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District Court of Appeal, Fourth District, California.

Donald V. FRANKLIN, Plaintiff and Respondent, v. Charles P. HANSEN, Defendant and Appellant.

Civ. 7011.

Decided: December 18, 1962

Galvin R. Keene, Newport Beach, for appellant. Arthur V. Jones, Newport Beach, for respondent.

This is an action by plaintiff-respondent, a licensed real estate broker, for commissions claimed due after a breach of contract by defendant-appellant in refusing to complete a sale of defendant's real property at Newport Beach. Judgment went to the plaintiff for $5,000. Defendant appeals.


Defendant Hansen owned a residence at 608 South Bay Front, Balboa Island, Newport Beach. During the summer of 1959, plaintiff orally indicated to defendant that he would like to sell this property for him and defendant orally stated that he would be willing to sell the property for $115,000. Previously, plaintiff had acted as agent for defendant in the rental of the house. Various offers were made and defendant indicated that he would take no less than $100,000 cash for the property. On January 15, 1960, plaintiff obtained an offer at that price. Plaintiff telephoned defendant informing him of the offer and requested an authorization by telegram to sell the property for $100,000 cash. No previous signed listing had been made by defendant. When asked to do so, defendant always answered that his word was good and he needed no signed listing. On January 15, 1960, defendant sent a telegram to plaintiff reading:

‘Los Angeles, Calif. * * * D. V. Franklin 208 Marine Balboa Island Calif.: This is to confirm that I will sell 608 South Bay Front Balboa Island for 100,000 cash this offer good until noon 1/19/60. Chas. P. Hansen’

Thereafter, on January 19, 1960, plaintiff contacted Mr. and Mrs. William J. Butters, prospective purchasers. About noon on that day, plaintiff telephoned defendant informing him that he had sold the property for $100,000 and defendant seemed pleasantly surprised. Plaintiff suggested a particular escrow company and defendant assented thereto and said that the property could not be delivered until the expiration of the present rental lease on June 15, 1960. It appears that the Butters owned a home nearby and were willing to buy the Hansen property if they could sell theirs for $80,000. Plaintiff negotiated such a sale of their property and the Butters agreed to buy defendant's property that same day. Plaintiff accepted a check for $5,000 as down-payment and the Butters signed a deposit receipt on the standard form wherein they agreed to pay $100,000 for the property, furnished as per inventory, and agreed to pay an additional $95,000 cash, possession to be given on or about June 1, 1960. This form was mailed to defendant for signature, together with a form for the payment of five per cent real estate commission.

Subsequently, defendant called plaintiff and advised plaintiff that he had changed his mind about selling the house, for sentimental reasons, and asked plaintiff about ‘getting out of the deal.’ He requested an appointment with the Butters to discuss a possible withdrawal ‘to get out of the deal.’

On January 22, 1960, defendant appeared at plaintiff's office, told plaintiff that he was entitled to his commission and that he (defendant) would pay the same and he wanted the Butters' consent to release him from the sale. After some discussion, the Butters refused and defendant remarked, ‘Okay, I guess I'm stuck. Send me the papers.’

It appears that the papers had been previously mailed to defendant but that they were not received until a later date on account of misdirection. Subsequently, defendant refused to sign the papers and refused to sell the property or to pay a commission.

One of the real estate agents testified that defendant said plaintiff did a good job and that defendant said he would pay a broker's commission but he wanted the Butters to withdraw. Another agent said that defendant orally agreed that he would pay the accepted real estate commission in Newport Beach and that commission was five per cent. There were no other writings except the telegram and deposit receipt. It is defendant's contention that the written memorandum was not a sufficient memorandum of employment of plaintiff or a sufficient written ratification of employment to comply with the statute of frauds, Civil Code, section 1624, which states:

‘The following contracts are invalid, unless the same, or some note or memorandum thereof, is in writing and subscribed by the party to be charged or by his agent:

‘5. An agreement authorizing or employing an agent or broker to purchase or sell real estate for compensation or a commission.’

or Code of Civil Procedure, section 1973, subsection 5, to the same effect, or Civil Code, section 2310, providing:

‘A ratification can be made only in the manner that would have been necessary to confer an original authority for the act ratified, or where an oral authorization would suffice, by accepting or retaining the benefit of the act, with notice thereof.’

(Citing Edwards v. Laird, 22 Cal.App. 398, 134 P. 365; Watkins v. Clemmer, 129 Cal.App. 567, 19 P.2d 303.) It is further agreed that plaintiff did not procure a purchaser, ready, able and willing to purchase on the terms specified. Citing Andrews v. Waldo, 205 Cal. 764, 272 P. 1052; Dea v. Davy, 150 Cal.App.2d 435, 309 P.2d 864.

The trial court received into evidence, over objections, the parol testimony as to the entire transaction. Defendant claims error in this respect, relying on Ellis v. Klaff, 96 Cal.App.2d 471, 216 P.2d 15; Herzog v. Blatt, 80 Cal.App.2d 340, 180 P.2d 30; Kleinsorge & Heilbron v. Liness, 17 Cal.App. 534, 120 P. 444; Morrill v. Barneson, 30 Cal.App.2d 598, 86 P.2d 924.

In Kennedy v. Merickel, 8 Cal.App. 378, 380–381, 97 P. 81, 82, it is said that:

‘The provision that the employment or authorization shall be in writing does not require that it be by a written contract intended by the parties as an obligation. It may be merely a note or memorandum. [Citing Lindley v. Fay, 119 Cal. 239, 51 P. 333.] It is not requisite that it shall be an instrument by the terms of which the agent is empowered to so bind the principal as to support an action for specific performance. [Citing Grant v. Ede, 85 Cal. 418, 24 P. 890.]

‘A writing signed by the owner and addressed to the broker expressly or impliedly acknowledging his authority to act as agent for the purposes of the sale is a sufficient compliance with the statute.’ [Citing Imperato v. Wasboe, 47 Misc. 150, 93 N.Y.S. 489.]

In the Imperato case, the court said, 93 N.Y.S. at page 490:

‘It is to be noted that there is no specific requirement in the statute, beyond the fact that the authority to act shall be evidenced by a writing.’

In that case, the authorization was, as noted 93 N.Y.S. on page 490:

‘Mr. P. Imperato, Real Estate Broker—Dear Sir: * * * There will be no need of my meeting you if you haven't party who desires to purchase my house No. 416 East 124th Street at $15,000, as I am not very anxious to dispose of my property, and I do not intend to sell for any less. Very truly yours, [signed] O. Wasboe.’

The court held a compliance both with the purpose and the demand of the statute, and said that the plaintiff is addressed in his capacity as real estate broker; that the letter describes the property, states a minimum price and is signed by the defendant, and that all the elements of a properly written authorization are embodied in the letter.

It appears to us that the telegram, in connection with the evidence of the surrounding circumstances, has met these requirements, as constituting an authorization of agent Franklin to sell on behalf of defendant the described property for $100,000 within the time limit specified. See also Cody v. Dempsey, 86 App.Div. 335, 83 N.Y.S. 899; and 80 A.L.R. 1457, restating the general rule that:

‘In construing such statutes [those requiring a broker's authority or some memorandum thereof to be in writing] with respect to the sufficiency of the writing required thereunder, while the courts have had in view the consideration that the statute was intended to protect the landowner from the imposition of false claims by real estate brokers and have therefore held that in order to entitle the broker to his commissions there must be a writing sufficiently complying with the terms of the statute, whenever it was necessary to protect the broker from being defrauded by the landowner they have not failed to place a liberal construction upon the statute, consistent with its terms. So, expressions to the effect that the statute must not be so construed as to enable the landowner to commit imposition and fraud upon an agent, where there has been a substantial compliance with the statute, are not uncommon in the adjudicated cases.’

See also Daniel v. Calkins, 31 Cal.App. 514, 160 P. 1082. Moore v. Borgfeldt, 96 Cal.App. 306, 309, 273 P. 1114, is a case bearing close analogy to the subject. A terse note was written by the defendant to plaintiff after serveral conversations about the owner's property and his anxiety to sell. It read:

‘I will take Lee Garage deed of trust for $39,800.00 and $3200.00 cash, for 510 Stockton Street, subject to $40,000.00 loan. Offer good for twenty-four hours. Commission all over and in excess of the above amount. Dated December 17, 1925. C.J.B.’

The court held that this showed a sufficient authorization to act in connection with the definite piece of property involved.

In Euless v. Westphal, 71 Cal.App. 611, 235 P. 742, it was said that any contract is to be interpreted in view of the surrounding circumstances with the aim to arrive at the intention of the parties, and cited cases are of little aid unless they arise out of similar circumstances. It is the function of the trial court to determine the meaning and effect of an alleged contract in suit in the light of all the cases and surrounding circumstances. In Sanchez v. Yorba, 8 Cal.App. 490, 97 P. 205, the court considered the surrounding transactions in construing a somewhat similar writing. In Wachs v. Wachs, 11 Cal.2d 322, 326, 79 P.2d 1085, 1087, the court said:

‘The trial court should therefore have permitted appellant to plead and prove the surrounding circumstances, not for the purpose of varying the terms of the written instrument, but for the purpose of aiding the court in interpreting the contract of the parties as embodied in the written instrument.’

In Smith v. Blodget, 187 Cal. 235, 240, 201 P. 584, 586, the court said:

‘Whether an agreement permitting a person ‘to sell’ land on certain terms creates the relation of principal and agent or that of vendor and purchaser under a contract of sale depends upon the intention of the parties.'

To the same effect is Brewer v. Horst and Lachmund Co., 127 Cal. 643, 646–647, 60 P. 418, 419, 50 L.R.A. 240, where it is said:

‘If there were nothing to look to but the telegrams, the court might find it difficult, if not impossible, to determine the nature of the contract, or that any contract was entered into between the parties. But the court is permitted to interpret the memorandum (consisting of the two telegrams) by the light of all the circumstances under which it was made * * *. ‘Parol evidence is always admissible to explain the surrounding circumstances, and situation and relation of the parties, at and immediately before the execution of the contract * * *.’'

See also Gibson v. De La Salle Institute, 66 Cal.App.2d 609, 152 P.2d 774; Payne v. Pathe Studios, Inc., 6 Cal.App.2d 136, 44 P.2d 598.

It is well established in California that the memorandum required by the statute of frauds relating to real estate brokers' contracts (Civil Code, sec. 1624, subd. 5) need not include a statement that a commission will be paid, and that an agreement to pay a real estate broker's commission may be shown by parol, where there is sufficient written memorandum to satisfy the statute of frauds relating to real estate brokers' contracts. (Bruner v. Van's Markets, 103 Cal.App.2d 135, 229 P.2d 56.) See also Caminetti v. National Guaranty Life Co., 56 Cal.App.2d 92, 132 P.2d 318; Herring v. Fisher, 110 Cal.App.2d 322, 242 P.2d 963; 9 A.L.R.2d § 6, p. 757.

Incidentally, the telegram in the Brewer case contains the significant word ‘confirm.’ The telegram in the instant case, directed to plaintiff, recites: ‘This is confirm that I will sell * * *’ etc. This in itself, indicates that some offer had been made by plaintiff to secure a purchaser for defendant's property and to sell this particular property. Accordingly, parol evidence of the surrounding circumstances was admissible to show that defendant was confirming his oral employment of plaintiff to sell that particular property. The word ‘confirm’ has been defined by Webster's Collegiate Dictionary, Fifth Edition, at page 212, as: ‘To render valid by formal assent; ratify.’ The trial judge so construed it in his colloquy with counsel during the trial. The court remarked:

‘It [the telegram] says, ‘I confirm,’ in effect, ‘what has gone on before.’ * * * Certainly the word ‘confirmed’ is going to embrace the fact that he asked these people to employ them for a commission to sell his house, or it is meaningless.'

Finally, defendant claims plaintiff did not procure a purchaser ready, able and willing to buy on the terms specified, in that the defendant offered the property for $100,000 cash and the purchaser deposited only $5,000 down, with the balance to be paid some time in the future. In Lathrop v. Gauger, 127 Cal.App.2d 754, 766, 274 P.2d 730, 737, wherein a $25,000 down-payment was required and the offer was accompanied by a $2,500 deposit, the court said:

‘We fail to see any substantial difference between the terms set forth in the purchaser's agreement and the defendant's authorization to plaintiff. * * * The allowance of 30 days before completing the cash payment cannot be held to be a fatal variance, when it is considered that during this period the evidence of title would be produced and the delays customary to the handling of escrows would follow.’

In Bunyard v. Farman, 176 Mo.App. 89, 161 S.W. 640, 642, it is said:

‘The rule that a purchaser * * * must be ready, willing, and able means [where no time is fixed in the contract] that he must be ready, willing, and able to carry out the purchase within a reasonable time.’

The question of the ability of the purchaser to pay the price suggested arose during the trial and the trial court allowed counsel for plaintiff to ask the witness about it. The purchaser testified that he was in the livestock and farming business and showed a financial statement for net worth in excess of $100,000. Counsel for defendant did not cross-examine him on the subject. Thereafter, the trial court found in favor of plaintiff in elaborate and detailed findings and specially found that the Butters paid the $5,000 and executed and delivered a promise in writing to complete the purchase of the property in accordance with the terms of the telegram. In Pellaton v. Brunski, 69 Cal.App. 301, 231 P. 583, it was held that if any evidence is shown in the record which will support the finding of the trial court that the purchaser in the case at bar had the ability, the judgment must be upheld. See also Ramsdell v. Krehmke, 95 Cal.App. 195, 272 P. 333.

This sufficiently disposes of the issues presented.

Judgment affirmed.

GRIFFIN, Presiding Justice.

SHEPARD and COUGHLIN, JJ., concur.