COLBURN v. SESSIN (1949)

Appeal from judgment in favor of defendants after the sustaining of a demurrer to plaintiff's complaint without leave to amend.

The action was brought by plaintiff, a licensed real estate broker, to recover a commission for the sale of real property made by defendants Sessin and Gutlin to defendants Winton. The facts alleged in the complaint are as follows: Defendants Sessin and Gutlin, owners of real property, entered into an oral agreement with plaintiff whereby his services were retained to obtain a purchaser ready, able and willing to purchase the property; the owners agreed to pay plaintiff 5 per cent of the sale price for his services in the event the property could be sold; the owners agreed that they would furnish plaintiff with a signed, written memorandum confirming the agreement; in reliance thereon he undertook to and did locate purchasers; he so informed the owners and submitted to them a proposed written memorandum of the broker's commission agreement and requested its execution; they assured him they would execute and deliver it but requested him to introduce them to the prospective purchasers so that the proposed transaction might proceed in the interim; relying on such representations plaintiff introduced the proposed purchasers to the owners; the latter had no intention of fulfilling their promise and made it only with the intention of causing plaintiff to disclose the identity of the purchasers; the owners failed to execute the memorandum for the payment of the commission and thereafter sold the property to defendants Winton who were the purchasers produced by plaintiff.

Defendants demurred to the complaint generally and on the ground that the alleged contract is void and unenforceable by reason of subdivision 5 of section 1624 of the Civil Code. Demurrers were sustained without leave to amend and judgment was entered in favor of defendants.

An agreement authorizing or employing a broker to purchase or sell real estate for compensation or commission is 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. Civil Code, sec. 1624, subd. 5; Code Civ.Proc., sec. 1973, subd. 5; Blanchard v. Pauley, 92 Cal.App.2d 244, 206 P.2d 864, 865; Marks v. Walter G. McCarty Corp., 33 Cal.2d 814, 819, 205 P.2d 1025, 1027.

The pleaded facts do not, as plaintiff contends, bring the case within an exception to the general rule. This action has no similarity to Le Blond v. Wolfe, 83 Cal.App.2d 282, 188 P.2d 278, where the broker cancelled a contract with the seller of real property upon the oral promise of the purchaser that he would pay the commission. In that case the broker changed his position to his own detriment by releasing the sellers from any obligation to pay him a commission. Such change of position created an equitable estoppel against the purchaser from setting up the statute of frauds as a defense. An examination of Seymour v. Oelrichs, 156 Cal. 782, 106 P. 88, 134 Am.St.Rep. 154, upon which plaintiff mainly relies, will show that it does not support his position.

The instant case is similar to Sweeley v. Gordon, 47 Cal.App.2d 381, 118 P.2d 14, and White v. Hirschman, 54 Cal.App.2d 573, 129 P.2d 430, in each of which the broker relied on an oral contract or an unsigned memorandum as his authority to effect a sale, and in each action the broker was denied recovery. In the White case the court held that where the broker's commission agreement is unenforceable by reason of the statute of frauds he is not entitled to enforce the agreement indirectly by an action for the reasonable value of time and money laid out for expenses and advertising in attempting to effect the sale. In both cases and in Hicks v. Post, 154 Cal. 22, 96 P. 878, it is well said that to allow a broker to recover under circumstances alleged in the complaint in the instant action would abrogate the statutory requirement that authority to sell real property must be in writing.

Plaintiff does not contend that the purchasers, respondents Winton, agreed to pay a commission but apparently seeks to hold them liable by reason of their purported connivance with the sellers in frustrating plaintiff's recovery of compensation for bringing the parties together. Such contention is disposed of in a second case entitled Sweeley v. Gordon, 47 Cal.App.2d 385, 118 P.2d 16, 842, where a conspiracy between purchaser and seller was alleged. The court held, 47 Cal.App.2d 385, page 387, 118 P.2d 16, 842, that the seller had the legal right to stand upon the statute of frauds and the purchaser was not liable in damages to the plaintiff even if he did not fact induce the seller to assert nonliability by reason of the statute.

In the instant case plaintiff did not change his position. He did not, as in the Le Blond case, yield a claim against one party to the transaction on the oral promise of another to pay a commission. The proceedings were initiated between plaintiff and the owners and the former, relying upon an invalid contract, brought the sellers and the purchasers together. Plaintiff was presumed to know it to be the law that oral contracts for a commission on the sale of real property are void and unenforceable. His plea of estoppel is made under circumstances similar to those in the White and Sweeley cases above cited and rejected by the court.

Judgment affirmed.

WILSON, Justice.

MOORE, P. J. and McCOMB, J., concur.