198 Cal. App. 2d 658 | Cal. Ct. App. | 1961
The plaintiff, a licensed real estate broker, sought to recover a commission for which provision had been made in a lease executed by the defendant Lazarus as lessor and by Ronald Priestley as lessee. She relied on no other
The lease was executed on March 24, 1958, and was for a period of 20 years commencing on November 1, 1958. The lessor agreed to construct upon the demised premises a building suitable for use as an ice palace and auditorium • if the building costs should exceed $100,000, the total amount of such excess costs was to be paid by the lessee.
Article IV of the lease was as follows: “It is expressly understood and agreed that this lease shall be void and of no effect in the event that Lessor is unable to obtain upon reasonably satisfactory terms financing for the entire portion of building costs to be borne by him as defined and provided in this lease. In that event all monies paid to or deposited with Lessor by Lessee shall be returned to Lessee and neither party shall have any further obligation to each other or cause of action against the other. It is understood and agreed that ‘reasonably satisfactory terms’ as provided in this Article IV shall include, but not be limited to, a loan for a term of not less than ten (10) nor more than twenty (20) years with annual interest at six percent (6%) and initial charges, including brokerage, not to exceed one (1%) percent. It is further understood and agreed that if Lessor is unable to obtain said financing upon reasonably satisfactory terms, Lessee shall have a reasonable opportunity to obtain said financing upon reasonably satisfactory terms as defined in this Article IV.”
Article V of the lease was in part as follows: ‘ ‘ Lessor will pay, and will hold Lessee harmless therefrom, the standard Real Estate Board commission ... to wit: a total commission of $9,000.00. Lessor will pay 50 percent of said commission to the brokers when construction work on the building described herein is actually commenced and will pay 50 percent of said commission upon receipt from Lessee of the payment of $10,000.00 provided in Article 111 (6)1 against Lessee’s payment of $24,000.00 provided above. Lessee will
Thereafter the lease was assigned to a corporation of which Mr. Priestley was president and a major stockholder. On July 7, 1958, the lease was modified with respect to certain matters. It was provided that in the event the building costs should exceed $100,000, Mr. Lazarus, the lessor, would advance the amount of such excess costs in the form of a loan to the corporation which was to be repaid as provided in that supplemental agreement. Changes were also made with respect to the payment of rental.
Construction of the proposed building was never undertaken. On August 29, 1958, an agreement and release was executed by Mr. Lazarus and by Mr. Priestley, individually and on behalf of the corporation. One paragraph therein was as follows:
Some of the findings of fact of the trial court were: There was no agreement for the payment of a commission by the defendant to the plaintiff except that contained in the lease; the plaintiff at all times acted as broker for Ronald Priestley; Priestley paid a deposit of $9,000 to the defendant; the lowest bid received for the construction of the building was in the amount of $127,000; the defendant attempted to obtain the required financing and applied therefor to certain banks but “was not able to obtain any financing or commitments whatsoever, for the reason amongst others, that the institutions would not loan on a one purpose building”; the lessor could not obtain the “agreed financing”; the construction of the building was never started and the lessor did not receive the sum of $10,000 for which provision was made in article III (6) [III (b) ] of the lease.
Harold Blair, a real estate salesman, testified that he represented Mr. Lazarus, the lessor, and that the plaintiff, Mrs. Boyd, represented the lessee in the transaction.
Mr. Lazarus testified that the lowest bid for the construction of the building as planned was approximately $127,000. He discussed the additional cost of $27,000 with Mr. Priestley. Mr. Priestley said that he could not raise the money and asked Mr. Lazarus to do so; Mr. Lazarus agreed that he would if the terms of the lease were changed so as to compensate him for the additional investment. As a result of the conversations between the two men, the supplemental agreement of July 7, 1958, was made. By that time Mr. Lazarus did not have from any source a loan of at least $100,000 for a period of 10 years at the interest rate of 6 per cent with 1 per cent charges or on any terms reasonably approximating such terms. He had no loan at all. Upon his application to the Bank of Encino, a loan was refused. Before August 1, 1958, Mr. Lazarus had not agreed with Mr. Priestley that there should be a mutual release. On August 4, 1958, Mr. Lazarus had no loan commitment for $100,000 on any terms from any source.
Over the plaintiff’s objection limited to the ground of its relevancy, a letter from a vice-president of the Bank of America was received in evidence; therein it was stated in substance that in 1957 Mr. Lazarus inquired with respect to whether that hank would finance an ice-skating rink on his property and he was informed that it was not the bank’s policy “to grant loans on property improved by a building to be used for this purpose.”
A portion of the deposition of Mr. Lazarus was read into evidence on behalf of the plaintiff. Therein Mr. Lazarus testified as follows: “ Q. Did you ever tell Mr. Priestley you wouldn’t go ahead with the deal unless he raised the guaranteed rental to $2,000 minimum? A. I did, maybe. I don’t know. I probably did, but whether I did or not I don’t know at this particular time. I said, ‘If you want the deal, you have to pay the $2,000 extra,’ and I wouldn’t be a bit surprised that I did tell him that.”
Prior to the time that Mr. Lazarus testified on his own behalf at the trial, Mr. Priestley, when called as a witness by the plaintiff, testified as to the efforts of Mr. Lazarus in the latter part of July or the first part of August to get Mr. Priestley to modify the terms of the lease so as to provide a more favorable financial return for Mr. Lazarus. Mr. Priestley told him that it was impossible for him to accept the proposed revision. Thereafter, Mr. Priestley contacted his attorney and he and Mr. Lazarus entered into the release.
Half of the commission was to be paid when construction of the proposed building was actually commenced. The other half was to be paid when the lessor received a particular payment of $10,000. Accordingly, performance was not due as to either portion of the commission except upon the happening of a particular event. (See Cochran v. Ellsworth, 126 Cal.App.2d 429, 439-440 [272 P.2d 904] ; Amies v. Wesnofske, 255 N.Y. 156 [174 N.E. 436, 437-438, 73 A.L.R. 918].) But it is manifest that the parties did not contemplate that the construction of the building would commence before the financing could be obtained pursuant to the provisions of article III (b). The trial court was justified in determining that it was not possible for Mr. Lazarus to obtain such financing because of the one-purpose nature of the proposed structure. Under the provisions of article IV, the lease was to be “void and of no effect” in that event. In such event the lessor and lessee were free to treat the lease as terminated. As said in Houghton v. Kuehnrich, 46 Cal.App.469 [189 P. 457], at page 474: 1 ‘ The provision of said agreement for the payment of a compensation to plaintiff was an integral part of it, and when the contract was canceled and terminated all its provisions were canceled and terminated, including the provision for plaintiff’s benefit.”
The judgment is affirmed.
Shinn, P. J., and Vallée, J., concurred.
The reference was apparently intended to be to article III (b) which was in part as follows: "(b) Notwithstanding any other provision in this lease Lessee will pay Lessor the sum of Twenty-Four Thousand Dollars (§24,000.00) as guaranteed rent in advance for twelve (12) months of the term of this lease ... in installments as follows: Nine Thousand Dollars (§9,000.00) upon the date of the signing of this lease. Five Thousand Dollars (§5,000.00) at the time that construction is actually commenced on the demised premises. Ten Thousand Dollars (§10,000.00) to be paid at least sixty (60) days before occupancy of the premises by Lessee.”
Under date of August 4, 1958, Mr. Lazarus’ attorney wrote to Mr. Priestley’s attorney in part as follows: 11 Specifically, Mr. Lazarus advises me that he has obtained the financing specified in the lease. . . .” The proposed form of release which had been submitted on behalf of Mr. Priestley on or about August 1, 1958, was returned to the latter’s attorney. In a letter to Mr. Priestley dated August 6, 1958, Mr. Lazarus ’ attorney stated in part: ‘ ‘ Mr. Lazarus has obtained the necessary financing upon satisfactory terms and has been ready, able and willing to commence construction work on the premises at once.”
Under date of August 1, 1958, Mr. Priestley’s attorney sent a fornt of release to Mr. Lazarus’ attorney.