500, provided the client could finance the transaction. At Rose’s request, Needles agreed to confirm by telegram, saying, “but let’s have it understood that these people have to finance this thing. ’ ’ Needles, on December 16, sent plaintiff a telegram reading: “Final offer per conversation $22500.” (Emphasis added.) Needles’ principal was one John O. Major. From December 16, 1946, until January 28, 1947, Major was endeavoring, principally from one Howell, to obtain a loan so that he could finance the purchase of the bowling alley. Both Rose and defendants were informed frequently by Needles of the progress of his principal’s effort to finance the purchase of the alley. Defendants requested Rose to get the purchaser’s signature on the deposit receipt which they had signed. On January 13, Rose wrote Needles enclosing the receipt and requesting that Needles have his client sign it. On January 25, Needles informed Rose that Major could not raise the money to buy the alley. Rose the

The bowling alley was sold on January 29, to Major through another agent, one Cameron, under the following circumstances: Defendant Gulyas, about August, 1946, saw Major at the bowling alley in the company of Cameron, who was a real estate broker. Cameron did not have an exclusive listing from defendants, but was trying to get a loan for Major so that he could buy. After about two months’ unsuccessful effort to raise money for Major, Cameron did nothing further, and Major dropped out of sight. Defendants heard nothing of or from Major thereafter, and did not know until January 25, that Major was Needles’ principal. On January 29, after Needles had terminated all negotiations with plaintiff, Major called Cameron, told him that the American Trust Company had turned down his application for a loan, and asked Cameron if he could negotiate one for him. Cameron thought he could, and Major agreed to be at his office at 2 o ’clock that afternoon. Cameron communicated with his bank, offering to put up his commission as collateral, and the bank agreed to make the loan. Cameron then phoned defendants, asking if the alley had been sold, and told them he had a buyer for it. Defendants, Major and Cameron met at the latter’s office that afternoon, and an agreement to sell to Major, and for him to buy, at $22,500, was executed by the parties. This sale was consummated, Cameron receiving a commission of $2,250.

Plaintiff contends that the complaint pleads facts forming the basis of relief upon two theories: (1) that he produced a buyer who entered into a written contract with defendants to buy the bowling alley, and (2) that within the time provided in the listing agreement he notified defendants that he had negotiated with Major, and that the defendants made sale of the alley to such person within the 90-day period, hence entitling plaintiff to the commission.

The facts do not support plaintiff's contention on the first theory. At no time did Major actually agree unconditionally to buy the alley. The only acceptance obtained by plaintiff of the offer of defendants to sell, as set forth in the deposit receipt, was Needles’ telegram, “Final offer per conversation $22500.” (Emphasis added.) This was obviously a conditional acceptance, conditioned, as set forth in the conversation, upon Needles’ principal being able to raise the necessary money to pay the purchase price. Thus, plaintiff did not produce a buyer, ready, able and willing to buy the alley. In the letter of December 12, offering $20,000 for the alley, and accompanied by the deposit cheek of $750, Needles had set forth the requirement that the lease to be transferred to the buyer should contain an option to renew for a five-year term at the expiration of the present term. This deposit was retained by Bose during the entire time of his negotiations with Needles, and is still retained by him. After sending the telegram, Needles agreed that the option requirement set forth in the letter would be waived. Neither the retention of the deposit nor the references to the conditions set forth in the letter, in any way change the fact that the purchaser’s acceptance of the seller’s offer was a qualified one. In fact, in agreeing to waive the option requirement, Needles again referred to the fact that everything was conditional upon his client’s ability to finance, for he said, “. . . if I can raise the 22-5, we will take it under the present terms of the lease.” That the acceptance of the seller’s offer to sell must be unconditional to entitle the broker to a commission is well settled. (See Edwards v. Billow, 31 Cal.2d 350 [ 188 P.2d 748 ].)

Plaintiff’s position is based upon his assumption that the three documents—(1) Needles’ letter of December 12, offering to purchase for $20,000 upon certain conditions; (2) the deposit receipt signed by defendants; and (3) the telegram from Needles—constitute a binding agreement on the part of the defendants to sell and of Needles (for his principal) to buy; and hence, as said in Clark v. Dulien Steel Products, Inc., 54 Cal.App.2d 92 , 97 [ 128 P.2d 608 ] : “The readiness, willingness and ability of the seller was demonstrated by the buyer entering into a contract with it.” But the facts show, as pointed out heretofore, that no such contract was entered into.

Plaintiff, relying among others upon the cases of McNamara v. Steckman, 202 Cal. 569 [ 262 P. 297 ], Meyer v. Selg

Plaintiff cites 10 California Jurisprudence, page 919, to the effect that it is a well-established rule that the parol evidence rule is a rule of substantive law and not dependent upon objections made at the trial, but ignores the statement on page 918, applicable here, that the rule “does not apply where the instrument does not purport to be a complete statement of the agreement of the parties ...” Where the terms are ambiguous or uncertain, the parol evidence rule does not apply; and as said in 10 California Jurisprudence, page 941, “. . . this is not allowing parol evidence for the purpose of varying or altering the instrument, or of putting a different construction upon its language from that which it would naturally bear, but for the purpose of showing the circumstances under which the language was used, and applying it according to the intention of the parties.”

Plaintiff contends that under his complaint and the facts, he is entitled to recover because of the sale made by the owners to Major. An examination of his complaint, however, discloses that he has failed to plead this theory. His complaint alleges that through his efforts he brought defendants and Major, through his agent Needles, together, and that the said Major, through his agent Needles, “did in writing offer to buy said property for the said sum of . . . $22,500, and said defendants . . . agreed to sell said property to said John C. Major at said price. . . . That subsequently thereto and prior to the expiration of said agreement marked Exhibit ‘A,’ and incorporated herein [the listing agreement, a copy of which was attached to the complaint] defendants did sell said property to said John 0. Major, for a price which plaintiff is informed and believes, and upon such information and belief, alleges to be . . . $22,500.” The last paragraph of the complaint alleges the receipt by plaintiff of the $750 deposit, which plaintiff is holding for whomever may be entitled to it.

There is no allegation in the complaint to bring plaintiff within the terms of that portion of the listing agreement upon which he relies under his second theory. The agreement on its face shows that the listing expired on December 28. There is no allegation that within five days of the termination of the listing plaintiff notified defendants that he had negotiated with Major. Plaintiff now contends that the parties by their acts extended the agreement until January 28, and that on January 25, he gave defendants the name of Major as the party with whom he had been negotiating. But there is no allegation in the complaint that the listing was extended, or that he notified defendants of Major’s name. It is apparent that the entire complaint is framed upon the theory that plaintiff brought Major, through Needles, and defendants together ■ that Major in writing offered to buy and defendants in writing agreed to sell to Major, and “That subsequently thereto and prior to the expiration of said agreement” defendants did sell to Major. While courts should not be technical in the matter of pleading, a plaintiff should not be permitted to base his entire complaint on one theory, and then later adopt another theory which is not even hinted at in the pleading. The rule of extension of a broker’s contract is dependent upon a waiver. Moreover, the five-day provision does not apply if the broker has otherwise performed the contract. The com

Thus, the record shows that the issue concerning the claimed second theory was not before the court without objection, and was not advanced there by plaintiff. A reading of the transcript definitely shows that plaintiff’s presentation of the testimony of the defendant Balogh was to prove his allegation that he had fully performed his agreement in getting buyer and seller into a written contract of purchase and sale, which actually resulted in a completed sale.

Plaintiff complains that the court did not make a finding as to whether plaintiff gave defendants proper notice of the name of the prospective buyer, and as to whether or when the later sale to Major took place. The court did find on all matters set forth in the complaint, with the exception of the allegation that defendants, prior to the expiration of the listing agreement, sold to Major. It did find that Major’s offer to purchase was conditioned upon his ability to finance the purchase,

The facts, too, are against the plaintiff on this issue. The listing agreement, by its very terms, definitely terminated on December 28. Plaintiff did not notify defendants of Major’s name within five days of that date. He claims that because the defendants permitted him to continue negotiations with Needles after that date, the listing was extended until January 28, when defendants in writing terminated the deposit receipt “and all other contracts.” However, the acts of the parties did not constitute a continuance of the listing agreement. They merely constituted what would have been an extension of time by defendants, had the sale with Needles been consummated. At most their effect was that, if plaintiff had succeeded in consummating the sale with Needles, there would have been a performance by him of his part of the contract, although late, which would have taken it out of the statute of frauds. The’ listing agreement itself was not extended. Had plaintiff, after December 28, and before January 28, produced an entirely new purchaser, defendants would have been under no obligation to sell to such person. They were waiving the time element only as to Needles’ principal. Their actions did not constitute an extension of any other part of the listing agreement, which terminated and ended in 60 days. Therefore, the plaintiff failed to comply with the contract in not notifying defendants of the name of the prospective purchaser within five days of December 28.

It has been held that the time set forth in a real estate broker’s contract to sell real property cannot be extended by

This is not a case in which a broker brings a buyer and seller together, and in order to prevent the broker from getting his commission, the seller holds off selling until the broker’s agreement has expired, and then sells to the person so produced. Here, prior to plaintiff’s entry into the field, there had been some negotiations between Major, the agent Cameron, and defendants. These, however, were completely broken off. After Needles had been unable to arrange financing for Major, and after Rose had notified defendants that the deal was completely off for failure of Major to raise the necessary money, Major went back to Cameron, who then was able to arrange the financing through his own credit, and then notified defendants. The actual sale was not made through any .effort of plaintiff, but entirely through the efforts of Cameron, who earned and received the commission. To require the defendants to pay plaintiff an additional commission, on the claim that because defendants were willing to, and did, extend plaintiff’s time to make a sale to Major until plaintiff himself stated the sale was off, defendants thereby extended all of the terms of the listing agreement, would be unjust, and contrary to law.

The judgment appealed from is affirmed.

Peters, P. J., and Ward, J., concurred.