Wilson v. Shea

JAMES, J.

Appeal taken by defendants C. E. Cooper and Robert Marsh from a judgment entered against them, and from an order denying their motion for a new trial.

At a time anterior to the commencement of this action defendant R. P. Shea held contract rights in certain real property located in the city of Los Angeles. He exchanged these rights with one Vance for an automobile. At a later date Vance desired to dispose of the interest thus acquired in the real estate. Shea and Cooper at that time were both employed with Robert Marsh & Co., realty brokers. Under their contract of employment commissions earned on property sold were divided as follows: Shea, ten per cent; Cooper, fifty per cent; Robert Marsh, forty per cent. Vance being a friend of Shea’s and having purchased the contract rights in the lots from the latter, submitted to the firm mentioned his proposition to rid himself of his interest in the real estate. A purchaser was found in the person of one Mrs. Looney, the assignor of the plaintiff. The agent who represented Mrs. Looney, realizing that there might be a question regarding the title which it was possible to obtain under the contracts, insisted that a guaranty contract be given, which contract was furnished by defendant Shea. This contract guaranteed that a good title would be secured within one year, in default of which Shea agreed in writing that upon notice of the fact being furnished him, he would pay to Mrs. Looney the sum of $1,318, and take back an assignment of Mrs. Looney’s interest in the lots. There was a commission paid on the deal amounting to the sum of $560, which came into the hands of Robert Marsh & Co., to be divided among Shea, Cooper, and Marsh in the proportions hereinbefore mentioned. This commission was so divided. Some time after the execution and delivery of the guaranty contract signed by Shea, a copy thereof was presented to Cooper and Marsh. Shea had added a postscript to which he secured the signatures of Cooper and Marsh, which postscript was worded as follows: “It is hereby agreed that the responsibility of this guarantee

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is shared by Robert Marsh & Co. and C. B. Cooper with R. P. Shea, said responsibility being prorated in accordance with commission.paid.” This addendum was not made upon the original guaranty; in fact was not contemplated to be made at all by Mrs. Looney, and was not of any influence in furthering the deal as made with her. Mrs. Looney’s agent testified with reference to the closing of the transaction as follows: “In order to close this deal, I required Mr. Shea to give the written guaranty introduced in evidence here. I was satisfied to take the written guaranty of R. P. Shea solely and individually, and I did so, and I closed the deal upon that understanding.” This witness testified that it was several months after the closing of the transaction that he learned of the making of the addendum. However, at the end of the year Mrs. Looney was unable to secure good title to the lots purchased from- Vance, and this suit was brought by her assignee against Shea on the guaranty, Cooper and Marsh being joined by. reason of the alleged liability which accrued against them under the “postscript” contract. The trial judge entered judgment for the full amount of the guaranty, to wit, $1,318, against Shea, and against the appellants Cooper and Marsh in such proportions of the total amount of the guaranty as the amounts of commission paid to them bore to such whole amount. No appeal was taken on the part of defendant Shea. The appellants here, Cooper and Marsh, contend that no right of action existed in favor of Mrs. Looney or her assignee, as against them under the addendum contract, for the reason that they at no time contracted any liability in favor of Mrs. Looney. The judgment as against these appellants, if sustained, must be sustained wholly by reason of the provisions of section 1559 of the Civil Code. That section provides as íoIIoavs : “A contract, made expressly for the benefit of a third person, may be enforced by him at any time before the parties thereto rescind it.” This section is but an expression of the rule established by the majority decisions of the courts of the United States, permitting an action to be brought against a person by a party in whose benefit such person may have contracted with another. The rule of the decisions is clear to the point that in order to sustain such an action there must have been an intent clearly manifested on the part of the contracting parties to make the obligation inure to the benefit of the third' party.