Herman v. Savage

KNIGHT, J.

The defendant, M. J. Savage, appeals from an order granting a new trial after verdict and judgment in his favor in an action brought by plaintiff as assignee of Alberton Realty, Inc., to recover a real estate broker’s commission claimed to be due for services rendered by the realty company in connection with a written agreement made between defendant and Mrs. Ray Schwartz for the exchange of certain real property situate in San Francisco, and which exchange defendant subsequently refused to consummate. The order granting the new trial was made upon the ground that the verdict was not supported by the evidence.

The exchange agreement wras executed by defendant on September 29, 1932, and by Mrs. Schwartz on October 7, 1932, following several weeks negotiations between all parties interested. According to the testimony introduced on behalf of plaintiff the only reason given by defendant for his refusal to go through with the exchange was his fear of the outcome of the presidential election which was then close at hand. At the trial, however, he placed his refusal upon the grounds that Mrs. Schwartz had failed to perform certain prerequisite conditions specified in the agreement of exchange and that the tender of exchange made by her was defective and without readiness or ability to perform.

The first ground of refusal so urged is based upon the following facts: The property belonging to Mrs. Schwartz, which defendant agreed to accept in the exchange, was located on the corner of Bush and Franklin Streets. Erected thereon was a building consisting of one story and mezzanine, and the entire premises were under a fifteen-year lease to the Firestone Tire and Rubber Company of West Virginia. The term of the lease began in June, 1930, and was to expire in June, 1945. It called for a gradual increase of rentals ranging from $1100 to $1250 a month and gave the lessee an option to purchase the property. In connection with this lease the exchange agreement provided among other things as follows: The second party (Mrs. Schwartz) shall, as a condition precedent to the first party’s obligations, furnish the following: “(1) The originals (or copies if the originals are not in the possession of or avail

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able to Second Party), of all correspondence between the Firestone Tire and Rubber Co. (both the Ohio and West Virginia corporations), or the Firestone Realty Co., or any agent of any of said companies, and Second Party, between the date of said lease and the present time, concerning the said lease of the said Franklin Street property, with a statement in writing signed by Second Party affirming and warranting that such originals and copies include the whole of the said correspondence. If it appears from the said correspondence that the Firestone Tire and Rubber Co. (both the Ohio and West Virginia corporations, or either of them), or the Firestone Realty Co., or any agent of any of said companies, have in any manner questioned the validity of the said lease, or in any manner repudiated the same, then First Party may, at his option, declare this agreement to be null and void and may refuse to perform the covenants hereof. ... (4) Second party shall furnish proof satisfactory to First Party that Second Party has offered to sell the Franklin Street property to the Firestone Tire and Rubber Co., a West Virginia corporation, for a price not exceeding the approximate value at which the said property is being transferred under this agreement of exchange, and that said offer was made in accordance with the terms of the said lease with the said Firestone Tire and Rubber Co., and that the said Firestone Tire and Rubber Co. has, on a date not earlier than September 28th, 1932, rejected the said offer and refused to exercise its option under said lease to purchase the said property.”