Pearsall v. Townsend

CRAIL, J.

This is an appeal from a judgment in favor of the plaintiff in an action upon a contract made between the defendants and H. H. Townsend for the express benefit of the plaintiff. Hereafter he will be referred to as Townsend and will not be included when the word defendants is used. It is the contention of the defendants that the plaintiff, a third person, cannot enforce the contract against them, the defrauded parties, where the contract could not be enforced by the said Townsend. In order to understand this contention it will be necessary to set forth a statement of the facts rather fully.

The defendant Parkford owned all of the stock of the defendant company. The defendant company was the owner of a tract of land in Los Angeles County hereafter called “Hollydale”. Townsend was a real estate broker. Townsend entered into a contract with the company dated August 29, 1923, and hereafter called “Exhibit A”, by the terms of which Townsend agreed at his own cost and expense to subdivide the property and lay out and improve the streets and alleys and also to sell lots, paying all the sale expenses, in consideration of which Townsend was to receive one-half of the gross sales price of all lots sold.

Pending the negotiations of the aforesaid contract Townsend and plaintiff Pearsall entered into a contract by the

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terms of which the plaintiff agreed to do the necessary engineering, surveying and map work to subdivide the said property, staking the lots, surveying streets, and preparing the profiles and maps. The defendants admit in their briefs that the plaintiff thereafter did the work required of him under his contract and that the price fixed was fair and reasonable. It is undisputed also that the defendants knew that the plaintiff was performing and had performed the said work in the subdivision. Townsend proceeded under the contract Exhibit A for several months with the defendant company, but difficulties between him and the company arose out of Townsend’s failure to account for moneys received by him and other acts claimed by the defendant company to have been fraudulent.

In an effort to adjust and settle these difficulties the defendant Parkford made the contract with Townsend upon which the plaintiff bases his action, hereafter called “Exhibit B”. Under the terms of said contract Townsend assigned to the said defendant all of his interest in said subdivision and further agreed, “As consideration for this assignment the party of the second part agrees to advance and pay the commissions, salaries and other expenses incurred by the party of the first part and owing on account of the sales made and work done under said contract and further agrees to finance the completion of said contract in the manner hereinafter stated. . . . All existing contracts for improvements of streets, sidewalks, etc., shall be carried out and financed by the party of the second part hereunder”. Thereupon the plaintiff stated to the said defendant that the total amount of his bill for services performed in the subdivision was $5,070. It is not contended by defendants that the contract in part was not made expressly for the benefit of the plaintiff.