Oullahan v. Baldwin

Garoutte, J.

This is an action by real estate brokers to recover commissions for negotiating a sale of a tract of land situated near the city of Stockton. The owners thereof gave Gaman & Lyon, real estate brokers of San Francisco, the following writing:

“ Stockton, September 17, 1887.

“We, F. T. Baldwin, B. F. Langford, and John D. McDougald, do hereby constitute and appoint Gaman & Lyon, of 339 Kearny street, of San Francisco, our sole agents for a period of five days from date hereof, to negotiate a sale of our Stockton lands, consisting of thirteen hundred and fourteen (1,314.35) and thirty-five hundredths acres, and known as ‘ Stockton Gardens.’ Our price for said land is one hundred and sixteen thousand six hundred and sixty-six (116,666.65) and sixty-five hundredths dollars net to us, ... . and any amount over and above said sum for which our said agents may sell said land we agree to give them for commissions for their services. Terms of payment shall be $10,000 within the five days, $5,000 additional on confirmation of title.....Complete abstract of title to be furnished and ten days allowed for examination.”

The brokers had in view one C. D. Barrows as prospective purchaser, and were expecting him to appear upon the scene at any moment for the purpose of viewing the land. After the owners had placed the property in the hands of Gaman & Lyon under the aforesaid agreement, they ascertained that certain parties residing in San Jose were desirous of purchasing, whereupon they stated to the brokers their fears that the prospective buyer, Barrows, would fail to purchase, and that prior to the expiration of the life of the contract the San Jose parties would undergo a change of mind, and thus no sale be consummated to any one, and they thereupon requested said brokers to release them from the contract. In answer to such request Gaman & Lyon sent them the following letter:

“Stockton, Cal, September 20, 1887.

“ Messrs Baldwin, Langford, and McDougald,,

“ Sirs: You have requested us to release you from the contradi which we hold on your tract of land near Stockton, known as the ‘ Stockton Gardens.’ Replying, we beg to say that, under the circumstances, and in view of the amount of labor we have performed, we cannot, in justice to ourselves, release you from said contract, but we will concede that unless we can convince you by Thursday morning, at eight o’clock, that we will make a sale, we will then waive all claims under said contract. Respectfully yours,

“ Gaman & Lyon.”

Baldwin gave his power of attorney to Langford and McDougald to act for him in the premises, and was not in the city on Thursday, the 22d. Langford was not in Stockton upon that day, and hence McDougald alone, aside from their attorney, represented the owners in the transaction. Thursday morning, September 22d, at seven o’clock, Lyon informed McDougald that Barrows was present and ready to take the land upon the terms stated in the contract, whereupon McDougald requested them to meet him at Judge Budd’s law office at eight o’clock, for the purpose of completing the trade. The parties met at that time, and Barrows offered himself as a purchaser, and tendered his personal check for ten thousand dollars as the first payment under the contract. This check was declined, as not the equivalent for the money, whereupon McDougald was informed that the money would be produced for him upon the opening of the bank, and McDougald then stated that he would allow them until 9:30 o’clock of that morning to produce the money, and if not present with it at that time he would close the trade with other parties. Thereupon Lyon and Barrows withdrew, and McDougald sold the land to the San Jose parties at ten o’clock at a largely increased price. Lyon drew the money from the bank at ten o’clock, and passed the remainder of the day in an effort to tender it to McDougald as the first payment upon the purchase price, but McDougald was elusive, and Lyon’s efforts in that direction were not crowned with success.

Viewing the case from any standpoint, the letter written by the brokers to the defendants, and which was entirely voluntary upon their part, and written purely through a spirit of accommodation, in no way changes the status of this litigation. In speaking as to the effect of this letter, respondent’s counsel says: “ While we do not contend that they [the owners] would or should- demand of appellants anything unreasonable or impossible, they had the right to demand and receive evidence sufficient to satisfy them, as reasonable men, that the premises would be sold according to the terms of the power or authority given appellants.” After a review of the evidence upon this point, we can say it fills the measure furnished by respondent’s counsel. If the letter bound the brokers to convince the owners, by eight o’clock upon Thursday morning, the 22d, that a sale would be made upon that day, or that all their rights under the contract would lapse by reason of a failure so to do, then the brokers fulfilled the self-imposed conditions; for at the agreed time ample evidence was produced to convince McDougald of the certainty of the sale. At least the evidence was sufficient to convince a fair man of ordinary understanding, a man who was honestly willing to be convinced, and, consequently, it must be held that McDougald was convinced. But, aside from the foregoing considerations, we think - the letter a false quantity in the case. It neither strengthens nor weakens the cause of either party. The contract of defendants was simply an employment of Gaman & Lyon, as brokers, to negotiate a sale of the realty. They were made sole agents for that purpose for the period of five days from September 17th, which would include the entire day of September 22d. It is insisted that the letter modified the terms of the contract, but the letter itself in express words says: “ We cannot, in justice to ourselves, release you.”

As already suggested, the letter was entirely voluntary, no pecuniary consideration passed to the brokers for its issuance, and there were no mutual covenants. It did not possess a single element necessary to create a binding, valid contract upon the brokers. Again, conceding the letter to have a binding force upon the writers of it, it in substance says: “We cannot now release you from the contract, but if we do not convince you by Thursday morning at eight o’clock that we will make a sale, we will then waive all claims under the contract.” This statement amounts simply to a conditional promise to waive something at a specified time in futuro. It is not a waiver, but an agreement to waive at a particular future time. There can be no waiver until the time arrives and the condition fails, and when the time does arrive, if the party declines to waive the only result is a violated promise and a breach of the agreement. The waiver does not take place ipso facto upon the failure of the condition and the arrival of the appointed time. Positive action upon the part of the party holding out the promise is demanded. This letter, conceding the failure of the condition, does not constitute a waiver of rights under the contract any more than a promise by an attorney to his brother attorney that upon the morrow he will extend his time ten days to file a brief constitutes in itself such extension.

No question of estoppel arising from the letter is suggested by counsel, neither does it appear to be present in the case. But it is insisted by some of respondents’ counsel that a waiver took place, or an estoppel against plaintiffs was created at the eight o’clock meeting in the lawyer’s office, and the basis of this contention is found in the following testimony of defendant’s attorney: “He went away when Mr. McDougald told him he would wait until half past nine o’clock for the money, and if he came back with the money in that time they would complete this trade. If not, he would go down below and take up the other offer, and Mr. Lyon left, saying, ‘Very well.’ That is the last I saw of him.” Conceding the broker to have used the words charged to him, still it is a very small thing out of which to build either a waiver or an estoppel. The pecuniary interests here involved are too weighty to depend upon such a slender thread. The phrase “Very well” may mean assent, and again it may mean the strongest dissent. Tone, inflection, gesture, and manner are the only indicators by which the phrase may be properly interpreted. The subsequent history of the various doings of these parties upon this day destroys the claim of either a waiver or estoppel upon the part of plaintiffs.

The brokers were simply authorized to negotiate a sale. Their contract was completed and their commissions earned when they produced a purchaser within the five days, ready, willing, and able to purchase upon the terms stated in the contract of employment. They had all of the twenty-second day of September in which to produce such purchaser, and upon that day they did produce a purchaser in the person of C. D. Barrows. That he was ready, able, and willing to purchase is entirely apparent from the record. It can scarcely be said to be denied by opposing counsel. The fact that his check was not a legal tender amounts to nothing. He was not required to produce at that eight o’clock meeting either check or money. He was not required to attend any meeting whatever at that time. He was entitled to the last hour of the fifth day in which to pay the $10,000. The contract so expressly provided. At this meeting he offered himself as the purchaser upon the terms presented by the contract, and stated he would pay the $10,000 in cash as soon as the bank opened, an event which was near at hand. He attempted to pay the $10,000 through his broker during the entire day of the 22d, but was prevented by his failure to secure a personal audience with McDougald. He was not only willing, but using his best efforts to pay this money, free of all limitations and conditions not found in the contract, and his efforts to make the first payment upon the purchase price is the highest evidence that he was a purchaser, ready, able, and willing to take the property. Aside from these considerations, the property was sold to third parties at ten a. m. upon the 22d, and, if a tender of. the first payment ever was required in order to establish Barrows’ ability and good faith in the transaction, the conduct of the owners in making this sale waived it.

Conceding that no liability for commissions was created against respondents by the occurrences taking place at the meeting in the lawyer’s office, appellants still make a showing by subsequent events that entitles them to recover. From ten o’clock A. m. until Dr. Barrows left the city of Stockton, some time during the afternoon of that day, he was there, ready and willing to buy the land upon the terms fixed by the owners. He had the ten thousand dollars in hand and was anxious to make the first payment. This period of time was during the life of the contract, and when those conditions existed defendants’ liability attached. The fact that one of the owners was in Sacramento, another in Arizona, and the third was suddenly called from the city to look after important matters upon his farm during the expiring hours of the contract is entirely immaterial. It is apparent that the broker was acting in good faith, and his rights cannot be sacrificed or injuriously affected by the absence of all the owners from the city of Stockton at this important period of time.

For the foregoing reasons it is ordered that the judgment and order be reversed, and the cause remanded for a new trial.

De Haven, J., Fitzgerald, J., McFarland, J., and Beatty, C. J., concurred.