64 N.Y.2d 899 | NY | 1985
Lead Opinion
OPINION OF THE COURT
Memorandum.
The order of the Appellate Division should be affirmed, with costs, for reasons stated in that court’s Per Curiam opinion. We would only note the following.
The dissent relies upon the rule that where the sale fails due to the seller’s fault or default, a broker is entitled to-the commission unless the parties clearly intend otherwise. Their reliance is misplaced. The rule is inapplicable where, as here, the brokerage agreement explicitly provides that the commission is due when “title passes”, not merely when the broker has obtained a prospective buyer. In light of such a provision, the rule would apply only if the seller and the broker’s prospective buyer had already entered a sales contract, and the seller’s “fault” or “default”, within the meaning of the rule, would have reference solely to a breach of that sales contract. Indeed, such were precisely, the circumstances in the cases adverted to by the dissent in support of the rule. (See, Colvin v Post Mtge. & Land Co., 225 NY 510, 515-516; see also, the additional cases on point cited in 2 NY PJI 935-936 to which the dissent refers: Levy v Lacey, 22 NY2d 271, 273-274; Stern v Gepo Realty Corp., 289 NY 274, 276-277.) Here, there was no executed sales contract to be breached, and the seller’s mere refusal to enter into one with the broker’s prospective buyer is not a “fault” or “default” of the
A fortiori this conclusion is unavoidable under the well-settled maxim of contra proferentem. If there is any doubt or uncertainty as to the meaning of the disputed language in the brokerage agreement, all ambiguity must be resolved against the broker who prepared it. (See, 151 West Assoc. v Printsiples Fabric Corp., 61 NY2d 732, 734; United States v Seckinger; 397 US 203,216.) Here, the brokerage agreement does not define the phrase “willful default on the part of the seller”, but leaves it fairly susceptible, on its face, to different interpretations. Under these circumstances, the terms should be construed against the broker and, thereby,, limited in their application to seller’s nonperformance of an executed sales contract.
Dissenting Opinion
(dissenting). The Appellate Division’s decision, reached entirely as a matter of law, upholds the right of a seller (defendant) offered a better price to escape payment of a fee to a real estate broker (plaintiff) who has produced a buyer ready, willing and able to purchase the property on the seller’s terms. In defendant’s words: “Marvin Billet testified (and the trial court and Appellate Division both found) that he did not enter into the proposed contract of sale with Mr. Steinberg so that he could accept Mr. Little’s better offer.”
The parties to a brokerage contract may of course fashion their own agreement, and if their agreement plainly contemplated such a result there would be no occasion to dissent. But the brokerage agreement in issue does not plainly provide for, or require, the" unpalatable result that a party by his own willful, unjustified act of withholding his signature from a contract for the sale of the property on his terms may defeat the broker’s right to a commission.
The brokerage agreement entered into by plaintiff and defendant provides, in relevant part: “The aforesaid commission is due and payable to the above named licensed broker as, if and when title passes [rider omitted], except for willful default on the part of the seller, in which case the commission shall" be payable upon demand after said default.” We are informed that such a clause is standard in brokerage agreements in this State.
In the view of the Appellate Division (now the view of this court) “willful default” can be read only to mean a formal contract default, thereby permitting the seller to avoid any obligation to the broker until there is a signed contract of sale for the property. We believe, with Justice Lazer, that it is “immaterial whether the seller’s repudiation of the transaction
To construe the clause in question to refer only to default in closing title is to ignore case law holding the broker entitled to his commission upon producing a buyer ready, willing and able even though no contract of sale between buyer and purchaser is ever signed (Tannenbaum v Boehm, 202 NY 293; Mooney v Elder, 56 NY 238; Polo v Scheldt, 195 App Div 903; Neur v Jaffe, 179 App Div 37; Suydam v Healy, 93 App Div 396; see, Pfeiffer, New York Law of Real Estate Brokerage § 71), as well as case law to the effect that a brokerage agreement will not be construed to “agree that if the sale falls through because of the seller’s fault, he [the broker] shall be entitled to nothing * * * unless such a result is clearly intended” (Colvin v Post Mtge. & Land Co., 225 NY 510, 516). Here the clause in question does not distinguish between a default prior to contract and one thereafter. A clause that simply excepts the seller’s willful default — without more — necessarily excepts not only a default in the closing of title but also a default in entering into a contract after the entire work of the broker has been done and he has become entitled to his commission (cf. Benenson Mgt. Co. v Banner Holding Corp., 13 AD2d 929). We disagree with the perception of the majority that the clause is “fairly susceptible, on its face, to different interpretations”: in the context of this agreement a default is a default, whether it occurs before or after a signed contract.
Permitting the seller unilaterally to defeat the broker’s right to a commission by withholding his signature from a perfectly acceptable contract of sale contravenes the fundamental proposition — rooted in considerations of fairness and justice — that a
Chief Judge Wachtler and Judges Jasen, Simons and Alexander concur; Judge Kaye dissents and votes to reverse in an opinion in which Judge Meyer concurs.
Order affirmed, with costs, in a memorandum.