Court Opinion

ID: 5450857
Source: CourtListenerOpinion
Date Created: 2022-01-08 18:38:20.11461+00
Date Added: 2024-06-11T08:32:22.671220
License: Public Domain

TRAYNOR, J.
I dissent. The majority opinion holds that this court is bound by the implied interpretation of the agreement of September 23, 1942, by the trial court because “ [conflicting] inferences may be drawn from the contract and the surrounding circumstances.” The very possibility of what the majority opinion calls conflicting inferences, actually conflicting interpretations, far from relieving the appellate court of the responsibility of interpretation, signalizes the necessity of its assuming that responsibility. It is established that in the absence of conflicting extrinsic evidence the appellate court must make its own interpretation of the instrument, displacing the interpretation of the trial court if they are inconsistent. (Estate of Platt, 21 Cal.2d 343, 352 [131 P.2d 825] ; Moffat v. Tight, 44 Cal.App.2d 643, 648 [112 *18P.2d 910] ; Mitchel v. Brown, 43 Cal.App.2d 217, 222 [110 P.2d 456] ; Texas Co. v. Todd, 19 Cal.App.2d 174 [64 P.2d 1180] ; Wall v. Equitable Life Assur. Soc., 33 Cal.App.2d 112 [91 P.2d 145] ; see O’Connor v. West Sacramento Co., 189 Cal. 7, 18 [207 P. 527]; California W. D. Co. v. California M. O. Co., 178 Cal. 337, 341 [177 P. 849] ; Brant v. California Dairies, Inc., 4 Cal.2d 128, 133 [48 P.2d 13] ; 5 C.J.S. 32, 722, 751.) If the extrinsic evidence is conflicting, the trial court, having seen and heard the witnesses, is in a better position to evaluate that evidence, and its interpretation of the instrument is ordinarily conclusive. (See 111 A.L.R. 742.) Even then, however, the appellate court will determine the reasonableness of the trial court’s interpretation based on its findings as to extrinsic facts. (Melvin v. Berendsen, 7 Cal. App.2d 389, 391 [46 P.2d 189]; Ballsun v. Star Petroleum Co., 105 Cal.App. 679, 685 [288 P. 437] ; Fowle v. Bigelow, 10 Mass. 379.)
In interpreting a written agreement, the court must ascertain the meaning of the words and other manifestations of intention forming the agreement. (Restatement: Contracts: §226; 3 Williston, On Contracts [1936] p. 1726.) It must consider the usual meaning of the words, the circumstances in which they were used, and the reasons for their use. This function is a judicial one, even though it “may not involve any question of law in the exact sense” (Thayer, Preliminary Treatise on Evidence, p. 204) to be exercised according to the generally accepted canons of interpretation so that the main purpose of the instrument may be given effect. (See Civ. Code, §§ 1635-1661; Code Civ. Proc., §§ 1856-1866.) Factual and legal elements are so closely interwoven that there can be no effective review of the trial court’s interpretation unless the appellate court goes through the whole process of interpretation. Otherwise conflicting decisions of trial courts, in the event one party has made identical agreements with other parties, would have to be affirmed by the appellate courts, which would be bound by any number of conflicting interpretations of the same agreement.
In the present case there was no conflict in the extrinsic evidence. This court is therefore bound to make its own interpretation of the agreement of September 23, 1942. That agreement was the only one existing between the parties, for the correspondence between respondent and the attorney for *19the estate before September 23,1942, consisting of requests for information by the respondent and answers by the executors, did not constitute a contract authorizing or employing respondent to procure a purchaser. (Morrill v. Barneson, 30 Cal.App.2d 598 [86 P.2d 924] ; Lambert v. Gerner, 142 Cal. 399 [76 P. 53] ; Kleinsorge & Heilbron v. Liness, 17 Cal.App. 534, 536 [120 P. 444]; see 4 Cal.Jur. 554.) The agreement of September 23, 1942, read in the light of the previous rejection of respondent’s claim for a commission on the sales to Willig and the Brownscombe letter with which the form of contract signed by them was sent to the executors, is open to only one reasonable interpretation, namely, that it authorized respondent to procure a new purchaser and promised a commission payable out of the proceeds of any sale to such purchaser. The text of the agreement, authorizing respondent to procure a purchaser and promising a commission in the event of a sale to such purchaser, could not relate to Willig, who had already bought the property and severed his relationship with respondent. It clearly shows that the parties intended to provide for a commission for future and not for past services. Any doubt as to that intention is removed by the Brownscombe letter: “Mr. Alex McCluskey, a broker of this city, has one or more prospective purchasers for the Rule ranch and personal property. I have advised him for his protection he should have a formal listing from the "executor before making a bid in court. ’ ’ Since Willig at that time was known to both parties to have purchased the property subject to confirmation by the court and to have severed his relationship with respondent, he was neither a purchaser whom respondent “has” nor “one or more” purchasers nor a “prospective purchaser.” The advice that respondent secure a formal listing for its own protection before “making a bid in court” undoubtedly related to the provision in section 785 of the Probate Code allowing the court in its discretion to accept a bid of at least ten per cent more than the price named in the return of sale, if made to the court by a responsible person before confirmation of the return sale. A promise of a commission in this event was not unnecessary as the majority opinion assumes, for section 761 of the Probate Code limits the commission to one-half only if there are two brokers, one who has procured the original purchaser, and the other who has procured the purchaser who makes the higher bid. *20If there is only one broker, namely the one who secured the purchaser making the higher bid on which a confirmed sale is made, section 761 would not apply and the broker would be entitled to the full commission if he had secured a written contract pursuant to section 760. Moreover, it cannot be assumed that the parties believed that a written promise of a commission was unnecessary with respect to bids in court. In the absence of other authority clearly in point, Brownscombe may have relied for his advice on the statement in California Jurisprudence (11B Cal.Jur. 53 § 667), a widely used encyclopedia of California law, that brokers, who procure a bid in court on their own responsibility, cannot be allowed a commission out of the estate, citing Hickman-Coleman Go. v. Leggett, 10 Cal.App. 29 [100 P. 1072] ; Estate of Strybing, 5 Cof.Prob.Dee. 438. The parties were properly advised to remove any uncertainty in this respect by executing the instrument in question. If respondent had intended that the instrument provide for a commission for the sale to Willig, he would have said so, assuming of course that he did not intend to lull the executors into the belief that the agreement related to the procuring of a new purchaser and to use the instrument as a basis for a claim for a commission on the Willig sales. Such an intent would be of no avail, for respondent could not attain by a trick what had been denied him when he asked for it. (Civ. Code, §§ 1640, 1649, 1654; Code Civ. Proc., § 1864; Brant v. California Dairies, Inc., 4 Cal.2d 128, 133 [48 P.2d 13]; Pacific Lumber Co. v. Industrial Acc. Com., 22 Cal.2d 410, 422 [139 P.2d 892]; McClintick v. Leonards, 103 Cal.App. 768, 774 [285 P.351] ; see 4 Cal.Jur. Ten-year Supp., 1943 revision, 135.)
The record shows that respondent at the trial vigorously objected to the admission of the Brownscome letter in evidence. Since he now contends that the letter was not admissible, it is necessary to determine the question whether the letter was admissible as extrinsic evidence in aid of the interpretation of the agreement of September 23, 1942. Respondent contends that the promise of a commission in the instrument of September 23rd covered the sales to Willig and that in view of the clear, common meaning of the language used, the promise cannot be otherwise interpreted. Even if it be assumed that the instrument of September 23rd would seem unambiguous to a reader unfamiliar with the circumstances surrounding its execution, appellants would not be precluded from showing the *21meaning intended by the parties, and the court could still interpret the instrument in accord with that intention.
The main purpose of interpretation is to give effect to the intention of the parties at the time of contracting (Civ. Code, § 1636; Universal Sales Corp. v. California, etc., Mfg. Co., 20 Cal.2d 751, 760 [128 P.2d 665] ; Bader v. Coale, 48 Cal.App.2d 276 [119 P.2d 763]; see 6 Cal.Jur. 255, 4 Cal.Jur. Ten-year Supp., 1943 revision, 107). This purpose would be defeated if it could not be determined what the parties meant when the language of their contract seems unambiguous to the general reader unaware of the circumstances under which the contract was executed, who bases his understanding of the language exclusively on his knowledge of the meaning of the words in common usage. (Ermolieff v. R. K. O. Radio Pictures, 19 Cal. 2d 543, 550 [122 P.2d 3].) Though language that appears unambiguous to the general reader gives rise to an inference that the parties used the language in its ordinary meaning, the inference may be rebutted by evidence that the parties used the words in question in a different sense. (Code Civ. Proc., § 1861; Civ. Code, § 1636; Weinstein v. Moers, 207 Cal. 534 [279 P. 444]; Shean v. Weeks, 176 Cal. 592 [169 P. 231]; see McBaine, The Rule Against Disturbing the Plain Meaning of Writings, 31 Cal.L.Rev. 145, 149.) Otherwise “the meaning of the people who did not write the document” would determine its interpretation (see 9 Wigmore, Evidence, 4th ed., § 2462), and the intention of the parties might be nullified (Weinstein v. Moers, supra, at p. 540) in violation of the provisions of sections 1856. 1860, 1861 of the Code of Civil Procedure and sections 1636 and 1647 of the Civil Code, which are applicable not only when an ambiguity appears to the reader from the face of the instrument, but also when there is an “extrinsic ambiguity” (Code Civ. Proc., § 1856, subd. 2), namely, an ambiguity that arises when the instrument is read in the light of all the circumstances surrounding its preparation. (Pacific Indemnity Co. v. California Electric Works. 29 Cal.App.2d 260, 272 [84 P.2d 313].) As the United States Supreme Court declared in Reed v. Merchants’ Mut. Ins. Co.. 95 U.S. 23. 30 [24 L.Ed. 348] : “Although a written agreement cannot be varied by addition or subtraction bv proof of the circumstances out of which it grew and which surrounded its adoption, yet such circumstances are constantly resorted to for the purpose of ascertaining the subject matter and the standpoint of the parties in relation thereto. Without some knowledge derived from such evidence, it would be im*22possible to comprehend the meaning of an instrument or the effect of the words of which it is composed. This preliminary-knowledge is as indispensable as that of the language in which the instrument is written.” (See, also, Jenny Lind Co. v. Bower & Co., 11 Cal. 194, 198.)
The extrinsic evidence admissible to furnish the preliminary knowledge necessary to an understanding of the language of the instrument comprises the evidence as to “circumstances surrounding the parties at the time they contracted . . . including the object, nature and subject matter of the agreement . . . and the preliminary negotiations between the parties” in order that the court may “place itself in the same situation in which the parties found themselves at the time of contracting.” (Lemm v. Stillwater Land & Cattle Co., 217 Cal. 474, 480 [19 P.2d 785]; Civ. Code, § 1647; Code Civ. Proc., § 1860; Universal Sales Co. v. California etc. Mfg. Co., supra, p. 761.)
The statement sometimes found in the cases that the extrinsic facts are admissible only when a written instrument is ambiguous, simply means that the language used by the parties must be susceptible to the meaning claimed to have been intended by the parties. (Balfour v. Fresno Canal & Irr. Co., 109 Cal. 221 [41 P. 876]; Smith v. Carlston, 205 Cal. 541, 550 [271 P. 1091]; Barlow v. Frink, 171 Cal. 165, 172 [152 P. 290] ; Kenney v. Los Feliz Investment Co., Ltd., 121 Cal.App. 378, 386 [9 P.2d 225]; In re Smith’s Will, 254 N.Y. 283 [172 N.E. 499, 72 A.L.R. 867]; Goode v. Riley, 153 Mass. 585 [28 N.E. 228] ; Restatement, Contracts, § 242, comment a; Holmes, The Theory of Legal Interpretation, 12 Harv.L.Rev. 417,420.) If the evidence offered would not persuade a reasonable man that the instrument meant anything other than the ordinary meaning of its words,- it is useless. (See Williston, Contracts [rev. ed. 1936], § 629.) In the light of the foregoing principles, the BrownseOmbe -letter was clearly admissible.
Since there was no written contract, as" required by section 760 of the Probate Code, to pay respondent a commission on the sales to Willig, the judgment should be reversed. The rule that a broker must have a contract in order to recover for his services, however beneficial they are to the principal, is necessary to protect the principal, who otherwise would frequently be unable to determine whether the price agreed upon with the purchaser included- a commission: (See Restatement, Agency, §§ 441 Comment (c), 448 Comment (f); *23Lasoya Oil Co. v. Jarvis, 191 Okla. 213 [127 P.2d 142, 142 A.L.R. 270]; 12 C.J.S. p. 134.) Section 760 of the Probate Code has adopted this rule, adding the requirement that the contract be in writing. This formality protects the broker from competing claims of others, and the estate from “the assertion of false claims for compensation by brokers and agents” (Kleinsorge & Heilbron v. Liness, 17 Cal.App. 534, 538 [120 P. 444]), which would otherwise be a source of litigation, that would sometimes result in the principal’s paying the commission twice. (See Selvage v. Talbott, 175 Ind. 648 [95 N.E. 114, Ann.Gas. 1913 C 724, 33 L.R.A. N.S. 973]; Barney v. Lasbury, 76 Neb. 701 [107 N.W. 989]; Annotation 17 A.L.R. 891, 894.) The statute is vitiated when the courts allow a broker to recover a commission in the absence of a written contract. (White v. Hirschman, 54 Cal.App.2d 573, 574 [129 P.2d 430]; Hicks v. Post, 154 Cal. 22, 28 [96 P. 878]; Jamison v. Hyde, 141 Cal. 109 [74 P. 695]; Kleinsorge & Heilbron v. Liness, supra, p. 538.)
Edmonds, J., concurred.
Appellants’ petition for a rehearing was denied November 13, 1944. Edmonds, J., and Traynor, J., voted for a rehearing.