Marks v. Walter G. McCarty Corp. , 33 Cal. 2d 814 ( 1949 )

SHENK, J.

The plaintiff sued to recover broker’s commissions for procuring the sale of the Beverly-Wilshire Hotel, its furniture and equipment. Judgment for the plaintiff'was entered in the sum of $57,500 as commissions on the sale of both the real and personal property. The defendant appealed.

The defendant corporation was the owner of the hotel property until it was sold in 1944. The corporate stock was owned by Walter G. McCarty and his wife. McCarty, the president, had authority to negotiate the sale of the property. In October, 1943, a meeting was arranged by 0 ’Neill, the manager of the Beverly-Wilshire, between the plaintiff, a licensed real estate broker, and McCarty. At that meeting McCarty said that the hotel and furnishings were for sale at a price of $2,000,000, and that a commission of 5 per cent would be paid. The plaintiff said he was very much interested in the deal and had in mind a prospective purchaser or syndicate of purchasers. McCarty gave the plaintiff an unsigned typewritten document headed: “Re Beverly Wilshire Hotel—October 14, 1943,” which set forth a description of the property and the sale price and terms. McCarty had listed the property in this manner with at least 20 brokers, but'had not given an exclusive agency to any of them. McCarty also instructed 0 ’Neill to show the plaintiff the hotel and to furnish him with financial statements of its operations.

. The plaintiff began to work on the deal immediately by contacting a number of prospects. Through his attorneys the plaintiff contacted Arnold Kirkeby, a Chicago hotel operator, in the month of October, shortly after his first meeting with McCarty. Kirkeby, the ultimate purchaser, manifested interest in participating in the purchase and operation of the hotel. Numerous telephone calls and correspondence between the plaintiff or his agents and Kirkeby ensued. It was proposed by the plaintiff that Kirkeby participate with a syndicate in the purchase, and there was discussion as to the percentage of interest he would take. During these negotiations the plaintiff met with McCarty two or three times a week. The plaintiff testified that in November, 1943, he told McCarty that Kirkeby was to be a member of the purchasing syndicate.

In February of 1944, McCarty informed the plaintiff that the sale price was being raised from $2,000,000 to $2,250,000. At that time McCarty gave the plaintiff a carbon copy of a typewritten document on letterhead stationery with a picture of the hotel at the top underneath which was printed: The Beverly-Wilshire Hotel, Walter G. McCarty Corporation.” This document contained the price of the hotel ($2,250,000), the terms of sale, and a provision for a broker’s commission fixed at $57,500 (5 per cent on the first $50,000 and'2% per cent on $2,200,000). In reading the agreement the plaintiff, noted that the broker’s commission had been reduced, from the sum previously indicated. According to his testimony, the. plaintiff protested that it seemed unfair for McCarty to raise the price of the hotel and thus make the deal harder to consummate and at the same time reduce the commission. When McCarty told him other brokers were willing to receive a-commission of $57,500, the plaintiff agreed to work for that figure.

Thereafter the plaintiff renewed his efforts to form a syndicate, which was to include Kirkeby, for the purpose of buying the hotel. The plaintiff testified that on April 17, 1944, he told McCarty that he had hopes that the deal could be closed but that he wanted something in writing so that the terms would be confirmed. McCarty wrote the terms in longhand on a sheet of yellow paper which he handed to the plaintiff. The sheet was dated April 17, 1944, and headed: “Kirkeby deal—Walter Marks, Broker.” The heading was followed by the sale terms and at the bottom was written: ‘ ‘ Commission to Broker $57,500 payable at close of escrow. ’ ’ A few corrections were made by the plaintiff which McCarty approved.

From April through July the plaintiff and Kirkeby frequently discussed the possible purchase but no definite agreement was reached, principally because of Kirkeby’s dissatisfaction with the mortgage payments required by McCarty’s proposal. The plaintiff sought to bring others into the deal to assist in the financing. One arrangement seemed promising to Kirkeby, and at the plaintiff’s urging, he came to Los Angeles about August 1, 1944. The plaintiff had told McCarty in the latter part of July that he was bringing Kirkeby to Los Angeles.

The plaintiff met Kirkeby when he arrived and arranged a meeting between Kirkeby and a prospective member of the purchasing syndicate. At this stage discussions centered around a syndicate in which Kirkeby would acquire a half-interest. However these negotiations collapsed and in a private conversation the plaintiff suggested that Kirkeby purchase the property alone. Kirkeby said that perhaps he would. He stated he wanted to see McCarty alone. The plaintiff made an appointment with McCarty for Kirkeby and loaned the latter his ear to drive to McCarty’s ranch. Afterward Kirkeby told the plaintiff that he was pleased with the meeting and he thought that he and McCarty had reached an agreement as to price and terms. About that time, however, Kirkeby received word that a New York hotel in which he was interested had been offered to him at a favorable price and he • decided to leave Los Angeles without proceeding further on the Beverly-Wilshire deal. The plaintiff said he “would continue to watch the deal” for Kirkeby and the latter stated “he would continue to keep his interest in the Beverly-Wilshire Hotel, and any information 1 [the plaintiff] could give him he would be glad to get. ’ ’ In November, 1944, Kirkeby, dealing directly with McCarty, purchased the hotel and furnishings on price and terms substantially the same as those agreed upon in August.

From these facts it may readily be seen that there was evidence to support the finding of the trial court that the plaintiff was employed as a broker on commission in the sale of the real and personal property known as the Beverly-Wilshire Hotel. There was also evidence from which the court could properly find that the plaintiff was the procuring cause of the sale. The defendant challenges this finding by reference to evidence that negotiations between Kirkeby and McCarty took place before the plaintiff became involved in the transaction. It appears that McCarty had intermittently spoken to and corresponded with Kirkeby between 1939 and 1942 about a possible sale of the hotel. But these negotiations were terminated on November 13, 1942, a year before the plaintiff began to work on the deal, when Kirkeby wrote McCarty: “Our views are so far apart both as to price and terms, I do not believe it would be worth while for us to continue the negotiation.” Although the plaintiff did not introduce Kirkeby and McCarty and was not the first to call Kirkeby’s attention to the fact that the hotel was for sale, the finding that the plaintiff was the efficient cause of the sale can be supported by the evidence which shows that only through his efforts over a period of many months were the parties brought together in August, 1944, when terms and price were settled. (Webster v. Parra, 72 Cal.App. 639, 648 (237 P. 804]; 12 C.J.S. § 91, p. 210.) It has been shown that negotiations did not come to an end in August, for Kirkeby, although then short of capital, stated he would continue his interest in the hotel. ■ Less than three months later the sale was closed at the August price. It was therefore reasonable to conclude that the plaintiff brought about the sale, and the fact that he was not present when the sale was consummated is immaterial. (Williams v. Kinsey, 74 Cal.App.2d 583 [169 P.2d 487]; Pryor v. McGuire, 59 Cal.App. 234 [210 P. 532] ; see Fitzpatrick v. Underwood, 17 Cal.2d 722,733 [112 P.2d 3].)

To recover a commission on a contract authorizing a broker to sell real estate, the broker must prove not only the existence of an agreement and procurement of a willing purchaser but must meet the requirements of the statute of frauds which declares that such an agreement “is invalid unless the same or some note or memorandum thereof be in writing and subscribed by the party to be charged, or by his agent. ’ ’ (Civ. Code, § 1624(5); Code Civ. Proc., § 1973(5).) It is the defendant’s principal contention that the plaintiff cannot recover a commission for the sale of the real property because there was no written contract or memorandum subscribed by the party to be charged- A scrutiny of the documents relied upon by the plaintiff as together constituting a sufficient memorandum immediately discloses that they are lacking in one statutory essential, namely, the signature of the party to be charged.

•However, the plaintiff contends that the letterhead “The Beverly-Wilshire Hotel, Walter G. McCarty Corporation” printed on the typewritten document given the plaintiff in February of 1944 by McCarty is a sufficient signature. The statute of frauds does not demand that the ■signature of the party to be charged be placed at the end of the writing relied upon if a proper signature be found elsewhere on the instrument. (California Canneries Co. v. Scatena, 117 Cal. 447 [49 P. 462]; 49 Am.Jur. § 380, p. 683; 112 A.L.R. 937.) Furthermore the signature need not be manually affixed, but may in some cases be printed, stamped or typewritten. (171 A.L.R. 334; 49 Am.Jur. § 377, p. 680; Rest., Contracts, § 210.) But it is a universal requirement that the statute of frauds is not satisfied unless it is proved that the name relied upon as a signature was placed on the document .or adopted by. the party to be charged with the intention of authenticating the writing. In other words the defendant must intend to appropriate the name as a signature. (McNear v. Petroleum Export Corp., 208 Cal. 162 [280 P. 684]; Little v. Union Oil Co., 73 Cal.App. 612 [238 P. 1066]; Sherwood v. Lowell, 34 Cal.App. 365 [167 P. 554]; 49 Am.Jur. § 381, p. 683; Rest., Contracts, § 210.)

This requirement has been well stated by the New York Court of Appeals, Cardozo, Chief Justice, in an opinion holding that the printed name of the defendant on its order form was not a signature which would satisfy the statute of frauds: “We may, indeed, infer from the delivery of the writing that the defendant intended to assume the obligation of a contract, whether the document was signed or unsigned. It might have .intended as much if there had been no writing whatever. It may even have supposed that a writing was unnecessary. Something more must be found before the statutory requirements can be held to be obeyed. The defendant must have intended not merely to contract, but to sign. We see no mark of such purpose.” (Mesibov, Glinert & Levy v. Cohen Bros. Mfg. Co., 245.N.Y. 305, 311 [157 N.E. 148] (1927). See, also, Lee v. Vaughan’s Seed Store, 101 Ark. 68 [141 S.W. 496, 37 L.R.A.N.S. 352]; Dorian Holding & T. Corp v. Brunswick T. & Ry. S. Co., 230 App.Div. 514 [245 N.Y.S. 410].) There is nothing on the face of the proffered documents which would indicate that McCarty intended to adopt the letterhead as a-signature of the corporation. The letterhead "is found on a carbon copy of a typewritten sheet which sets forth terms for the sale of the hotel but which bears no signature. This was the form used by McCarty in listing the property with numerous brokers. The other documents, one typewritten, the other written in McCarty’s hand, have neither signature nor letterhead. In McNear v. Petroleum Export Corp., supra, 208 Cal. 162, this court held that where it is claimed that a name appearing on a document was intended as a signature satisfying the statute of frauds, the intention must appear on the face of the document itself and “proof of such intention may not rest in parol.” The rule stated in that case would seem to dispose of the plaintiff’s claim without need of further discussion because of his failure to produce a memorandum with some mark of authenticating intention on its face. The plaintiff insists, however, that parol evidence was admissible on the issue of whether McCarty intended to adopt the létterhead as a signature.

Even if it be assumed that parol evidence is admissible no evidence appears in the record which would support the findings and judgment granting commissions on the sale of the real property. Cited by the plaintiff as significant are the facts that the writing was a carbon copy, yet on letterhead stationery, that it was delivered to the plaintiff as a broker, and that it was the defendant’s custom to list the property with brokers in this manner which contemplated the payment of a commission. At most this evidence discloses an intention on the part of McCarty to contract; it does not reveal an intention to appropriate the letterhead as the defendant’s signature.

Testimony of McCarty on cross-examination is relied upon by the plaintiff as evidence of his intention to adopt the letterhead as the corporation signature. That testimony is obviously insufficient. “Q. Well, what was your intention when you gave out letters on the stationery of the BeverlyWilshire Hotel, which were obviously carbons of an original letter? A. I again state I could not answer that. It is very possible in giving this to the various brokers, having a picture of the hotel on it, it was something from which they could see what the hotel was and so forth. That is the only explanation I could add. . . . Q. Well, as a matter of fact, Mr. McCarty, wasn’t the purpose of having this letter or this memorandum typed on Beverly-Wilshire stationery and the copies given to brokers, wasn’t the purpose of that to authenticate this memorandum and show that it was from the BeverlyWilshire Hotel and not from anyone else? A. I don’t know— I don’t believe I understood your question. Q. Well, I will reframe it then. A. All right. Mr. Duque : Would you read it? (Question read.) A. Well, as to the Beverly-Wilshire Hotel, I would have to answer no. It was from my office. Q. Well, was it the purpose of having it on the Walter G. McCarty Corporation stationery for the purpose of authenticating it and showing that it came from your corporation; wasn’t that the object of having it on that stationery? A. Well, I wouldn’t say that it was. If you write a letter, any letter, you wouldn’t use somebody else’s stationery. I write it on my own letterheads. Q. Well, do you customarily use your own letterheads for carbon copies of letters ? A. Not for general letters that I write out. I might have in a case where I am trying to sell a piece of property. This shows a picture of the hotel on there, and I put it on all of my carbon copies. Q. That is just my point, and that is just why I am asking you, isn’t it a fact that contrary to your usual custom of using yellow paper for carbon copies, in this instance you were selling a hotel and you wanted to authenticate the memorandum which you were giving out to the brokers, so you had the memorandum, typed and all the copies of the memorandum typed on your own corporate stationery; wasn’t that the reason? A. Well, that is probably the reason. Q. And isn’t that the fact, isn’t that what you did? A. Well, I don’t know. I .might have had some not on my letterhead, or might have sent .out some of those memorandums not on my letterhead. I don’t think I did. I have no recollection of that.”

This testimony was elicited on cross-examination by counsel - to establish his theory .of authentication. Rather than tending to prove adoption of the letterhead as -a signature, it shows that if McCarty had any purpose in mind in using the letterhead it was to identify the contractual terms on -the stationery as relating to the proposed sale of -the BeverlyWilshire Hotel, since copies were to be distributed to a number of brokers. ■

The wisdom of adhering to the statute of -frauds by declaring the memorandum in this case inadequate is apparent. Here the defendant’s letterhead was printed on its stationéry at some earlier -time for a purpose unconnected with the -transaction in suit. . The four corners of the .document give no indication of an intent to adopt the letterhead as a signature. Sympathetic consideration for the plaintiff because of the absence of a writing “subscribed” as required by the statute is not enough. A decision in his favor would in effect repeal the statute of frauds and open the way for the assertion of false claims resting entirely in parol. The protection intended to be afforded by the statute would be lost.

The plaintiff was experienced in real estate deals, having handled more than 100 such transfers as a licensed real property broker over a period of 17 years. He testified that he knew the law required a broker to have an agreement in writing signed by the seller before he could enforce his claim to a commission. When asked by counsel why he didn’t request a signed memorandum of McCarty the plaintiff answered; “I didn’t think it was necessary at that time. I thought his word was sufficient. I had not, as a rule, taken and asked for a written commission agreement; I don’t remember of ever actually doing it in my entire experience in the real estate business.” Thus the plaintiff failed to procure a signature of the defendant’s agent McCarty, although it seems clear that the latter, a real estate broker himself, did not sign because he did not intend to sign. The plaintiff, a man of experience in this line of business, knew how to protect himself in the transaction but failed to do so.

Although the plaintiff is prevented by the statute of frauds from recovering a commission on the sale of the real estate there is no such barrier in this case to his recovery of a commission on the sale of the personal property as to which no written memorandum is required. It is contended by the defendant that McCarty would not have sold the furnishings apart from the hotel and that the commission agreement is therefore entire and void in toto. It may be conceded that as between the parties to the purchase the contract was indivisible. As between broker and selling party, however, the broker’s right to a commission depends, not on whether the real and personal property would have been separately sold, but on whether the sale price of the personal property actually sold can reasonably be ascertained. (Dabney v. Edwards, 5 Cal.2d 1,17 [53 P.2d 962,103 A.L.R. 822]; Ryan v. Walker, 35 Cal.App. 116, 119 [169 P. 417]; Porter v. Fisher, 4 Cal. Unrep. 324 [34 P. 700].) Here the sale price of the personal property .was stated to be $600,000 in the final escrow instructions which were signed by McCarty. While the defendant asserts .that the separation was .made for tax purposes only, the fact remains that a definite portion of the purchase price was apportioned to the personal property. Thus there was adequate evidence to support the trial court’s finding that the sale price of the personal property transferred is severable from the. sale price of the real estate, and that the fair value of tbe services performed by the plaintiff in bringing about the sale of the personal property is $30,150..

.The judgment for the plaintiff is modified by striking therefrom the words and figures “Fifty-seven thousand, five hundred dollars ($5.7,500),” and inserting in lieu thereof the words and figures “Thirty thousand one hundred fifty dollars ($30,150),”. and as so modified the judgment is affirmed.

Gibson, C. J., Edmonds, J., Traynor, J., Schauer, J., and Spence, J., concurred.