Opinion
Rehearing Denied March 6, 1941
Hearing Granted April 11, 1941
Appeal from Superior Court, Los Angeles County; Clement D. Nye, Judge.
Action by C.F. Haigler and others against Dottie Delphy Donnelly, and others, for money received by the named defendant, a real estate broker, for the use and benefit of plaintiffs. From a judgment for plaintiffs, defendants appeal.
Judgment reversed.
COUNSEL
W.W. Comstock and Harry A. Finkenstein, both of Los Angeles, for respondents.
Henry S. Cohen and Bernard B. Cohen, both of Los Angeles, for appellants.
OPINION
WOOD, Justice.
Plaintiffs commenced this action upon a common count for money received by defendant Donnelly, a real estate broker, for the use and benefit of plaintiffs. A judgment was rendered in favor of plaintiffs in the sum of $3,908.35, of which $500 was awarded by the court as punitive damages. The appeal is from the judgment.
Plaintiffs listed their apartment house with defendant in March, 1939, for the purpose of negotiating a lease for a term of years at a rental of $250 per month and also listed the furniture and furnishings of the apartment house for sale for $3,000 cash. These amounts were to be net to the plaintiffs. The listing card was not produced at the trial and its contents were established by plaintiff C.L. Haigler, who testified that defendant "should get his commission from the other party that he sold to". On April 7, 1939, plaintiffs signed a listing card in which defendant was authorized to sell the apartment house together with the furniture and furnishings for the sum of $27,500 and in which plaintiffs agreed to pay a commission of 5 per cent "if they find a buyer for said property at the price or terms above indicated, or any lower price I may later accept". Thereafter defendant procured Mrs. Silva as lessee of the apartment house and on May 11, 1939, plaintiffs entered into a written contract with Mrs. Silva by which Mrs. Silva purchased the furniture and furnishings for the sum of $2,500 and leased the apartment house for the term of ten years at a rental of $250 per month. She paid to defendant the sum of $2,500 in cash for the furniture and furnishings and also the sum of $1,000 to apply on the rent. Later plaintiffs authorized defendant to repay to Mrs. Silva the sum of $91.65 in making a pro-ration of the rent. In the contract between plaintiffs and Mrs. Silva it is provided: "It is hereby agreed that so much of said down payment or any other money collected by Donnelly & Co. as is necessary shall be retained by Donnelly & Co., to pay the seller’s commission and the balance if any, after said payment, shall be paid by said Donnelly & Co., to said party of the first part or held by agent subject to first parties order". Defendant deducted from the sum which she had received from Mrs. Silva the sum of $1,150, which she claimed to be due her as commission, and tendered to plaintiffs a check for $2,258.35. This tender was refused as being insufficient in amount, plaintiffs claiming that they should receive the entire sum of $3,500, less the small sum which had been repaid to Mrs. Silva. At a later date plaintiffs cashed the check under the stipulation of the parties that it could be done without prejudice to the rights of either of them.
The judgment in favor of plaintiffs, which was entered on May 9, 1940, for the sum of $3,908.38, required that defendant pay interest on the sum of $1,150 from May 26, 1939, to the date of the entry of the judgment. There is a marginal note on the judgment record showing that satisfaction of the judgment to the extent of $2,258.35 was filed on June 20, 1940.
The contract which plaintiffs made with Mrs. Silva contains in effect the terms upon which defendant had been authorized to sell the furniture and lease the property except that the purchase price of the furniture was changed from $3,000 to $2,500. Plaintiffs were not compelled to enter into this agreement, not having authorized defendant to sell the furniture at the price of $2,500, but since they agreed finally to accept the lower price they became liable to pay to defendant the reasonable value of the services which she had rendered in procuring the purchaser. They had the right to stand upon their original proposition to sell the furniture for $3,000 net to them with the understanding that defendant would receive as commission any sum for which the furniture could be sold over and above that price. Their acceptance of the new terms constituted a waiver of the conditions which had been agreed upon for the payment of the commission. Since the amount to be paid under the conditions under which the sale was actually made had not been agreed upon, the rule to be applied is that defendant is entitled to reasonable compensation. Hall v. Douglas Aircraft Co., 23 Cal.App.2d 498, 73 P.2d 668; Moore v. Borgfeldt, 96 Cal.App. 306, 273 P. 1114; Wetzell v. Wagoner, 41 Mo.App. 509. The record discloses that defendant presented evidence to establish the reasonable value of her services but the trial court erroneously failed to make a finding thereon.
The trial court erred in ordering defendant to pay the sum of $500 as punitive damages. It is provided in section 3294 of the Civil Code that "in an action for the breach of an obligation not arising from contract" the plaintiff may recover punitive damages in addition to actual damages where the defendant has been guilty of oppression, fraud or malice. The relations between plaintiffs and defendant were contractual. Under the first listing plaintiffs agreed to pay a commission over and above a definite amount which was set as the purchase price of the property, and under the second listing they agreed to pay a specified commission upon a specified selling price. When no sale was effected under either of these listings and a sale was actually effected under terms different from the terms set forth in the listings plaintiffs became liable under an implied contract to pay for the services rendered. Plaintiffs recognized their obligation to pay the commission by signing the contract with Mrs. Silva containing a provision that defendant could retain from the purchase price a sufficient sum to pay her commission. Defendant at all times claimed the right to retain the sum which was not tendered to plaintiffs and presented evidence to the effect that the sum retained by her approximated the rates prevalent in the city. There was an implied contract on her part to deliver to plaintiffs any sum received by her over and above the reasonable value of her services. The record contains no evidence to justify an award of punitive damages.
The judgment is reversed.
We concur: MOORE, P.J.; McCOMB, J.