Case ID: ad_115/html/0701-01.html
Source: Caselaw Access Project
Author: {"author": "Rich, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Gustav J. E. Tieck, Appellant, v. Thomas P. McKenna, Respondent.
    Second Department,
    November 21, 1906.
    Principal and agent — when broker entitled to commissions from both parties to sale — section 640d, Penal Code, unconstitutional — when right accrues — performance — evidence.
    When a real estate broker is employed by both vendor and purchaser on an exchange of lands he can recover compensation of both if each had knowledge ■ that he acted for the other party. And when no discretion or trust was left to such broker acting for both parties, and the details of an exchange were left to the principals, he is entitled to.recover commissions from both pártiesin the absence of an expressed agreement to the contrary.
    Former section 640d of the Penal Code relating to offers to sell real property without written authority was unconstitutional, and the failure of a broker to show such written authority does not authorize the dismissal of his complaint in an action for commissions.
    Under a contract giving a broker a right to commissions on the execution of a written contract of exchange between owners, his right to commissions becomes absolute on the execution of such contract by the parties, irrespective- of whether one of them was able or willing to perform. -
    In any event the ability and willingness of a party to perform his written contract to exchange lands becomes a question for the jury when it is shown that his lands were free of incumbrances, and under such proof it is error to direct a verdict for tlie defendant.
    A broker who assigns an action for commissions is competent to testify to the agreement to pay commissions, and when he has given testimony establishing ■ such contract it is error to direct a verdict for the defendant.
    Appeal by the plaintiff, Gustav J. E. Tieck, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Kings on the 14th day of June, 1905, upon the verdict of a jury rendered by direction of the court after a trial at the Kings County Trial Term.
    
      S. Livingston Samuels, for the appellant.
    
      Max D. Steuer, for the respondent. I
   Rich, J.:

The plaintiff is the assignee of one Solomon Marcus, a real estate broker, and the action is brought to. recover commissions for the services of the latter rendered as such broker ,to the defendant. The record discloses during the direct examination of a witness ’ called by the plaintiff in rebuttal, and apparently before its' conclusion, ■ the following: “The Court: We have been all over . this before. I have made Up my mind what I am going to.do with this case. I am going to direct a verdict in favor of the defendant, as the evidence stands now, if I am asked to.. Mr. Samuels: May I ' ask on what ground? The Court: Yes, on the ground that the plaintiff’s assignor was the broker for Mr. Oppenheimer and did not disclose it to Mr. McKenna. Mr. Samuels: With that intimation then I will rest now. We rest, your Honor. The Court: That is one of the'grounds.. Of course, there is this other ground as to the legality of the statute and as to whether it affects this situation, and then there is the other ground as to whether or not the. agent brought to McKenna a person who was willing and able to perform. On those three grounds if you rest and the other side rest--Mr. Samuels : Well, on the ground of ability to perform. The Court:. You have asked me my reasons and I have given them to you as

soon as I have made up my mind about them. ' Mr. Samuels : I don’t want to argue. I thought I might offer more testimony on the question of ability to perform, which is something new, and your Honor makes that a ground of dismissal. If that is not made a ground of the dismissal I don’t care to offer any evidence. The Court: You may ask as to his ability to perform.”

Counsel then proved by the witness that when he purchased the .property he had the title searched; that there were no liens upon it except the mortgage of $61,000, and that while he was the owner there no liens were created upon it by way of judgment, mortgage, or anything of that kind, and rested the case. Counsel for the defendant then moved for the dismissal of the complaint or the direction of a verdict, upon the three grounds stated by the court, and the two additional grounds that the plaintiff has failed to establish a cause of action and that there is no proper or legal proof of any measure of reasonable value for the services. The court directed the jury to find a verdict in favor of the defendant of no cause of action, to which direction the plaintiff duly excepted.

As there was no indication by the court in its final disposition of the case as to which of the grounds stated it based its action upon, we have deemed it advisable to consider them seriatim.

The court was in error in assuming that Marcus did not disclose to the defendant the fact that he was acting ás a broker for Mr. Oppenlieimer. The evidence was to the contrary, the defendant himself testifying: I knew that Mr. Marcus was going to charge Mr. Oppenheimer a commission for the sale of his property, which is proper. He said he was his client and he was his agent.”

When a broker is employed by both the vendor and the pur- . chaser, neither can refuse compensation if he had knowledge that the broker held the same relation to the other party. (Jarvis v. Schaefer, 105 N. Y. 289.) The evidence does not disclose that Marcus was authorized to fix th'e value of the properties to be exchanged, or to make any agreement with reference thereto that would bind the parties. Ho discretion was left to him and no trust was reposed in him; all the details of the exchange were determined and agreed upon by the parties themselves. Under such circumstances, and in the absence of an express agreement to the contrary (which, if it existed as testified to by the defendant and denied by Marcus, presented a question to be determined by the jury), - Marcus was entitled, to receive and his assignee could compel payment for his services by both parties. (Norton v. Genesee National Savings Assn., 57 App. Div. 520.)

2. That Marcus did not have written authority from Oppenheimer or the defendant to represent.them in an exchange of properties, if required as a condition to the validity of the agreement to which the plaintiff testified, by the provisions of section 640d of the Penal Code, furnished no ground for the direction of the verdict. This court held that section unconstitutional (Grossman v. Caminez, 79 App. Div. 15), and while ■ our attention is directed to the fact that the Appellate Division of the first department has differed With us, we still adhere to our views expressed in that action.

3. The direction of the verdict was not warranted by the evidence of non-completion of the contract entered into between Oppenheimer and the defendant. If it he true that'the former was not able or willing to perform, such fact does not prevent the plaintiff’s recovery, in the absence of an express agreement to that effect. The right of Marcus to compensation became absolute when through his efforts the written contract of exchange was entered into between Oppenheimer and the defendant, if the agreement testified to hy him was made by the defendant. (Kalley v. Baker, 132 N. Y. 1; Norton v. Genesee National Savings Assn., supra; Charles v. Cook, 88 App. Div. 81.) If this were not so, the evidence that there were no liens upon the property of Oppenheimer, preventing his transfer of the title which he had undertaken to _ transfer to the defendant by his contract, pnade the question one of fact for the jury.

4. There was sufficient evidence of the value of the services of Marcus to take the question to the jury.

5. Whether or hot the plaintiff had established a cause of action depended entirely upon the determination of the question whether the • defendant had employed Marcus to render the services for which the plaintiff sought to recover. The testimony of Marcus, if believed by the jury, was sufficient to establish such agreement, and that there was no understanding, nor was he at any time prior to the rendition of his services informed, that the defendant was to pay no commissions. On the other hand, the defendant testified that there was no such agreement, and that it was understood and specifically agreed that if he entered into the contract with Oppenlieimer he was to pay no commissions to Marcus. These were questions of fact to he determined by the jury, and should have been submitted/to them.

The action of the trial justice in taking the case from the jury and directing a verdict for the defendant was erroneous, and the judgment appealed from must be reversed, and a new trial granted, costs to abide the event.

Hirschberg, P. J., Jenks, Hooker and Miller, JJ., concurred.

Judgment reversed and new trial granted, costs to abide, the event. 
      
       See. WMteley v. Ferry (83 App., Div. 197).— [Rep.