3 P.2d 950 | Cal. Ct. App. | 1931
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *388 Appellants were the owners of the leasehold and furnishings of the Ramona Hotel in San Francisco. Being desirous of disposing of these properties they entered into negotiations with respondents, who were real estate brokers. Respondents secured an offer from one Swanson to exchange a ranch owned by him for appellants' hotel properties. This offer took the form of a writing embodying an agreement to exchange the properties upon terms set out therein, which was signed by Swanson and transmitted by respondents to appellants for their signatures. [1] Instead of signing this proposed agreement appellants attached thereto a letter signed by themselves which recited that they accepted and approved the proposed agreement "with the following stipulations and conditions added thereto". The letter set out several stipulations different from or additional to those contained in the proposed agreement signed by Swanson and was therefore in legal effect not an acceptance of the contract proposed by Swanson, but a counter offer to him and did not result in a binding contract between Swanson and appellants for the exchange of their properties.
[2] However, the proposed agreement as executed by Swanson contained a provision by the terms of which appellants were to pay respondents a commission of $2,500. In *389 their letter attached to the proposed agreement appellants stated that "the commission of $2500.00 due to Keeler Graf may be paid by us at any time within sixty days after closing of deal". This amounted to an agreement by appellants to pay respondents a commission of $2,500 upon the exchange of the properties upon the terms set out in the proposed agreement signed by Swanson as modified by the provisions contained in the letter signed by appellants.
One of the conditions contained in the proposed agreement was that Swanson's ranch was subject to an encumbrance "in the amount of $18,000.00 payable $2000.00 per year". It developed that this encumbrance was in fact a flat obligation contained in a note by the terms of which the entire $18,000 was payable one year after the date of the note's execution. After extended negotiations the exchange failed of consummation and upon the refusal of appellants to pay the commission, respondents sued and recovered judgment for $2,500, from which appellants take this appeal.
Under section
In the trial court respondents met this contention by offering oral testimony which was received over appellants' objection tending to prove first: that Swanson had an oral agreement with the bank by which he was to pay only $2,000 per year on the $18,000 obligation and that the bank was willing to make the same terms orally with appellants in the event that they acquired the ranch; second: that at the time the proposed agreement was drawn appellants were advised of this fact and were satisfied to accept the ranch subject to *390 the existing encumbrance; and third, that following the counter proposal contained in their letter appellants orally agreed to accept the ranch subject to the existing obligation. The trial court found in accordance with this testimony.
[3] Appellants attack the reception of this evidence and the making of findings based thereon as error, pointing to section
[4] As to evidence that the bank had agreed orally to the payment of the $18,000 at the rate of $2,000 per year and that appellants knew this fact and were satisfied with it prior to the drawing of the proposed agreement it is settled that "a written contract cannot be modified by a contemporaneous oral agreement in direct conflict therewith between the same parties". (PacificStates Securities Co. v. Steiner,
[6] Respondents rely on cases of which Toomy v. Dunphy,
Moore v. Borgfeldt,
Respondents' difficulty is that they are relying upon a written memorandum which called for an exchange upon certain specific terms and one of those terms the other party to the proposed exchange was unable to meet. The case is typical of the very evil sought to be avoided by the addition of subdivision 6 to section
[7] Finally respondents say in their brief "that it is felt that there is considerable merit to the contention that respondents' contract of employment did not need to be evidenced by a writing", citing Guy v. Brennan,
For the errors discussed the judgment is accordingly reversed.
Nourse, P.J., and Sturtevant, J., concurred. *393
A petition for a rehearing of this cause was denied by the District Court of Appeal on November 5, 1931, and a petition by respondents to have the cause heard in the Supreme Court, after judgment in the District Court of Appeal, was denied by the Supreme Court on December 3, 1931.