#### Ross C. Holliday, Respondent, v. The Roxbury Distilling Company, Appellant.

First Department,

March 5, 1909.

Principal and agent —action to recover commissions for procuring loan not consummated — facts essential to recovery — attachment — evidence of willingness and ability of lender to make loan — hearsay.

Where a broker seeking to hold his principal for commissions for services rendered in procuring a person able and willing to make a loan which was not consummated, bases his right to recover upon an allegation that the negotiations fell through on account of the principal’s misrepresentations as to the security to be given, he must give most satisfactory proof of the ability and *655willingness of the party to make the loan, and that the failure to consummate the same was solely owing to the default of his principal.

An attachment against the defendant should he vacated where the only proof of ■ the proposed lender’s willingness and ability to make the loan was an affidavit of the plaintiff's assignor stating that the vice-president of a banking association with which he negotiated the loan stated that the bank was able and willing to make the loan and wanted to do so until it discovered that a part of certain whisky offered by the defendant as collateral security was musty and impure, such evidence being merely hearsay.

So, too, the evidence that the whisky offered by the defendant as collateral security was musty, is mere.hearsay where it is only alleged that the vice-president of the bank stated that it “ had discovered” that more than half.of the whisky was not good and is insufficient to support an injunction, especially where it is not shown that the defendant did not have other whisky which would have answered the requirements of the contract.

Mere admissions of the defendant’s agent that a suit was pending against the defendant to recover on account of an alleged sale of musty whisky is not an admission that defective- security was offered.

Appeal by the defendant, The Roxbury Distilling Company, from an order of the Supreme Court, made at the Hew York Special Term and entered in the office of the clerk of the county of Hew York on the 27th day of January, 1909, denying the defendant’s motion to vacate a warrant of attachment.

*John Vernou Bouvier, Jr.*[ *John B. Doyle*and *Dudley Davi*s with him on the brief], for the appellant.

*Walter H. Griffin,*for the respondent.

Laughlin, J.:

This is an action to recover commissions alleged to have been earned by the plaintiff’s assignor, one Proctor, in procuring a loan of $400,000 for the defendant. The loan was not consummated, but the plaintiff claims that his assignor procured a party ready, able and willing to make the loan upon the terms upon which he was authorized to procure it and that it was not made owing to misrepresentations on the part of defendant with respect to the security to be furnished therefor. The plaintiff alleges that the defendant was to secure the loan “ by a stock of good, pure whisky in government bond as collateral, and by $200,000 of the first mortgage six per cent gold bonds of the defendant as additional security, if required.” The plaintiff failed to present on his application for

*656the warrant of attachment any competent evidence that his assignor procured a party ready, able and willing to make the loan on the terms proposed, even if that would have been sufficient. The plaintiff presented the affidavit of his assignor to the effect that pursuant to negotiations had by the latter with the Hibernian Banking Association of Chicago, that association was ready, able and willing to make the loan and that it had unimpaired capital and a surplus of over $2,000,000; that he called on the banking association to make final arrangements and was informed by the vice-president that *“*although the bank was able, ready and willing to make the loan and wanted to do the business, yet the bank had discovered that over half of the whisky which the defendant had offered to> pledge as collateral for the said loan was musty and was not good and pure, and for that reason they would not make said loan.” • This is the only evidence presented tending to show that plaintiff procured a party able, ready and willing to make the loan. We are-of opinion that the evidence is insufficient to establish those facts. The affidavit of the plaintiff’s assignor with respect to the declarations of the vice-president of the Hibernian Banking Association on that subject was mere hearsay and it afforded no proof that the banking association was ready, able and willing to make the loan. The general rule applicable to the employment of brokers to procure *a loan*is that their commissions are not earned unless the loan is made *(Crasto*v. *White,*52 Hun, 473 ; *Ashfield*v. *Case,*93 App. Div. 452 ; *Duckworth*v. *Rogers,*109 id. 168), and while this rule probably would not be applicable in the case at bar, .it- being alleged that the negotiations fell through on account of. defendant’s misrepresentations as to the security tó be given, it emphasizes the importance of "having most satisfactory proof of the ability, readiness and willing^ ness of the party to make the loan and that the failure to consummate the same was solely owing to the failure of the broker’s principal. In other words, there may be a liability for a breach of á contract where a person after employing a broker to make a loan on certain securities discovers that his securities are not as valuable as he supposed and that he would be unable to perform a contract to furnish securities for a loan according to his representations to his broker, but that would not afford a basis for a recovery by the broker of *commissions*as for full performance on his part. The.

*657vice-president of the banking association may not have been authorized to make the loan, and notwithstanding the surplus shown the money may not have been on hand or procurable within a reasonable time.

Moreover, there is no competent evidence that the whisky which defendant intended to furnish as security was musty. We merely have the declaration of the vice-president of the Hibernian Banking Association made to plaintiff’s assignor that the banking association *“*had discovered ” that more than one-half of the whisky which defendant offered to pledge was musty and was ‘not good and pure and that it refused on that ground to make the loan. This was merely hearsay. There is no evidence- that defendant identified any stock or quantity of whisky as the whisky it -intended -to offer as security, nor is there any evidence that it did not have a stock of whisky somewhere in government bond that would answer the requirements of its contract with the broker. We have not overlooked the fact that plaintiff’s assignor states in his affidavit that after the loan had been refused on the ground stated he called on the agent of defendant at Chicago and was informed by him *“*that a lot of the whisky of the defendant that they had in their warehouse was musty ” and that a suit was then pending against defendant to recover $25,000 on account of an alleged sale of musty whisky. This does riot supply the. material facts. It is not an admission concerning the security.

. It follows that the order should be reversed, with ten dollars costs and disbursements, and motion to vacate the warrant of attachment granted, with ten dollars costs.

Ingraham, McLaughlin, Clarke and Scott, JJ., concurred.

Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs.