Case Name: Bernard A. Schweid and Harry A. Schweid, Respondents, v. Carl W. Storandt, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1913-07-08
Citations: 157 A.D. 855
Docket Number: 
Parties: Bernard A. Schweid and Harry A. Schweid, Respondents, v. Carl W. Storandt, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 157
Pages: 855–868

Head Matter:
Bernard A. Schweid and Harry A. Schweid, Respondents, v. Carl W. Storandt, Appellant.
Fourth Department,
July 8, 1913.
Principal and agent — action by real estate brokers for commissions — misrepresentations in statement furnished by owner to broker.
Where in an action by real estate brokers to recover commissions under a contract to procure a purchaser for the defendant’s building, it appears that after the execution of the contract the defendant furnished to the plaintiffs a statement as to the number of apartments in the building to be sold and the sum for which they were separately rented, to be used in procuring a purchaser; that the plaintiffs procured persons to sign a contract to purchase in reliance upon such statement, and that they refused to complete the purchase because of misrepresentations in the statement, a judgment for the plaintiff should be affirmed.
Foote, J., dissented, with opinion.
Reargument of an appeal by the defendant, Carl W. Storandt, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of Monroe on the 21st day of August, 1912, upon the verdict of a jury, and also from an order entered in said clerk’s office on the same day denying defendant’s motion for a new trial made upon the minutes.
Frederick A. Mann, for the appellant.
George A. Carnahan, for the respondents.

Opinion:
Robson, J.:
There is no controversy over the question of plaintiffs' employment by defendant as real estate brokers to sell certain real estate owned by defendant, known as the Berlin Block, situate in the city of Rochester, 1ST. Y., and that if plaintiffs procured a purchaser for such property at the price of $50,000 the defendant would pay them as their commissions the sum of two and one-half per centum upon the purchase price. This is admitted by defendant's answer. Plaintiffs further allege that they did in fact procure and produce a purchaser ready, willing and able to purchase said property at that price upon terms of payment thereof which were accepted by the defendant. The defendant in his answer denies this. The material question to be decided, therefore, is whether plaintiffs did in fact produce such purchaser.
Plaintiffs did procure and submit to defendant a written paper signed by one A. William Black as follows: "Black, Elwood and McCarthy, A. William Black, " which was in form an offer to purchase the premises for $50,000, to be paid and secured as stated therein. Defendant accepted the offer in writing signed by him, but included in the acceptance two further provisions that $1,000 be deposited " to bind the bargain, transfer to be made on or before March 28th, 1912. " While the offer appears in terms to be that of three persons, viz., Black, Elwood and McCarthy, when McCarthy's attention was called to it by service upon him of defendant's acceptance thereof he at once repudiated the offer as having been made or authorized to be made by him; and it is not claimed that he can be considered as a party thereto. Shortly thereafter and on March 21, 1912, a meeting was had at which the defendant, one of the plaintiffs, A. William Black, Elwood and one Louis Black were present. As a result of negotiations at that interview it was agreed that, as McCarthy was not bound as a party to the offer, Louis Black should take his place as a party to the deal, but Louis Black did not in fact sign the offer. The $1,000 required in defendant's acceptance was thereupon paid to him, the amount being furnished by the two Blacks and Elwood, and paid by the check of A. William Black. The date when the transaction was to be closed was also agreed upon. At this point, if this were all of the transaction it would seem to be clear that plaintiffs had procured and produced a purchaser willing to buy the property at a price and upon terms satisfactory to defendant; and the ability of these parties to perform is shown. On the face of the papers A. William Black and Elwood were bound by a written contract to purchase on the terms agreed; and it was further agreed that Louis Black was to be substituted in place of McCarthy as one of the purchasers, though not, perhaps, as pointed out by Mr. Justice Foote, actually a party to any written agreement to purchase, and for that reason doubtless his -agreement would not be an enforcible one against him for the purchase of the property. But if these parties were both able and willing to perform the terms of the agreement, then, of course, though all may not in fact have been bound by an agreement to purchase enforcible by defendant, yet, being both able and willing to purchase, if the sale did not in fact materialize due to the after-fault of the defendant, or his refusal to comply with the terms thereof, the plaintiffs would still have completed their broker's contract and earned their stipulated broker's compensation. (Sibbald v. Bethlehem Iron Co., 83 N. Y. 378, 384.) The sale was in fact not consummated, and the refusal of the prospective purchasers to comply was, I think, due entirely to circumstances for which the defendant owner was solely responsible.
The original broker's contract described the property simply as the Berlin Block and its location; but it appears that a considerable part of the building was constructed for and used and let as apartments. Its apparent value for rental purposes depended to some extent upon the number of rental apartments it had and its investment value also depended upon the amount of rentals it produced. Some months after defendant made the broker's contract with plaintiffs, and while they were engaged in their efforts to sell the property, the contract being still in full force, defendant furnished them information as to the number of apartments there were in the building, and the sum for which they were separately rented. This information was embodied in defendant's presence from his dictation in a written statement prepared by one of the plaintiffs. The purpose for which this information was obtained and the statement prepared was known to defendant, i. e., that it was to be used by plaintiffs in negotiation with prospective purchasers as a statement showing what the building actually was. The effect of this transaction by defendant with the agents was, it seems to me, to enlarge to that extent the terms of the agency contract and the representations thus made were thereafter to be treated and considered in relation to the original contract of agency the same as if they had been actually included therein. The purpose for which the statement was to be used' was recognized by defendant and, therefore, plaintiffs had at least implied authority to use it as a representation made by defendant with like effect as though originally a part of the agency contract. If it had been contained in the original contract of agency there could be little doubt that, if false and the agent relying upon the truthfulness of the representation and having secured an able and willing purchaser who also relied on the truthfulness of the representations, and who on learning their falsity for that reason refused to purchase, the agent would have earned his commissions. (Dotson v. Milliken, 209 U. S. 237.) Plaintiffs, using this statement for the purpose for which it had been prepared, showed it to the prospective purchasers, or some of them, before the offer to purchase was made, and Black at the meeting on March 21, 1912, above referred to, asked defendant if the statement had been made by his authority, and was, in effect, assured by him that such was the fact. The agreement to purchase, hereinbefore referred to, was then made in apparent and warranted reliance on the truthfulness of the statement. It is admitted that this statement was in fact false in that it represented there was one more apartment than the building actually contained, and the apparent rentals as stated therein were correspondingly increased by the amount of rental of that apartment. After the offer was accepted in the manner and form above described the prospective purchasers ascertained the incorrectness of the statement. When the parties thereafter met at the agreed time and place to complete the transaction the purchasers declined to complete the transfer, basing their refusal practically on two grounds, one of which was the misrepresentation in the statement above referred to. It is not necessary to refer to the other objection advanced by them for the reason that its consideration as a ground upon which such refusal could properly be based was withdrawn by the court in his charge to the jury from their consideration. Both parties seem to have accepted the court's holding in this respect as correct, for no exception was taken to it, and no request to charge otherwise was made. The court further charged the jury that this misrepresentation concededly made, and for which either the plaintiffs or the defendant were responsible, furnished sufficient ground for the purchasers' refusal to complete the transfer. He further left it to the jury to pass upon as a question of fact whether plaintiffs or the defendant were responsible for the misrepresentation, charging that if the plaintiffs were responsible for it, then there could be no recovery in this action; but, if it was chargeable to defendant, then plaintiffs were entitled to their commissions. The finding of the jury in favor of plaintiffs is amply supported by the evidence.
It follows, if I am correct in my view of the law applicable to this case, that plaintiffs were not required to show that defendant had an enfórcible contract with the purchasers; but that it was shown that they had fulfilled their contract with defendant by producing purchasers who were ready, able and willing to buy the property on defendant's own terms, and that the sale was not completed for the single tenable reason that defendant had by material misrepresentation of the property, for which he alone was responsible, prevented its actual consummation.
The judgment and order should be affirmed, with costs.
All concurred, except Foote, J., who dissented in an opinion.