Peyton v. Cly

• Decision Date: 26 August 1960
• Citation: 184 Cal.App.2d 193,7 Cal.Rptr. 504
• Court: California Court of Appeals Court of Appeals
• Parties: Jerry PEYTON, doing business as Jerry Peyton & Associates, and Leo Sullivan, Plaintiffs and Respondents, v. Monte CLY and Roselle Cly, Defendants and Appellants. Civ. 24355.

Page 504

7 Cal.Rptr. 504

184 Cal.App.2d 193

Jerry PEYTON, doing business as Jerry Peyton & Associates, and Leo Sullivan, Plaintiffs and Respondents, v. Monte CLY and Roselle Cly, Defendants and Appellants.

Civ. 24355.

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

Aug. 26, 1960.

Harley E. Kempley, Los Angeles, for appellants.

Robert J. Schmorleitz and Frank T. Hennessey, North Hollywood, for respondents.

RICHARDS, Justice pro tem.

Appeal by defendants from a judgment for a real estate broker's commission in favor of plaintiffs in the sum of $4,750 with interest.

Plaintiffs are licensed real estate brokers, and on or about November 11, 1954, defendant Monte Cly signed a listing agreement for a motel property with the plaintiffs wherein plaintiffs were granted the 'open * * * right to exchange or sell my property' for a period of 180 days and wherein it was agreed that if an exchange was effected by the agents, they would be paid a commission of 5 percent of the selling price. Monte Cly himself was not the owner of the motel, but instead it was owned by his wife, defendant Roselle Cly. It was their custom in dealing with property to have Mr. Cly appear as 'owner' until the time of transfer of title. Mrs. Cly did not sign the listing agreement nor did she 'by an instrument in writing' authorize Mr. Cly to sign it. During the month of December, 1954, the plaintiffs informed Mr. Cly that a certain property owned by a Mr. and Mrs. Militello was available for exchange and thereafter brought Mr. Cly and Mr. Militello together in order that they might negotiate an exchange. Thereafter, on December 27, 1954, without the knowledge of the plaintiffs, Mrs. Cly and Mr. and and Mrs. Militello opened two separate escrows for the exchange of their properties. Defendants having refused to pay the commission, the action followed.

As grounds for reversal, defendants contend:

1. The listing agreement signed by Monte Cly was invalid in that he had not been authorized 'by an instrument in writing' (Civ.Code, § 2309) to execute the same.

2. That plaintiffs represented both the buyers and sellers without disclosing such dual representation.

3. That having introduced the parties, the plaintiffs rendered no further service as brokers, thereby abandoning the listing agreement.

4. Insufficiency of the evidence to support the findings.

Statute of Frauds

The plaintiffs' complaint alleged that 'Monte Cly was authorized and empowered to and did act as the agent of defendant, Roselle Cly, and all things herein alleged to have been done by him were done by him in his capacity as agent for Roselle Cly.' This allegation was specifically admitted in its entirety by the answer of the defendants. It is elemental that a party is bound by the admissions of his own pleadings (Razzano v. Kent, 78 Cal.App.2d 254, 259, 177 P.2d 612), and may not make a contention based on a statement of fact contrary thereto (Bloss v. Rahilly, 16 Cal.2d 70, 77, 104 P.2d 1049; Gates v. Bank of America, 120 Cal.App.2d 571, 575, 261 P.2d 545). The agency having been specifically admitted, it was unnecessary to offer any proof thereof (Lifton v. Harshman, 80 Cal.App.2d 422, 431, 182 P.2d 222; Westberg v. Whittiken, 101 Cal.App. 204, 206, 281 P. 509), and evidence would not have been admissible to prove the untruth of the allegation. Lifton v. Harshman, supra, 80 Cal.App.2d at page 432, 182 P.2d at page 228. In Johnson v. Lehtonen, 151 Cal.App.2d 579, 312 P.2d 35, the defendant expressly admitted an allegation of the complaint that a contract wherein he agreed to sell real property was executed by his agent, and the court held that such admission precluded him from attempting to prove lack of written authority of his agent to execute the contract. We are of the opinion that the same principle applies here and that the defendants having expressly admitted the execution of the listing agreement by Monte Cly as agent for Roselle Cly, they are precluded from raising on appeal the issue of whether the agent was authorized so to do in writing. In Durbin v, Hillman, 50 Cal.App. 377, 195 P. 274, it was held that although there was an issue of the agent's authority in writing raised by a denial of the agency, nevertheless where no objection was made to oral evidence to prove the agency and the defendant not having urged any reliance on lack of written authority, he was precluded from raising such want of written authority on appeal.

Moreover, defendants did not plead the statute of frauds herein as an affirmative defense, nor did they at any time nor in any manner raise that issue during the trial. A contract not executed in conformity with the provisions of the statute of frauds is not void but merely voidable. O'Brien v. O'Brien, 197 Cal. 577, 586, 241 P.861. Hence, the rule is well established that the failure of a defendant to raise the issue of the statute of frauds in some appropriate manner constitutes a waiver of that defense, and it may not thereafter be raised upon an appeal. Pao Ch'en Lee v. Gregoriou, 50 Cal.2d 502, 506, 326 P.2d 135; Howard v. Adams, 16 Cal.2d 253, 257, 105 P.2d 971, 130 A.L.R. 1003; Coleman v. Satterfield, 100 Cal.App.2d 81, 84, 223 P.2d 61.

The defendants having expressly admitted the agency, we paraphrase the decision of this court in Allen v. Gindling, 136 Cal.App.2d 21, at page 27, 288 P.2d 130, at page 134, by concluding: 'Thus the fact of [Monte's written authorization] was not an issue in the trial court. It may not therefore be raised on appeal.' Where the statute of frauds is not pleaded nor the question raised in the trial court, it will not be considered on appeal. Gower v. Bertrand, 44 Cal.App. 233, 235-236, 186 P. 172.

Dual Representation

In contending that the plaintiffs were not entitled to recover because of a dual representation of both parties to the exchange without a disclosure thereof to their principals, the defendants are in effect asking this court to create reversible error by making an implied finding of fact favorable to the defendants based on conflicting evidence upon an issue not raised by the pleadings, not raised at the trial, and not the subject of a finding by the trial court. This we will not do.

While it is true that an undisclosed dual representation by a broker other than as a mere middleman without disclosure thereof furnishes either principal with grounds to avoid the transaction (McConnell v. Cowan, 44 Cal.2d 805, 809-810, 285 P.2d 261; Vice v. Thacker, 30 Cal.2d 84, 90-91, 180 P.2d 4; Butler v. Solano Land Co., 203 Cal. 231, 263 P. 530; Gordon v. Beck, 196 Cal. 768, 771-773, 239 P. 309; Glenn v. Rice, 174 Cal. 269, 272, 162 P. 1020; Jarvis v. O'Brien, 147 Cal.App.2d 758, 759-760, 305 P.2d 961; Hagge v. Drew, 73 Cal.App.2d 739, 741-742, 167 P.2d 263), yet whether or not the plaintiffs were acting in a dual capacity or were mere middlemen generally presents a question of fact that should be determined by the trial court upon proper pleadings which present that issue, and thus permit the opposing litigants to meet the issue and the trial court to pass upon it. In each of the cases just above cited, the...