Opinion
Rehearing Denied July 14, 1930
Hearing Granted by Supreme Court Aug. 25, 1930.
Appeal from Superior Court, San Diego County; W.P. Cary, Judge.
Suit by F.G. Calhoun against George G. Downs and others. Judgment for defendants, and plaintiff appeals.
Reversed, with instructions.
COUNSEL
E.W. Peterson and Sherman Lacey, both of San Diego, for appellant.
Wright & McKee and C.M. Monroe, all of San Diego, for respondent Ahlborn.
Hendee & Rodabaugh, of San Diego, for respondents Downs.
OPINION
BEAUMONT, Justice pro tem.
Plaintiff brought an action to reform a contract and have it enforced as reformed. He alleges that he is a licensed real estate broker; that defendants George G. Downs and Lola Downs gave him authority to sell certain real property for the sum of $10,000 and agreed to pay the commission usually paid in the community, 5 per cent.; that this agreement was not in writing; that he, at his own expense, procured a purchaser, respondent Ahlborn, who was ready, willing, and able to buy; that he effected a meeting of the sellers and purchaser and that, at such meeting, the sale and purchase of the property was agreed upon and the price and terms determined; that the price was $10,000; that they (the defendants) agreed to pay plaintiff the sum of $500 as commission for said sale; that plaintiff and defendants agreed to reduce the oral agreement to writing, and that accordingly a written agreement was then made, but that the name of plaintiff and the amount of his commission were omitted; that such omission was due to the mutual mistake of plaintiff and defendants; that said instrument was then and there signed by each of the defendants. The last paragraph of the written agreement so executed is as follows: "I agree to pay a commission of $______ to ______." Plaintiff asked reformation by insertion of "500" in the first blank above mentioned and his name in the second, and enforcement as reformed. Defendants demurred generally, and defendant Ahlborn, in addition, demurred on the ground that the agreement sued on was within the statute of frauds. The demurrers were sustained without leave to amend.
In the briefs much of the argument is directed to the statute of frauds. Respondents claim that the agreement sought to be reformed is within the statute. Appellant is just as positive it is not. The allegations of the complaint place it, if reformed as plaintiff prays, in substantially the same position as the complaint in Cole v. Low, 81 Cal.App. 633, 254 P. 676, 677, in so far as respondents Downs are concerned. In that case the complaint was in two counts. Both counts allege that defendant had verbally employed plaintiff to sell certain property and that he had agreed to pay a commission to plaintiff; that plaintiff procured a purchaser in accordance with the terms of the oral agreement; that an agreement of sale was made in writing between the seller and the purchaser; and that at the bottom of said agreement was the following: "Commissions of $3400.00 to Cole Brothers." The second count alleged, in addition, that the written agreement was "and is an agreement in writing made for the express benefit of plaintiffs herein and said agreement has not been rescinded by the parties thereto." Defendant contended that the employment was oral and that the written agreement was not sufficient to satisfy the statute of frauds. The appellate court held that the question of such statute was not involved; that the first count was "founded upon the doctrine that, where services have been rendered with the intention that they shall be paid for, but payment therefor is unenforceable because there exists no written contract between the parties, and after rendition of said services the party receiving the benefit thereof promises, in writing, to pay therefor, his moral obligation to pay for what he has previously received furnishes a consideration to support the subsequent promise to pay." Crawford v. Kennedy, 64 Cal.App. 719, 222 P. 644, 645; Carrington v. Smithers, 26 Cal.App. 460, 147 P. 225; Muir v. Kane, 55 Wash. 131, 104 P. 153, 26 L.R.A.[[[[N.S.] 519, 19 Ann.Cas. 1180; Mohr v. Rickgauer, 82 Neb. 398, 117 N.W. 950, 26 L.R.A.[N.S.] 533; Bagaeff v. Prokopik, 212 Mich. 265, 180 N.W. 427, 17 A.L.R. 1292. And the second cause of action is grounded upon the theory that the provision of said agreement relating to commissions was made expressly for respondents’ benefit, and that said agreement not having been rescinded, the provision mentioned may be enforced by respondents under section 1559 of the Civil Code, which declares that, "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." Lundeen v. Nowlin, 20 Cal.App. 415, 129 P. 474; Stanton v. Carnahan, 15 Cal.App. 527, 115 P. 339; Washer v. Independent, etc., Co., 142 Cal. 702, 76 P. 654.
"It will therefore be seen that in both counts respondents rely upon an alleged subsequent written promise to pay for past services, and, consequently, that portion of the statute of frauds invoked by appellant is not pertinent, the determinative question being whether said agreement as a whole fairly implies a promise to pay for said past services."
In the present case we have an agreement in writing wherein a seller agrees to sell and a purchaser agrees to buy real estate particularly described. The terms are agreed upon. A receipt of the first payment made is acknowledged. The rate of interest upon the deferred payments is determined. Add to this the sentence above quoted, and the inference therefrom is that respondents had agreed to pay some one a commission for services rendered in the sale of the property described therein.
Respondents call to the attention of the court, with the mere statement that the appellant is not a party to the instrument sought to be reformed, the case of Mabb v. Merriam, 129 Cal. 663, 62 P. 212. We are of the opinion that that case has no application here. In that case there was an attempt to substitute the name of one person for that of another, the latter being one of the parties to the contract. The contract, as executed, apparently was complete within itself, and there was nothing to indicate that any other person could even be interested in the subject-matter thereof. Where, as here, it clearly appears upon the face of the instrument that the name of a party has been omitted, and when accompanied by proper allegations in the complaint, equity will not be denied the right to supply it by reformation. There is neither an attempt herein to add another party nor to change the contract. Reformation is invoked for the purpose of supplying the name of a party clearly omitted. In Wilson v. Shea, 194 Cal. 653, 229 P. 945, 946, Mabb v. Merriam is cited. After discussing the absence of certain allegations that seemingly might have been added to the complaint, the court therein said: "The instrument itself is neither ambiguous nor uncertain in any of the foregoing respects, and is nowhere in the plaintiff’s said complaint alleged to be so. It would seem clear therefore that the case of Mabb v. Merriam, 129 Cal. 663, 62 P. 212, must be given exact application to the facts of the case at bar. ***" Section 3399 of the Civil Code provides that, when, through mutual mistake, a written contract does not express the intention of the parties, it may be revised on the application of the party aggrieved, and "the party aggrieved, in the sense of the statute, means one whose pecuniary interest is affected by the mistake," as was said in Enos v. Stewart, 138 Cal. 112, 70 P. 1005, 1006. The statute should never be strictly construed unless manifest justice demands it. Merkle v. Merkle, 85 Cal.App. 105, 258 P. 969. In this case it seems clear to us that the facts, for the demurrer admits the truth of the material allegations of the complaint, require a liberal construction of the statute, and that we have before us an instrument that can be reformed.
From the foregoing it is our opinion that a cause of action, not barred by the statute of frauds (Civ.Code, § 1624), is stated against respondents, Downs. A short discussion only is required as to the position of respondent Ahlborn. Respondents’ brief impliedly admits that if liability is established as to respondents Downs, it attaches to Ahlborn. From the allegations of the complaint it is clear that Ahlborn signed the written instrument sought to be reformed and that if it is reformed, he will be severally and jointly (with respondents Downs) liable thereunder. Civ.Code, § 1660. Appellant’s services in negotiating the purchase and sale of the property and in obtaining the execution of a binding written agreement were of some benefit to the buyer, Ahlborn, as well as to the sellers, respondents Downs. Cole v. Low, supra. In addition to the allegations of the complaint heretofore considered, appellant alleged that after the execution of said instrument, respondent, Ahlborn, for a valuable consideration, agreed in writing with respondent Downs that he would pay any commission claimed for the sale of the property under consideration and guaranteed the Downs against any loss thereon; that the commission so referred to was the commission due appellant, and which respondents had theretofore agreed to pay. When all the allegations of the complaint are considered together, a cause of action not barred by the statute is clearly stated against respondent Ahlborn.
Appellant claims that the allegations of his complaint are sufficient without seeking reformation of the instrument, but that he has gone further and invoked the aid of equity. Even if parol evidence could be introduced under appellant’s pleading without its being reformed, as appellant contends, it is not error to seek the assistance of equity by reformation. 34 Cyc. 906; Murphy v. Lacey, 204 Cal. 94, 266 P. 535. In Braithwaite v. Henneberry, 124 Ill.App. 416, in affirming a judgment for the reformation of a lease, the court said: "Counsel for appellee contend that appellants have an adequate remedy at law, because in a suit at law for damages for breach of the contract, they might show the mistake by parol evidence; but this does not exclude jurisdiction in equity to correct the mistake."
The judgment is reversed with instructions to overrule the demurrers.
We concur: MARKS, Acting P.J.; BARNARD, J.