Collins v. Vickter Manor, Inc.

• Decision Date: 08 February 1957
• Citation: 47 Cal.2d 875,306 P.2d 783
• Court: California Supreme Court
• Parties: SI COLLINS, d/b/a Si Collins & Associates, and Irwin Lachman, Plaintiffs and Appellants, v. VICKTER MANOR, Inc., a corporation, Joseph Engle, and Abe Vickter, Defendants and Respondents. L. A. 23974.

Page 783

306 P.2d 783

47 Cal.2d 875

SI COLLINS, d/b/a Si Collins & Associates, and Irwin Lachman, Plaintiffs and Appellants, v. VICKTER MANOR, Inc., a corporation, Joseph Engle, and Abe Vickter, Defendants and Respondents.

L. A. 23974.

Supreme Court of California, In Bank.

Feb. 8, 1957.

Frye & Yudelson, Collman E. Yudelson and Lawrence E. Silverton, North Hollywood, for appellants.

Peter T. Rice and Sam Lipson, Los Angeles, for respondents.

SCHAUER, Justice.

Plaintiffs appeal from a judgment of dismissal entered after defendants' demurrer to the second amended complaint was sustained without leave to amend. Plaintiffs, licensed real estate brokers, seek to recover a brokers' commission from defendant corporation and damages from the individual defendants for asserted wrongful interference with the contractual relations between plaintiffs and defendant corporation. We have concluded that under the established rules as to construction of pleadings the complaint states causes of action against both the corporation and the individual defendants, and that the 'ambiguities' listed in the special demurrer cannot support the above described order. ¹

Each of the first four counts of the complaint (which plaintiffs refer to as separate causes of action) attempts to state substantially the same cause of action against defendant corporation for a brokers' commission of $3,000. The material allegations of these four counts may be summarized as follows:

On or about October 20, 1954, defendant corporation orally employed plaintiffs to procure a purchaser for described real property owned by the corporation and agreed to pay plaintiffs a commission of $3,000 for their services. Plaintiffs obtained a buyer, Grayson, who agreed to pay $65,000 for the property. Grayson and defendant corporation executed a so-called deposit receipt; a copy of the deposit receipt is attached to and made a part of the complaint. The document is signed by plaintiffs as well as the prospective buyer and seller; it recites that plaintiffs received from Grayson a deposit on account of purchase of the described property, on stated terms, 'Purchase price to be $61,750.00.' At the bottom of the document appears the following:

'We, the undersigned (seller), approve and agree to the foregoing, and agree to pay said broker a real estate commission of $3087.50.

'65000.00.....to seller 3000.00 comm. ²

Vickter Manor, Inc.

Abe Vickter (secy.)

Seller'

We, the undersigned (buyer), agree to purchase the above described property for the price and terms outlined above.

Purchaser Leonard Grayson'

Significant 'terms outlined above' in the receipt are (1) 'Seller to furnish satisfactory soil compaction report on each bldg site from a reliable testing firm such as D. D. Warren Co.' and (2) 'Final contour map and filing map subject to buyers approval.' Plaintiffs aver that these 'conditions were subsequent to the formation of a valid contract for the sale of the above described real property, but were precedent to the Buyer's duty to pay the purchase price.' In connection with these terms it is to be noted that the transaction evidenced by the deposit receipt was the proposed sale of unimproved property for the apparently contemplated purpose of subdivision, improvement, and resale.

The complaint further alleges that Grayson, the purchaser procured by plaintiffs, 'was ready, willing and able to purchase the said real property on the terms and conditions imposed by the said Defendant corporation'; that Grayson, by entering into an escrow on October 26, 1954, as contemplated by the deposit receipt, ³ accepted in writing the oral offer to sell made by defendant corporation, and was at all times 'ready, willing and able to complete the purchase' of the property; that the corporation, however, prevented the buyer's performance 'by failing to deposit the necessary papers in the said escrow; by failing to furnish any soil compaction report; by failing to furnish any contour map or filing map for the buyer's approval; and by giving written notice of withdrawal from said escrow on or about November 19, 1954'; that plaintiffs 'have duly performed all of the conditions of said contract on their part to be performed' but defendant corporation has refused to pay plaintiffs their earned commission of $3,000, and that the total sum remains unpaid.

Plaintiffs also attempt to state causes of action against defendant Engle (fifth 'cause of action') and against defendant Vickter (sixth 'cause of action') for $3,000 damages caused by interference of the respective individual defendants with the contractual relations between plaintiffs and the corporation. These 'causes of action' repeat the substance of the allegations of the counts against the corporation and add the following averments: Engle, Vickter, and one Lipson were the officers and directors of defendant corporation and 'beneficial owners' of its property; no stock of the corporation was ever issued. While the above mentioned escrow was still open, Engle and Vickter, with full knowledge of plaintiffs' contract with the corporation, 'wrongfully, intentionally, and without justification,' prevented the corporation from depositing in the escrow 'those documents necessary in order to close said escrow.' The individual defendants did this to prevent closing of the escrow and to permit the corporation and themselves to profit by a sale to others. Engle, president and managing officer of the corporation, had power, on behalf of the corporation, either to complete the sale or to prevent its completion, and he, joined by Vickter, caused the corporation to send written notice of withdrawal from escrow on or about November 19, 1954.

The allegations of the Complaint, with the incorporated deposit receipt, sufficiently state the following cause of action against defendant corporation: The corporation employed plaintiffs to procure a purchaser; plaintiffs procured a purchaser ready, able, and willing to buy on terms sufficiently expressed in the deposit receipt; the corporation 'approve(d) and agree(d) to' those terms; the deposit receipt appears to satisfy the statute of frauds as a written and signed memorandum of the corporation's agreement to pay plaintiffs $3,000 for their services (Civ. Code, § 1624, par. 5; Code Civ.Proc., § 1973, par. 5); the corporation breached its agreement to pay plaintiffs' commission. The right of the brokers to their commission is not, on the facts here alleged, defeated by the failure of the parties to consummate the transaction. (See Meyer v. Selggio (1947), 80 Cal.App.2d 161, 164(4), 181 P.2d 690.)

Defendants rely on Lawrence Block Co. v. Palston (1954), 123 Cal.App.2d 300, 305-306, 266 P.2d 856. It is there correctly determined that 'To entitled a broker to a commission for a sale of real property it must be established that in pursuance of his contract and within the time specified therein, he found a purchaser ready, able, and willing to buy on the terms and conditions specified in the contract of employment, or, if the exact terms are not specified in his contract, upon terms satisfactory and acceptable to his employer.' However, defendants assert, the only right of plaintiffs to recover a commission grows out of the written deposit receipt between the buyer and seller, and therefore the following statement in the Block Company case is controlling: 'Where the only agreement to pay a broker a commission is contained in the contract between his principal and the customer, the broker's right to compensation is dependent upon performance of that contract.' But this statement does not indiscriminately control every three-party writing signed by the broker, his principal, and the customer. Such a three-party writing may unequivocally specify, or where uncertain may be construed or shown by extrinsic evidence to mean, that the broker has fully performed the duties of his employment and earned his commission by having obtained a buyer ready, able, and willing to proceed with a purchase in accord with those terms of the writing which define the seller's offer the offer for which the seller employed the broker to produce a qualified acceptor. Where the deposit receipt is subject to such interpretation, recovery of the commission is not prima facie precluded by those decisions which refuse to allow recovery because the broker did not fully perform the terms of his contract. Manifestly a different case is presented if by the terms of the employment contract the broker's right to commission is expressly, or by established implication,...