Case ID: ad_99/html/0143-01.html
Source: Caselaw Access Project
Author: {"author": "O’Brien, J.: Ingraham, J. (concurring):", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William J. Roome, Respondent, v. Josephine G. Robinson and Agnes D. Robinson, Appellants.
    
      Seal estate hroJcer— what he must show to entitle him to commissions—when the questions as to employment and, good faith are for the jury — competency in evidence, as an admission, of a proposed contract read on a conference for compromise —what admission, made during an attempt to arrive at a compromise of a dispute, is competent — effect of a statement that it was made without prejudice.
    
    In an action brought by a real estate broker to recover commissions alleged to have been earned by him upon a sale of the defendants’ real estate, it appeared that the defendants had refused to consummate a contract for the sale of the real property negotiated by the plaintiff; that after the vendee in the contract of sale had threatened to bring an action for specific performance, the attorney for the defendants called a conference of the interested parties with a view to a settlement of the controversy. At the opening of the conference the attorney for the defendants announced that whatever was then said or done was to be without prejudice to the rights of any of the parties. During the conference the attorney for the defendants exhibited a proposed contraqt for settlement signed by one of the defendants, which proposed contract contained the following clause: “It is agreed that out of the first payment of Twenty-five thousand dollars, the party of the first part (Josephine Q. Robinson) will pay to William J. Roome (the plaintiff) his commission of Four thousand and fifty dollars for effecting this sale and his action to recover same is thereupon to be discontinued, without costs.”
    The attempt to reach a settlement was abortive and the parties finally separated without executing the contract.
    
      Meld, that it was necessary for the broker to establish, first, an employment by the defendants; second, the rendition of services at their request, and, third, the exercise by him of good faith towards the defendants in connection with the employment;
    That the plaintiff was not entitled to introduce a copy of the proposed contract in evidence on the theory that the clause quoted therefrom was an admission against the defendants’ interest;
    That the admission of a distinct fact which in itself tends to establish a cause of action or defense is not rendered inadmissible by the fact that it was made during a discussion relating to a compromise, unless it is expressly stated to be made without prejudice; but if the admission is of such a nature that the court can see it would not have been made except for the purpose of producing the objects of the negotiation, and under an agreement that could fairly be implied, from the circumstances, that it was not to be used afterward to the prejudice of the party making it, it is not error for the court to exclude the evidence;
    That the only kind of an admission, made during an attempt at compromise, which can be received in evidence is where there was a distinct, unqualified admission of an independent fact made, not as a part of an attempted adjustment, but because it was a fact.
    The questions whether the plaintiff was employed by the defendants or by the parties who purchased the property, and whether the plaintiff acted in good faith toward the defendants, considered in this case to be questions of fact for the jury.
    Appeal by the defendants, Josephine G. Robinson and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Few York on the 18th day of February, 1904, upon the verdict of a jury rendered by direction of the court after a trial at the Few York Trial Term, and also from an order entered in said clerk’s office on the 17th day of February, 1904, denying the defendants’ motion for a new trial made upon the minutes.
    The plaintiff seeks to recover of the defendants commissions as broker amounting to $4,050, which he alleges were due him for procuring for them at their request a purchaser of their property on the southwest corner of Sixth avenue and Twenty-third street. The defendants denied that they agreed to pay the plaintiff for procuring a purchaser or that he did so as alleged in the complaint.
    The defendants’ property had been leased to the Riker Drug Company, and the plaintiff, who had originally purchased it for the defendants’ mother, testified that knowing the lease had not long to run, he suggested to the Riker Company that they buy that or some other property in the neighborhood, and thereafter the officers of the company told him they desired to purchase property and he said he would see whether they could buy from the defendants; that he sent to the defendants his employee, Green, who returned with a paper, signed by Josephine Robinson, addressed to plaintiff, saying she would sell for $400,000 ; that he then went personally to the Robinsons and obtained the following letter signed by one of the defendants:
    “ Ma/rch 11, 1901.
    
      “ Mr. Rooms r
    “Dear Sir.— We will take four hundred and five thousand dollars for the southwest corner of Twenty-third Street and Sixth Avenue. This price only to hold good till Tuesday, March 12, 1901, twelve o’clock. Respectfully yours,
    “A. ROBIFSOF.”
    
      The plaintiff further testified that he toid the Riker Company the result and it was agreed that the decision would be given the following morning, and at that time he was told that the company would purchase the property, and wrote to the defendants as follows:
    “ March 12 th, 1901.
    “ Dear Miss Robinson :
    “I have sold your property on the southwest corner of 23rd Street and Sixth Avenue for four hundred and five thousand ($405,000) dollars. As required by your note of yesterday’s date my parties buy the property before 12 m., March 12th, 1901.
    “ Yours respectfully,
    “WILLIAM J. ROOME.
    “ To Miss J. Gr. Robinson and Miss A. Robinson.”
    The plaintiff also testified that he had spoken to the defendants before about selling their property and made some offers, and they said that if they got a good price they would sell, but had not concluded whether to sell or not; that he had talked with the Riker people about purchasing the property and he thought that if they could not buy elsewhere in the vicinity, they would have to purchase from defendants as the location was valuable to them; that he knew the company did not wish it to be known that they were buying and he did not tell the defendants that their own tenant was desiring to purchase, and when the contract was drawn up, the name of Mr. Rockwell, a relative of the Rikers and a man without means, was inserted as purchaser.
    An officer of the Riker Company testified that he had been speaking with the plaintiff of purchasing property and plaintiff said he did not think the company could obtain defendants’ property for $400,000 ; that finally he “ asked Mr. Roome to go to Miss Robinson and see at what price he could get the property for us; ” that the Riker Company was anxious that the Robinsons should not know it was the company that desired to purchase “ because we thought that would put the price up ” and so Mr. Rockwell was mentioned, but “ we were supplying the financial ability; ” that “ as a matter of fact we subsequently paid $465,000. * * * We had to pay it to get it.”
    
      In corroboration of .plaintiff’s testimony, Oreen testified that he obtained a written offer from defendants to sell and thereafter interviewed the defendants, and upon being informed of the sale one of the defendants said that the contract would lie signed in a few days and that she would pay the one per cent commission to the plaintiff, and the sum of $25,000 was fixed as the amount to be paid upon execution of the contract.
    The defendants subsequently refused to sign the contract or to sell for $405,000, and this resulted in two actions being threatened, one by Rockwell for specific performance and one by plaintiff for commissions. With a view to settle and adjust these suits and the differences between the parties, a meeting was held in May, at which the defendants were represented by an attorney who called the conference and an attorney appeared for Mr. Rockwell and also for plaintiff and a proposed contract was exhibited, signed by one of the defendants. "Under objection and exception a copy of this contract was put in evidence, although it was testified that the meeting and what was said and done were to be without prejudice to any of the parties.
    This proposed contract contained a clause as follows: “ It is agreed that out of the first payment of Twenty-five thousand dollars, the party of the first part (Josephine G-. Robinson) will pay to William J. Roome, his commission of Four thousand and fifty dollars for effecting this sale and his action to recover same is thereupon to be discontinued, without costs.”
    The learned trial judge directed a verdict in plaintiff’s favor for the commissions claimed, and from the judgment so entered the defendants appeal.
    
      Harold Nathan, for the appellants.
    
      Henry W. Jessup, for the respondent.
   O’Brien, J.:

We think that the judgment in this case must be reversed. It was entered on a verdict directed in favor of the plaintiff, but in our view, giving to the testimony the inferences most favorable to plaintiff, the learned trial judge had no right to determine the issues in his favor as matter of law, they being, in our opinion, questions which should have been submitted to the jury.

In order to recover it was necessary for the plaintiff to prove, first, an employment by the defendants; second, the rendition of services at their request, and, third, that in connection with such employment he acted in good faith towards the defendants. Were it not for the testimony of Green, to the effect that the day following the alleged employment he called at the defendants’ home and saw one of the defendants who told him that she had received the plaintiff’s letter announcing that he had sold the property, and that she was willing to pay one per cent commission, there would be little, if any, proof of employment or agreement to pay for the services rendered. It is to be noted that this expression of willingness to pay by one would not necessarily bind both defendants. Moreover, Green, being an interested witness, his testimony is not conclusive. The further question as to whether the plaintiff was acting for the Biker Company or for the defendants is also involved. Taking plaintiff’s testimony it cannot be said as matter of law that it was established that he was acting solely as the broker of the defendants. Such a determination cannot be conclusively made from the letter which the ¡ plaintiff obtained from one of the defendants, wherein she stated the sum that she and her sister would take for the property, which letter, it would appear, was obtained by the plaintiff as the result of a suggestion of the Biker Company that he should get from the owners of the property something in writing expressive of their willingness to sell. Involved and included in this question of whether the plaintiff’s employment was by the defendants or by the Biker Company is the subsidiary one to which we have adverted, namely, whether the services performed were rendered at the request of the Biker Company or at the request of the defendants.

This, like the principal question of who really employed the plaintiff, we think was for the jury, and could not as matter of law be resolved in plaintiff’s favor. So, too, the question of plaintiff’s good faith w'as one of fact. As said by Andrews, J., in Carman v. Beach (63 N. Y. 97): “ If the plaintiff proceeded to act under this employment it was his duty to act solely for and in the defendant’s interest. This, although not expressed, was implied in the contract. The defendant was entitled to the disinterested efforts and judgment of the plaintiff in the matter of the agency, and if the plaintiff had procured a purchaser for whom he was also acting as agent, without disclosing the fact to the defendant, it would have constituted such a fraud as would have precluded him from recovering any compensation.” And in Clafin v. Farmers & Citizens’ Bank (25 N. Y. 293) it was said: “ The principal is entitled to the exercise in his behalf of all the skill, industry and ability of his agent and to his intensest fidelity to his trusts.”

Upon this question of whether or not the plaintiff acted in good faith as the defendants’ broker, we have the evidence that, with knowledge of the anxiety displayed and the desire expressed by the Riker Company to obtain the property, the plaintiff, with a view to aiding them in that direction, deliberately suppressed the name of the Riker Company in the transaction for fear it would provoke the defendants into demanding a higher price and that in order to successfully carry out this concealment the contract, which was really for the Bikers, was, at the suggestion of the plaintiff, to be taken in another name, and, as a consequence, Mr. Rockwell, who was related to the Bikers, was mentioned by them as a person in whose name the contract should be made, it being understood by both the plaintiff and the Bikers that the person so selected was a mere figurehead in the transaction, and possessed neither the money nor the financial ability to complete such a large transaction. If the plaintiff was working solely in the interest of the defendants and was employed by them, then he was under the implied obligation of using the utmost good faith, candor and zeal in obtaining for them the best price for their property. From all the testimony, however, two inferences are inevitable, the first being that he was willing to aid the Biker Company in obtaining the property at the lowest price for which the defendants were willing to sell and the other that he deliberately suppressed the fact that that company was the purchaser, because he, as well as the officers of the Riker Company, were fearful that if this was known to the defendants, they would demand a higher price for the property. That this fear was entirely justified appears from what subsequently occurred when the defendants having refused to carry out the contract and the Biker Company having come out into the open as purchasers, the defendants insisted and obtained from that company the sum of $465,000 for the property, which was an advance of $60,000.

We do not think, therefore, that the good faith, zeal and fidelity of the plaintiff to the defendants were conclusively established, but, as already said, taking the most favorable view there was on this issue a question for the jury.

We think that the conclusion of the learned trial judge was to some extent influenced by evidence improperly received and when admitted must have had weight in his decision that the plaintiff had made out a cause of action as matter of law entitling him to a direction of a verdict. Over the objection and exception of defendants he admitted in evidence the proposed contract to which we have referred, signed by one of the defendants, in which was a provision requiring the defendants to pay the plaintiff a commission.

It appears that after the plaintiff had begun this suit and another suit had been threatened by Rockwell for specific performance, the attorney for the defendants drew up the contract in question, had it signed by one of them and then sent word to the proposed purchaser Rockwell and his attorney and to the plaintiff and his attorney to attend a meeting, for the purpose of reaching a compromise and settling and adjusting their differences. The persons designated did attend the meeting, and it is not seriously disputed but that the attorney for the defendants opened the conference by a statement that whatever was said or done was to be without prejudice to the rights of. any of the parties. Then succeeded a discussion of the terms of statement, and, among other things, reference was made to the proposed contract, signed by one of the defendants, which contained the provision about paying the commission to the plaintiff. The attempt, however, to reach a settlement was abortive ; the contract was not signed or executed by the parties thereto and they finally separated because of a failure to agree.

Upon the trial the plaintiff produced a copy of this proposed contract upon the theory, no doubt, that it was an admission against interest and was successful in obtaining a ruling by the learned trial judge, over the objection and exception of the defendants, admitting it. This, we think, was error. As well stated in White v. Old Dominion S. S. Co. (102 N. Y. 660) : “ There is no doubt but that the rule is well established in this country that the admission of a distinct fact which in itself tends to establish a cause of action or defense is not rendered inadmissible from the circumstance that it was made during discussion relating to a compromise unless it is expressly stated to be made without prejudice; but if the admission is of such a nature as that the court can see it would not have been made except for the purpose of producing the objects of the negotiation, and under an agreement that could fairly be implied from the circumstances that it was not to be used afterward to his prejudice, it is not error for the court to exclude the evidence. The rule referred to is founded upon public policy and with a view of encouraging and facilitating the settlement of legal controversies by compromise which object is supposed to be obstructed by the fear entertained by litigants that such a negotiation may be converted into a trap to inveigle the unwary into hazardous admissions. The law, therefore, excludes such admissions as appear to have been made tentatively or hypothetically, but admits those only which concede the existence of a fact. Stephens on Evidence states the rule to be that they are inadmissible ‘ if made under circumstances from which the judge infers that the parties agreed together that evidence of it should not be given.’ (Page 52.) Wharton’s most recent work on Evidence says: 1 An implied admission of liability made a part of the negotiations for a compromise expressly for the purpose of peace (whether such admission be made under the technical proviso without prejudice or not) will not be received in evidence against the party making it, when its object was merely to suggest a scheme of settlement.’ (§ 1082.) ” (See, also, Tennant v. Dudley, 144 N. Y. 504; West v. Smith, 101 U. S. 273.)

These authorities, as well as the text books, will show that the only kind of an admission made during an attempt at compromise which can be received in evidence is where there was a distinct, unqualified admission of an independent fact made, not as a part of an attempted adjustment, but because it was a fact. Here the provision in the proposed contract could not be regarded as an admission of a distinct fact outside of the proposed compromise which was sought to be effected. Nor was it a distinct admission of liability at all, the most that could be said of it being that it was a provision incorporated in a proposed contract which, if carried out so as to give the defendants the benefit of the other provisions, would have obligated them to pay the plaintiff’s commission. The insertion of the provision was not necessarily because the defendants were legally liable for the commission, but it was inserted because the defendants, for the purpose of stopping litigation and obtaining the advantages resulting to them from carrying out of an entire agreement of compromise, were willing to assume the obligation with respect to the payment of the commission.

The contract not having been executed or delivered and having been prepared only to promote a compromise which was not actually made, we think the admission of the contract was violative of the rule excluding such evidence.

If outside of this evidence there was sufficient to justify the direction of a verdict we should not because of this error reverse the judgment, but, as we have endeavored to point out, the questions of fact as to the plaintiff’s right to recover upon the evidence should have been submitted to the jury. As there must be a new trial, we deem it proper to call attention to this erroneous ruling so that it may not upon the new trial be repeated.

We think, therefore, that the judgment and order should be reversed and a new trial ordered, with costs to the appellants to abide the event.

McLaughlin, Hatch, and Laughlin, JJ., concurred.

Ingraham, J. (concurring):

I concur in the reversal of this judgment upon the ground that upon the undisputed evidence the plaintiff failed in the performance of the duty that he owed to his principals to obtain for them the best price for their property. The plaintiff does not dispute that he failed to communicate to the defendants the fact that the Riker Company was the purchaser of the property and acquiesced in the substitution of a dummy for the Riker Company as the purchaser, because of the fear that if the defendants had knowledge of the fact that their tenant was endeavoring to purchase the property they would insist upon a greater price. I think this conduct entirely inconsistent with the duty of a broker to his principal, and upon the undisputed evidence the plaintiff did not perform the duty that he assumed when he undertook to act for the defendants. For that reason he is precluded from recovering.

Judgment and order reversed, new trial ordered, costs to appellants to abide event. 
      
      Steph. Dig. Ev. (Chase’s ed.) art. 30.—[Rep.