25 Cal. 2d 1 | Cal. | 1944
Lead Opinion
This is an appeal by the executors of the last will and testament of Charles H. S. Rule, deceased, from an order of the probate court fixing and allowing a broker’s commission, and directing payment thereof by the executors, to respondent real estate broker Alex McCluskey, upon the sales to a purchaser secured by respondent of certain real and personal property of the Rule estate. The substance of appellants’ contention is that the evidence fails to support the interpretation which the trial court (sitting in probate) placed upon a written contract between appellants and respondent relative to the procurement of a purchaser, and that therefore such court erred in allowing respondent a commission
The respondent Alex McCluskey, doing business under the firm name and style of McCluskey Realty Company, Santa Rosa, California, at all times concerned was a duly licensed real estate broker and his son C. E. McCluskey was a licensed salesman employed by the father. They carried on their business correspondence on stationery with letterheads showing their profession. As early as January 16, 1942, respondent or his son and agent, on their letterhead stationery, wrote to H. S. Young, an attorney whose firm was employed as the attorneys for the executors in this estate and who was handling the estate matters on behalf of his firm, stating that “Mr. Tom Brownscombe, Attorney here in Santa Rosa, gave us your name stating that you were the attorney for the Charles Rule estate. We have two or three substantial cash buyers for stock ranches and would like to know at an early date if the Rule Ranch at Jenner is for sale and your best price. The writer has been on the ranch several times and we feel that we are fairly familiar with same.” On January 20 Mr. Young replied as follows: “In response to your letter of January 16th, I beg to enclose herewith prospectus on the Rule Ranch. Any cattleman who buys this ranch would take over the registrations for the Hereford breeding stock and the well known good will.” The prospectus, which, in effect, is an obvious sales talk and invitation for bids on the property, accompanied the letter.
In August, 1942, in continuation of the negotiations which had been opened in January, the agent on behalf of the realty company, on its letterhead, wrote to Young for, and the latter in response mailed to him, an inventory of the livestock and equipment on the Rule Ranch. In the meantime the agent had contacted one Louis T. Willig, had succeeded in interesting him in purchasing the property and, during the latter part of August, was, with the father, respondent herein, engaged in assisting Willig to obtain financing for the purchase. On August 24 Willig, who had just learned that one of the executors was one W. P. Wobber, a personal acquaintance of his, inquired of the agent whether the latter would object if he, Willig, saw Wobber personally concerning the property, and received the agent’s permission to do so. There was no sug
“Upon Tues., Aug. 25, we again contacted Mr. Willig, by appointment, and discussed the possibilities of financing the purchase and the amount of his proposed bid. In the meantime we had ascertained from one of our local banks what they would loan him on the property. Yesterday, Sept. 1, we ’phoned Mr. Willig, making an appointment to meet him at our office following an interview he proposed to have with Mr. Puller, Pres, of the Bank of Sonoma County at Sebastopol. Mr. Willig failed to appear at our office and upon our ’phoning Mr. Puller we were advised that Mr. Willig had told him of our contact with him but that ... he was going to file directly with Mr. Wobber.
“We feel very definitely that under the circumstances if Mr. Willig does file a bid it should be regarded as being subject to our commission.” (Italics added.)
Under date of September 5,1942, Young replied as follows: “I have your letter of September 2nd. The executors have not yet made any return on the Rule Ranch sale, so as I write this letter it is questionable as to who will be the successful bidder. While it is most agreeable to us to deal with brokers nevertheless this bid came directly from the purchaser and not through any broker, as a net bid. I think you will fully understand as the attorney for the estate there is nothing I can do concerning your commission.” (Italics added.) The statement in the above quoted letter that “this bid came directly from the purchaser and not through any broker” is apparently true only in a limited and technical sense. The evidence amply supports a finding that the bid came through the efforts of the broker who contacted and interested the bidder and carried on negotiations with him as shown above. The statement that the proposal came “as a net bid” is, of course, a conclusion of the writer of the letter, not binding on Mr. MeCluskey or the court.
On September 12, 1942, the executors, knowing that the broker had actually procured the bid and that he would claim a commission on the sale if confirmed, through Young’s law
On September 22 the above mentioned Mr. Thomas M. Brownscombe, an attorney and inheritance tax appraiser in Santa Rosa, at whose office the executors in this estate had specified that bids for the ranch property should be filed, wrote to Young in San Francisco as follows: “Dear Harry: Mr. Alex McCluskey, a broker of this city, has one or more prospective purchasers for the Rule ranch and personal property. I have advised him that for his protection he should have a formal listing from the executor before making a bid in court. Accordingly I enclose herewith a form of contract to' be signed by the executor. If it meets with your approval would you kindly have it signed and return it to me.”
The form of contract referred to in this letter was, under date of September 23, 1942, signed by the two executors, and, prior to the hearings on September 25 of the petitions for confirmation of the proposed sales, was delivered to the respondent. It is addressed to the respondent, dated September 23, 1942, and the body of it reads as follows:
“This will authorize you to procure a purchaser for the real and personal property of the estate of CHARLES H. S. RULE, deceased, a petition for the confirmation of the sale of which has been heretofore filed in the Superior Court of Sonoma County. A commission will be paid you out of the. proceeds of a sale to any purchaser secured by you in an amount to be fixed and allowed by the court upon confirmation of the sale.” It is signed, “Very truly yours, Wallace L. Ware Executor. W. P. Wobber Executor.”
Obviously the executors in signing the quoted contract did not regard the property as having been actually sold. No other bids were made at the time of the court hearings on September 25, and on that date Mr. Willig’s bids were considered by the court and the sales to him confirmed. By stipulation of the parties the hearing on respondent’s application for broker’s commissions was continued to October 2. Subsequent continuances placed the actual hearing on such
Appellants contend:
First, that the contract embodied in the letter of September 23, 1942, addressed to respondent broker and signed by the two appellant executors evidences no intention by the executors to pay to respondent a commission for services which the latter had already performed, viz., the procuring of Willig as a bidder and prospective purchaser for the estate property; and that such contract should be construed as referring to future or other bidders to be produced by respondent.
Second, that, in any event, the authority granted appellants by section 760 of the Probate Code to contract to pay a commission to a real estate agent out of the proceeds of the sale of estate property to any purchaser secured by such agent is by the terms of that section limited to services to be performed and purchasers to be secured by the agent in the future, and that appellants were without power to contract to pay for services already rendered by an agent.
Section 760 of the Probate Code, upon which each of the parties hereto relies, provides as follows: “The executor or administrator may enter into a written contract with any bona fide agent to secure a purchaser for any real or personal property of the estate, which contract shall provide for the payment to such agent out of the proceeds of a sale to any purchaser secured by him of a commission the amount of which must be fixed and allowed by the court upon confirmation of the sale; and when said sale is confirmed to such purchaser, such contract shall he binding and valid as against the
Appellants, in support of their first contention—that the contract by its own words clearly contemplates payment to respondent for future services, only—urge the right of the trial court in construing the contract to consider the “surrounding circumstances and the matter to which” the contract relates, and particularly the expressions contained in the letter of September 22 to Young from Brownscombe (whom appellants designate as respondent’s attorney and agent) with which the contract form was forwarded to Young for signing by appellant executors. The fact is, however, that the trial court had before it and undoubtedly did consider evidence of the surrounding circumstances, including the Brownscombe letter, and yet determined that respondent broker was entitled to his earned commission. And, in the absence of findings of fact and conclusions of law, every intendment is in favor of the judgment or order appealed from and it is presumed that every fact or inference essential to the support of the order and warranted by the evidence was found by the court. (See Haime v. de Beaulieu (1942), 20 Cal.2d 849, 852 [129 P.2d 345] ; Bekins Van Lines, Inc. v. Johnson (1942), 21 Cal.2d 135, 137 [130 P.2d 421] ; Estate of Shaw (1927), 85 Cal.App. 518, 525 [260 P. 351] ; 2 Cal.Jur. 852, § 499; 10 Cal.Jur. 741, § 62.) Whether, in the light of the conflicting inferences to be drawn from the evidence, the parties by their contract intended to provide for the payment to respondent of a commission for his past services—which had not yet matured into a confirmed sale and which, hence, in one sense, were services in course of rendition—in securing Willig as a bidder and prospective pur
Prom the date of the first communication (January, 1942) between respondent or his agent on the one hand and Young, as attorney for the executors, on the other, it was known to Young and through him to the executors ( 1 Cal.Jur. 846-847, § 125; 3 Cal.Jur. 611, § 25; Laukkare v. Abramson (1935), 9 Cal.App.2d 447, 449 [50 P.2d 478]; Smith v. Thomsen (1935), 8 Cal.App.2d 603, 606 [48 P.2d 102]) that respondent's realty company was interested in securing a purchaser for the estate property and in thereby earning a commission. The evidence shows that Mr. Young, and, consequently, the executors, knew at the time Willig’s bid was received that he had been secured by respondent as a prospective purchaser and they (Young and the executors) had been specifically notified, prior to the time that they determined to accept Willig’s bid and prior to their filing in court of the petitions to confirm the sales to him, of that fact and of the fact that respondent claimed to be entitled to a commission for his services performed. Thereafter appellant executors filed the petitions for confirmation and, prior to the hearing on such petitions, executed the contract under which the trial court presumably awarded a commission to respondent. It has been consistently held in this state, following the language of Muir v. Kane (1909), 55 Wash. 131, 135-136 [104 P. 153,19 Ann.Cas. 1180, 26 L.R.A. N.S. 519] that “The moral obligation to pay for services rendered as a broker in selling real estate under an oral contract, where the statute requires such contract to be in writing, is just as binding as is the moral obligation to pay a debt that has become barred by the
Moreover, the acts of the executors in accepting the benefits of respondent's services by petitioning for confirmation of the sale to Willig (until which confirmation, as previously noted, there could be no binding obligation to pay a commission), after definite notice that respondent was the procuring cause of Willig's bid, and in thereafter executing the written contract of September 23, constituted ratification of the acts of respondent as agent of the executors in the same manner (i. e., in writing) as it is claimed was required for a precedent authorization, and thus entitled respondent broker to his commission. (See 4 Cal.Jur. 578-579, § 22.)
Appellants charge that certain expressions contained in the letter of September 22 from Brownscombe to Young (which accompanied the form of written contract executed September 23) indicate that the contract contemplated payment to respondent for future services only, that in writing such letter and preparing the contract Brownscombe was act
It may also be noted that although appellants argue that the contract was prospective only and was intended by the parties thereto to cover only future services to be rendered by respondent, i. e., the production of increased bids in court at the time of hearing on the petitions for confirmation of the sales to Willig, no express contract is required by the Probate Code in order to entitle to a commission a broker producing a purchaser to whom, upon an increased bid in open court, the sale is confirmed. Under such circumstances, by the provisions of section 761 of the Probate Code, such broker is entitled to commission on the full purchase price for which the sale is confirmed, less one-half of the commission on the original bid. The authorization to pay this com
The language of Brownscombe’s letter, previously mentioned, supports the implied views of the trial court. In the letter Mr. Brownscombe says, "I have advised him [Mr. McCluskey] that for his protection he should have a formal listing from the executor before making a bid in court. Accordingly I enclose herewith a form of contract to be signed by the executor. If it meets with your approval would you kindly have it signed and'return it to me.’’ (Italics added.) While conflicting inferences may be drawn it is apparent that the trial court could have considered as significant the fact that Mr. McCluskey would need no protection in the shape of a written contract for a commission on a sale which might be confirmed to a new bidder in open court on proceedings initiated to confirm a sale to a previous bidder. No "approval” by Mr. Young or the executors would be necessary to entitle him to the commission on such a proceeding. Likewise the statement in the Brownscombe letter that Mr. McCluskey had "one or more prospective purchasers for the Rule ranch and personal property” was a proper and correct reference to Mr. Willig and, the trial court was warranted in finding, Mr. Young and the executors knew it. Willig, obviously, was a "prospective purchaser” until the proposed sales to him had been confirmed. The statement in the letter that in Mr. Brownscombe’s opinion Mr. McCluskey should have "a formal listing . . . before making a bid in court” may be presumed to have been interpreted by the trial court as referring to the actual presentation in court of Mr. Willig’s bids in asking
Appellants seek to sustain their second contention— that, as executors, they were without authority to contract to pay a commission to • respondent for the procuring of a purchaser whose bid had already been returned to the court for confirmation—by reliance upon the doctrine, enunciated in Perry v. Superior Court (1938), 29 Cal.App.2d 114, 116 [84 P.2d 250], that “the administration of the estate of deceased persons is purely statutory, and the procedure outlined in the statutes is controlling. When the powers and duties of the administrator are fixed by statute there is no inherent right to assume or exercise any power not conferred, or to depart from the procedure outlined.” (See, also, 11a Cal.Jur. 86-87, § 35.) They assert that the opening words of section 760 of the Probate Code, i. e., “The executor . . . may enter into a written contract with any bona fide agent to secure a purchaser for any real or personal property of the estate,” limit the power of an executor to that of contracting to pay for services to be performed by the agent in the future and that he is not empowered to agree to pay for past services—in this case the procuring of a bid which appellant executors had accepted but which the court had not yet confirmed. Respondent, however, urges that a purchaser has not been “secured” within the meaning of section 760 until a sale has been completed by court confirmation and fixing of the amount of commission to be allowed, and that until that time the executors may execute the contract authorized by the section and may thereby bind the estate to the payment of the commission fixed by the court upon confirmation. Actually, the estate is not bound by any such contract until and unless the proposed sale is confirmed by the court and then the commission is payable only out of the proceeds of the sale. The section in question itself provides that “when
In Wilson v. Fleming (1930), 106 Cal.App. 542, 549 [289 P. 658], the court in construing the first two paragraphs of section 1559 of the Code of Civil Procedure (the same, except for immaterial changes, as present Probate Code section 760), held that “not until ... a deed is passed and a mortgage or deed of trust taken for such payments as are deferred, has a sale been actually completed within the meaning of section 1559 [of the Code of Civil Procedure].” And as defined by Webster’s New International Dictionary (1943 ed.), “to secure” is “to acquire certainly.” In 56 Corpus Juris 1275-1276 the verb “secure” is stated to mean “to acquire certainly, ... to confirm.”
Moreover, provisions of the Probate Code are to be liberally construed with a view to effect its objects and to promote justice. (Estate of Paterson (1939), 34 Cal.App.2d 305, 315-316 [93 P.2d 825].) It appears that such a construction was adopted by this court in the recent ease of Estate of Mitchell (1942), 20 Cal.2d 48 [123 P.2d 503], in which a broker was awarded a commission on a sale of estate property to a purchaser secured by him under a contract (in the form of a letter) which failed to make express provision for payment of any commission whatever, either out of proceeds of the sale or from any other source. In affirming the award this court, speaking through Mr. Justice Shenk, stated (pp. 50-51), “Although the parties did not expressly provide for a commission it is not seriously questioned that a commission was intended if a sale was consummated and confirmed by
For the reasons above stated the order appealed from is affirmed.
Gibson, C. J., Shenk, J., Curtis, J., and Carter, J., concurred.
Dissenting Opinion
I dissent. The majority opinion holds that this court is bound by the implied interpretation of the agreement of September 23, 1942, by the trial court because “ [conflicting] inferences may be drawn from the contract and the surrounding circumstances.” The very possibility of what the majority opinion calls conflicting inferences, actually conflicting interpretations, far from relieving the appellate court of the responsibility of interpretation, signalizes the necessity of its assuming that responsibility. It is established that in the absence of conflicting extrinsic evidence the appellate court must make its own interpretation of the instrument, displacing the interpretation of the trial court if they are inconsistent. (Estate of Platt, 21 Cal.2d 343, 352 [131 P.2d 825] ; Moffat v. Tight, 44 Cal.App.2d 643, 648 [112
In interpreting a written agreement, the court must ascertain the meaning of the words and other manifestations of intention forming the agreement. (Restatement: Contracts: §226; 3 Williston, On Contracts [1936] p. 1726.) It must consider the usual meaning of the words, the circumstances in which they were used, and the reasons for their use. This function is a judicial one, even though it “may not involve any question of law in the exact sense” (Thayer, Preliminary Treatise on Evidence, p. 204) to be exercised according to the generally accepted canons of interpretation so that the main purpose of the instrument may be given effect. (See Civ. Code, §§ 1635-1661; Code Civ. Proc., §§ 1856-1866.) Factual and legal elements are so closely interwoven that there can be no effective review of the trial court’s interpretation unless the appellate court goes through the whole process of interpretation. Otherwise conflicting decisions of trial courts, in the event one party has made identical agreements with other parties, would have to be affirmed by the appellate courts, which would be bound by any number of conflicting interpretations of the same agreement.
In the present case there was no conflict in the extrinsic evidence. This court is therefore bound to make its own interpretation of the agreement of September 23, 1942. That agreement was the only one existing between the parties, for the correspondence between respondent and the attorney for
The record shows that respondent at the trial vigorously objected to the admission of the Brownscome letter in evidence. Since he now contends that the letter was not admissible, it is necessary to determine the question whether the letter was admissible as extrinsic evidence in aid of the interpretation of the agreement of September 23, 1942. Respondent contends that the promise of a commission in the instrument of September 23rd covered the sales to Willig and that in view of the clear, common meaning of the language used, the promise cannot be otherwise interpreted. Even if it be assumed that the instrument of September 23rd would seem unambiguous to a reader unfamiliar with the circumstances surrounding its execution, appellants would not be precluded from showing the
The main purpose of interpretation is to give effect to the intention of the parties at the time of contracting (Civ. Code, § 1636; Universal Sales Corp. v. California, etc., Mfg. Co., 20 Cal.2d 751, 760 [128 P.2d 665] ; Bader v. Coale, 48 Cal.App.2d 276 [119 P.2d 763]; see 6 Cal.Jur. 255, 4 Cal.Jur. Ten-year Supp., 1943 revision, 107). This purpose would be defeated if it could not be determined what the parties meant when the language of their contract seems unambiguous to the general reader unaware of the circumstances under which the contract was executed, who bases his understanding of the language exclusively on his knowledge of the meaning of the words in common usage. (Ermolieff v. R. K. O. Radio Pictures, 19 Cal. 2d 543, 550 [122 P.2d 3].) Though language that appears unambiguous to the general reader gives rise to an inference that the parties used the language in its ordinary meaning, the inference may be rebutted by evidence that the parties used the words in question in a different sense. (Code Civ. Proc., § 1861; Civ. Code, § 1636; Weinstein v. Moers, 207 Cal. 534 [279 P. 444]; Shean v. Weeks, 176 Cal. 592 [169 P. 231]; see McBaine, The Rule Against Disturbing the Plain Meaning of Writings, 31 Cal.L.Rev. 145, 149.) Otherwise “the meaning of the people who did not write the document” would determine its interpretation (see 9 Wigmore, Evidence, 4th ed., § 2462), and the intention of the parties might be nullified (Weinstein v. Moers, supra, at p. 540) in violation of the provisions of sections 1856. 1860, 1861 of the Code of Civil Procedure and sections 1636 and 1647 of the Civil Code, which are applicable not only when an ambiguity appears to the reader from the face of the instrument, but also when there is an “extrinsic ambiguity” (Code Civ. Proc., § 1856, subd. 2), namely, an ambiguity that arises when the instrument is read in the light of all the circumstances surrounding its preparation. (Pacific Indemnity Co. v. California Electric Works. 29 Cal.App.2d 260, 272 [84 P.2d 313].) As the United States Supreme Court declared in Reed v. Merchants’ Mut. Ins. Co.. 95 U.S. 23. 30 [24 L.Ed. 348] : “Although a written agreement cannot be varied by addition or subtraction bv proof of the circumstances out of which it grew and which surrounded its adoption, yet such circumstances are constantly resorted to for the purpose of ascertaining the subject matter and the standpoint of the parties in relation thereto. Without some knowledge derived from such evidence, it would be im
The extrinsic evidence admissible to furnish the preliminary knowledge necessary to an understanding of the language of the instrument comprises the evidence as to “circumstances surrounding the parties at the time they contracted . . . including the object, nature and subject matter of the agreement . . . and the preliminary negotiations between the parties” in order that the court may “place itself in the same situation in which the parties found themselves at the time of contracting.” (Lemm v. Stillwater Land & Cattle Co., 217 Cal. 474, 480 [19 P.2d 785]; Civ. Code, § 1647; Code Civ. Proc., § 1860; Universal Sales Co. v. California etc. Mfg. Co., supra, p. 761.)
The statement sometimes found in the cases that the extrinsic facts are admissible only when a written instrument is ambiguous, simply means that the language used by the parties must be susceptible to the meaning claimed to have been intended by the parties. (Balfour v. Fresno Canal & Irr. Co., 109 Cal. 221 [41 P. 876]; Smith v. Carlston, 205 Cal. 541, 550 [271 P. 1091]; Barlow v. Frink, 171 Cal. 165, 172 [152 P. 290] ; Kenney v. Los Feliz Investment Co., Ltd., 121 Cal.App. 378, 386 [9 P.2d 225]; In re Smith’s Will, 254 N.Y. 283 [172 N.E. 499, 72 A.L.R. 867]; Goode v. Riley, 153 Mass. 585 [28 N.E. 228] ; Restatement, Contracts, § 242, comment a; Holmes, The Theory of Legal Interpretation, 12 Harv.L.Rev. 417,420.) If the evidence offered would not persuade a reasonable man that the instrument meant anything other than the ordinary meaning of its words,- it is useless. (See Williston, Contracts [rev. ed. 1936], § 629.) In the light of the foregoing principles, the BrownseOmbe -letter was clearly admissible.
Since there was no written contract, as" required by section 760 of the Probate Code, to pay respondent a commission on the sales to Willig, the judgment should be reversed. The rule that a broker must have a contract in order to recover for his services, however beneficial they are to the principal, is necessary to protect the principal, who otherwise would frequently be unable to determine whether the price agreed upon with the purchaser included- a commission: (See Restatement, Agency, §§ 441 Comment (c), 448 Comment (f);
Edmonds, J., concurred.
Appellants’ petition for a rehearing was denied November 13, 1944. Edmonds, J., and Traynor, J., voted for a rehearing.