Case ID: ad_154/html/0685-01.html
Source: Caselaw Access Project
Author: {"author": "Hirschberg, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Milton L’Ecluse, Appellant, v. Richard C. Field, Respondent.
    Second Department,
    January 10, 1913.
    Principal and agent —broker’s action for commissions — good faith of owner selling through another broker.
    In an action by the assignee of a real estate broker to recover commissions it appeared that the plaintiff’s assignor after considerable labor had procured a customer willing to purchase defendant’s property; and that he informed defendant that the customer would purchase the property at defendant’s price on the following day when she expected to see her legal adviser. On that day defendant sent plaintiff’s assignor a letter withdrawing the property from the market and stating that he intended to occupy it during the summer. On the next day the defendant authorized another broker to sell the property, giving him another day to effect a sale, on which day the client of plaintiff’s assignor bought the property through the other broker, at the same price at which it had been listed with plaintiff’s assignor, although the consideration mentioned in the contract was $2,500 more. The defendant claimed that the increased price was the real reason for the transfer of the property to another broker, while the plaintiff claimed that the increased price was inserted in the contract of sale as a “blind” to defraud his assignor of his commissions.
    
      Held, that the determination of defendant’s good faith in canceling the authority of plaintiff’s assignor and almost immediately thereafter selling the property through another broker was a question of fact, and an order setting aside a verdict for the plaintiff should be reversed.
    
      Appeal by the plaintiff, Milton L’Ecluse, from an order of the Supreme Court, made at the Suffolk Trial Term and entered in the office of the clerk of. the county of Suffolk on the 27th day of February, 1912, setting aside the verdict of a jury in favor of the plaintiff and granting the defendant’s motion for a new trial.
    
      Willard N. Baylis [Frederick H. Sanborn with him on the brief], for the appellant.
    
      Edward P. Lyon [Percival C. Smith with him on the brief], for the respondent.
   Hirschberg, J.:

■ The appeal is from an order setting aside the verdict of a jury rendered in the plaintiff’s favor. The action was instituted to recover broker’s commissions alleged to have been earned by the plaintiff’s assignor, a corporation of which the plaintiff was an officer, in connection with the sale of real estate owned by the'defendant on Long Island. Evidence was adduced from which the jury would have been warranted in finding the following facts: The plaintiff had a client, a Mrs. Palmer, who was desirous of purchasing a home, and to whom on behalf of his corporation he showed the defendant’s place. Mrs. Palmer stated that she was much pleased with the property and offered to pay $75,000 for it. Plaintiff communicated this offer to the defendant, who refused it, but authorized the plaintiff to put the property on the corporation’s books for sale at $87,500. Thereupon the plaintiff disclosed the name of his client to the defendant because he thought he could trust the defendant, who was an old friend of his. Subsequently plaintiff succeeded in getting Mrs. Palmer to offer $80,000, which offer was also refused by the defendant. Finally, after considerable labor by the plaintiff, Mrs. Palmer, on May 6, 1910, told him that she realized that she must pay $87,,500 to get the property; that she would see her adviser, a Mr. Livingston,'in a few days upon his return from Atlantic City; and that if he did not object she believed that she would take the property at $87,500. On May ninth the defendant telephoned the plaintiff and inquired about the situation, and was then informed that Mrs. Palmer would purchase the property when Mr. Livingston returned, his return being expected the following day. On the tenth of May defendant sent plaintiffs assignor a letter, stating that as it had been unable to sell the property he would occupy it during the summer and wished it withdrawn from the market. On the eleventh of May the defendant authorized another broker, named Medbury, who also had been acting for Mrs. Palmer, to sell the property, giving him until the following day to effect the sale. On the twelfth of May Mrs. Palmer bought the property from Medbury, who, she was informed, was the only broker authorized to offer it for sale. The price mentioned in the contract of sale was $90,000. Mrs. Palmer, however, paid only $87,500 for the property. The explanation offered on behalf of the defendant for this discrepancy is that Medbury gave Mrs. Palmer $2,500 from his commission of five per cent, and that the defendant received $85,500, after deducting the balance of Medbury’s alleged commission, whereas if plaintiff’s assignor had sold the property for $87,500, defendant would, after deducting its commission of two and one-half per cent, have received only $85,312.50. The difference of $287.50 in the transaction seems to be claimed by the respondent as the real reason, for transferring the matter to Medbury, although the respondent’s letter stated that he had decided to withdraw the property from the market and reside there during the summer. On the other hand, the plaintiff claimed that the sum of $90,000 was inserted in the contract of sale as a blind,” the better to effectuate the defendant’s scheme to fraudulently deprive the plaintiff’s assignor of its commissions on the eve of the successful termination of its efforts to induce Mrs. Palmer to purchase at the defendant’s figures.

I think the determination of defendant’s good faith in canceling the authority of plaintiff’s assignor and almost immediately thereafter selling through Medbury to Mrs. Palmer was, on the conflicting evidence in the case, a question of fact for the jury and that their verdict should not have been disturbed. In its opinion setting aside the verdict the learned Trial Term cited the cases of Willard v. Ferguson (125 App. Div. 868, 872), Cole v. Kosch (116 id. 715) and Gardner v. Pierce (131 id. 605). The facts in those cases differ essentially from those herein presented. In Willard .v. Ferguson, {supra) the broker did not introduce the purchaser to the seller, and was not employed by the seller to negotiate the sale. In Cole v. Kosck (supra) the court merely held that the listing of the property by the owner with one broker did not preclude him from offering it for sale through another. In Gardner v. Pierce (supra) the court restated the well-settled rule that a real estate broker’s commissions are not earned until the broker brings the minds of the parties to an agreement for a sale upon definite terms. There it was held that an offer of $35,000, unaccepted, did not preclude the vendor from subsequently selling his property for $72,000 to another broker. There was no fraud in the case, nor any evidence upon which a finding of fraud could have been based.

On the facts in the case at bar the jury might have found that the withdrawal of the property from plaintiff’s assignor, followed by its almost immediate sale to the same client produced by plaintiff’s assignor and on the original terms of sale, was merely a dishonorable device, designed to deprive the plaintiff’s assignor of its commission, or, as was well expressed by Judge Pryor in the former New York Court of Common Pleas in Ames v. McNally (6 Misc. Rep. 93, 95), they might have found “that the pretended withdrawal of the property, and the subsequent sale to the very purchaser produced by plaintiffs and on substantially the terms proposed through them, were nothing more .than an expedient for cheating them of their commission.”

In any view which can reasonably be taken of' the case it would seem that the issue of good faith on the part of the defendant was one of fact for the jury and not of law for the court.

The order should be reversed, with costs, and the verdict of the jury reinstated, with costs.

Burr, Thomas, Carr and Rich, JJ., concurred.

Order reversed, with costs, and verdict of jury reinstated, with costs, 8th day of March, 1912, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 2d day of July, 1912, denying the defendants’ motion for a new trial made upon the minutes.