Alden v. Earle — 23 N.Y. St. Rep. 961

Majority

p. 961

William H. Alden and Morris E. Sterns, Resp’ts, v. William P. Earle, App’lt.

(New York Superior Court, General Term,

Filed January 7, 1889.)

Headnote

Brokers — Real estate agents — Commissions—When cannot be recovered.

Defendant owned a building which he desired to rent, and plaintiffs, who were real estate brokers, sent one Hulburt to see it, with a view of taking a lease. An interview was had by Hulburt with defendant on the subject, he not disclosing the fact that plaintiffs had sent him. Plaintiffs saw defendant, and got his terms, telling what their commissions would be for effecting a lease, to which defendant assented. Plaintiffs then made an offer on behalf of Hulburt, better than the terms named by defendant, and defendant said he would see about it and let them know. After their negotiations with Hulburt, plaintiffs wrote several letters to defendant about the lease, the last of which being the only one answered, defendant declining the proposition, and notifying them that negotiations were closed. Hulburt, about ten days afterwards, leased the premises from another broker, who had the premises in charge, from the time negotiations were begun. Held, that there being no evidence that defendant revoked plaintiffs’ authority in bad faith, or as a device to secure their services for nothing, he had a right to so revoke it; and having done so before an argument was entered into, no commissions could be recovered by plaintiffs from him.

Appeal from a judgment entered upon a verdict in favor of plaintiffs at a trial term.

Hamilton Odell, for app’lt; Simon Sterne, for resp’ts.

The action is brought by the plaintiffs, a real estate broker, to recover commissions for renting certain premises of the defendant. The obligation that a

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broker assumes, and that he must perform before he is entitled to commissions, is stated in Sibbald v. Iron Co. ( 83 N. Y., 381 ).

Finch, J., in delivering the opinion of the court in that case, says: “The duty he undertakes, the obligation he assumes as a condition of his right to demand commissions, is to bring the buyer and seller to an agreement.” -The court, among other cases, cited the case of Wylie v. Bank ( 61 N. Y., 415 ), and in speaking of that case it said: “It was held that, to entitle the broker to commissions, he must produce a purchaser ready and willing to enter into a contract on the employer’s terms. This implies and involves the agreement of buyer and seller—the meeting of their minds produced by the agency of the broker.” And at page 382 it is said: “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.” Another principle established by that case is: “To such a contract as existed in the present case, where no time for the continuance of the contract is fixed by its terms, either party is at liberty to terminate it, subject only to the ordinary requirements of good faith.”

Applying these principles to the facts of this case, it is clear that the plaintiffs had not performed the work they were employed to do, the performance of which was necessary before they were entitled to compensation, as they had not effected the leasing of the premises before their authority was revoked. There was no employment of the plaintiffs by the defendant to obtain a tenant for the premises. Another broker was in charge, had the keys of the building, and had a sign on the building that persons wishing to rent should apply to him. The plaintiffs sent Mr. Hulburt to look at the premises. He obtained admission to the property, and had an interview with the defendant, without disclosing the fact that he had been sent by .the plaintiffs. Subsequently plaintiffs wrote two letters to the defendant, asking him to call on them in regard to the property. Defendant, however, did not call, and several days afterwards one of the plaintiffs called at the defendant’s house, and had an interview with him. Subsequently another interview was had, at which plaintiffs stated that the commission would be one per cent, on the five years lease, to which defendant said, “ That is all right.” Defendant then stated that “$11,000 a year would take the building to a good party on alease,” and plaintiff then made an offer on behalf of Mr. Hulburt of $11,000 for the first year,

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$11,500 for the second year, and $12,000 for the three years thereafter. To that the defendant said : “ That looks very good; I will think it over and let you know.” There were subsequent negotiations between Hulburt and the defendant, and several letters were written by plaintiffs to the defendant, to which no answer was returned, and on January 31, 1887, plaintiffs wrote a letter to the defendant, in which they say : “After considerable work on our part, we have induced them again (Merwin, Hulburt & Co.) to say they will take your building, No. 26 West Twenty-third street, upon the terms proposed by them, and let the rent commence on the fifteenth of April. This, they say, is their best offer, and they desire to hear from us at once— your acceptance or rejection—as they have several other places in view.” And in reply to that letter, on the same day, defendant wrote to plaintiffs : ‘1 The proposition you make for Messrs. Merwin, Hulburt & Co., for my building, 26 West Twenty-third street, on the terms of five years lease, I most respectfully decline. The negotiation is now closed.”

Up to this time it is evident that the plaintiffs had not performed their obligation. They had not procured a tenant on terms satisfactory to the defendant. At no time had the defendant appeared anxious to have anything to do with them, or encourage them to proceed on his behalf, and although the evidence would justify a finding that there was an obligation to pay them the commissions if they had procured a tenant who had agreed to his terms, and was satisfactory to him, there certainly was nothing that was said or done that would prevent the defendant at any time revoking the authority that the plaintiffs had, and that he did. The plaintiffs subsequently endeavored to obtain from Mr. Hulburt a more favorable offer, and failed, and then apparently abandoned the negotiations, and had no further connection with the property. There is not the slightest evidence of bad faith on behalf of the defendant. He made no further efforts to negotiate with Hulburt, or, so far as appears, to lease the property. It does appear, however, that about ten days afterwards, Mr. Hulburt went to the broker who had charge of the property; made him a new offer for the premises, on more advantageous terms than the offer made by the plaintiffs, which offer defendant subsequently accepted. The efforts of plaintiffs had been unsuccessful. They failed to bring the defendant and the proposed lessee to an agreement. The negotiations were closed, and, as it was held in Sibbald v. Iron Co., supra., 387 , they very plainly had acquired no right to the commissions for anything that might happen in the future, unless upon the sole and only ground that the defendant

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terminated the agency in bad faith, and as a device to get the benefit of the plaintiffs’ labors without paying for them. I believe, therefore, the complaint should have been dismissed. The judgment should be reversed, and a new trial ordered.

Sedgwick, C. J., concurs.