Case Name: Elmer E. Knight, Appellant, v. Sherman Brown and Hattie Brown, Respondents
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1914-05-06
Citations: 162 A.D. 438
Docket Number: 
Parties: Elmer E. Knight, Appellant, v. Sherman Brown and Hattie Brown, Respondents.
Judges: 
Reporter: Appellate Division Reports
Volume: 162
Pages: 438–443

Head Matter:
Elmer E. Knight, Appellant, v. Sherman Brown and Hattie Brown, Respondents.
Third Department,
May 6, 1914.
Principal and agent — action by real estate broker for commissions — evidence —■ erroneous charge.
In an action by a real estate broker to recover commissions upon the sale of a farm owned by the defendants, it was conceded that through the efforts of the plaintiff a parol agreement of sale had been made between the defendants and one O., in pursuance of which a deed was executed by the defendants, and a check for the amount of the cash payment drawn by C., payable to the defendant B., indorsed by him and both placed in escrow in the hands of an attorney, with instructions to deliver the deed upon the collection of the check. Before the check could be presented for payment the defendants changed their minds, stopped payment thereon and refused to deliver the deed to 0., who was at all times ready and willing to consummate the purchase. The plaintiff claims that at first defendants asked $8,300 for the farm, subject to the payment of five per cent commissions, but that G. refusing to pay that sum, defendants told plaintiff he might make the sale at $8,100, in which event defendants would pay commissions of $100. The plaintiff and O. testified that the sale was made at that sum, but that 0., upon learning of certain incumbrances, decided that he could not make the payments, whereupon plaintiff then agreed that the commissions of $100 should be deducted from the purchase price, and that plaintiff would wait for the payment thereof until it was convenient for 0. to make it. The defendants denied the making of this agreement.
Held, that the court erred in instructing the jury that, as a matter of law, O. was liable to the plaintiff for the amount of the commissions, and that the plaintiff by accepting G. as paymaster, thereby released the. obligation as against the defendants;
That when defendants refused to accept payment of the purchase price and to deliver the deed, they prevented plaintiff from collecting his commissions, and that under all the evidence the right of the plaintiff to recover was a question of fact.
Appeal by the plaintiff, Elmer E. Knight, from a judgment of the Supreme Court hi favor of the defendants, entered in the office of the clerk of the county of Broome on the 19th day of August, 1913, upon the verdict of a jury, and also from an order entered in said clerk’s office on the same day denying plaintiffs motion for a new trial made upon the minutes.
Herbert C. Kibbe [T. B. Merchant of counsel], for the appellant.
Edmund B. Jenks, for the respondents.

Opinion:
Lyon, J.:
This action was brought by the plaintiff, a real estate broker, to recover commissions upon the sale of a farm owned by the defendants as tenants by the entirety. Concededly through the efforts of the plaintiff a parol agreement of sale was made in July, 1912, between the defendants and one Croft, in pursuance of which a deed of the farm to Croft was executed by the defendants, and a check for the amount of the cash payment was drawn by Croft payable to the defendant Sherman Brown and indorsed by him, and both were placed in escrow, in the hands of the attorney who prepared the deed, with instructions to him to deliver the deed to Croft upon the collection of the check which was drawn upon a bank in Lock-port, and which the attorney placed in the hands of his local bank for collection. Before the check, which was collectible, could be presented for payment, the defendants changed their minds, or as the defendant Sherman Brown testified, "I backed out of the bargain I had made," and directed payment of the check stopped and that it be returned to the local bank, which was done, after which the attorney tendered the check to the defendants, who refused to receive it, whereupon the attorney mailed it to Croft, who retained it. Croft, who was at all times ready and willing to consummate the purchase, demanded the deed, through the plaintiff, as his representative, of each of the defendants, as well as of the attorney, with whom it had been left in escrow, and each refused to deliver it. The defendants having refused to pay the plaintiff any commissions, this action was brought. As before stated, these facts were conceded, but the parties differ as to the agreement between themselves relative to the payment of commissions. The plaintiff claims that at the outset defendants asked $3,200 for the farm, which price was subject to the payment of five per cent commissions in case plaintiff should succeed in making a sale, but that Croft refusing to pay that sum, defendants told plaintiff he might make the sale at $3,100, in which event defendants would pay plaintiff commissions of $100. The plaintiff and Croft testified that the sale was made at that sum, but that upon Croft learning that a payment of $150 would become due upon one of the mortgages in the fall and that payments aggregating $750 would be required to be made by him on or before November first upon the basis of a sale of the farm at $3,100, Croft said he could not handle it, and decided that he could not take the place, whereupon plaintiff, after some hesitation, said that rather than see the deal fall through he would wait for his commissions until Croft was able to pay them, thus reducing the payments to $650 which Croft said he could make, and thereupon the plaintiff, defendants and Croft agreed to meet at the attorney's office the following day, at which time the deed was executed, the check given for the difference between the amount of the principal and interest of the mortgages as of November first, and the sum of $3,000, and the deed and check placed in escrow as before stated. The plaintiff and Croft testified upon the trial that it was then agreed that the commissions of $100 should be deducted from the purchase price of $3,100, and that plaintiff should wait for the payment thereof until it was convenient for Croft to make it. Upon the other hand the defendants denied the making of the agreement as testified to by plaintiff and Croft, and claimed that the only sum mentioned between plaintiff and defendants as the price of the farm was $3,000, and that the defendants refused to be liable for the payment of any commissions whatever to plaintiff, but told plaintiff that he must look to the purchaser for his commissions and could have whatever sum he could get for the farm above $3,000. The consideration mentioned in the deed was one dollar. In his charge the court submitted to the jury the question as to what the bargain was between the plaintiff and defendants as to the commissions he was to receive upon a sale of the farm, but instructe,d the jury as matter of law that if the plaintiff agreed to accept Croft as the person to pay the commissions, the plaintiff could not recover in the action. Following the charge and the retirement of the jury the jury returned into court and stating their inability to agree, and requesting further instructions, the court said: "It was my duty to instruct you as a proposition of law that if all three of the parties agreed between themselves that the plaintiff would take Oroft as paymaster for his commissions and the check which Oroft was to give to Brown was reduced $100 and all three consented to this agreement, then he can not recover in this action. It is just as I illustrated to you before, if Brown was owing Knight, and Oroft was owing Brown, and they agreed that Oroft should pay Knight instead of paying Brown and then Brown paying Knight, Brown was thereby released and the plaintiff cannot recover in this action." The record following these instructions is as follows: "Plaintiff's counsel said, I request your Honor to charge "that if the plaintiff consented to accept payment of his commissions direct from Oroft instead of having Oroft pay same to Brown and Brown to him, and there was in the same agreement a promise, express or implied that the defendant would consummate the deal by delivering the deed, and if the defendant failed to keep his part of the agreement, and himself first broke the agreement by refusing to deliver the deed, and the plaintiff only intended to release Brown, and Oroft only intended to become bound to plaintiff for the commission, when the deed was delivered, then the plaintiff is entitled to recover in this action. The court said, I will decline to charge that entire as I do not believe it is all true and said to the jury that this was no determination as to whether or not the plaintiff could recover his commissions for his work in effecting the sale. Then one of the jurors said, by refusing to charge as counsel has requested your Honor determines that the plaintiff is not entitled to recover his commissions upon this agreement. The court said, we have not determined that. We are not determining that and do not care to in this action, he ought not to lose his commissions. The same juror said, but he will lose them under this instruction of yours. The court replied, we are not determining whether he has a right to recover his commissions from Hr. Oroft; he could recover them from Mr. Oroft and Mr. Oroft could have held the place and could have held Brown to the agreement to sell the place had he seen fit and Croft is still liable for these commissions, but if it was agreed between the three parties that the plaintiff was to accept Oroft as paymaster it is as if Brown was owing the plaintiff and Oroft was owing Brown and the plaintiff consented to release his claim against Brown and Brown consented to transfer to the plaintiff so much of the debt which Croft owed him and the plaintiff was to accept Croft as paymaster and look to him for his pay and all three agreed to it, he thereby released the obligation as against Brown. " To these instructions and the refusal of the court to charge the plaintiff excepted. The jury rendered a verdict of no cause of action. From the judgment entered thereon, and from the order denying plaintiff's motion for a new trial, this appeal has been taken. In his brief upon this appeal the counsel for the respondent very properly says: "We regard the trial judge's charge as equivalent to the direction of a verdict of no cause of action; and, therefore, concede that the appellant is entitled upon this appeal to have considered the facts most favorable to a recovery by him which the jury could have found from the evidence."
We think the court erred in its instructions that as matter of law Croft was liable to the plaintiff for the amount of the commissions, and that the plaintiff by accepting Croft as paymaster thereby released the obligation as against Brown. According to the evidence upon the part of the plaintiff Croft was at all times ready and willing to perform the contract upon his part, and the $100 to be paid by Croft was part of the purchase price of the farm. If Croft could have been compelled to pay this portion of the purchase price, there would seem to be no good reason why he could not have been compelled to pay the balance of the purchase price, notwithstanding the fact that the defendants herein refused to deliver the deed or to carry out the agreement of sale upon their part. Furthermore, according to the evidence upon the part of the plaintiff, $100 of commissions was in fact being paid by the defendants, as it was being paid out of the purchase price of the farm, but hi order to effect a sale, defendants apparently not being inclined to waive the payment of any portion of the purchase price, the plaintiff consented to await the convenience of the purchaser, who was evidently responsible, for the payment of the commissions, and thereby an agreement of sale was reached by reason of which plaintiff became entitled to his commissions to be paid out of the purchase price of the farm, and which was followed the next day by the execution of the deed and check and their being deposited in escrow. The defendants as well as Croft and the plaintiff were parties to the agreement, and as Croft was to pay fche commissions to plaintiff out of the purchase price of the farm, it was plainly in contemplation of all the parties and impliedly agreed that the sale should be consummated according to the agreement; hence when defendants by refusing to accept the payment from Croft and to deliver the deed prevented plaintiff collecting the commissions to which he was entitled, we think, assuming the evidence introduced by the plaintiff to truly state the facts, that the defendants rendered themselves liable to plaintiff and that under all the evidence the right of the plaintiff to recover in this action was a question of fact for the determination of the jury.
The judgment and order appealed from should, therefore, be reversed and a new trial granted, with costs to the appellant to abide the event.
All concurred.
Judgment and order reversed and new trial granted, with costs to appellant to abide event.