STROMER v. BROWNING

Reset A A Font size: Print

District Court of Appeal, Third District, California.

Gordon STROMER, Plaintiff and Respondent, v. J. L. BROWNING, Defendant and Appellant.

Civ. 10972.

Decided: April 20, 1966

Diepenbrock, Wulff & Plant, Sacramento, Downey, Brand, Seymour & Rohwer, by Ronald Paul, Sacramento, for appellant. James G. Changaris, Yuba City, for respondent.

After a proposed land sale fell through Stromer, a real estate broker, sued Browning, the landowner, for a commission. A nonjury trial resulted in findings and a judgment in the broker's favor. The landowner appeals.

We summarize the principal findings of the trial court: In 1958 Browning, owner of Hawn Ranch, and Stromer entered into an oral brokerage contract by which the latter would receive commission of 5 percent of the ranch sale proceeds ‘as, if and when’ received by Browning. Later Browning signed two separate written memoranda acknowledging employment of the broker and his promise to pay a commission. Stromer procured Roger and Richard Wilbur as buyers. On October 10, 1958, Browning and his then attorney, Mr. Horace Wulff, met with Stromer and the Wilburs. At that time the parties entered into an oral contract of sale; they agreed on all terms of the sale and nothing remained to be done except to prepare and execute the necessary documents. The Wilburs remained ready, willing and able to buy the ranch but Browning breached the oral contract of sale and refused to convey Hawn Ranch to the Wilburs on the agreed terms.

On appeal we view the evidence in the light most favorable to Stromer, the respondent, indulging in all reasonable inferences favoring the findings of the trial court and refusing to disturb findings of fact which are supported by substantial evidence. (Berniker v. Berniker, 30 Cal.2d 439, 444, 182 P.2d 557.) Guided by these concepts we summarize the evidence: In June 1958 Browning gave Stromer oral authority to find a buyer for the ranch. Browning wished to reserve from sale 73 acres which he planned to use as a duck club, and a 5 percent commission was fixed. Stromer drew up a descriptive brochure. Browning gave him the names of several prospects.

Roger and Richard Wilbur were brothers who owned a nearby ranch. In September the Wilburs submitted an offer through Stromer to buy Hawn Ranch for $475,000. On September 24, 1958, Browning submitted a written and signed counteroffer to sell to the Wilburs for $500,000. The counteroffer was addressed to Stromer Realty Company and contained a specific reference to Stromer's commission.1 The counteroffer was not accepted. On October 10 the Wilburs and Stromer met with Browning and Horace Wulff. Mr. Wulff took notes of the negotiations in order to reduce the parties' understandings to writing at a later date. Browning's trial testimony was that at the conclusion of the meeting all terms of the sale were ‘clear’ in his mind. Roger Wilbur testified that the parties reached an agreement at the meeting. The final figure was $545,000, a sum calculated to include interest on deferred payments. All agreed that the parties were not to be bound until each had examined, approved and executed the documents of sale to be prepared by Horace Wulff. Earlier the Wilburs had placed a $10,000 deposit in escrow.

A levee bordered the southerly edge of the duck club acreage to be retained by Browning. A 30-inch pipe equipped with a valve extended through the levee. When the level of the duck pond reached this pipe, water would flow through it to a bean field south of the levee. The Wilburs proposed to flood the bean field and establish a duck club there. The bean field was dependent on the 30-inch pipe as its only source of water. At the October 10 meeting the principals agreed upon the centerline of the levee as the south boundary of the duck club acreage to be kept by Browning. They also agreed that the 30-inch pipeline would be available for the Wilburs' needs after Browning's duck pond reached a designated level.

Four days after the October 10 meeting Browning met Roger Wilbur at the ranch. He gave Wilbur a key to the ranch since the latter wished to begin building blinds for the imminent duck-hunting season. Browning also explained that a Mr. Parker had contacted him regarding the purchase of some rock to be removed from the ranch. He suggested that Wilbur rather than he sign the contract with Parker, since Wilbur was to purchase the property. Wilbur did sign the contract. After receiving the key Wilbur posted the property against trespassers. He also built four duck blinds on the property. Browning testified that on October 14 the deal with the Wilburs was ‘consummated.’

Browning's documents of sale were prepared by Horace Wulff and delivered to the escrow depositary in November.2 Instead of the levee centerline the papers now specified a boundary line 20 feet south of the levee, cutting 20 feet off the bean field to be conveyed to the Wilburs. Instead of the agreed provision for a water supply, the papers would invest Browning with virtual control of the 30-inch pipe and provide the Wilburs a right only to water considered excess to Browning's needs. Browning had survey stakes placed on a line 20 feet south of the levee. He also closed the valve in the pipe, shutting off the water which had been forming a duck pond in the bean field. The Wilburs rejected the alterations in Browning's demands, instructed Stromer to tell Browning the deal was off and told their attorney to withdraw the $10,000 deposit from escrow.

The debate ranges over a number of legal and factual contentions, including attacks on the findings. Most of the issues can be readily resolved and set to one side, leaving a single pivotal law question for disposition.

Stromer sues upon an oral brokerage contract, one which is within the statute of frauds.3 Notwithstanding the oral character of the contract itself, a signed note or memorandum satisfies the statute of frauds if it exhibits a contractual intent to employ the broker. (Beazell v. Schrader, 59 Cal.2d 577, 580, 30 Cal.Rptr. 534, 381 P.2d 390; Franklin v. Hansen, 59 Cal.2d 570, 574, 30 Cal.Rptr. 530, 381 P.2d 386.) If the principal signs a writing demonstrating the employment, other conditions of the contract may be established by oral evidence. (Franklin v. Hansen, supra; Rogers v. Grua, 215 Cal.App.2d 1, 6, 30 Cal.Rptr. 39.) Browning's signed counteroffer of September 24, 1958 (quoted in footnote 1, supra) not only demonstrated an intent to employ Stromer as broker but also specified the conditions and rate of compensation. Responding to an offer received through Stromer's realty firm, the counteroffer was addressed to the same firm, constituting a communication directly to the broker himself. As a signed memorandum of employment, it fully satisfies the statute of frauds.

The contract did not call for a commission upon the broker's procuring a buyer ready, willing and able to purchase on the seller's terms. Most distinctly, the contract was one providing a commission only upon consummation of a sale and out of payments actually received. The oral agreement's character is substantiated not only by the counteroffer of September 24, 1958 (quoted in footnote 1, supra) but by the proposed fee contract (quoted in footnote 2, supra) sent to the escrow depositary as part of the abortive November transaction. Even more emphatically, the latter document expressed an intent to pay the broker only out of purchase money actually received by the seller. The trial court regarded both documents as sufficient memoranda to satisfy the statute of frauds.4

We reach the findings. The trial court found that at their October 10 meeting the parties entered into an ‘oral contract’ of sale; that on October 10 Browning and the Wilburs agreed upon all terms of the sale and nothing remained to be done except to prepare and execute the necessary documents in accordance with the oral agreement. Defendant's attack on these findings has partial substance. First, in the context of this lawsuit the finding of an oral contract, in the sense of an enforceable obligation, is nothing but a misplaced conclusion of law.5 Second, such an oral contract is within the statute of frauds an unenforceable. (Civ.Code, § 1624, subd. 4.) Third, even as a conclusion of law the statement is contrary to the evidence, because all the parties had agreed that no one would be bound until all had approved and executed documents of sale.

The judgment does not swing on the flimsy ‘oral contract’ finding. Findings not necessary to support a judgment may be disregarded. (Hopkins v. Warner, 109 Cal. 133, 139, 41 P. 868; Alonso v. Hills, 95 Cal.App.2d 778, 789, 214 P.2d 50.) At this point the vital finding is the declaration that Browning and the Wilburs agreed upon all the terms of the sale. This finding does not invade the province of legal relationships. It is a flat declaration of the ultimate fact that a meeting of the minds took place, covering all phases of the transaction. Contrary to Browning's contention, it needed no addendum listing the specific terms as to which agreement had been reached.6

The finding that Browning ‘breached his oral contract’ is weak but not fatally so. In one sense it is a declaration of legal relationship or, more precisely, of violation of a legal relationship. Pleading decisions tend to classify such a declaration as a conclusion of law. Other decisions, involving jury verdicts or trial court findings, display a more charitable attitude.7 Although intrinsically conclusionary, the finding of contract breach receives adequate buoyancy from the rule that findings will be construed to uphold the judgment, being upheld whenever the language is clear enough to indicate what the trial court intended.8 The intent of the trier of fact is clear enough. The court was simply stating that Browning had broken his promise to sell the property on the agreed terms.

There are other attacks on the findings. Some are based on misinterpretations, others are aimed at surplusage or amount only to quarrels of draftsmanship. The essential findings are those stated at the outset of this opinion. They are fully supported by the evidence we have summarized. By incorporating the basic elements of these findings in a question of law we reach the pivotal issue on which this case turns: Is a selling broker whose commission is payable only upon consummation of the sale and out of money received by the seller, entitled to his commission when the seller, although not bound by an enforceable contract, refuses without justification to proceed with sale to which he has previously agreed?

California decisions on brokers' fees feature deceptively generalized statements of doctrine. Although phrased in relatively sweeping terms, many of these rules really belong in the pigeonholes of specific fact situations. The fact patterns vary according to the terms of the broker's arrangement with his principal, the kind of ties formed between seller and buyer and the source of the explosion which blew them apart. The rules, however broadly phrased, are not mathematical axioms to be applied across the board. Successively narrowing statements, of potential interest here, are as follows: A broker's right to his fee is measured by the terms of his contract with the principal. (Uhlmann v. North Whittier Highlands, 167 Cal.App.2d 758, 763, 334 P.2d 1022.) If the contract imposes a contingency as a condition of fee payment, his right to a fee does not materialize unless the contingency occurs. (Phillips v. Barton, 207 Cal.App.2d 488, 494, 24 Cal.Rptr. 527; Wesley N. Taylor Co. v. Russell, 194 Cal.App.2d 816, 828, 15 Cal.Rptr. 357; Ridgway v. Chase, 122 Cal.App.2d 840, 847, 265 P.2d 603.) If he has seen fit to hinge payment of his fee to performance of a contract between seller and buyer, he cannot complain if, through nonperformance of the contract, his own contingent rights are lost. (Cochran v. Ellsworth, 126 Cal.App.2d 429, 440, 272 P.2d 904; Lawrence Block Co. v. Palston, supra, 123 Cal.App.2d at p. 307, 266 P.2d 856.) If compensation is conditioned upon consummation of a sale, his contingent claim does not materialize until the sale is completed. (Ira Garson Realty Co. v. Brown, supra, 180 Cal.App.2d at pp. 624–625, 4 Cal.Rptr. 734; Sanstrum v. Gonser, supar, 140 Cal.App.2d at pp. 438–740, 295 P.2d 532; Cochran v. Ellsworth, supra, 126 Cal.App.2d at p. 440, 272 P.2d 904.)

Enumeration of rules could stop at that point in an appropriate situation, that is, one where consummation fails without the seller's fault. Prevention of consummation by the seller himself evokes a further rule. When consummation of the sale is prevented solely by the seller's unjustified refusal to proceed with the transaction, the broker is entitled to his fee. (Collins v. Vickter Manor, Inc., 47 Cal.2d 875, 881, 306 P.2d 783; Coulter v. Howard, 203 Cal. 17, 23, 262 P. 751; Turner v. Waldron Realty, 209 Cal.App.2d 376, 385, 25 Cal.Rptr. 771; Ridgway v. Chase, supra, 122 Cal.App.2d at p. 847, 265 P.2d 603; Ratzlaff v. trainor-Desmond Co., 41 Cal.App. 586, 592–593, 183 P. 269.) Some decisions ascribe the rule to the theory that a repudiating seller will not be permitted to take advantage of his own remissness (e. g., Collins v. Vickter Manor, Inc., supra), others to the notion of an independent obligation running from seller to broker, requiring the former to exercise good faith and to abstain from intentional acts to discourage or prevent completion of the purchase (e. g., Coulter v. Howard, supra). Recovery is permitted even where the brokerage contract calls for a commission out of purchase money ‘as paid.’ (Ratzlaff v. Trainor-Desmond Co., supra.) Existence of a formal, enforceable contract of sale is not a precondition of recovery where, after a meeting of the minds between the principals, the seller voluntarily repudiates the agreed terms. The decisions allow the broker his fee—or, what is the same thing, damages in lieu thereof—when he and the buyer do everything necessary to complete the sale on the agreed terms and formulation of a written contract or completion of escrow is prevented by the seller's voluntary act (see, e. g., Collins v. Vickter Manor, Inc., supra; Coulter v. Howard, supra).

The findings effectually declare that Browning, the seller, voluntarily repudiated the sale upon terms to which he and the buyers had previously agreed. The broker's right to recover a commission follows as a matter of law.

Judgment affirmed.

FOOTNOTES

1.  The counteroffer stated in part: ‘TO: STROMER REALTY COMPANY I hereby submit the following counteroffer to the offer you received from Roger C. Wilbur as evidenced by the deposit receipt, dated September 16, 1958, to wit:‘* * *‘Your commission for consummating said sale shall be 5% of the gross purchase price, payable 5% of each principal payment within 10 days after my receipt of the same, with the understanding, however, that if I receive any interest on any such payments you shall receive interest at the same rate upon the amount of your commission paid during any such subsequent year.’

2.  Included was a typed form of brokerage fee contract designed for the signatures of Browning and Stromer and actually signed by Browning. It stated in part:‘WHEREAS, the Seller has agreed to pay to the Real Estate Broker for such services a five percent (5%) commission of the purchase price as, if and when he receives the same.‘NOW, THEREFORE, IT IS AGREED between the parties as follows, to-wit:‘1. That the Seller hereby agrees to pay to the Real Estate Broker as and for his services in procuring such purchaser a sum equivalent to five percent (5%) of said purchase price actually received by Seller, which payments shall be made within five (5) days from and after Seller's receipt thereof, that is, either the initial payment or any subsequent installments thereof.’

3.  Civil Code, section 1624 declares in part:‘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, or to lease real estate for a longer period than one year, or to procure, introduce, or find a purchaser or seller of real estate or a lessee or lessor of real estate where such lease is for a longer period than one year, for compensation or a commission.’

4.  In reliance upon the brokerage provision included in the escrow papers (quoted in footnote 2, supra), defendant argues extensively that where the only provision for a broker's fee is in a document prepared for use between the seller and buyer, the broker must stand or fall by that provision alone; he cannot recover on a contract varying from that specified in the document (citing Ira Garson Realty Co. v. Brown, 180 Cal.App.2d 615, 624, 4 Cal.Rptr. 734; Sanstrum v. Gonser, 140 Cal.App.2d 732, 738–739, 295 P.2d 532; Lawrence Block Co. v. Palston, 123 Cal.App.2d 300, 306–307, 266 P.2d 856.) He points out that his escrow papers, calling for a commission only upon sale consummation, cannot be used as a memorandum of a brokerage contract on entirely different terms. However correct as an abstraction, the argument is irrelevant. In the first place, the counteroffer of September 24 addressed directly to the broker stands on its own as an adequate memorandum of the oral agreement, without the assistance of the document sent into escrow in November. The ‘listing’ is quite independent of the escrow documents. Secondly, the broker's success on appeal is hinged to the trial court's finding of an agreement to pay a commission out of sales proceeds ‘as, if and when received by the defendant.’ There is not the slightest question but that the contract called for a commission only upon sale consummation.

5.  See Hunter v. Sparling, 87 Cal.App.2d 711, 721, 197 P.2d 807. While the demarcation between declarations of ultimate fact and conclusions of law is often nebulous, the character of the ‘oral contract’ finding is fairly apparent, for the declared existence of such a contract requires resort to the artificial process of the law rather than natural (i.e., laymen's) inferences from evidence. ‘Whether a finding is one of an ultimate fact or a conclusion of law depends on the nature of the evidence. ‘If, from the facts in evidence, the result can be reached by that process of natural reasoning adopted in the investigation of truth, it becomes an ultimate fact, to be found as such. If, on the other hand, resort must be had to the artificial processes of the law, in order to reach a final determination, the result is a conclusion of law.’' (Hayward Lbr. Co. v. Construction etc. Corp., 110 Cal.App.2d 1, 3, 241 P.2d 1054, 1055, quoting Levins v. Rovegno, 71 Cal. 273, 278, 12 P. 161.)

6.  Comparable declarations, whether in pleadings or findings, have been sustained. (Adams v. Williams Resorts, Inc., 210 Cal.App.2d 456, 462, 26 Cal.Rptr. 656; Doudell v. Shoo, 20 Cal.App. 424, 438, 129 P. 290.) In Williams v. Hill, 54 Cal. 390, the court holds that a finding declaring the truth of a pleaded allegation that the parties had contracted along certain lines was conclusive on the question whether there was a verbal understanding different from a later written contract. (See 2 Chadbourn, Grossman & Van Alstyne, California Pleading, pp. 160–162.) Existence of a meeting of the minds being in issue, a finding of that ultimate fact embraces the necessary probative facts to sustain it. (See Wishart v. Claudio, 207 Cal.App.2d 151, 153, 24 Cal.Rptr. 398; Witkin, Cal.Procedure (1965 Supp.) Trial, pp. 664–665.)

7.  See 2 Chadbourn, Grossman & Van Alstyne, California Pleading, pp. 181–185, discussing the pleading of breach of contract. Cf. San Francisco Brewing Corp. v. Bowman, 52 Cal.2d 607, 615, 343 P.2d 1; Beck v. Schmidt, 3 Cal.App. 448, 110 P. 455.

8.  See Richter v. Walker, 36 Cal.2d 634, 639, 226 P.2d 593. In pursuing the rule which calls for interpretation of trial court findings, we are aware of another doctrine: that conclusionary statements, unsupported by facts found, will be disregarded. (County of Santa Cruz v. McLeod, 189 Cal.App.2d 222, 235, 11 Cal.Rptr. 249; Hunter v. Sparling, supra, 87 Cal.App.2d at p. 721, 197 P.2d 807.) In seeking to interpret a finding framed in conclusionary terms, an appellate court is caught in a collision between these rules. Reconciliation is available by limiting the latter rule to findings which supply little or no inkling of the trier's intent. According to theory, findings are declarations of the trial judge; according to practice, most findings are drafted by the victorious attorney. Experienced lawyers recognize drafting of findings as a sweaty and dangerous business. Sensible appellate interpretation of technically imperfect findings will tend to diminish the dangers, which frequently have little bearing on the merits. The appellate court may on occasion resort to section 956a, Code of Civil Procedure, and make its own findings.

FRIEDMAN, Justice.

PIERCE, P. J., and GOOD, J. pro tem., concur.