Pohl v. Mercurio

MUSSELL, J. This is an action for real estate broker’s commission and for reasonable value of services rendered.

Defendants, as partners, owned certain real property in the city of San Diego, upon which a business was conducted known as Van’s Market. On March 13, 1946, defendants by letter gave plaintiff, a real estate broker, an exclusive listing to sell the property for a net price of $50,000. It was provided in the letter that the listing would be automatically cancelled unless plaintiff had a ‘ ‘ deal in Escrow or one pending satisfactory to the writer as of March 28th, 1946.” There was a further condition that there be no advertising of any nature as to the sale of the property. On April 11, 1946, defendants wrote to plaintiff confirming a previous telephone conversation wherein it was agreed that plaintiff would no longer have an exclusive listing on Van’s Market. At the time of the listing, and the letter of April 11th, the premises were occupied by Van’s Market, a corporation, under a lease at a monthly rental of $185, terminating on May 14, 1947. No mention was made in the listing of the lease but its existence was known to plaintiff and he accepted the listing with the understanding that he was not to contact the tenant. Sometime in February, 1946, defendants had commenced negotiations with the tenant for a new lease and that fact was known to plaintiff, but he took no part in the negotiations and no agreement as to a new lease was entered into during the time of the listing. Plaintiff contacted Dr. E. P. Chartres-Martin as a prospective buyer and the doctor was interested in purchasing the property, provided that a new lease be secured which was satisfactory to him. On May 1, [238194]6, the doctor signed a written offer of purchase, “Subject to existing lease expiring in May, 1947, and also to be subject to a new lease to be executed and approved by the buyer herein, thru this escrow or above deposit ($2500.00) to be returned.” Defendants then secured a tentative lease from Van’s Market for a term of 10 years, providing for a monthly minimum rental of $400, or a sum equal to 2 per cent of all sales made from the premises. The document also contained the following provisions in article 3. “Improvements:

“The parties hereto agree that the present building is too small for the Lessee’s needs, and it is understood that as soon as it is possible to obtain materials and priorities, the Lessor is going to enlarge the building and make such other improvements as are agreed upon between the Lessee and the Lessor.” The tentative lease' was submitted to Dr. Chartres-Martin but he would not accept it and insisted that an amendment be added to Article 3, as follows: “And it is further agreed that when said building is enlarged and such other improvements are made as are agreed upon, an adjustment in the rental shall then be made, so as to compensate the Lessor for his increased investment in the property.” The doctor also insisted on the insertion of this amendment and condition in the escrow instructions and in the addition thereto of the following language: “ It is understood and agreed by all parties that this escrow and the closing thereof is contingent upon and subject to the following: That a lease of the above described property for a period of six years shall be executed by the present tenant of said property wherein the above purchaser shall be the Lessor. Said lease zand all the terms and conditions thereof shall be approved in writing by the said purchaser before the closing of this escrow. Seller to grant a permanent easement over adjoining 15 feet directly south of this property as a driveway in exchange for a similar 10 foot easement over the rear of this property.” The tentative lease, as amended by Dr. Chartres-Martin, was presented to Van’s Market but the corporation refused to enter into such a lease providing for additional rent in return for improvements, and no lease was ever executed satisfactory to Dr. Chartres-Martin. After ascertaining that the tentative lease as amended would not be executed by Van’s Market and that the doctor insisted on the provisions contained in the amendment and in the escrow instructions, defendants notified plaintiff that there could be no further negotiations as to the sale of the property and that it was