Guy v. Brennan

213 P. 265, 60 Cal. App. 452, 1923 Cal. App. LEXIS 632

• Court: California Court of Appeal
• Decided: January 17, 1923
• Docket: Civ. No. 3876.
• Status: Published

Opinions

FINLAYSON, P. J.

Plaintiff, a realty broker, brought this action to recover the commission earned by him in the sale of defendants’ apartment house. Judgment passed for plaintiff and defendants appeal.

The first point advanced by appellants against the judgment is more technical than meritorious. The complaint alleged and the trial court found that defendants employed plaintiff to find a purchaser for the “furniture, furnishings and equipment” of the apartment house. Defendants, who had leased the house from the owner, held a five-year lease thereon. Plaintiff, as the proof showed, was employed to find a purchaser of the lease as well as of the furniture and equipment. It now is claimed that the finding that plaintiff was employed to sell the “furniture, furnishings and equipment” is not supported" by the evidence, for the reason that plaintiff’s employment extended to the procurement of a purchaser of the lease as well as of the furniture and equipment. We can see in this objection no good reason for disturbing the judgment. The gist of plaintiff’s cause of action is the performance of certain services in bringing about a sale of defendants’ property. The fact that the allegation in the complaint and the finding of the court did not describe all that was to pass to the purchaser in the event that a sale should be effected through plaintiff’s efforts could not have misled defendants as to the nature of the services which plaintiff was employed to perform and for which he now is seeking compensation; and we are unable to see how defendants could have been injured by the failure of the complaint and findings to make mention of the lease. Under the familiar and oft-cited sections of the code and constitution (Code Civ. Proc., see. 475; Const., art. VI, sec. 4%) the error will here be disregarded.

Appellant’s second point is that the contract of employment, which was oral, was invalid under that provision of our statute of frauds which provides that an agreement employing an agent or broker to sell “real estate” for a compensation or commission is invalid unless the same or some note or memorandum thereof be in writing and subscribed by the party to be charged, or by his agent. (Civ. Code, see. 1624, subd. 6; Code Civ. Proc., sec. 1973, subd. 6.) In this particular subdivision of the statute the words “real estate” are used, whereas in the preceding subdivision the words “real property” occur. Appellant’s contention, stated in the language of their brief, is: “We contend that by the use of the term ‘real estate’ rather than ‘real property’ in this subdivision (subd. 6) the legislature referred to ‘estates in real property.’ ” And because a lease for years is an estate (Civ. Code, sec. 701 and see. 761, subd. 3), and a broker employed to sell a lease for years is therefore employed to sell an ‘ ‘ estate, ” it is argued that respondent was employed to sell “real estate,” within the meaning of subdivision 6 of the statute of frauds. This argument loses sight of the significance of the word “real” in the expression “real estate.” It may be conceded, as appellants contend, that by the words “real estate,” as here used, the legislature did refer to “estates” in, i. e., interests in, “real property,” and not to the land itself—the corpus. But even so, the words “real estate” do not connote any and every estate or interest in real property. They embrace only such an estate or interest in real property as reaches to the dignity of real estate. And a lease is not “real” estate. The legislature was dealing with the terms of art, and is presumed to have used them in their technical sense. “The term ‘real estate,’ ” says Kent, “means an estate in fee or for life in land, and does not comprehend terms of years, or any interest short of a freehold.” (3 Kent’s Commentaries, p. 401.) “They [the words “real estate”] import a freehold interest, either an estate for life or in fee simple.” (Bourn v. Robinson, 49 Tex. Civ. App. 157 [107 S. W. 873].) “A leasehold interest is not real estate, but merely a chattel real, which is personal property.” (Townsend v. Boyd, 217 Pa. 386 [12 L. R. A. (N. S.) 1148 [66 Atl. 1099].) See, also, Mayor v. Mabie, 13 N. Y. 151 [64 Am. Dec. 538], Scogin v. Perry, 32 Tex. 21, 29, and Harrington v. Sharp, 1 G. Greene (Iowa), 131 [48 Am Dec 365].

If we return to the definitions which are to be found in our code we shall be led to the same result. An estate is an interest in real property. (Civ. Code, see. 701.) A lease— an estate for years—is an estate in real property. (Civ. Code, sec. 761, subd. 3.) But though a lease is an “estate,” i. e., an interest in real property, it is not “real” estate. It is a chattel. (Civ. Code, see. 765.) True, it is a chattel real (see. 765); but all chattels are included within the code definition of personal property. (Civ. Code, see. 14, subd. 3; Code Civ. Proc., see. 17, subd. 3.) It follows, therefore, that under the definitions to be found in our codes a lease for years, though a chattel real, is personal property, and, therefore, though it may be an estate or interest in real property, it is not such an estate or interest as is connoted by the words “real estate.” “A term for years is only personal property—a chattel real. . . . An assignment of a term for years is, therefore, governed generally by the rules applicable to the sale of personal property.” (Jeffers v. Easton, Eldridge Co., 113 Cal. 352, 353 [45 Pac. 680, 681]. See, also, Summerville v. Stockton Milling Co., 142 Cal. 538, 539 [76 Pac. 243].)

If the term “real estate,” as used in this subdivision of our statute of frauds, were held to include a lease for years, a singular anomaly might arise. Neither an agreement for, nor the actual transfer of, a lease for one year or less need be in writing. This is because our statute of frauds, by appropriate qualifying language, in effect exempts from its operation all leases for a term not longer than one year. (Code Civ. Proc., sec. 1973, subd. 5; Civ. Code, sec. 1624, subd. 5, and see. 1091.) But the words “real estate,” as used in subdivision 6 of sections 1624 of the Civil Code and 1973 of the Code of Civil Procedure, are not thus limited by any qualifying word or phrase. The result is that those words, as used in subdivision 6, include any and every interest in real property which properly may be denominated “real estate.” So that if it were proper to classify an estate for years as “real estate,” then no agreement authorizing or employing an agent or broker, for a compensation or a commission, to find a purchaser of any lease, even of a lease for one month, would be valid unless the employment were in writing. “Estates for years embrace all terms limited to endure for a definite and ascertained period, however short or long this period may he; that is to say, they embrace terms for a fixed number of weeks or months, or for a single year, as well as for any definite number of years, however great.” (24 Cyc. 958.) Thus in Stoppelkamp v. Mangeot, 42 Cal. 316, it was held that a lease for one month is technically a tenancy for years. Since a parol lease for a year or for a shorter definite period is valid, what an anomaly it would be if an agreement employing a broker to find a purchaser for such a lease were invalid unless it or a memorandum thereof were in writing! And yet such an anomalous situation is inescapable if the words “real estate,” as used in subdivision 6 of the statute, shall be held to include leasehold interests.

We are, of course, aware that there is a reverse side of the picture which we have painted of an anomalous situation, and that under our construction of the words “real estate” an oral employment of a broker to secure a purchaser of a lease for a term longer than one year will be valid, although the lease which is the subject matter of the employment must be in writing in order to be valid. But because either construction of the words “real estate” will involve what appears to be somewhat of an anomaly, we think there is all the more reason why those words should be construed in the light of our code definitions— definitions which, as at common law, make all chattels, real as well as personal, to fall within the definition of personal property.

There is nothing in Commercial Bank v. Pritchard, 126 Cal. 600 [59 Pac. 130] which conflicts with the foregoing views. That case, following the reasoning in Garter v. Gianella, 98 Cal. 527 [33 Pac. 458], holds that an instrument whereby a lease is created must be deemed to be a “conveyance” for all the purposes mentioned in sections 1213 and 1214 of the Civil Code. The court was obliged so to hold because, by section 1215 of the Civil Code, there is an express legislative declaration that the term “convey anee,” as used in sections 1213 amd 1214, shall embrace every instrument, except wills, whereby any estate or interest in real property is created, aliened, mortgaged or encumbered. But because the legislature has said, in effect, that, for the purposes of the law respecting the recordation of conveyances, a written instrument whereby a leasehold interest is created shall be deemed to be a “conveyance,” it does not necessarily follow that the leasehold interest conveyed by such instrument is “real estate.”

The words “real property,” as defined by section 14 of the Civil Code, subdivision 3, are “coextensive with lands, tenements and hereditaments.” The learned author of the majority opinion in Commercial Bank v. Pritchard, supra, seems to have used the terms “real estate” and “real property” interchangeably. It doubtless was in view of this laxity in the commissioner’s use of two expressions which, technically, are not convertible terms, that Mr. Justice McFarland was prompted to write a separate but concurring opinion so as to avoid any possible future misconception as to the real purport and extent of the court’s decision. That this was the purpose of the concurring opinion seems evident from its language, Mr. Justice McFarland saying: “I concur in the judgment; but the opinion of the commissioner might, perhaps, [italics ours] be construed as holding, generally, that an estate for years in land is real property, which, of course, is not so. An estate for years is, in its nature, personal property—a chattel real; and it is subject for most purposes to the law which applies to personal property. (See Jeffers v. Easton, 113 Cal. 345, where the subject is discussed and our code division of property into real and personal is shown to be, substantially, that of the common law.) ”

We think it clear that whether we look to the common law or to our code definitions, the term “real estate,” as used in subdivision 6 of sections 1624 of the Civil Code and 1973 of the Code of Civil Procedure, must be held not to embrace such an estate or interest in real property as amounts only to an estate for years.

The judgment is affirmed.

Works, J., concurred.