Duffy v. Campbell

SALSMAN, J.

Defendants Ralph F. and Emily J. Campbell (sellers) and Tom Snook (buyer) appeal from a judgment in favor of plaintiffs Tom Duffy and K/R Sales, Inc., (brokers) for damages resulting from defendants’ breach of a contract to pay a real estate transaction commission.

Appellants Campbell (the sellers) owned property at 2308 Bates Avenue, Concord. They listed their property for sale with respondent Tom Duffy, a licensed real estate broker. The listing agreement was dated February 16, 1961 and was to expire May 16, 1961. The agreement stated an asking price of $39,500 cash, provided for multiple listing of the sellers’ property with other brokers and stipulated that the sellers would pay a 6 percent broker’s commission.

On February 17, 1961, the Campbells executed an “Authorization to Sell” in behalf of Duffy. This authorization also contained the sellers’ promise to pay a 6 percent broker’s commission.

Toby Van Pelt, a real estate salesman employed by K/R

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Sales, Ine., interested appellant Snook in the Campbell property. Snook decided to make an offer. He signed a “Deposit Receipt” for Van Pelt, dated March 28, 1961. He offered to buy the subject property for the listed price of $39,500. He agreed to pay $31,000 cash subject to refinancing the property with a $21,000 loan. He proposed that the balance of the purchase price be carried by the Campbells on a 5-year note, secured by a second deed of trust. Snook’s offer was further subject to “. . . sale of Buyer’s Home at 166 Pulido Danville, California within 90 days from this date.” The deposit receipt also provided for payment of a broker’s commission of 6 percent of the selling price.

Snook’s offer was accepted in writing by the Campbells on the day the offer was made. The parties opened an escrow with Western Title Guaranty Company.

Sale of the Snook property proved difficult. On June 28, 1961, by mutual agreement, terms of the deposit receipt were extended to August 28, 1961. The Campbells wanted all cash for their property because they planned to purchase property in Nevada and needed cash for this purpose. However, before the termination date to which the deposit receipt had been extended arrived, the Campbells found they could use “paper” instead of cash in their Nevada deal, and so informed Snook. Both Snook and the Campbells were anxious to complete the sale, and accordingly, some time before August 28th, met at the office of Snook’s attorney. There they worked out an arrangement by which their sale could be completed, despite the fact that Snook’s home was still unsold. They agreed in writing that the price of the Campbell property would be reduced by the amount of the broker’s commission; Snook was to obtain a loan of $21,000, and was to give his note for $10,000, secured by a second deed of trust, payable in full in seven years. Finally, Snook agreed to give his personal, unsecured note for the balance of the purchase price. Snook further agreed to hold the Campbells harmless in the event a broker’s commission was found due on the sale.