Doke v. Brockhurst

California Court of Appeal Apr 29, 1957 No. Civ. 17033Published

Before: Dooling

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Holding. The court held that a party who relinquishes a commission in reliance on an oral promise that is subsequently rendered unenforceable by the statute of frauds is entitled to recover the value of that consideration to prevent the other party's unjust enrichment.

Issues

Whether a party may recover consideration given for an oral contract that is unenforceable under the statute of frauds.
Whether a defendant who receives a financial benefit equivalent to the relinquished commission is liable for restitution.
Whether a defendant can enforce terms of an oral contract against a plaintiff while simultaneously asserting the statute of frauds to avoid their own obligations under the same contract.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The failure to give a written agreement as promised in a transaction governed by the statute of frauds thereby rendering the contract unenforceable will entitle the party who has paid money in reliance upon such agreement to its recovery back.”

“To permit Dawe to retain this financial benefit which he received at Doke’s expense would be just as inequitable as if Doke had paid him in cash.”

“It is because the statute of frauds prevented his enforcement of the promised agreement that he is entitled to recover the consideration given for it.”

DOOLING, J.

Plaintiff and respondent Doke is a licensed real estate broker. Mr. and Mrs. Broekhurst placed a tract of land in respondent’s hands for sale. Defendant and appellant Dawe desired to purchase this land for the purpose of subdividing it and building 46 homes thereon for sale. The price fixed by the Brockhursts was $58,400 which included a 10 per cent commission to respondent Doke amounting to $5,840.

Appellant Dawe approached respondent Doke and proposed to him that if he would forego this $5,840 commission on the sale for the Brockhursts Dawe would give Doke an exclusive written contract to sell all of the homes to be built in the proposed subdivision to which Doke orally agreed. Thereafter a written contract for the sale of the tract to Dawe for $58,400 was signed by the Brockhursts. Attached to this writing was an agreement signed by the Brockhursts to pay Doke a commission of $5,840. This writing was placed in escrow with a title company.

Dawe then went to Doke and told him that he was anxious to close the deal and persuaded Doke to cancel the portion of the contract providing for the $5,840 commission before he received the proposed exclusive agency from Dawe in writing. As a result Dawe was able to purchase the property from the Brockhursts for a net payment of $52,560, thus saving the amount of Doke’s commission of $5,840.

Doke acted as exclusive agent for the sale of homes built by Dawe on this tract from the middle of 1953 until April of 1954 and received commissions for the sale of homes therein totaling $8,250 and additional commissions amounting to $1,200 were held for him by the title company at the time of the trial.

Although frequently requested to do so by Doke Dawe failed to execute the promised exclusive agency contract in writing and in April of 1954 Dawe gave a written contract of agency for the sale of the remaining houses in the tract to another broker.

Doke filed his complaint herein in which he sought damages for the breach of the exclusive agency contract or in the alternative for the recovery of the sum of $5,840, the amount of the commission on the original sale which he had given up.

[516]

The trial court found that because the exclusive sales agreement had not been reduced to writing action on it was barred by the statute of frauds. (Civ. Code, § 1624, subd. 5.) Judgment for $5,840 was entered on the ground of failure of consideration in that Dawe had refused to give the agreed exclusive agency contract in writing to Doke and that Dawe was thereby unjustly enriched in the sum of $5,840 which he had been relieved of paying to the Broekhursts by reason of Doke releasing his commission from the Broekhursts in that amount.

Doke v. Brockhurst

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DOOLING, J.

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