Matthews v. Starritt

252 Cal. App. 2d 884, 60 Cal. Rptr. 857, 1967 Cal. App. LEXIS 1579
CourtCalifornia Court of Appeal
DecidedJuly 26, 1967
DocketCiv. 23632
StatusPublished
Cited by5 cases

This text of 252 Cal. App. 2d 884 (Matthews v. Starritt) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Matthews v. Starritt, 252 Cal. App. 2d 884, 60 Cal. Rptr. 857, 1967 Cal. App. LEXIS 1579 (Cal. Ct. App. 1967).

Opinion

TAYLOR, J.

Plaintiff, Everett J. Matthews (hereafter Matthews), appeals from an adverse judgment in his action for declaratory relief against W. B. and Betty Starritt (hereafter Starritt), holding that he was not entitled to a real estate broker’s commission under either the exclusive listing agreement or the deposit receipt. He contends that the trial court erred in construing the written agreements of the parties. We have concluded that there is no merit in this contention.

The record reveals the following: Matthews, a licensed real estate broker with 18 years of experience, was representing a buyer, IClauer, on the purchase of property next- door to the *886 onedialf acre parcel owned by Starritt in Hollister. It occurred to Matthews that Klauer might also be interested in the Starritt property. Matthews found out that Starritt was willing to sell their property for $75,000 or $79,000, and then asked Klauer if he would be interested. Klauer indicated that the $79,000 price was too high.

About a week later, Matthews again discussed the Starritt property with Klauer who then authorized him to convey his firm offer of $75,000. On representation by Matthews that Klauer was ready, willing and able with a firm offer, Starritt arranged to meet with Matthews to prepare and sign the papers on Klauer’s terms on October 31, 1964. Prior to the preparation of the documents, Starritt informed Matthews that one of the tenants on the property, Richfield Oil Company (hereafter Richfield), had a 20-day option.

On October 31, 1964, Starritt signed a California Real Estate Association standard form exclusive listing agreement with Matthews for a seven-day period ending midnight, November 7, 1964. The agreement provided that the sale was subject to the existing leases and also subject to the refusal of the purchase price by Richfield within 20 days. The paragraph relating to the payment of the broker’s commission is set forth in full below. 1 Thereafter, on the same day, Klauer signed a deposit receipt evidencing his offer of $75,000 on the property and requiring an acceptance in writing in seven days. The deposit" receipt also provided that the sale was subject to the existing leases and the refusal of the purchase price by Richfield within 20 days.

Both of the clauses relating to Richfield’s option were in Matthews’ own wording and handwriting and were read carefully by Starritt. Matthews’ right to a commission in the event that Richfield exercised its option was not discussed by the parties prior to or at the time of the execution of the agreements. Matthews delivered a signed copy of the deposit receipt to Starritt the same day and deposited Klauer’s $5,000 check in his trustee account.

Thereafter, pursuant to their lease, Starritt informed Rich-field of Klauer’s offer. On November 19, 1964, Richfield exercised its option to purchase the property. After Starritt *887 informed Matthews of this fact, the matter of Matthews’ right to a commission came up for the first time. Matthews asked: “Well, where does that leave me?” Starritt replied-. “Everett, I don’t know, but if you’re entitled to a commission you’ll get it; if you’re not entitled to a commission, you won’t get it.” Matthews testified that Starritt indicated he would like to get out of paying the commission. Both agreed that the clauses relating to the Richfield option were inserted in both documents for the protection of Starritt.

Since there is no material conflict in the extrinsic evidence in this case, we must make an independent determination of the meaning of both the listing agreement and the deposit receipt (Parsons v. Bristol Development Co., 62 Cal.2d 861, 866 [44 Cal.Rptr. 767, 402 P.2d 839]). In doing so, we are mindful of certain well established rules. If the trial court’s interpretation is a reasonable one, it should be accepted by this court (Parsons v. Bristol Development Co., supra). Furthermore, in case of an ambiguity, the contract should be construed most strongly against the-party who drafted or supplied it (Warshauer v. Bauer Constr. Co., 179 Cal.App.2d 44, 51 [3 Cal.Rptr. 570] ; Civ. Code, § 1654). Thus, where a listing agreement is prepared by a broker, as in this case, any uncertainty in the provisions therein relating to the commission should be construed in favor of the seller (Ri vadell, Inc. v. Razo, 215 Cal.App.2d 614, 624 [30 Cal.Rptr. 622]). With these well established rules in mind, we now consider the court’s interpretation of the commission provisions.

The major contention on appeal is that the trial court erroneously interpreted the language “subject to . . .. refusal of the purchase price ... by Richfield” in both agreements as a condition precedent to Matthews’ right to receive the commission. “Subject to” means subordinate to (Colonial Sav. & Loan Assn. v. Redwood Empire Title Co., 236 Cal.App.2d 186, 191-192 [46 Cal.Rptr. 16] ; Cockerill v. Tobin, 59 Cal.App. 112, 114 [209 P. 1022]), and is generally interpreted as a condition precedent (Lawrence Block Co. v. Palston, 123 Cal.App.2d 300, 310 [266 P.2d 856]).

Matthews argues, however, that the language “subject to” was not used in the instant case in its usual sense but simply denoted the extent of the interest to be conveyed by Klauer. The fact that the reservation concerning the Richfield option was separately stated and was not included in -the paragraph subjecting the sale to existing leases, is some indi *888 cation that the option provision was considered by the parties as a condition precedent and not a mere limitation on the interest to be conveyed.

Furthermore, the additional provisions of both agreements support the court’s construction. Both the listing agreement and deposit receipt expressly provide an expiration date seven days after the date of the execution of the agreements but both were made subject to Richfield’s 20-day option. Thus, the parties did not provide a sufficient period of time to insure the exercise of the option during the operative period of their agreements, indicating that the option provision was considered a condition outside the agreements and that Rich-field had to refuse to buy before the commission would become payable.

Matthews’ argument that the second sentence of the paragraph relating to his commission (quoted above) obligated Starritt to pay a commission if the property was withdrawn from sale or transferred during the term of the agreement or any extension thereof, overlooks the fact that Richfield exercised its option on November 19, 1964, 12 days after the expiration date of both agreements, and there was no evidence of an extension of either agreement.

Finally, Matthews contends that he is entitled to recover his commission under the exclusive listing agreement alone, as he did secure a purchaser and his services were the procuring cause which effected the sale to Richfield. Plaintiff cites

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Bluebook (online)
252 Cal. App. 2d 884, 60 Cal. Rptr. 857, 1967 Cal. App. LEXIS 1579, Counsel Stack Legal Research, https://law.counselstack.com/opinion/matthews-v-starritt-calctapp-1967.