Keystone Mortgage Co. v. MacDonald

HUFSTEDLER, J.

Appellant, Keystone Mortgage Co., Inc. (“Keystone”), a licensed real estate broker, sued Jack II. MacDonald and his coadventurers (“MacDonald”) to recover a $7,000 broker’s fee alleged to have been earned by obtaining a loan commitment complying with a written authorization. Judgment was entered for MacDonald following the granting of MacDonald’s motion for judgment pursuant to section 631.8 of the Code of Civil Procedure,

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from which Keystone appeals.

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Summary of the Evidence

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On November 14, 1960, MacDonald signed a written agree.ment prepared by Keystone employing Keystone to obtain a trust deed loan on a described parcel of real property “in the amount of $700,000.00 for a term of 20 years payable in monthly installments of $5,117.00 including principal and interest at a rate not to exceed 614% per year.” The contract further provided, “In consideration of your services I agree to pay you $7,000.00 or One

%

of the amount of the loan approved by the lender and accepted by me. This may be taken as an order and receipt for your commission on any escrow in which the loan funds are placed for disbursement, and the escrow agent is instructed to pay you according^. ... In the event you are successful in obtaining a commitment on the terms above specified, or upon any other terms approved by me in writing, and I refuse or fail for any reason

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to accept said loan, then I hereby agree to pay you upon demand as compensation for your services, an amount equal to One % of the face amount of said loan. ... It is my further understanding, and I hereby agree to the following requirements as a part of the loan . . . Assignment of a noncaneellable lease with Insurance Company of North America covering the entire second and third floors of said building for a term of 15 yrs. at an annual rental of $96,140.00. ’ ’

Keystone did not procure a commitment on the terms specified in the agreement, but on December 15, 1960, Keystone did obtain a commitment from Franklin Life Insurance Company (“Franklin”) for $700,000 for 19 years with interest at the rate of 6(4 percent per annum, payable in monthly installments of $5,253.30, principal and interest, plus deposits for taxes and insurance, subject, however, to 14 conditions, including the following: “10. Receipt of 2% Standby Fee on or before 1/5/61, to be returned to borrower at time of loan closing, but if loan not closed said fee to be retained by Franklin. ... 14. This commitment is predicated on a non-eancellable lease to Insurance Company of North America for a term of 15 years at an annual guaranteed rental of $96,140.00. Further subject to leasing of area, prior to loan closing, to tenants acceptable to Franklin to provide annual rentals of not less than $30,000.00. All terms, conditions, provisions and agreements contained in said leases are subject to approval of our Legal Department.” The commitment further provided, “This commitment will expire Jan. 31, 1962, and the loan is to be delivered during January, 1962. The Franklin reserves the option to call for delivery of the loan at any earlier date provided the loan has been closed and is ready for delivery. ’ ’ Jack H. MacDonald endorsed upon the commitment document the notation, “Accepted: 28th of December, 1960.”