Austin v. Richards

VALLÉE, J.

Appeal by defendant from a judgment for plaintiff in an action to recover a real estate broker’s commission.

Defendant was the owner of a parcel of improved realty. On March 6, 1954, by an instrument in writing, defendant granted plaintiff, a licensed real estate broker, “the exclusive and irrevocable right” to sell the property for $350,000 on terms of “Cash or acceptable to Seller,” in consideration of which she agreed to pay plaintiff a commission of 5 per cent of the purchase price.

In May plaintiff received an inquiry in answer to an advertisement from a Mr. Gerhardt, a resident of New Jersey. Gerhardt came to California and examined the property with defendant, and the two entered into negotiations. On June 7,1954, defendant and Gerhardt entered into a written agreement whereby defendant agreed to sell and Gerhardt to buy the property for $310,000, payable $90,000 in cash and the balance at the rate of $1,300 a month without interest. In the contract defendant agreed to pay plaintiff as commission the sum of “$10,000.00—(5000.00 on close of Escrow $5,000.00 Jan 4 1955 (Note.).” Plaintiff initialed this provision as “OK.” On the following day an escrow was opened on joint escrow instructions signed by defendant and Gerhardt which called for performance on or before August 1, 1954. The escrow instructions contained the following: “Commission: payable as follows:—$5,000.00 at close of escrow & $5,000.00 on January 4, 1955, the seller will execute a personal note for second payment on commission without interest,” and “Commission is acceptable in full settlement. E. C. Austin.”

On June 25, 1954, defendant gave Gerhardt a notice of

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rescission of the contract on the grounds of fraud purportedly practiced on her by Gerhardt.

The complaint alleged the foregoing facts. The answer admitted them, denied plaintiff had performed all the conditions and agreements on his part to be performed, denied that anything was due or owing, and admitted defendant had not paid plaintiff any sum. The answer set up three affirmative defenses: 1. The complaint does not state facts sufficient to constitute a cause of action. 2. The contract to pay a commission was procured by fraud of plaintiff and the contract to sell was procured by fraud of Gerhardt, aided and abetted by plaintiff. 3. The consideration for the purchase was inadequate. The court found for plaintiff on all issues, except it found that the consideration for the purchase was inadequate but plaintiff was not responsible therefor. Judgment was for plaintiff in the sum of $10,000, from which defendant appeals.