Allen v. Gindling

• Decision Date: 03 October 1955
• Court: California Court of Appeals Court of Appeals
• Parties: J. Monroe ALLEN, Plaintiff and Respondent, v. A. L. GINDLING and Millgee Investment Co., Inc., a corporation, Defendants and Appellants. Civ. 20892.

Page 130

288 P.2d 130

136 Cal.App.2d 21

J. Monroe ALLEN, Plaintiff and Respondent, v. A. L. GINDLING and Millgee Investment Co., Inc., a corporation, Defendants and Appellants.

Civ. 20892.

District Court of Appeal, Second District, Division 2, California.

Oct. 3, 1955.

Sylvan Y. Allen, Los Angeles, for appellants.

Harry R. Roberts, Pomona, for respondent.

FOX, Justice.

This is an appeal by the defendants from a judgment in favor of plaintiff for a real estate brokerage commission pursuant to written escrow instructions executed by defendants for the purchase of certain real property. Defendants failed to complete the purchase of the property. Thereupon, plaintiff brought this action for the recovery of his commission as provided in the instructions.

In seeking a reversal, defendants contend that: (1) plaintiff was not a duly licensed real estate broker; (2) a fictitiously named firm must have its own broker's license independent of such a license issued to a person doing business under the fictitious firm name as a sole proprietor; (3) it is not established that plaintiff was employed as a broker to represent the defendants in the purchase of the property in question; (4) there was no sufficient note or memorandum of plaintiff's employment to satisfy the statute of frauds; and (5) plaintiff failed to produce sellers who were ready, willing and able to convey the property to defendants in accordance with the escrow instructions.

In view of the nature of defendants attack it is necessary to delineate the transaction in considerable detail.

Defendants, as buyers, entered into written escrow instructions dated May 1, 1953, for the purchase of certain real property from the Southwicks, as sellers, for the total price of $158,000. In the buyers' part of the instructions, defendants agreed, inter alia, that 'On or before July 15, 1953, I will hand you the sum of $148,000.00 [$10,000.00 was to be paid outside of escrow] which you will deliver when you obtain a deed to vestee named below of the hereinafter described property, and on or before July 15, 1953, I will hand you the additional sum of $7,900.00 to cover payment of commissions as authorized below.' (Emphasis added.) The buyers' part of the instructions then provided for the disposition of the above mentioned $7,900 in the following manner:

'Pay commissions as follows at close of escrow: (1) $3,950.00 to Merle Allen Co., 127 N. Bright Ave., Whittier, Calif., (2) $3,950.00 to * * * [another designated broker].'

The property being sold by the Southwicks, referred to in the escrow instructions as 'Parcel I,' was situated northerly of Whittier Boulevard, but did not adjoin this boulevard. By the terms of the escrow instructions, the Southwicks were to convey to the defendants the property in fee owned by them, together with a sixty-foot easement for street, sanitary sewer and public utility purposes, over the land lying between the Southwick property and Whittier Boulevard, which easement was referred to in the instructions as 'Parcel II.' The property over which this easement was to pass was owned by the Campbells and a Mr. Tinker. The buyers and sellers supplemented their agreement as contained in the escrow instructions by executing, under date of May 11, 1953, an additional memorandum. It dealt with a number of details of the transaction, viz., the reservation by the sellers of the right to cultivate and remove crops for a designated period, the right of sellers to remove buildings, equipment, smudge pots, tanks, irrigation lines and agricultural supplies, and the reservation by the sellers of a parcel of approximately one acre. A formula for the adjustment of the price for the reserved parcel was established.

It was provided in the memorandum of May 11th that the $10,000 to be paid outside of escrow should be paid to sellers' attorney on or before 15 days after receipt of the preliminary title report, if said report was acceptable to the buyers.

On June 3, 1953, the title company furnished defendants a preliminary report on the property. The next day, defendant Gindling notified the attorneys for the sellers that objection was taken to a 'wild easement,' shown as Exception 2 in the report. Sellers' attorney, in due course, advised defendants that the title company was prepared to eliminate this 'wild easement,' and demanded payment of the $10,000 deposit called for by the memorandum of May 11th within 15 days after notification by the title company to the buyers of the elimination of this exception. On June 12th the title company wrote defendants that it was prepared to eliminate this exception.

On June 25th defendants wrote the attorneys for the sellers, advising that they had examined the title report, and while acknowledging that the sellers held the easement for street, sanitary sewer and public utility purposes called for as Parcel II in the escrow instructions, the defendants requested that the sellers acquire fee title to the property covered by the easement and that the easement be dedicated by endorsement on a subdivision map.

On July 7th the sellers extended the closing date of the escrow to July 20th on condition that the defendants pay for the labor and materials for spraying the grove and thus protecting the on-coming crop, due to the delay in the escrow. Defendants were also informed that the acreage adjustment for the parcel reserved in the memorandum of May 11th had resulted in a credit of an additional $553 to the sellers from the buyers.

Well in advance of the closing date of the escrow, sellers deposited in escrow a duly executed grant deed to the property described in the instructions as Parcel I and Parcel II. This grant deed was in favor of the defendant corporation, as the buyers' nominee. The sellers had obtained a grant deed from the Campbells, in favor of the sellers, as grantees, covering the property designated as Parcel II. Sellers had also obtained a quitclaim deed to this same parcel from Tinker in favor of the defendant corporation as grantee.

On July 16th, a conference was held at the office of Musick & Burrell, attorneys for the sellers, in which Philip C. Jones, of that firm, advised defendant Gindling that the sellers had performed all things required on their part by the escrow instructions and the supplemental memorandum and agreements, and that they were ready to close the escrow. Gindling stated he was having some financial difficulties and requested an additional 90 days to close the escrow. The sellers declined to grant the 90-day extension. However, the sellers did agree at this conference to extend the closing date of the escrow to August 5th on condition that defendants deposit with sellers' attorneys by July 21st $11,500, representing the $10,000 to be paid out of escrow and $1,500 for the cost of spraying and grove maintenance. In the presence of all parties, including Gindling, Mr. Jones dictated a letter, setting forth the terms of an extension to August 5th. Gindling made no objection to the deposit or to the terms of the letter as dictated. He failed, however, to keep an appointment to return and sign an approval of the letter.

No money was ever deposited by defendants with the sellers' attorneys. Defendants did, however, on July 21st, deposit $11,500 with the escrow holder.

Philip Wills, a broker in the employ of plaintiff, telephoned Gindling on July 29th that the Title Sheet for defendants' proposed subdivision had been signed by Tinker and all the Campbells except David S. Campbell, who resided in Arizona. Gindling told him that it was important to get all the signatures as soon as possible,--to go to Arizona and get this signature; that they intended to go through with the deal. Wills and plaintiff went to Arizona the next day and secured the required signature. On July 31, Wills delivered the Title Sheet,...