Procedural Posture

Appellant sellers sought review of a judgment of the Superior Court of Los Angeles County (California), which awarded damages to respondents assignee and broker and attorney fees to respondents buyer, assignee, and broker for the sellers’ breach of a contract to sell real estate. Sellers alleged the trial court erred in finding they acted as a partnership and that one of them had authority as managing partner to bind the others.

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Overview

Buyer and sellers entered a contract for the sale of real estate in which broker acted as agent. Buyers deposited part of the purchase price in an escrow account with instructions. Sellers gave the bank different instructions and notified buyer that it would not sell the property without a reservation of mineral rights. Buyer assigned his interest in the contract to the assignee, who brought an action on the contract against sellers. The court held there was no error in the trial court’s award of the balance in the escrow account and damages to the assignee. The court held that there was substantial evidence supporting the trial court’s findings that the sellers acted as a partnership and that the seller who signed the contract had authority to bind the partnership. The fact of the partnership was not required by Cal. Civ. Code § 686 to appear in the deed by which sellers had taken title in their individual names. Further they operated a formal partnership which was engaged in the business of developing real estate and the seller who signed the contract was the managing partner of that partnership. The court found no error in the trial court’s awards of attorney fees.

Outcome

The court affirmed the judgment of the trial court.