BANION v. PARADISO

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District Court of Appeal, Fifth District, California.

Emory O'BANION, Plaintiff and Respondent, v. Bernard PARADISO et al., Defendants and Appellants.

Civ. 275.

Decided: March 17, 1964

Harold A. Parichan, Fresno, and William B. Boone, Santa Rosa, for appellants. Linneman, Burgess, Telles & Van Atta and Jess P. Telles, Jr., Dos Palos, for respondent.

On February 23, 1961, defendant Salvador H. Orduno signed a written memorandum offering to sell to respondent ‘all of my rights and title’ to certain real property for $2,000, with a 60-day period of acceptance. Respondent immediately accepted the offer and offered to pay the $2,000 at that time but Orduno stated that he did not need the money then and requested that it be put in escrow together with the money necessary to pay off a note and deed of trust to one B. Paradiso, the owner thereof, which respondent agreed to pay. Respondent went to a title company on the same day and requested a preliminary title report on the property; on March 21st the title company received information as to the amount needed to satisfy the deed of trust on which a notice of default had been recorded, and immediately contacted respondent requesting that that amount be deposited in escrow, which deposit was made by respondent on that same day. On about March 15th appellant Dominic Paradiso was asked by an employee of the title company to pick up a form of request for reconveyance to be filled in by B. Paradiso, the owner of the note and deed of trust, as to the balance owed, and Dominic was told at that time that the note on which foreclosure proceedings had been commenced was going to be paid off. This form, however, was never returned to the title company, and the amount necessary to satisfy the note and deed of trust was arrived at in another manner.

On March 22d defendant Orduno told Dominic that respondent was going to buy the property but was supposed to have let Orduno know, that Orduno had not heard from respondent and guessed that he was no longer interested in buying the property.

On March 24th the respondent met Orduno in front of the Wells Fargo Bank in Los Banos and notified him that the money for the property was on deposit at the title company and all Orduno had to do was go over there, sign the deed, and he could get the money, but Orduno replied that he was selling the property to someone else. Immediately prior to this conversation, inside the bank, the Paradisos had been completing their purchase of the property; checks totaling $2,000 had been written by them, but no documents had yet been signed either by the Paradisos or the Ordunos. Respondent testified that on that same occasion he told Orduno in the presence of Bernard and Dominic Paradiso and Mrs. Orduno that he had considered that he had bought the property, that Mr. Orduno stated, ‘Well, that is right.’ However, the sale to the Paradisos was completed that day, and respondent remarked that he would hold Orduno to the agreement of February 23d. On March 29th the respondent filed suit against the Ordunos and appellants to compel specific performance and to quiet title as against the Paradisos.

The Ordunos, without an attorney, filed an answer admitting that the defendants (the Ordunos) ‘agreed and offered to sell all of his right, title and interest, and any right, title and interest which his wife, Delfina G. Orduno, might own, in and to said real property to plaintiff herein,’ but denied that Delfina G. Orduno assented and agreed to said conveyance in accordance with the terms of the written instrument. All other allegations in the complaint were denied.

The answer of all the Paradisos denied the entire complaint because of the lack of information or belief as to the first cause of action, generally and specifically denied each and all of the allegations with regard to the second cause of action as to notice, and the third cause of action as to quieting title.

After trial without a jury, the court found in favor of the respondent, and particularly found that Mr. Orduno had agreed to sell the real property to the respondent for $2,000, that it was Orduno's intention to include in said offer all the right, title and interest of Mrs. Orduno, that she had assented and agreed to said conveyance in accordance with the terms of the written instrument. The court further found that while said offer was in full force and effect the respondent had accepted said offer on February 23, 1961, and offered to pay said $2,000, that the respondent had, in accordance with Orduno's request, deposited the funds with the Merced County Title Company, together with the sums necessary to pay off the deed of trust under which foreclosure proceedings had commenced, that said offer was fair, equitable and just, and that the acceptance had been made within the 60-day period. It also found that notwithstanding the acceptance of the offer, Mr. and Mrs. Orduno had given a deed to the property to the appellants Paradiso, each of whom had received the same with full and complete notice and knowledge of the rights of the respondent in and to said premises, and further found that the Paradisos have no right, title or interest in said premises. As a conclusion of law the court required the Ordunos to convey the real property to the respondent, that Dominic Paradiso, the beneficiary under the deed of trust, be required to convey said real property on payment to him of the sums due on said deed of trust, that the deed conveying the property to Bernard, Dominic and Helen Paradiso be cancelled and that a decree be entered declaring that the plaintiff is the owner of the land and that the Paradisos have no right, title or interest in and to said real estate. From this judgment the Paradisos only appeal.

The appellants, by their answer and the pretrial statement, properly raised the statute of frauds. There is no requirement that the statute be specifically pleaded, but the issue must be raised in some manner in the trial court. (Walsh v. Standart, 174 Cal. 807, 810, 164 P. 795; Carrier & Brad-dock v. S. W. Straus & Co., 213 Cal. 508, 513, 2 P.2d 811.)

In volume 23 of California Jurisprudence Second, Statute of Frauds, section 150, pages 440–441, it is stated: ‘One method of making the statute available as a defense is to deny generally in the answer the execution of the agreement, without referring to the statute itself or affirmatively alleging that the agreement was orally made.’

However, as to whether or not the appellants can successfully invoke the statute not being parties to the written instrument, is another question.

In Demeter v. Annenson, 80 Cal.App.2d 48, 57, 180 P.2d 998, 1004, Mr. Justice Peters stated: ‘The rule is elementary that the statute of frauds can be invoked only by the parties to the unwritten contract, and is not available to third persons who are not parties to it.’

The court in Wood Estate Co. v. Chanslor, 209 Cal. 241, 250–251, 286 P. 1001, 1004, said: ‘It would seem to be the rule that third parties cannot avail themselves of the defense of the statute if the two principals acquiesce.’

This is also discussed in Mitchell v. Locurto, 79 Cal.App.2d 507, 512–513, 179 P.2d 848, 851, where the court stated:

‘Civil Code section 2309 requires that where an agent is given authority to enter into a contract required by law to be in writing, such authority can only be given by an instrument in writing. An agreement for the sale of real property is required by Civil Code section 1624 to be in writing. Furthermore, subdivision 4 thereof specifically provides that ‘such agreement, if made by an agent of the party sought to be charged, is invalid, unless the authority of the agent is in writing, subscribed by the party sought to be charged.’ Such invalidity, however, may not be raised if the principal * * * does not object. In Wood Estate Co. v. Chanslor, 209 Cal. 241, 250–251, 286 P. 1001, 1004, it is held: ‘Appellants' objection is that the authority of the agent must be in writing under our statute of frauds. Just how a third party to such a contract can attack it, when the two principals do not object, is not made to appear. It would seem to be the rule that third parties cannot avail themselves of the defense of the statute if the two principals acquiesce. 12 Cal.Jur. 925; 25 R.C.L. 736.’'

In Bumb v. Bennett, 51 Cal.2d 294, 302, 333 P.2d 23, 28, the court said: ‘While the assignment might be voidable by the nonsigning partner, he has never objected and defendants, as judgment creditors, cannot invoke the statute of frauds to avoid the assignment.’

Thus, in view of the above authorities, the appellants cannot invoke the statute of frauds as far as the lack of writing of Mrs. Orduno is concerned because the court found that she had assented to it and the memorandum was satisfactory under the statute of frauds.

We believe that the respondent had an enforceable contract with Mr. and Mrs. Orduno. The writing was not uncertain; the price of $2,000 (the same as cash) was set forth; it was an offer by the vendor immediately accepted by the vendee; no part-payment was necessary; and specific performance was proper. Ambiguities and custom with regard to the sale of real estate may be explained in determining the proration of taxes, insurance and rents. ‘The usual and reasonable terms generally present in such contracts are, in contemplation of the parties, a part of such contract,’ and custom can step in with regard to the opening of an escrow, furnishing deeds, title insurance policies, etc. (O'Donnell v. Lutter, 68 Cal.App.2d 376, 383, 156 P.2d 958, 961.)

In Finn v. Goldstein, 201 Cal. 605, 607, 258 P. 85, quoting from Breckinridge v. Crocker, 78 Cal. 529, 535, 21 P. 179, it is said:

“But the memorandum must contain all the material elements of the contract; that is, it must show who is the seller and who is the buyer, what the price is and when it is to be paid, and must so describe the land that it can be identified.”

(See also Fritz v. Mills, 170 Cal. 449, 150 P. 375.)

Thus, we find that the memorandum offer of sale meets all the requirements necessary for an adequate and proper acceptance.

Appellants also complain without merit that there was no mutuality of obligation in that the respondent signed nothing in accepting the offer made by the Ordunos without any consideration. In 4 Witkin, Summary of California Law, Equity, section 40, page 2819, it is stated:

‘At the time of its making the holder of an option to purchase is not bound to purchase and there is of course no mutuality either of obligation or remedy. But when the option is exercised the option holder binds himself to purchase, and the necessary mutuality exists at the time he brings his action. On the theory that mutuality at the time of suit is the really significant requirement, the option holder is entitled to specific performance.’

Harper v. Goldschmidt, 156 Cal. 245, 250–251, 104 P. 451, 453–454, 28 L.R.A.N.S., 689, settles this problem, quoting from Parsons on Contracts, sections 9 and 10, as follows: “The difficulty, therefore, cannot be that the contract is not mutual, but that one of the parties has not obtained the evidence which the statute requires him to produce to bind the other.”

The Ordunos were the parties to be charged, as provided for in the statute of frauds. It is stated in 1 Witkin, Summary of California Law, Contracts, section 93, at page 101: ‘Hence, where two parties contract for the sale of real property, and the vendor signs, the fact that the purchaser has not signed is immaterial if the purchaser brings the action, for the vendor is in such a case the party to be charged.’

There is no question that the interest of Mrs. Orduno was included in the sale to respondent. This is noted from the deposition of Mrs. Orduno in which she expressly admits that she knew her husband was selling her interest in this property as well as his own and that she intended for him to do that, and from Mr. Orduno's confirmation that he was selling the entire interest and was acting for both parties in the transaction of the sale to the respondent.

We think these circumstances are sufficient as expressly provided in 50 California Jurisprudence Second, Vendor and Purchaser, section 339, at pages 435–436, where it is said:

‘But although it is true that the relationship of husband and wife, standing alone, cannot sustain a finding that one is the agent of the other, a husband's or wife's authority to act as agent for the other in the sale of real estate need not be in writing, but may be inferred from circumstances. It may be proved by circumstantial as well as by direct evidence, and may be shown by less evidence than other kinds of agencies. It may also be proved by evidence of ratification of acts already performed without previous authority.’

This is also discussed in 23 California Jurisprudence Second, Statute of Frauds, section 125, at page 392, where it is said:

‘Accordingly, whenever the two principals to an agreement within the operation of the statute acquiesce therein, a third party to the contract cannot complain that the oral character of the agreement renders it invalid. For instance, an objection that the agent of a vendor of real property had no authority in writing to sell the property cannot be successfully advanced by the purchaser for the purpose of avoiding the sale, after acceptance by the purchaser of a deed from the vendor, for this matter concerns only the vendor and his agent.’

The appellants were not bona fide purchasers inasmuch as the evidence discloses that prior to completion of the transfer of title from Orduno to them the appellants had notice that Orduno had contracted to sell the realty in controversy. The testimony shows that at the time all the parties met in front of the bank the appellants were advised of the offer and of the acceptance thereof. Further, the appellants had received information from the title company that the note and deed of trust were going to be paid off, and they were furnished with a form of request for reconveyance. (50 Cal.Jur.2d, Vendor and Purchaser, §§ 358, 359, 363, 377, pp. 457–458, p. 463, and pp. 478–481.)

Thus, we have concluded that the offer contained in the written memorandum resulted in a specifically enforceable contract upon the acceptance by the respondent under the facts shown by the record.

The judgment is affirmed.

RALPH M. BROWN, Justice.

CONLEY, P. J., and STONE, J., concur.

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