De La Questa v. Armstrong Holdings Co.
De La Questa v. Armstrong Holdings Co.
Opinion of the Court
This is an appeal by plaintiff from the judgment entered upon an order sustaining a general demurrer to the amended complaint, without leave to amend, plaintiff conceding that no amendment could be made.
It is alleged in the amended complaint that the defendant, a corporation,' was the owner of a thirty-two hundred acre ranch in the county of Santa Barbara, together with the improvements, stock, and necessary equipment. Being de *489 sirous of securing the services of plaintiff to negotiate an exchange or sale of said property with a party known to plaintiff, but unknown to defendant, it employed plaintiff to negotiate the sale or exchange of the ranch prop'erty, at a valuation of one hundred and seventy-eight thousand dollars, to be consummated upon terms acceptable to the defendant, promising to pay plaintiff a commission of five per cent upon such valuation for procuring a person or party ready, willing and able to take over the property. It promised and did send to plaintiff from its office in Los Angeles a memorandum of the terms of this employment, subscribed by it. By the terms of the writing the defendant purports to give to the plaintiff the exclusive right and option to purchase the property, together with all farm and ranch equipment, including stock on said premises, for the price of one hundred and seventy-eight thousand dollars, cash, or upon terms acceptable to the board of directors of said company. Other terms of the sale were set out. It is further specified in the instrument that in case plaintiff, or anyone to whom he may assign the option, purchase the property within the period granted, the defendant will pay to plaintiff or to his order a commission of five per cent of the aforesaid cash valuation of one hundred and seventy-eight thousand dollars. No consideration was received by defendant for the option, except plaintiff’s agreement to sell or exchange the property.
Within the time specified, plaintiff produced the party willing and able to purchase the ranch, who offered to transfer and convey to defendant real and personal property of the agreed value of one hundred and seventy-eight thousand dollars, in exchange for the property of the defendant. This offer was satisfactory and acceptable to the defendant, and it so informed the plaintiff, at the same time stating to him that he had complied with the terms of the memorandum agreement and had earned, and was entitled, upon the consummation of said exchange, to the compensation provided to be paid to plaintiff by the defendant, according to its terms. Defendant informed the plaintiff, however, that it desired to further negotiate with the intending purchaser for the purpose, if possible, of securing from him the transfer of additional personal property in the place and stead of certain portions of the real property offered in exchange for its property. The defendant delayed the closing o'f the trans *490 action until after the time specified in the agreement, through no fault or neglect of plaintiff, and continued to negotiate with the party produced by plaintiff, and the exchange was finally consummated. The value of the real and personal property conveyed, and transferred, to the defendant was the sum of one hundred and seventy-eight thousand dollars.
On these facts plaintiff claims to have earned and to be entitled to his commission, he having produced the person ready, willing, and able to and who did take the property on terms satisfactory, and agreed to, by the defendant. The respondent’s theory is that the memorandum or agreement amounted only to an option granted to the plaintiff, and being an instrument in writing, superseded any prior oral negotiations had between the parties, and that consequently the allegations of the complaint as to what preceded the execution of the writing must be disregarded, no fraud being claimed. It relies upon the well-known principle of law that parol evidence cannot be admitted to vary, or add to, the terms of a contract plain and unambiguous on its face. Its argument, in effect, is that the agreement is one merely for the sale of the property upon terms acceptable to the defendant, with a provision for a discount of five per cent in the event of a sale to plaintiff or his assignee. Appellant’s theory is that the agreement was both an option and an authorization to sell upon commission. His theory is supported by the authorities. (Mitchel v. Gray, 8 Cal. App. 423, 429, [97 Pac. 160]; Burt v. Stringfellow, 45 Utah, 207, 216, [143 Pac. 234].)
We are of the. opinion that the plaintiff has stated a cause of action, and that the demurrer was improperly sustained. The memorandum of the agreement, entered into between the parties, is not so clear' and unambiguous as to be readily understood without some explanation of the situation of the parties at the time it was entered into. The writing prepared and executed by the defendant (omitting descriptive matter and portions immaterial to this discussion) is as follows:
“For value received and for the time hereinafter stated, the Armstrong Holdings Company hereby gives to Edward de la Questa the exclusive right and option to purchase the property of said company located in the County of ‘Santa *491 •Barbara . . . together with all farm and ranch equipment, including stock now on said premises, comprising approximately 3,200 acres, for the price of one hundred seventy-eight thousand dollars ($178,000) cash, or upon terms acceptable to the board of directors of said company, . . .
“In case Edward de la Questa, or anyone to whom he may assign this option purchase said property within the time hereinafter specified, said Armstrong Holdings Company agrees to pay said Edward de la 'Questa, or to his order, a commission of five per cent (5%) of the aforesaid cash consideration of one hundred seventy-eight thousand dollars ($178,000). This option to remain in full force and effect for the period of twenty (20) days from date and after that time to be void and of no force or effect.”
The contract in this case was executed by the defendant in favor of the plaintiff. When different constructions of the provisions of an agreement are otherwise equally proper, that is to be taken which is most favorable to the party in whose favor the provision was made. (Code Civ. Proe., sec. 1864.) In cases of uncertainty the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist. (Civ. Code, sec. 1654.) In the instant case the defendant prepared the agreement. We do not need to rely solely upon these technical rules of interpretation, however, in arriving at a conclusion in this matter. Other controlling principles applicable to the construction of contracts afford a more satisfactory determination of the question.
The judgment is reversed. The action is remanded to the lower court with instructions to overrule defendant’s demurrer to the amended complaint, permitting it to answer thereto within such time as may be proper.
Welch, J., pro tern., and Richards, J., concurred.
Reference
- Full Case Name
- EDWARD De La QUESTA, Appellant, v. ARMSTRONG HOLDINGS COMPANY (A Corporation), Respondent
- Cited By
- 5 cases
- Status
- Published