Preston v. Carnation Co.

196 Cal. App. 2d 43, 16 Cal. Rptr. 240, 1961 Cal. App. LEXIS 1544
CourtCalifornia Court of Appeal
DecidedOctober 3, 1961
DocketCiv. 25458
StatusPublished
Cited by8 cases

This text of 196 Cal. App. 2d 43 (Preston v. Carnation Co.) 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
Preston v. Carnation Co., 196 Cal. App. 2d 43, 16 Cal. Rptr. 240, 1961 Cal. App. LEXIS 1544 (Cal. Ct. App. 1961).

Opinion

FOURT, J.

This is an appeal from a judgment in favor of the defendant upon a claim of plaintiff for a real estate broker’s commission.

Plaintiff, a real estate broker, brought an action against the defendant to collect a broker’s commission of five per cent of and upon the sales price of a certain parcel of real property sold by the defendant to the city of Burbank. The plaintiff claims to have been the procuring cause of the sale of the property to the purchaser.

A résumé of some of the facts in the case is as follows: In 1956 the plaintiff, upon an oral contract of employment, sold some property of the defendant’s and was paid a broker’s commission for such service. Thereafter, the defendant told the plaintiff that it wished to sell off certain of its property in the city of Burbank for the sum of $400,000.

The plaintiff, a resident of the city of Burbank, told defendant of his knowledge to the effect that the city of Burbank had indicated an intention of building a new municipal power plant and work yard and that the city might be interested in the purchase of the land in question. The defendant, on May 18, 1956, gave to plaintiff a letter of authority to present the property to the city for a sale. The plaintiff thereafter directed a letter to the city outlining the proposed terms of purchase of the property in question as of that time. Various surveys were had and made by the city and the property in question was included within some of the surveys. To finance the power plant and work yard the city intended to issue and sell bonds which needed the approval of the voters.

The defendant gave to the plaintiff an exclusive listing (to expire November 30, 1956) of certain property which in total area was smaller than the parcel which was originally to be sold. No sale of the property so described was made.

On November 6, 1956, a bond election was held in the city of Burbank and the voters rejected the proposal to issue and sell the bonds for the purposes heretofore mentioned.

On December 6, 1956, the defendant directed a letter to plaintiff giving him a new exclusive listing of certain parcels of the property. This listing was effective to December 31, 1956. The area of the parcels and the price thereof were different from those of the property heretofore listed with *45 the plaintiff. Plaintiff was told in the letter 11 [T]his exclusive will run through December 31, 1956 and if not sold by that time, we will place the property on an open listing basis but we would be glad to protect you or anyone else who has an active prospect.” Plaintiff claims that he reopened negotiations with the city. No sale was completed in 1956. Plaintiff requested a new exclusive listing of defendant’s property and was refused.

On January 30, 1957, the city enacted an ordinance calling for a bond election to be held on February 26, 1957. The bond issue was approved by the voters at the election. On April 16, 1957, the city council noticed a meeting to consider the matter of the location and construction of the plant which was contemplated in the bond issue election. The attorney for the defendant was present at the council meeting. Plaintiff was told in effect by the attorney for the defendant that he, the plaintiff, would have nothing to do with the matter so far as defendant was concerned.

On August 1, 1957, a condemnation action was filed by the city of Burbank and a copy of the summons and complaint were served upon the defendant. The city in said action sought to condemn a part of defendant’s property. On September 25, 1957, the condemnation case was settled when the defendant and the city entered into a “Sales Agreement.” The description of the real property and the terms and conditions of the purchase and sale thereof mentioned in the ‘1 Sales Agreement ’ ’ were different from those contained in the proposal made in the letters to the plaintiff in 1956.

The city manager of the city of Burbank testified with reference to a conversation he had with the plaintiff on or about February 19, 1957, and said, “. . . because we were at that time not at all interested in purchasing the property because the bonds hadn’t been issued. We weren’t sure whether or rather where we were going to put the public works yard so that I could not truthfully say that we were discussing the sale of the property. ... I couldn’t be interested in buying the property at that time because it was not determined whether or not we needed any more property; whether the bonds would pass or not; whether this would be the property that we would ultimately purchase, because there were a number of sites that were being considered.”

The general manager of the public service department of the city of Burbank testified in effect that the city was not an active prospect as a purchaser of the property up to about *46 March of 1957. He testified further with reference to the various ramifications involved in the surveys and in the bond elections and of the various views of the interested parties as to where the plant was to be located.

Appellant now asserts that he is entitled under the circumstances to a real estate broker’s commission of 5 per cent of the sales price of the property to the city. Civil Code section 1624 provides in part as follows:

“The following contracts are invalid, unless the same, or some note or memorandum thereof, is in writing and subscribed by the party to be charged or by his agent:
“4. An agreement for the leasing for a longer period than one year, or for the sale of real property, or of an interest therein; and such agreement, if made by an agent of the party sought to be charged, is invalid, unless the authority of the agent is in writing, subscribed by the party sought to be charged;
“5. An agreement authorizing or employing an agent or broker to purchase or sell real estate for compensation or a commission; ...”

Plaintiff in the first instance did have a written instrument subscribed by the party to be charged which spelled out in effect his rights. After December 31, 1956, however the plaintiff had no such effective writing.

Volume 9, California Jurisprudence 2d, Brokers, section 44, page 190 states, “If a definite time for the continuance of a broker’s agency is fixed in the employment agreement, his authority terminates upon the lapse of that time. ’ ’ The plaintiff should have known, under the circumstances, that unless the employment was evidenced by a writing he could not recover under either an oral contract or in quantum meruit. (See Augustine v. Trucco, 124 Cal. App.2d 229 [268 P.2d 780]; Pacific Southwest Development Corp. v. Western Pac. R.R. Co., 47 Cal.2d 62 [301 P.2d 825].)

There is substantial evidence in the record to the effect that the city was not and could not have been an active prospect for the purchase of the real property in question until after the bond election in February 1957. Further, there is ample evidence in the record to the effect that the plaintiff did not produce the city as a purchaser which was ready, willing and able to purchase the defendant’s property on the terms which were agreeable to the defendant.

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Cite This Page — Counsel Stack

Bluebook (online)
196 Cal. App. 2d 43, 16 Cal. Rptr. 240, 1961 Cal. App. LEXIS 1544, Counsel Stack Legal Research, https://law.counselstack.com/opinion/preston-v-carnation-co-calctapp-1961.