W. I. Hollingsworth & Co. v. Haas

California Court of Appeal Apr 29, 1935 No. Civ. 10011Published

Before: Fricke

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Holding. The court held that a foreclosure sale constitutes a 'transfer' of property by operation of law, thereby triggering the defendants' contractual obligation to pay the real estate broker's commission.

Issues

Whether a foreclosure and sale of property constitutes a 'transfer' under the terms of a real estate commission agreement.
Whether the trial court's findings regarding the parties' practical construction of the agreement were supported by the evidence.
Whether there was a fatal variance between the plaintiff's pleadings and the proof presented at trial.

Disposition. affirmed

Quotations verified verbatim against the opinion

“Under the agreement, therefore, respondent upon such transfer became entitled to its commission.”

FRICKE, J.,

pro tem.

Defendants appeal from a judgment for $2,750 in an action to recover a real estate broker’s commission.

Owning certain real estate in the city of Los Angeles and being desirous of disposing of the same, defendants called upon plaintiff and eventually a three-cornered deal was arranged by the latter whereby defendants received certain realty on Cahuenga Boulevard in the city of Los Angeles. Thereafter a mortgage on the Cahuenga property was foreclosed and the property was sold under the foreclosure decree. Included in the exchange agreement signed by defendants was the provision, “I hereby agree to pay my said agent immediately the regular Los Angeles Realty Board commission for his services”. Defendants also signed a letter on June 10, 1931, • constituting the agreement upon which this action is based, the provisions of which, as essential to a determination of the question before us, are: “In consideration of your services rendered in negotiating

[521]

an exchange of my property [on] . . . Ninth street for the property [on] . . . Cahuenga Boulevard ... we agree to pay you upon the resale, exchange or transfer of the property we are acquiring . . . the regular Los Angeles Realty Board commission on the value of [my Ninth street] property based upon the amount represented by the $60,000 mortgage thereon, plus the consideration which I receive from the equity in the Cahuenga boulevard . . . property.

“Provided, however, that in any event the commission which we hereby agree to pay . . . shall not be less than $2750.00.”

Appellants contend that no commission whatever was due except upon the resale, exchange or transfer of the Cahuenga Boulevard property, and that the foreclosure and sale of that property under a first mortgage was not a “transfer” within the meaning of that word as used in the agreement.

It will be noted that while the realty board rate of commission is specified in the first paragraph of the agreement, the amount of the commission therein provided for is not fixed but is to be based upon the sum of $60,000

plus

W. I. Hollingsworth & Co. v. Haas

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FRICKE, J.,

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