216 A.D. 565 | N.Y. App. Div. | 1926
Lead Opinion
The plaintiff, a real estate broker, brought this action to recover $1,500 for effectuating a sale of real property in the city of New York for defendant Louis Frankel, as vendor, to Alexander Watterson, as purchaser.
There is no dispute as to plaintiff’s having been duly licensed, as to the employment, the agreed amount of the brokerage and that plaintiff procured a prospective purchaser and brought the parties together. However, they signed a binder which, though sufficient in itself, contemplated a formal contract.
The amended answer alleges a defense which in part is as follows: “ It was agreed between the plaintiff and defendant herein that the commission was to be the sum of $1,500 payable in the manner following: $750 at the time and when a formal contract was made by said A. Watterson on November 20th, 1923, as provided for in the acceptance of November 14th, 1923, and only in case the balance of the money to be paid on the signing of the contract, to wit, $2,500, was paid, and in case of the signing of such contract the balance of $750 was to be paid on the closing of title; that upon this definite understanding between the plaintiff and defendant herein,' the said acceptance was signed by the defendant herein.”
It is alleged that Watterson refused to sign the formal contract or to pay the balance of the $2,500 payment; that he began an action, which at the time of the amendment of the answer was still pending, for the recovery of $500 paid on the binder; and that by reason of the failure of said Watterson to sign a formal contract and his “ failure to pay the balance of $2,500 as provided for in the acceptance, dated November 14th, 1923, the said plaintiff herein, in view of the agreement had between defendant and plaintiff, Was not entitled to any commission.”
It is to be noted that the conditions to the obligation to pay the brokerage thus alleged are the purchaser’s signing the formal contract and his making payment of the remainder of the $2,500 which was to be paid on contract. The reference to the time of closing might indicate a postponement of the time of payment of half of the agreed commission, but it does not indicate closing of title as a condition to the commission being earned. Nor does the record indicate that defendant might be able to show there Was such a condition.
On the papers presented, it is necessary to go very far in defendant’s favor to find that there might have been some special agreement as to commission such as the amended answer suggests. However, this is immaterial in view of the subsequent proceedings.
The plaintiff did procure a person willing to purchase the property,
The moving affidavit shows that the defendant in this case brought an action and recovered a judgment in the Supreme Court, New York county, against the purchaser, Watterson, upon the binder as a contract of sale. The recovery was for damages growing out of the breach of that contract, being the difference between the contract price of $142,000 and a resale price of $138,250. This is evidenced by the complaint in that action to which was attached a copy of the agreement of sale. The jury credited the payment of $500 and rendered a verdict for $3,250 upon which a judgment was entered. These facts are conceded.
If we assume there was an agreement that the payment of the brokerage was to be postponed as indicated above, an arrangement denied by plaintiff and not really supported for defendant, as pointed out at the Appellate Term, defendant availed himself of the binder as a contract, and, it might be added, successfully so in his action against the purchaser. The agreement alleged in the answer could not be interpreted to mean that the brokerage would not be paid if it became unnecessary to have a formal contract. As to the part of the broker’s compensation to be paid on consummation of the contract it is established by the affidavits that there was no special agreement such as might possibly relieve defendant from payment of that part of the brokerage despite the fact that defendant enforced the contract in the action against the purchaser.
The plaintiff appears to have been employed without reservation on September 5, 1923, to sell property belonging to defendant. That he secured a purchaser ready, able and willing to purchase at the terms' offered is not denied and is shown by the written contract signed by the parties November 14, 1923. When plaintiff secured such a purchaser he also earned his commissions under the terms of his employment especially in view of the fact that the contract of sale was afterwards enforced by the court giving the defendant the benefit of the contract and plaintiff’s services. (Belmar Contracting Co. v. State of N. Y., 194 App. Div. 69, 73; Strout Farm Agency, Inc., v. De Forest, 192 id. 790.)
The determination should be affirmed, with costs.
Clarke, P. J. and Dowling, J., concur; Merrell and Finch, JJ., dissent.
Dissenting Opinion
The plaintiff is a domestic corporation engaged in business as a real estate broker in the borough
,, ,T , , inrir> “ November 14i/i, 1923.
“ Mr. L. Frankél,
“ 264 5th Ave., New York.
“ Dear Sir.— I hereby accept your terms on premises 574-8 West 161st Street, as submitted to us, by your agents, Coughlan & Co., Inc., as follows:
“ Price $142,000.00, subject to 1st mortgage $75,000.00 at 5|% due 1928, standing second mortgage of $22,000.00 at 6% due 1930, payable $4,000.00 1st and 2nd year; $3,000.00, the 3rd and 4th years, and $2,000.00 yearly for the balance of the term, and my purchase money mortgage for $13,000.00, for 3 years at 6%, to be payable $1,000.00 per year, and $32,000.00 cash. Taxes, interest on mortgages, rents, insurance premiums, etc., to be apportioned as of the time of passing title. I am handing you herewith check for $500 as a binder and is to be applied to the $3,000.00 to be paid on the signing of the contract, balance of cash to be paid upon taking title, December 15th or sooner at my option. Rents are guaranteed to be as not less than $22,698.00. Contract to be signed not later than Tuesday, Nov. 20, 1923.
“ A. Watterson [Signed] A. WATTERSON
“ LOUIS FRANKEL.”
The defendant further alleges in his said separate and distinct defense that before the signing of said instrument it was agreed between the plaintiff and the defendant that the commission was to be the sum of $1,500, payable as follows: $750 at the time when a formal contract was made by said Watterson on November 20, 1923, as provided for in said acceptance agreement, and only in case the balance of the money to be paid on the signing of the contract, to 'wit, $2,500, was paid, and in case of the signing of such contract, the balance of $750 was to be^ paid on the closing
Upon the pleadings the plaintiff moved to strike out the defendant’s answer as sham, and for judgment under rule 113 of the Rules of Civil Practice, and the City Court granted its motion, and the judgment aforesaid in plaintiff’s favor was entered thereon. Upon appeal the Appellate Term, by a divided court, one justice dissenting, affirmed the order of the City Court.
It appears from the acceptance agreement, executed by the defendant on November 14, 1923, that said instrument was regarded only as a binder, and that the execution of a formal contract for the purchase of the premises was to be thereafter entered into not later than Tuesday, November 20, 1923. In his answer the defendant alleges that the commission, which the plaintiff was to receive for procuring a purchaser of the premises, was agreed to be paid in installments as follows: $750 at the time when a formal contract Was made by the purchaser on November 20, 1923, and only in case the balance of the money to be paid on the signing of the contract, to wit, $2,500, was paid, and, in case of the signing of said contract, the balance of $750 of said commission was to be paid on the closing of title.
George W. Coughlan, the president of the plaintiff, in his affidavit denies the allegation of the defendant as to the method and time of payment of the commission, and avers that no such agreement was made between the affiant, who conducted the transactions with the defendant on behalf of the plaintiff, arid defendant, and that
“ And also, that you have agreed to pay us $1,500 commissions on the signing of the contract.
“ The writer will communicate with you tomorrow the 14th inst., to arrange for the closing of the contract.”
It thus appears, not only from the allegations of the defendant’s answer, but also from the averments contained in the affidavit of the plaintiff’s president and its letter of November thirteenth, that the commission which the plaintiff was to receive w*as to be paid only upon the signing of the formal contract on November 20, 1923. Such contract was never signed.
The plaintiff contends that the acceptance agreement had all the necessary elements of a formal contract and was enforcible as such, and that subsequently the defendant brought action against Watterson thereon and recovered judgment against the would-be purchaser in the sum of $3,363.30. The plaintiff argues that having brought such action the defendant treated the acceptance agreement as a valid contract of sale and Was, therefore, bound to pay the plaintiff its commission. The answer to this contention, however, lies in the fact that the action Was not brought to- compel specific performance of the acceptance agreement as a contract of sale, but was to recover damages suffered by the plaintiff (defendant herein) by reason of Watterson’s failure to enter into the formal contract for the purchase of the premises in accordance with his agreement of November 14, 1923.
I think the allegations of the plaintiff’s complaint are clearly negatived by the admission in the affidavit of its president and in its letter of November 13, 1923, and that it unequivocally appears therefrom that the plaintiff’s commission was dependent upon the execution of a formal contract of purchase and sale, which was to
In the recent case of Watson v. Muskegon Steamship Corp. (208 App. Div. 158), decided by this court, the plaintiff was suing for a commission which was to be paid upon the “ consummation of the purchase and sale.” In that case the purchaser refused to perform and the seller brought action for damages. The same claim Was made in that case as here, that by the recovery of damages the "defendant, as seller, secured the benefit contemplated by the contract procured by the broker, and that, therefore, the latter was entitled to his commission. This court, upon the specific language of the agreement as to when the commission was earned, overruled the claim of the plaintiff, this court, per Finch, J., saying (at p. 160), “ the plaintiff ignores the fact that the very question at issue in the case at bar is whether the plaintiff has expressly contracted that he is only to be paid a commission in the event of a certain contingency,” which contingency was the “ consummation of the purchase and sale.” In the case at bar the defendant contends that the contingency upon which the plaintiff was entitled to its commission was the execution of the formal contract for the purchase of the premises. It seems to me we are bound by our decision in Watson v. Muskegon Steamship Corp. (supra).
The defendant’s answer alleges that the plaintiff’s commission
I am of the opinion that, under the circumstances presented - upon this appeal, the City Court improperly struck out the amended answer of the defendant, and that the determination of the Appellate Term should be reversed, with costs to the appellant in this court and in the Appellate Term, the judgment of the City Court reversed, with costs, and plaintiff’s motion for summary judgment denied, with ten dollars costs.
Finch, J., concurs.
Determination affirmed, with costs.
