162 N.E. 83 | NY | 1928
The plaintiff, a broker, sues to recover commissions for services in the procurement of a loan to be secured by a deed of trust covering defendant's land.
By the contract of employment the loan to be accepted by the defendant was to bear interest at the rate of six and one-half per cent. It was to mature in ten years *292 with amortization at an average rate of four per cent per annum. The expense of procuring it was not to exceed twelve per cent, with one per cent commission for the services of the broker.
Plaintiff submitted to defendant a proposed contract of loan to be underwritten by the Empire Bond and Mortgage Company, the trustee under a deed of trust. Defendant refused to sign it, asserting that it departed in many ways from the terms of the loan prescribed by the contract of employment. This action for commissions followed.
We think the loan procured was not the loan prescribed, and that the defendant was within its rights in refusing to accept it. The loan prescribed by the contract of employment was to bear interest, as we have seen, at the rate of six and a half per cent. The loan procured bore interest at that rate and more. By its terms the borrower was to relieve the bondholders of the payment of the normal Federal income tax, not exceeding four per cent, due upon the bonds, and was to deposit with the trustee a sum sufficient to discharge the liability thus assumed. In addition, the borrower was to pay the personal property tax due from owners of the bonds by virtue of such ownership in Pennsylvania, Connecticut, Maryland, Massachusetts and the District of Columbia. This assumption of a liability which in law was owing by the lender was equivalent to an increase of the interest, since it was compensation for the use of money beyond the rate prescribed. Again, the loan called for by the employment was to be amortized at an average rate of four per cent per annum. The loan procured and tendered was to be amortized at an average rate of six and two-thirds per cent. There were other deviations in connection with the expenses of procurement. After payment of twelve per cent to the trustee and one per cent to the broker, the borrower was to pay for a surety company bond at a cost of $2,400, and was to deposit *293 a sum of money equal to one per cent of the proposed issue as security to the trustee that it would go forward with performance.
The plaintiff did not fulfill the conditions of the contract of employment. The cause of action, therefore, fails.
The judgment of the Appellate Division and that of the Trial Term should be reversed and the complaint dismissed, with costs in all courts.
CARDOZO, Ch. J., CRANE, ANDREWS, LEHMAN and O'BRIEN, JJ., concur; POUND and KELLOGG, JJ., not sitting.
Judgments reversed, etc.