Margolis v. Los Angeles-First National Trust & Savings Bank

THOMPSON (R. L.), J.

This is an appeal from a judgment against the plaintiff in an action upon an assigned contract for the payment of broker’s commissions for the sale of real estate.

The defendant owned 312 lots in tracts 5320 and 5344 of Los Angeles. O. B. Smith was a duly licensed real estate agent. He was employed to sell these lots at specified prices.' The contract provides for the payment of broker’s commissions in the following language: “Said Smith shall receive as his sole commission that portion of the price obtained for each lot which is

in excess of the

[188]

list price,

... (in the following amounts and manner) : Fifty per cent (50%) of the down payment

received from each purchaser of lots,

and fifty per cent (50%) of each installment payment on the principal due from each purchaser, until the full commission of said Smith has been paid.” The contract authorizes the payment of purchase price of the lots as follows: “One-fourth (14) of the total price payable in cash as the down payment, and . . . the balance due under each of such sales shall be secured by a trust deed under which the principal shall be payable in equal quarterly, semi-annual or annual installments, all to mature within three years from the date of sale.”

Many of these lots were sold by the broker and conveyed to the purchasers pursuant to contract. A portion of the purchase price was paid in each instance. The unpaid portion was secured by trust deeds. Upon all cash payments for lots, the agent was promptly paid his full proportion of commissions earned as provided by the contract. The balance of his commissions was to be paid from “each installment payment due from each purchaser”. This balance of the commissions was conditioned and dependent upon the future payment of the remaining portion ■ of the installments of purchase price of the lots by the purchasers thereof. These purchasers defaulted in all payments which were secured by the trust deeds. The bank was required to foreclose these trust deeds and repossess the land. At the trustee’s sale of the lots no bidders appeared except the broker and the defendant. The broker bid “upon each of the lots as the same was offered for sale, an amount equal to twice the amount of the balance due appellant as commissions”. It is apparent these were not