Case Name: Nicholas F. Walsh, Respondent, v. William Gay, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1900
Citations: 49 A.D. 50
Docket Number: 
Parties: Nicholas F. Walsh, Respondent, v. William Gay, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 49
Pages: 50–52

Head Matter:
Nicholas F. Walsh, Respondent, v. William Gay, Appellant.
Beal estate broker’s commissions — not earned by producing a purchaser who takes an option and pays a certain sum which he forfeits—proof of knowledge of this fact by the broker.
Where a real estate owner enters into a preliminary agreement to sell the premises, for which the proposed vendee agrees to pay the sum of §250 upon the-signing of such agreement and a further sum of §750 upon the signing of the contract of sale and to forfeit the $250 in case he refuses to sign the contract of sale and complete the purchase, the broker who produces the proposed vendee is not entitled to commissions unless the proposed purchaser actually signs-the contract of sale and completes the purchase.
In an action by the broker against the owner to recover commissions the owner should be permitted to prove that the broker knew that the proposed vendee simply procured an option upon, and did not intend to buy, the property unless he purchased some adjoining lots.
Appeal by the defendant, William Gay, from a judgment of the Municipal Court of the city of New York, borough of Brooklyn, second district, in favor of the plaintiff, entered in the office of the clerk of said court on the 3d day of January, 1900, upon the verdict of a jury.
Frederick A. Drake, for the appellant.
Patrick J. O' Beirne, for the respondent.

Opinion:
Goodrich, P. J.:
The action is for the recovery of broker's commissions on an alleged contract for the sale of real property. The defendant was the owner of premises in the city of Hew York. The - plaintiff produced to him one Rosenberg as an intending purchaser. The defendant and Rosenberg made a written agreement respecting the sale, which provided that the defendant agreed to sell the premises to Rosenberg, who agreed " to pay the sum of §250 upon the signing this agreement and a further sum of S750 upon the signing of the contract for sale, the said contract to be signed on Thursday, February 16th the said Rosenberg to forfeit the sum of §250 in case of refusal to sign said contract and complete the purchase of said property, .the said contract to be closed 30 days from the date of same.
Paid on agreement....................... $250
To be paid on contract..................... 750
Cash..................... 9,500
Assuming mortgage of..................... 5,000
Making total........................... $15,500"
Rosenberg testified that he never offered to pay the $750 and that the proposed contract of sale between him and Gay was never executed.
It seems clear that this agreement was not a contract of sale to Rosenberg, but only preliminary or provisional to such contract, and as no contract of sale was ever executed between the parties, according to the terms of the agreement, there was no actual or completed sale of, or contract to sell, the premises to Rosenberg.
• While this view compels a reversal of the judgment, yet in view of the possibility of a new trial it is proper to consider one of the exceptions to the exclusion of evidence. This is not a case where a broker has been employed by an owner of real property to sell it and produces a party able and willing to make a purchase on the terms of the broker's employment. Ho such facts appear. On the contrary, the defendant offered to prove that the plaintiff knew that Rosenberg simply got an option upon, and did not intend to buy, this property unless he also purchased some adjoining lots. The refusal to admit evidence on this subject was error.
The judgment should be reversed.
All concurred.
Hatch, J. :
The engagement of a broker employed to sell land is to find for his principal a purchaser able, ready and willing to buy' the property upon the terms prescribed, and if he fail in this respect he is not entitled to compensation. (Sibbald v. The Bethlehem Iron Co., 83 N. Y. 378.) The plaintiff in the present case did not meet this requirement. No sale was expected to be made unless the party proposing to purchase fulfilled the terms of the option agreement. At no time after its execution was he ready or willing to comply with it. All that he did was to pay $250 for the privilege of buying the property at a future time upon certain terms. As he failed to fulfill these terms, there was no sale or at any time a binding agreement of sale, in consequence of which the plaintiff did not become entitled to compensation.
The judgment should be reversed.
Judgment of the Municipal Court reversed and new trial ordered, costs to abide the event.