Summary
In Mengel v. Lawrence (276 App. Div. 180) was involved the ability of a prospective purchaser to pay a cash price of $150,000, in proof of which it was shown that he maintained a bank balance of about $20,000 and that he had made various sales and purchases of real estate for large sums.
Summary of this case from Siegel v. LieseOpinion
276 A.D. 180 93 N.Y.S.2d 443 MENGEL v. LAWRENCE. Supreme Court of New York, First Department December 20, 1949
Action by J. William Mengel against Jessie C. Lawrence for commissions on sale which was never consummated because of defendant's refusal to proceed.
From a judgment of the Supreme Court, New York County, Bernard Botein, J., in favor of plaintiff upon verdict of a jury, the defendant appealed.
The Appellate Division, Callahan, J., held that the plaintiff was entitled to recover on theory of performance and that question of proposed buyer's ability to pay was for the jury. Judgment was affirmed. Alexander B. Siegel, New York City, of counsel (W. Mason Smith, Jr., New York City, with him on the brief; Van Vorst, Siegel & Smith, New York City, attorneys) for appellant.
Irving I. Hartman, New York City, of counsel (Sundell & Hartman, New York City, attorneys) for respondent.
Before PECK, P. J., and GLENNON, DORE, CALLAHAN, and VAN VOORHIS, JJ.
CALLAHAN, Justice.
The defendant appeals from a judgment entered on the verdict of a jury in favor of the plaintiff, a real estate broker, in an action for commissions. The complaint proceeded on the theory that the plaintiff had procured a purchaser ready, able and willing to buy the defendant's property on the terms proposed by the defendant.
There was testimony by the plaintiff that he had been employed by the defendant as a broker to sell her real property in South Salem, Westchester County, New York, for $150,000 all cash, and that the defendant agreed to pay him a 5% commission. The plaintiff claims to have advised the defendant on June 13, 1946, that he had a buyer ready, able and willing to pay $150,000 cash for the parcel, but that she refused to proceed with the deal because of objection to purchaser's race or religion on learning his name.
The defendant did not testify on her own behalf. The plaintiff's attorney, however, read parts of her deposition on examination before trial. The defendant admitted a telephone call from the plaintiff inquiring about the price of her property and that she quoted a figure of $150,000, but denied any hiring of the plaintiff as a broker or agreement to pay commissions. She further conceded that about the middle of June 1946, the plaintiff called her to say that he had a buyer, but allegedly refused to give the name of his client. The plaintiff is said to have informed the defendant that the property was being bought for development purposes, and the defendant refused to sell for anything like that. It does not appear, however, that the defendant in quoting the price for the property in any wise limited the nature of its use by a prospective purchaser. The area was zoned, and the buyer produced by the plaintiff testified that he was familiar with the zoning regulations.
One of the questions involved in this case is whether the plaintiff may recover for commissions in the absence of a meeting of the minds on the part of the buyer and seller as to the amount of down payment on execution of the formal contract of sale and as to date of title closing. The plaintiff concedes that these details were never discussed with the defendant. Nevertheless, the plaintiff contends that he is entitled to recover on the theory of performance because of the defendant's arbitrary and capricious termination of negotiations and refusal to proceed, although his buyer was ready, able and willing to close the deal.
Under the circumstances it would seem that the plaintiff might have treated the defendant's conduct as a breach of contract and proceeded on quantum meruit. Strout Farm Agency, Inc., v. De Forest, 192 A.D. 790, 183 N.Y.S. 119. On the facts in this case, however, the question is presented as to whether the plaintiff may recover on the theory of performance. It was suggested in the Strout case, supra, that a situation might arise where a broker arbitrarily discharged before agreement on some of the essential terms of a contract might recover the agreed compensation, if he could show that he had produced a purchaser who was not only ready, able and willing to meet the seller's proposed terms of sale, but also any undisclosed demands of a reasonable nature as to terms usually left for the formal contract. We think that this is such a case. The sale being for all cash, it was not to be expected that any terms would be discussed as to down payment and date of closing title until it came time for preparation of a formal contract. The seller might have proposed such terms in advance of contract and insisted on the buyer's acceptance, but did not see fit to do so in this case. We do not see how the defendant can complain of a failure to agree on these particulars, if, as the jury was entitled to find, she had capriciously refused to discuss them when a buyer was produced by the plaintiff. The natural progress of the transaction to a successful conclusion was thwarted by the defendant's sudden and wrongful refusal to proceed. Ostroff v. Doctor, 238 N.Y. 264, 144 N.E. 577.
The proposed purchaser testified that he was ready, able and willing to pay the ‘ all-cash’ consideration for the property. If this was so, as the jury appears to have found, it tends to establish his ability to pay any reasonable sum on contract. His readiness and financial ability in this regard were for the triers of the facts. The buyer testified that he ‘ was ready to take title as soon as the lawyers agreed among themselves on a time * * *. The moment the title company would be ready with the search, we'd be ready to take title.'
The trial court instructed the jury that the plaintiff was required to establish that he had found a buyer ready, able and willing to meet all the essential terms of the sale. It was left to the jury as a question of fact whether the failure to specify the amount of down payment on contract and date for closing of title constituted such a failure to agree on essential terms of the bargain as to justify the conclusion that there was no meeting of the minds of the parties. Of course, such details are essential to any formal contract for the sale of real estate. The question submitted to the jury might more properly have been whether the defendant had waived these terms or made them impossible of performance by her conduct. However, we see no substantial error in the manner in which the issues were left to the jury in this case.
The defendant should not be permitted to take advantage of conditions precedent unperformed, when she herself occasioned their non-performance. Sibbald v. Bethlehem Iron Company, 83 N.Y. 378, 38 Am.Rep. 441. The repudiation of contractual obligations under an agreement of hiring is not to be justified by evidence of omissions of matters not contemplated at the time and easily supplied or corrected. Ostroff v. Doctor, supra. A broker is not to be deprived of commissions because of an unreasonable demand of his employer resulting in failure to consummate a sale of real property with a buyer otherwise ready, able and willing to close the deal. Tanenbaum v. Boehm, 202 N.Y. 293, 301,95 N.E. 708, 711.
The defendant also contends that the proof was insufficient to show the financial ability of the plaintiff's client to pay the cash price of $150,000 for the property in question. In this connection the record discloses that the proposed buyer was an operator in Westchester County real estate; that between November, 1945 and August, 1946, he received $207,314.47 in cash from the sale of various real properties; that he invested $61,800 in other parcels between November, 1945 and March, 1946; and that he purchased real estate involving a cash investment of $180,000 after collapse of the deal with the defendant. The purchaser testified to the ownership of his own home in New York City, and that he maintained a bank balance in the neighborhood of $20,000. He also owned a publishing business in which he had invested $105,000, but said that he did not list this business as an asset. It was further testified that one Lutkoff had engaged in numerous other real estate transactions with the plaintiff's client as a partner and had knowledge of the proposed deal for the purchase of the defendant's property. Lutkoff, who was described as a man of unlimited means and with a lot of money, had viewed the property and agreed to take part in its purchase. While such proof did not show that the plaintiff's buyer actually had $150,000 in cash or his exact financial position on or about June 13, 1946, we think that the evidence warranted the submission of the case to the jury on the question of the purchaser's financial ability to consummate this deal, even if any possible contribution by Lutkoff be disregarded.
We have examined the defendant's other contentions as to alleged errors on the trial of this action and find that they are not substantial.
The judgment appealed from should be affirmed, with costs. Judgment affirmed with costs. Order filed.
PECK, P. J., and GLENNON, J., concur.
DORE, Justice (dissenting).
Plaintiff claimed that in a telephone conversation defendant employed him as a broker to find a purchaser of her property for $150,000 all cash, and also expressly agreed to pay him commissions. Defendant denied any such agreement to pay commissions but admitted she said the price was $150,000, all cash. The jury found for plaintiff and judgment has been entered in plaintiff's favor against defendant for $8,975.05.
The record indicates it was plaintiff who pressed himself on defendant's superintendent, her counsel and finally by telephone on defendant herself. She answered plaintiff's questions as to price only. Accordingly, the case does not fall into that class of cases in which an owner gives a broker not merely the price but complete terms on which he is willing to sell; it falls into the class in which all the essential terms have not been fixed or agreed on. In that latter class of cases, commissions are not earned until the customer produced by the broker reaches an agreement with the owner on price and other essential terms of the sale. This rule, recognizing the distinction between the different classes of cases, has been frequently applied. House v. Hornburg, 267 A.D. 557, 560, 562, 47 N.Y.S.2d 341, 344, 345affirmed 294 N.Y. 750, 61 N.E.2d 748; Arnold v. Schmeidler, 144 A.D. 420, 129 N.Y.S. 408; Haase v. Schneider, 112 A.D. 336, 98 N.Y.S. 587.
Plaintiff tried his case on the theory that he had been employed by defendant as a broker to secure a purchaser ready, able and willing to buy on defendant's terms and that plaintiff fully performed all the conditions on his part to be performed. It was on that theory that the case was submitted to the jury, namely, that plaintiff could recover solely on the basis that he had earned his agreed commissions. Without exception by plaintiff's attorney, the court charged the jury that it was plaintiff's duty ‘ to bring the minds of the buyer and seller to an agreement for a sale and to an agreement as to the price and the other essential terms upon which the sale is to be made .’ (Emphasis supplied.) The theory on which the case was pleaded, tried and submitted to the jury is the law of the case and is contrary to the theory that plaintiff now urges to support the judgment in his favor.
After a seller has accepted a purchaser, he may not defeat the broker's claim for commissions because at the time of making the contract the purchaser was not financially responsible. But that rule is not here applicable as concededly defendant had not accepted plaintiff's purchaser. Essential to recovery on a claim of this kind is proof that the broker had a customer not only willing to buy on the seller's terms but with the financial ability to do so. Schnitzer v. Price, 2d Dept., 122 A.D. 409, 106 N.Y.S. 767, Miller, J.; Alt v. Doscher, 102 A.D. 344, 92 N.Y.S. 439. Plaintiff's evidence establishes that Dworkin, the alleged proposed purchaser, did not have the purchase price-$150,000 all cash-for the property in question. He had no credit rating whatever and admitted on the witness stand that never in his life did he have $150,000 in cash. Thus he testified: ‘ A. Never, not only that time, but never in my life. If I had it, I'd use it.’ He also admitted that he had no binding agreement with his friend Lutkoff that would entitle him to call upon Lutkoff to provide the substantial amount of money involved, $150,000 all cash; and Lutkoff had died over a year before the trial. Accordingly, plaintiff on his own proof failed to establish an element essential to recovery. A purchaser is not ‘ able’ when he depends on third parties who are in no way bound to furnish the funds to make the purchase. Reynor v. Mackrill, 181 Iowa 210, 164 N.W. 335,1 A.L.R. 528, and cases cited.
But that is not all. In a case of this type, before defendant's alleged refusal to sell to plaintiff's proposed purchaser could deprive plaintiff of commissions based on a contract for the purchase and sale of defendant's property, plaintiff first had to prove that he had procured a contract in which the minds of the parties had met on all terms which they deemed essential thereto. On plaintiff's own theory of the action on which the case was tried and on his own testimony, he failed to prove that there was any meeting of minds on the amount of a down payment or the time of closing, both of which terms were apparently regarded by these parties as essential to the formation of such a bargain as they were considering. Plaintiff's witness Dworkin testified that apart from price ‘ as far as terms were concerned there were no terms as such,’ but he admitted it would take between sixty and ninety days before any closing could be arranged. There is nothing in the record to show any agreement on these material terms, and it is improbable that any seller would be willing to tie up such property for that length of time with no down payment and upon such an indefinite arrangement.
Under the facts in this record, the trial court erred in leaving to the jury to say what terms were deemed essential to the contract and to speculate without any evidence to guide them as to what sum ‘ would be required’ for a down payment and what ‘ date’ would be fixed for a closing. The only possible theory under which there could have been a meeting of the minds would be that the parties had agreed that there would be no down payment and that the transfer of title should occur in a reasonable time. The trial court, on the contrary, assumed that both of these points were intended by these parties to be agreed upon with precision, and erroneously left it to the jury to determine whether the facts were such that these parties would have agreed upon these points when they came to consider them. These errors are seriously prejudicial, but it is unnecessary to comment on the instructions in detail, as defendant's motions to dismiss at the close of plaintiff's case and at the close of the whole case should have been granted, since plaintiff's own proof failed on plaintiff's own theory to establish there was any meeting of the minds of the parties on all the terms of the contract which the parties deemed essential so as to warrant payment of commissions to plaintiff as broker. The fundamental rule applicable is stated in Sibbald v. Bethlehem Iron Company, 83 N.Y. 378, 382,38 Am.Rep. 441, as follows: ‘ But in all the cases, under all and varying forms of expression, the fundamental and correct doctrine is, that the duty assumed by the broker is to bring the minds of the buyer and seller to an agreement for a sale, and the price and terms on which it is to be made, and until that is done his right to commissions does not accrue.’ (Emphasis supplied.)
In a similar case and for a similar lack of proof, this court recently reversed a judgment in favor of a plaintiff, broker, and said: ‘ And even if plaintiff had proved it had been employed as broker, it could not recover because it failed to establish that there was such meeting of the minds of the parties on all essential terms of the agreement to purchase as to warrant payment of commissions to plaintiff as broker.’ Globus Realty Corp. v. Fleetwood Terrace, Inc., 275 A.D. 34, 87 N.Y.S.2d 141, 142.
In Stern v. Bristol Corp., 273 A.D. 371, 375-376, 77 N.Y.S.2d 324, 329, this court also reversed a judgment in favor of a plaintiff, broker, entered upon a verdict after a trial before the court and a jury and dismissed the complaint pointing out that the ‘ plaintiff wholly failed to prove any definite agreement on even a bare minimum of the terms essential to the contract claimed, and accordingly failed to prove that the minds of the parties met * * *.’ We also said: ‘ In Thompson & Co., Inc. v. New Madison Square Garden Corp., 225 A.D. 521-522, 233 N.Y.S. 608, 610, this court, quoting Gallagher v. Dullea, 199 A.D. 119, 191 N.Y.S. 439, stated the rule applicable as follows: ‘ It has been held that commissions on the sale of real estate are not earned until the minds of the buyer and the seller meet, not only in respect to the price, but also in respect to the terms of the sale and all the incidents of the transaction which must be worked out and understood between them.’ ' The Court of Appeals affirmed ( 298 N.Y. 766, 83 N.E.2d 463).
In Ansorge v. Kane, 244 N.Y. 395, 299-400,155 N.E. 683, 685, it was specifically held that the amount of the down payment is not a minor nonessential detail and even though the parties had agreed on the purchase price: ‘ They had not agreed on the terms of payment. The law implies nothing as to such terms * * *. The contract was never completed.'
There was no evidence adduced to show that the minds of the buyer and seller met on the material terms of the sale; plaintiff never earned his commission; and defendant's motions to dismiss the complaint should have been granted.
On no theory and certainly not on the theory on which this case was tried and submitted to the jury does this defendant owe this plaintiff the nearly $9000 the judgment directs her to pay; and to compel such payment is in our opinion to use the machinery of justice to accomplish the opposite for which it was established and maintained.
Accordingly, we dissent and vote to reverse the judgment appealed from and to dismiss the complaint.
VAN VOORHIS, J., concurs.