174 N.E. 436 | NY | 1931
Lead Opinion
The defendants, on December 9th, 1925, entered into a written contract with Harry F. de Riesthal and Charles E. Crawford, whereby the former agreed to sell to the latter certain real estate at a named price per acre, totaling approximately $124,000 for the entire acreage. The sum of $10,000 was presently paid; $30,000 was made payable on April 9th, 1926, when the deed was to be delivered; the balance was to be paid by the execution *159 and delivery of a purchase-money mortgage. The plaintiffs, Amies and Stephen J. Hines, whose estate is represented by the plaintiff J. Emma Hines, were a brokerage firm, doing business as Amies Hines. They introduced de Riesthal and Crawford to the defendants, by whom they were accepted as purchasers ready, willing and able to buy. Simultaneously with the execution of the contract of sale, the defendants executed and delivered to Amies Hines a writing recognizing the employment of the partners as their agents. The writing stated that "we agree to pay for their services in bringing about such sale the sum of Five Thousand ($5,000) Dollars, one-half of which is paid this date and the balance to be paid on the closing of title." The closing of title was adjourned from April 9th to June 1st, 1926, when de Riesthal and Crawford, for lack of funds, declined to complete the purchase. Accordingly, it was agreed between the buyers and the sellers that the sellers might retain the $10,000 already paid, and that the obligations of the contract should otherwise cease. In this action a recovery of $2,500, the balance of the commissions remaining unpaid, is sought.
Self-evidently the writing delivered to Amies Hines does not integrate the original contract of employment made by them with the defendants; nor is it an exclusive memorial of the defendants' promises originally made. The defendants "recognize" Amies Hines "as the agents who brought about the sale of our farm to de Riesthal and Crawford, with whom a contract is entered into this day." Here is an acknowledgment of a prior employment of Amies Hines to render services now already performed; not a memorandum of a contract yet to be performed. Nor can the writing bind the brokers, who accepted it, as the integration of a new contract entered into on the day of its making. The brokers, having already performed the services they had undertaken, were presently possessed of a chose in action *160
entitling them to recover commissions according to the express or implied terms of an agreement precedently made. Therefore, a new agreement, involving a surrender of the chose in action and the substitution of a promise to pay upon new terms, without consideration paid, would have been unenforcible. (Reis Co. v.Zimmerli,
Proof was given by the plaintiffs that the defendants, at the time when the contract of employment was made, unconditionally promised to pay the brokers the sum of $5,000 as their commissions for procuring a sale. Proof was given by the defendants that, at the very moment of employment, the defendants agreed to pay and the brokers agreed to accept the sum of $5,000, "half on the contract and half on the closing of the deal," as stated by the defendant Johanna Wesnofske; "twenty-five hundred to get when we draw the contract and the other half they get when they close the deal, after the deal is closed," as stated by the defendant John Wesnofske. The testimony of the defendants is in precise accord with the writing delivered to the brokers whereby the defendants admitted an obligation to pay one-half of the commissions "on the closing of title." The trial judge *161 charged the jury that the plaintiffs might recover if the defendants unconditionally promised to pay the sum of $5,000 for commissions; that they might not recover if the defendants promised to pay $2,500 on the signing of the contract, and "the other half of it when the title was closed." The jury, in reporting a verdict for the defendants, necessarily found that the agreement, as stated by them, was the agreement entered into. As the Appellate Division reversed on the law only, we must assume it to have been the established fact that the defendants promised to pay the balance of the commissions, or $2,500, "on the closing of title," and not otherwise. The first question to be decided is whether or not this was a promise to pay upon a condition which has not been fulfilled; the second, whether or not the fulfillment of the condition, assuming that the promise was conditional, has been waived.
The employment of such words as "when," "after," or "as soon as," clearly indicate that a promise is not to be performed except upon a condition. (Williston on Contracts, vol. 2, § 671.) Promises to pay broker's commissions, for the procurement of sales of real estate, are conditional when expressed to be performable "on the day of passing title" (Leschziner v.Bauman,
The question remains whether the condition qualifying the promise, that it should become performable only upon "the closing of title," has remained unfulfilled, because of any fault upon the part of the defendants. If a promisor himself is the cause of the failure of performance of a condition upon which his own liability depends, he cannot take advantage of the failure. (Williston on Contracts, vol. 2, § 677; Dolan v. Rodgers,
It has been very generally held that a vendor is under *164
no duty to his broker to enforce specific performance by the vendee, when commissions are conditioned upon performance; that the vendor may accept forfeiture by the vendee, retain the down payment made, and not become liable thereby to pay his broker. (Ash v. Oppman,
In this instance, on the day fixed for the closing of title, as postponed by mutual agreement, the vendees declined to proceed with performance. The forfeiture, unequivocally declared by the vendees, was accepted by *165 the vendors. True, the parties entered into a new agreement whereby the vendors were to retain the $10,000 previously paid and the vendees were to be released from their contract obligations. However, the vendors received from the agreement no right or thing which the law had not already given them, viz., the sum of $10,000 and the right to retain it. The defendants, therefore, neither prevented nor hindered performance. Non-performance was already, without their aid, an established fact. Passive acquiescence in a declared default and its consequences was not an act of prevention or hindrance. Neither did the defendants receive an additional advantage, bargained for in lieu of non-performance. Consequently a case of waiver was not made out. The condition upon which payment was made to depend, not having been performed or waived, no recovery may be had.
The judgment of the Appellate Division should be reversed and that of the Trial Term affirmed, with costs in the Appellate Division and in this court.
Dissenting Opinion
The defendants were the owners of seventy acres of farm land situated at Hicksville, Long Island, which they sold to de Riesthal and Crawford for $124,000, of which $40,000 was to be paid in cash, and the rest secured by bond and mortgage. Amies Hines were the real estate brokers putting through the deal, for which the usual commission of five per cent would have been $6,200. After some bickering, the brokers agreed to take $5,000 "as a flat commission." When the contract was signed and executed, the brokers took $2,500 in part payment, and agreed to wait for the balance until title was closed. The defendants, at the time of executing the contract with the purchaser, also signed the following memorandum:
"We, the undersigned, do hereby recognize Amies Hines, of 163-18 Jamaica Avenue, Jamaica, N.Y., as the *166 agents who brought about the sale of our farm to de Riesthal and Crawford, with whom a contract is entered into this day, and we agree to pay for their services in bringing about such sale the sum of Five thousand ($5,000) Dollars, one-half of which is paid this date and the balance to be paid on the closing of title."
The purchasers procured adjournments from time to time, and finally entered into an agreement with the defendant owners to be relieved of their contract. One of the purchasers, de Riesthal, testified that although they were financially able to carry out the contract, they did not have the available cash to meet the required payment. He said that they had sufficient property at that time, but not sufficient cash, yet they did not want to be sued for specific performance. Under these circumstances, the defendants agreed, through their lawyer, to take $10,000 as liquidated damages, keep their property, and exchange releases with the purchasers. The release is in evidence and is mutual, signed by all parties. The purchaser releases the seller, and the seller terminates the contract. The brokers knew nothing about this release and were not consulted.
What liquidated damages did the defendants, sellers, suffer? Through the efforts of the brokers, they have received $10,000 cash in settlement of something. Did this include the commission to be paid to their brokers, or did it represent their profit on the transaction? Whatever it is, the defendants by a formal written agreement have substituted one contract for another, and in place of giving a deed and taking mortgages, have kept their property and taken cash. Under these circumstances, are the brokers entitled to their commission?
Brokerage to be paid on the closing of title does not as a matter of law create a condition precedent. Whether it merely fixes the time of payment of a sum admittedly due, or whether the commission is dependent upon the passing *167
of title is generally a question of fact. (North SeaDevelopments, Inc., v. Burnett,
Passing this point, however, and assuming that the commission was not to be paid unless title closed, the action of the defendants estops them from making such a claim. They have received the benefit of the broker's services. Through his efforts they keep their property and $10,000 in cash, which they asserted paid all their damage. This sum was accepted as liquidated damages and the contract of sale canceled. Damages would ordinarily include the broker's commission, and there is nothing in this case to indicate that the $10,000 was not accepted with this in view. There is no evidence that the property was worth more or less than the purchasers agreed to pay for it, or to indicate what damages the defendants suffered. We must, therefore, assume that it included the one element we do know constituted a liability, to wit, the broker's commission. As before stated, the purchaser was not insolvent, but financially responsible; specific performance was to be avoided, and by the exchange of mutual releases the contract of purchase was canceled. The sellers participated in *168
terminating the contract, and cannot now claim that the brokers did not earn their commission. The principle involved is clearly apparent when we change the incidents of the transaction and assume that the seller agreed with the purchaser to keep his property and accept $100,000 profit. Under such circumstances no one would insist that the broker lost his commission because title did not close. (Morgan v. Calvert,
At least it would be a question of fact whether the settlement with the purchaser was to the advantage and profit of the defendants or whether the purchaser being unable to perform, the defendants in good faith merely accepted payment of the damage they had sustained. (Boysen v. Frink,
As to the record before us and the exceptions which raise these various points of law: The Appellate Division reversed as a matter of law and directed judgment for the plaintiff upon the theory that the words of the brokerage contract merely postponed time of payment and did *169 not create a condition precedent. We are agreed, I think, that these words at least, for the circumstances of this case, created a question of fact, and the matter should have been submitted to the jury as such. The trial judge held just the contrary, and charged the jury as matter of law that "if the plaintiff stipulated that he was to be paid the other $2,500 when the title was closed, the title never having closed, that part of the commission was not earned and the verdict should be for the defendant." To this an exception was taken. This was error. As above stated, the use of the word "when" may create a condition precedent having the significance of "if," or it may merely refer to the time of payment, the payment itself not being dependent upon the happening of any event, such as the closing of title. The question as to the intention of the parties in using the word "when" is for the jury. The fact is that the contract says to be paid "on the closing of title," but I take it that the words "on" and "when" are here synonymous.
The Appellate Division, therefore, was justified in reversing the judgment for the defendant for this error in the charge, although a new trial should have been ordered instead of judgment for the plaintiffs directed.
This being so, the case should now go back for a new trial, and this matter of the settlement by the defendants submitted to a jury, under proper instructions, even though the point was not clearly raised in the trial record before us. The judgment should be reversed and a new trial granted, with costs to abide the event.
CARDOZO, Ch. J., POUND and O'BRIEN, JJ., concur with KELLOGG, J.; CRANE, J., dissents in opinion in which HUBBS, J., concurs; LEHMAN, J., dissents on the ground that the seller released the buyer from his obligation.
Judgment accordingly. *170
