Case ID: ad_67/html/0050-01.html
Source: Caselaw Access Project
Author: {"author": "Hatch, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Richard H. Gatling, Respondent, v. Central Spar Verein, Appellant.
    
      Brgher’s commissions — when earned ■.— a failure to eonsu/mmate a loan because of a: defect in the principal’s title — it cannot be shown under a plea of performance — the rejection of the title by a title ■ guaranty company is not proof of a defect: therein.
    
    
      A broker employed to secure a.loan upon real estate, who procures a person who. stands, ready and willing to make the loan upon the terms proposed, is entitled, although the loan is not actually made, to recover his commissions, where it appears that the failure to consummate the loan is due to the act or misfortune-of the principal and not to that of the broker.
    Where the-complaint in an action brought by the broker in. such a case avers, performance of the contract on his part, the broker is not entitled, under such plea of performance, to show that the loan was not consummated because the-principal was unable to give a good title to the property on which a mortgage was to be given by the principal to secure the loan.
    
      Semble, that if such evidence had been competent under the pleadings, it would; have been necessary for the plaintiff to show the specific facts constituting, the defect in the defendant’s title, and not merely that the title had been, rejected by lawyers or title guarantee companies.
    Appeal by the defendant, Central Spar Yerein, from a judgment, of the Supreme Court in favor of the plaintiff, entered in the office; of the clerk of the county of New York on the 13th day of March,. 1901, upon the verdict of a jury rendered by direction of the court,, and also from an Order entered in said clerk’s office on the 13th day of- March, 1901, denying the defendant’s motion for a new trial made upon the minutes.
    
      
      Samuel P. Goldman, for the appellant.
    
      Charles Strauss, for the respondent.
   Hatch, J.:

This action was brought to recover the sum of $800, with interest, for services which the plaintiff avers were rendered and performed by the defendant at its request, in procuring a loan on certain premises owned by it. The defendant is a domestic corporation, and it appears by the undisputed testimony that its president and attorney authorized the plaintiff, who is a real estate broker, to procure a loan upon the defendant’s real estate mentioned in the complaint for the sum of $40,000 for five years at four per cent per annum, for which the president of the defendant was to give his bond secured by a mortgage upon the premises. Plaintiff negotiated the loan with the Bank for Savings and informed the officers and attorney of the defendant that he had secured an acceptance of the loan and requested from them a written authorization to procure the loan, which was given him under the hand of the president. Upon receipt of this authority the plaintiff went to the Bank for Savings and procured its written acceptance of the loan which he delivered to the attorney for the defendant. Thereafter the Bank for Savings declined to consummate the loan on the alleged ground that the title of the defendant to the premises upon which it proposed to give the mortgage was not marketable, and at the request of the president and attorney of the defendant the plaintiff sought elsewhere for the loan, and finally secured another written acceptance of the same from the East River Savings Institution, which he also placed in the hands of the representatives of the defendant; but this bank also-declined to advance the money because of alleged defects in the defendant’s title. The defendant resisted payment on the ground that the plaintiff had not performed his contract because it never succeeded in placing the loan as a result of his efforts, and, therefore, the plaintiff had not earned his brokerage as he had failed to procure a loan. It is conceded that each of the institutions which accepted this application for a loan at the instance of the plaintiff were financially able to make it, and otherwise entirely competent.

If the efforts of the plaintiff resulted in procuring a person or corporation, who stood ready and willing to make the loan upon the terms proposed, and the consummation in procuring a delivery.of the money was due to the act or misfortune of the defendant, and, in nowise to a failure of the plaintiff to fulfill the terms of his contract, the latter became entitled to recover the amount of the commissions agreed to be paid for his services. (Putzel v. Wilson, 49 Hun, 220; S. C., 16 N. Y. St. Repr. 920; Crasto v. White, 52 Hun, 473.)

It is conceded in the present case that the loan was not in fact made,, and it is claimed upon the part of the plaintiff that such result was due entirely to the defendant’s failure to give a good title to the premises, which was to be the security for the loan, and but for such fact the money would have been advanced pursuant to the terms of plaintiff’s contract with the defendant. Upon this subject the averment of the complaint is of performance by the plaintiff in procuring and obtaining a loan. There was no averment of the complaint showing excuse for non-performance or waiver or other reason why the money was not paid over. Upon the trial plaintiff offered evidence tending to establish that the failure to procure the money was due to the inability of the defendant to show perfect title to the premises in it. Defendant objected to the testimony upon the ground that it was not admissible under the pleadings. The objection was overruled and the defendant excepted.

It is well-settled law that a complaint which avers performance of a contract does not authorize proof showing an excuse or. waiver of non-performance. (Schnaier v. Nathan, 31 App. Div. 225; Elting v. Dayton, 43 N. Y. St. Repr. 363; affd. on appeal, 144 N. Y. 644; Bossert v. Poerschke, 51 App. Div. 381.)

It follows, therefore, that the plaintiff under his complaint could only recover by showing actual performance of his contract, and testimony tending to establish that failure to perform was due to the act of the defendant was not admissible thereunder. We are also of opinion that there was no sufficient proof showing that defendant’s title to the property was defective. The mere fact that title .had been rejected by lawyers, or title guarantee companies, did not have the effect of establishing that the title was defective as a matter of fact. Such testimony was mere hearsay. Even if evidence was admissible to show excuse for failure to perform the contract, nevertheless, it was incumbent upon the plaintiff to show by competent proof the infirmity in the title; and this could only be done by showing the specific facts evidencing the defect. There was no such evidence in this case. The nearest approach to it was a declaration of the existence of a lis pendens / but it was not made to appear when that was filed, or that it constituted any cloud upon the title at the time when the application for the loan had been ■favorably passed upon.

The court below construed the contract as authorizing a recovery for the full sum of $800, if the plaintiff was entitled to recover anything. Such, however, is not the language of the contract. The agreement was to pay $800, such sum to cover all fees, lawyers’ charges, disbursements, stamps, etc. Some of these expenses could not be incurred unless there was a fulfillment of the contract and payment over of the loan. It is evident, therefore, that the $800 does not measure the sum which the plaintiff would be entitled to recover, as the expenses, etc., not incurred would necessarily be deducted from such sum.

For these reasons the judgment should be reversed and a new trial granted, with costs to the appellant to abide the event.

Patterson, Ingraham and Ladghlin, JJ., concurred.

Judgment and order reversed, new trial granted, costs to appellant to abide event.