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Alden v. Earle

56 N.Y. Super. Ct. 366 24 Jones & S. 366 Court N.Y. Super. Ct. Decision date 1889-01-07 English

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p. 366
WILLIAM H. ALDEN, et al., Respondents v. WILLIAM P. EARLE, Appellant.

Headnote

Brokers—commissions not earned, in the absence of bad faith, unless they bring parties to prove an agreement. Evidence, insufficient to establish a bringing of the parties to an agreement.
Plaintiffs are real estate brokers and brought this action for commissions on a leasing of real estate. Defendant being desirous of leasing a building of which he was the owner, employed a broker named Goodale, who was in charge of the building and had the keys and who caused to be affixed on the building a sign, that persons wishing to rent should apply to him. The plaintiffs knowing that the building was to lease, sent a party to look at it and afterwards one of the plaintiffs had an interview with defendant in respect to leasing to that party, in which he said to defendant,—“ The commission is one per cent on five years lease, to which defendant replied that is all right but I think I would not like to rent to that party because I do not like the business; ” and also said, “ I suppose about $11,000 would take the building to a good party on alease.” Afterwards plaintiffs on behalf of their party, made a definite offer to defendant for a five years lease from May 1, 1887. This offer was declined. Defendant demanded that rent should begin March 1st and said to plaintiffs, “if your parties will take the place from March 1st, I will let them have it on the terms they propose.” After this, on January 31st, plaintiffs renewed the former offer with the exception of making the rent begin April 15th instead of May 1st, saying that was the best offer their parties could make. Defendant being pressed • to give a definite answer to this offer wrote to plaintiffs declining the offer and ending his letter with “ the negotiation is now closed.”—About a week after this the parties, on whose behalf plaintiffs had been negotiating with defendant, opened negotiations through Mr. Goodale, the ' result of which was a lease to them on the terms offered by plaintiffs, except that the rent was to commence April 1st. There was no evidence of bad faith on the part of the defendant. The facts were undisputed.
Held, (1) that plaintiffs had not earned commissions in as much as they had failed to bring the parties to an agreement. (2) That a direction of a verdict for plaintiffs was error.
Before Sedgwick, Ch. J., and Ingraham, J.
Decided January 7, 1889.
p. 367
Appeal from judgment entered on verdict of the jury, in favor of the plaintiffs, under the direction of the court.
The facts sufficiently appear in the opinion and the head notes.
Hamilton Odell, attorney and of counsel for appellant, argued:—
The duty that a broker undertakes, the obligation he assumes as a condition of his right to demand commissions, is to bring the buyer and seller to an agreement. Sibbald v. Bethlehem Iron Co., 83 N. Y. 381 ; Wylie v. Marine Bank, 61 N. Y 417 ; Salter v. Kimball, 14 Week. Dig. 191; Jacobs v. Kolff, 2 Hilt. 133; White v. Twitchings, 26 Hun, 503 ; Satterthwaite v. Vreeland, 3 Hun, 162 . Tested by the rules laid down in these cases the plaintiffs’ claim must fail. They were authorized to find a tenant for these premises at a specified rental and for a specified term. Sterne testified that the defendant said to him: “ If Merwin, Hulbert & Co. will take this place from March 1st, I will let them have it on the terms that they proposed.” Merwin, Hulbert & Co. refused to do this. Their first offer was for five years from the first of May. Their next and final offer was to let the rent commence on the 15th of April. This (the plaintiffs informed defendant) “ 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.” The defendant promptly rejected the offer, and notified the plaintiffs that “ the negotiation is now closed,” Hulbert asked the plaintiff Alden “if that was an end of the negotiation.” He said : “ There is a letter; it seems to have come to an end; that is all we can do for it.” Afterwards, Merwin, Hulbert & Co. opened negotiations for the same premises through another broker, which resulted in a lease more favorable to the defendant than that proposed by the “best offer” which the plaintiffs were able to procure.
p. 368
Simon Sterne, attorney and of counsel, and John K. Creevey of counsel, for respondents, on the questions considered in the opinion, argued:—
I. Under the facts in the case at bar plaintiffs earned their commission by the introduction of a customer to defendant. It was not necessary that they should conduct the negotiations. It is only where a fixed price is set upon property that the broker must bring a customer ready to give that price. Where there is no fixed price, the broker’s commission is earned when he has brought this customer and employer together and they, upon negotiations between themselves, come to an agreement. Wyckoff v. Bliss, 12 Daly, 324 ; Lloyd v. Matthews, 51 N. Y. 124 ; Sussdorf v. Schmidt, 55 N. Y. 319 . In the case at bar no fixed price was set upon the property as its rental value, nor definite time fixed. After considering the proposition made on behalf of Merwin, Hulbert & Co., defendant agreed to accept the firm, as tenants provided they would take the premises from March 1st instead of May 1st, as they had proposed. The final agreement was an exact compromise between these two propositions. This case, therefore, differs radically from the case of Wylie v. Marine National Bank, 61 N. Y., 415 , and also from the case of Sibbald v. The Bethlehem Iron Co., 83 N. Y. 378 .
II. Plaintiffs were the only efficient procuring cause of the lease in question. They not only brought the premises in question to the attention of the customer, and brought owner and tenant together, but they conducted the negotiation and brought it to a successful issue. It cannot be claimed that the final words in defendant’s letter “ the negotiation is now closed” were anything more than one move in the negotiation. It is of the essence of such negotiations that each party should present a firm front and should strive to impress the other with the opinion that he will not yield. The negotiations were not, in fact, closed, and there is nothing in the words quoted indicating, even by implication,
p. 369
a termination of plaintiff’s employment. The most that could be claimed under any circumstances would be, that the suggestions made by Goodale aided plaintiffs’ efforts to procure the slight modification demanded of having the term commence April 1st, instead of April 15th. Every other item and provision of the contract had been procured through their sole effort. Glentworth v. Luther, 21 Barb. 147 ; Wyckoff v. Bliss, 12 Daly, 324 ; Lloyd v. Matthews, 51 N. Y. 124 ; Fox v. Byrnes, 52 N. Y. Super. Ct. 150 ; Skillman v. Mitchell, 2 Rob. 523 ; Lyon v. Mitchell, 36 N. Y. 235 ; Morgan v. Mason, 4 E. D. Smith, 436; Smith v. McGovern, 65 N. Y. 574 .

The action is brought by the plaintiffs, real estate brokers, to recover commissions for renting certain premises of the' defendant.

The obligation that a broker assumes and that he must perform before he is entitled to commissions, is stated in Sibbald v. The Bethlehem 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. The Marine National Bank, 61 N. Y. 415 , and in speaking of that case, it is said, “ It was held that to entitle a 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 and meeting of their minds produced by the agency of the broker; ” and at page 382 it is said, “ But in all cases, under all and varying forms of expression, the fundamental and correct doctrine is, that the duty assumed by the broker was to bring the minds of the buyer and seller to an agreement of sale and the price

p. 370
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 that 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 this 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. Hulbert 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 defendant’s house and had an interview with him. Subsequently another interview was had at which plaintiffs stated that the commission would fee ¡one per cent on the five years lease, to which defendant said “ that is all right.” Defendant then stated “ that eleven thousand dollars a year would take the building to a good party on a lease,” and plaintiff then, made an offer -on behalf of Mr. Hulbert of $11,000 for the first year, $11,500 for the second year and $12,000 for the three years thereafter. To that defendant said, “That looks very good. I will think it over and let you know.”

There were subsequent negotiations between Hulbert

p. 371
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, Hulbert and Co.) to say they will take your building, No. 26 West 23d Street, upon the terms proposed by them and let the rent commence on the 15th of April. Thip 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, “ The proposition you make for Messrs. Merwin, Hulbert and Co. for my building 26 West 23d 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 encouraged 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 defendant at any time revoking the authority that the plaintiffs had and that he did.

The plaintiffs subsequently endeavored to obtain from Mr. Hulbert 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 had faith on behalf of the defendant: he made no further efforts to negotiate with Hulbert, or, so far as appears, to lease the property.

It does appear, however, that about ten'days afterwards Mr. Hulbert went to the broker who had charge of the

p. 372
property, made him a new offer for the property on more advantageous terms than the offer made by plaint-tiffs, 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 was said in Sibbald v. The Bethlehem Iron Co., supra, at page 387, they very plainly had acquired no right to the commissions for anything that might ,happen in the future, unless upon the solé and only ground that the defendant terminated the agency in bad faith and as a device to get the benefit of the plaintiffs’ labors without paying for them.

I think therefore the complaint should have been dismissed.

The judgment should be reversed and a new trial ordered.

Sedgwick, Ch. J., concurred.

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