Case ID: ny-st-rep_40/html/0696-01.html
Source: Caselaw Access Project
Author: {"author": "Osborne, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Alfred R. Page, App’lt, v. James W. Voorhies, Resp’t.
    
      (City Court of Brooklyn, General Term,,
    
    
      Filed October 26, 1891.)
    
    •1. Pleading—Amendment on trial.
    In an action for commissions on an exchange of real estate, the answer alleged, that commissions were to he paid only in case the exchange was actually consummated; that there was an additional mortgage on the property which defendant was to take, which the other party was unable to pay, and hence the exchange was not made. Held, that the court had power under 8» 723 of the Code, to allow the answer to be amended on the trial by adding an allegation that plaintiff or his clerk did not inform defendant of the existence of this mortgage.
    2. Trial—Requests for verdict—Submission to jury.
    While it is within the power of the court, where the plaintiff asks for the direction of a verdict in his favor and the defendant for a dismissal of the complaint, to take the case from the jury and decide it, yet it is not the duty of the court to exercise that power, especially where there is a decided contradiction in the evidence.
    3. Brokers—Duty to principal.
    A failure on the broker’s part to inform his principal of a mortgage on property which he is buying for him, is not, as matter of law, such a breach of duty as will forieit his right to compensation; but the question is one for the jury to determine on all the circumstances of the case.
    Appeal from judgment in favor of defendant, entered on verdict, aud from order denying motion for a new "trial.
    
      A. R. Page, for app’lt; C. J. Patterson, for resp’t
   Osborne, J.

This action was brought by plaintiff, a real estate broke]’, to recover a commission of $250 for'having effected a contract of exchange of certain property of defendant for certain property belonging to one Squance. As a result of plaintiff’s negotiations a contract was entered into by which defendant was to convey to Squance certain property at Gravesend, and Squance was to convey to defendant five certain houses on Second street in the city of Brooklyn, each subject to a mortgage of $4,500. The answer set up as a defense that the commission was only to be paid in case the exchange was actually consummated ; that there was a mortgage of $10,000 on Squance’s property, in addition to the five mortgages for $4,500, which mortgage Squance was unable to pay, and that consequently the exchange was not made.

At the trial of the action it appeared that plaintiff, or his clerk, W ard, who acted for plaintiff in the transaction, knew of the existence of the $10,000 mortgage at the time the negotiations for the exchange were going on, but it was a disputed question as to whether he communicated that information to .the defendant.

After the testimony was all in, defendant’s counsel asked leave to amend his answer by setting up the further defense that Ward, acting for plaintiff, did not disclose to defendant the fact that there was a $10,000 mortgage on Squance’s property; the amendment was allowed and plaintiff excepted.

Plaintiff’s counsel, at the close of the case, moved that the court direct a verdict for plaintiff, and defendant’s counsel moved to dismiss the complaint; both motions were denied, and counsel respectively excepted.

The court charged the jury that it was the duty of Mr. Ward to disclose the existence of the $10,000 mortgage to the defendant “If he did not, Mr. Page must suffer for the acts of Mr. Ward, and cannot recover in this action.” The court further charged the jury that if the agreement was that defendant should not be liable for the commission unless the deeds were passed, plaintiff was not entitled to recover, as it was admitted that the deeds never passed.

Plaintiff’s counsel excepted to so much of the charge as declared it to be the duty of Mr. Ward to disclose to defendant the fact that the property was encumbered by the $10,000 mortgage.

Defendant had a verdict in his favor, and from the judgment entered thereon, and from an order denying a motion for a new trial, plaintiff appeals.

As to the first point urged by the learned counsel for the appellant, that the learned judge erred in allowing the defendant to amend his answer, we are of the opinion that the amendment was within the discretion of the court under the provisions of § 723 of the Code of Civil Procedure, and that the discretion was wisely exercised. We cannot see how the plaintiff was in any respect injured by allowing the amendment. All the witnesses, as well as the parties, who had any knowledge on this point, were examined and cross-examined on the trial as to whether the existence of the $10,000 mortgage was disclosed to defendant, and we fail to perceive how plaintiff was surprised or misled by allowing the amendment Bernheim v. Daggett, 12 Abb. N. C., 316; aff’d in Court of Appeals, 84 N. Y., 670 ; Cunliff v. D. & H. Canal Co., 4 N. Y. State Rep., 775.

Nor do we think it was error in the learned trial judge to submit the case to the jury. While it is true that, after plaintiff had moved for a direction of a verdict in his favor and defendant had moved for a dismissal of the complaint, it was within the power of the court to take the case from the jury and decide it, yet we do not understand that it is the duty of the court to exercise that power, especially where, as in this case, there was such decided. contradictions in the evidence.

A different question, however, presents itself on the plaintiff’s exception to that portion of the judge’s charge which declared it to be the duty of the plaintiff, or of his clerk acting for him, to disclose to defendant the existence of the $10,000 mortgage, and that if he failed to do so he could not recover.

While we are well aware that the courts require of a broker the exercise of the greatest good- faith to his principal, and that it is his duty to disclose to his principal all material knowledge that he has relative to the proposed transaction, we cannot say that, as a matter of law, a failure on plaintiff’s part to inform defendant of this mortgage was such a breach of duty as would forfeit any right to compensation.

We think rather it was a question for the jury to decide as to whether a failure to inform the defendant of the mortgage in question was, under all the circumstances of this case, a breach of the duty which plaintiff owed to defendant, after the jury had been properly instructed as to the duty of -the plaintiff in the premises. It by no means follows that, even if defendant had known of the existence of this mortgage, he would have refused to enter into the contract of exchange; the contract provided that the Second street houses were, at the time of delivering the deeds, to be free of all encumbrances, except the $4,500 mortgages, so that defendant would suffer no loss if the $10,000 mortgage was not satisfied before the time arrived to deliver the deeds.

We are, therefore, of the opinion that the learned trial judge erred in that portion of his charge excepted to, and that for such error a new trial should be granted.

Judgment and order denying motion for a new trial-reversed, and a new trial ordered, with costs to abide the event

Van Wyck, J., concurs.