116 Misc. 323 | N.Y. App. Term. | 1921
In the absence of a special agreement providing otherwise a broker employed to sell real property is entitled to commissions vdien he produces a purchaser who is ready and able to buy upon the seller’s terms. But the broker and the seller may make any different agreement as to the time when, or the contingency upon which, the former’s commissions shall be paid. They may, of course, agree that the commissions shall not be paid unless title passes and may even agree that the broker shall not be entitled to recover although the failure to pass title be the fault of the seller. But this latter agreement will not be found unless the contract clearly shows it was the intention of the parties. Colvin v. Post Mortgage & Land Co., 225 N. Y. 510, 516.
There was a conflict in the proof which, however, has been settled by the judgment for the defendant. Thus, the fact must be assumed to be that the plaintiff agreed that the balance of his commission should not be paid unless title passed. It is admitted that title did not pass. On the adjourned day for closing the buyer appeared and stated he did not have sufficient moneys to carry out the contract and could not do so, and thereupon sought to secure its cancellation. And on the same day a formal cancellation ivas executed, the seller returning a part of the deposit as a further consideration therefor. These facts present the legal questions that must be considered. Has the plaintiff the right, to recover the balance of his commissions? Does the cancellation of the contract between the buyer and defendant make any difference?
Under the facts as established by the judgment the
If a broker’s right to commissions be contingent upon title- passing, and the failure to pass title be due to the refusal of the buyer to take or to any reason that did not involve the action or default of the seller, the commissions have not been earned. Larson v. Burroughs, 131 App. Div. 877; Fittichauer v. Van Wyck, 92 N. Y. Supp. 241; Condict v. Cowdrey, 139 N. Y. 273, 280. But if the seller be at fault, and if he has done something that has prevented title passing, the rule is different. Then his act, being in violation of his implied undertaking not to do anything to deprive the broker of his commissions, eliminates the
The right of a broker selling real property, to his commissions, though by special agreement they be payable only if title passes, if the failure to close be due to the seller, is emphasized by the rule applicable to cases involving commissions for procuring a loan upon real property. In the latter cases the broker is not entitled to his commissions upon producing a lender, although he be able and ready to make the loan sought, and in fact contracts so to do. The loan must actually be made before the commissions become payable. Crasto v. White, 52 Hun, 473; Ashfield v. Case, 93 App. Div. 452; Duckworth v. Rogers, 109 id. 168; Holliday v. Roxbury Distilling Co., 130 id. 654, 656. But if the loan does not go through because of the acts or default of the borrower, he is liable to the broker. Holman v. Patten, 227 N. Y. 22.
As a default by the buyer relieves the seller from liability for commissions, the fact that though the buyer has defaulted, he at a later date is willing to perform, does not change the situation. The seller is not then obliged to do so; and he may cancel the contract without becoming liable for commissions. Van Norman v. Fitchette, 100 Minn. 145, 149. In the case just cited a broker sued for his commissions. They
The language just quoted seems to point out the correct rule. The seller may not cancel the contract while it still has life. If he does he breaches his obligation to the broker. But when the contract has been broken by the buyer and no longer exists, the seller may cancel it, or, to put it more accurately, may cancel or compromise whatever rights, if any, grow out of it. Where the contract has been broken by the buyer the only right that then exists is one in the seller to recover damages for its breach or to seek specific performance. But he is not obligated to take either of these affirmative actions for the benefit, of the broker. He owes the latter no such duty. Seymour v. St. Luke’s Hospital, 28 App. Div. 119. And though the buyer might possibly go into equity asking specific performance notwithstanding his default, he would not have any right to such relief, and would, at most,
A cancellation following a default by the seller does not affect the situation created by his default. Being at fault, and having prevented performance, the seller is liable, and the subsequent cancellation of the contract works no change. Myers v. Buell, 142 Ill. App. 467.
It is necessarily implied in all that has been said, that if the seller acts with bad faith and helps to bring about the buyer’s default he is liable for the broker’s commissions because the failure of the performance of the condition precedent would then be due to his act.
Nothing that has been said conflicts with the holding in Williams v. Ashner, 152 App. Div. 447. There the broker’s contract was construed to be an agreement that if the lease was not signed, no matter what the cause (fraud excepted), the broker was not to get his commissions, and so upon this construction of the contract the arbitrary refusal of the lessor to sign did not aid the broker. In Pinkerton v. Hudson, 87 Ark. 506, 510, it is held that though a buyer has refused to complete, without fault of the seller, it is the latter’s duty to sue the buyer and failing to do that he is liable to the broker though the commissions were payable only after the property was sold and the money received. This conflicts with the rule stated in Seymour v. St. Luke’s Hospital, supra, and we think does not state the correct measure of the seller’s duty.
In the case at bar, the buyer defaulted. He refused to complete the contract. Thereupon the defendant
The judgment should be affirmed, with twenty-five dollars costs.
Kelby and Lazansky, JJ., concur.
Judgment affirmed.