Cohen v. ScolaCohen v. Scola
The defendant appeals from а judgment for brokerage commission obtained by the plaintiff in the Essex County District Court.
The defendant operates the Park View Restaurant, a luncheonette and restaurant business at 184 Elizabeth Avenue, Newark. His business includes customary stock and good will, fixtures and equipment, and a lease for the restaurant premises. The plaintiff describes himself as a business
The plaintiff testified that during the preliminary discussions on Marсh 28, 1950, the defendant and Klein agreed upon a sale at the price of $6,500 and he reduced his commission to $500. Later that day they went to the office of Klein‘s attorney who suggested that the contract of sale include a provision as to the gross receipts of the seller‘s business and a further provision for a lease beyond the term of the lease held by the defendant. These suggestions were agreeable to the defendant and a written contract was prepared and executed. Paragraph 1 provides that the seller agrees to sell and thе purchaser agrees to purchase the luncheonette and restaurant business including stock, fixtures, equipment, lease, good will, etc. Paragraph 5 provides that the seller reprеsents his gross weekly receipts to average $525 and guarantees that the gross receipts from March 29, 1950, to April 5, 1950, will aggregate $525; it further provides that this shall be deemed a trial period during which the buyer will have opportunity to keep tally of the gross receipts and in the event they do not aggregate $525 the deposit under the contract will be returned to the buyer. Paragraph 8 рrovides that the seller agrees to procure and deliver to the purchaser a lease for the premises for an unexpired period not less than three years from April 15, 1950, and in the event of the seller‘s failure to do so the buyer will be entitled to return of his deposit. Paragraph 10 provides that the parties agree that the plaintiff is the only broker who brought about the sale and is entitled to commission of $500 to be paid by the defendant. The gross receipts did not aggregate $525 during the period from March 29, 1950 to
Our courts have held that, in the absence of stipulation to the contrary, a broker earns his commission when he obtains a buyer on the seller‘s terms “either as originally propounded or as settled by agreement between the seller and buyer.” Dickinson v. Walters, 100 N.J.L. 62, 65 (Sup. Ct. 1924); Houston v. Siebert, 129 N.J.L. 468, 472 (E. & A. 1943). And where the agreement to sell is not consummated because of a default by the seller the right to commission is not defeated. See Louis Schlesinger, Inc. v. Burstein Realty Co., 123 N.J.L. 190, 192 (E. & A. 1939). Thus, recovery by the broker was allowed where the seller failed to fulfill his covenant against encroachments (Klipper v. Schlossberg, 96 N.J.L. 397 (Sup. Ct. 1921)), or his undertaking to obtain a mortgage loan for the buyer (Alpern v. Streiff, 5 N.J. Misc. 265 (Sup. Ct. 1927)), or, as here, to meet the stipulated minimum gross receipts during a trial period. Gabriel v. Glickman, 25 N.J. Misc. 120, 123 (Sup. Ct. 1947). See also Stevens v. Oschwald Realty Corp., 10 N.J. Misc. 1140 (Sup. Ct. 1932), affirmed 111 N.J.L. 355 (E. & A. 1933), where a broker was held entitled to recovery from the lessor for renting his property despite the fact thаt the lease was voided at the lessee‘s option upon rejection of the lessor‘s application for a building permit.
We are satisfied that the authorities compel the viеw that the failure to consummate the sale of the luncheonette and restaurant in the instant matter did not of itself disentitle the plaintiff to his claimed commission. The important question remaining, however, is whether he was barred from recovery because he was not licensed under
Accepting the foregoing construction of the statute, the plaintiff contends nevertheless that hе is entitled to recover
Reversed with direction that judgment be entered for the defendant.
BIGELOW, J.A.D. (dissenting).
The majority of the court hold that plaintiff‘s lack of a real estate broker‘s license bars recovery of a commission on the sale of defendant‘s business. The contract of sale covers “stock, fixtures, equipment, lease, good will and all rights under any contract for telephone service.” It is the word “lease” that is considered fatal to plaintiff‘s case. The terms of the lease are not given, but the vendor promises to procure for the purchaser a lеase for “not less than three years from April 15, 1950, and at a rental of not more than $100 first year * * * per month.” It is a fair inference that the lease included in the sale expired April 15, or only ten dаys after the day set for transferring title to the purchaser, April 5, 1950. I do not believe the Legislature intended that a business broker must hold a
The business of real estate broker and that of business broker are clearly distinct. The one deals with land, although the furnishings of a house may be included in the sale; the other relates primarily to chattels and intangibles, although the transfer of a lease is generally part of the deal. The statute,
The statute so definеs a real estate broker as to include one who negotiates a sale of “real estate or an interest therein.” In New York, a statute using substantially the same language, has been held not to require a license of a business broker, although the sale of the business includes the transfer of a lease. Weingast v. Rialto Pastry Shop, Inc., 152 N.E. 693 (N.Y. 1926). The contrary result has been reached in California, but only after the stаtute was amended so as expressly to include in the definition of real estate broker one who negotiates the sale of a lease. Nittler v. Continental Casualty, 271 Pac. 555 (1928). The transaction involved in Kenney v. Paterson Milk, etc., Co., 110 N.J.L. 141, 164 A. 274, 88 A.L.R. 1416 (E. & A. 1933), embraced the sale of land in fee “perhaps to the value of” $250,000.
I vote to affirm the District Court.