Court Opinion

ID: 5337352
Source: CourtListenerOpinion
Date Created: 2022-01-08 05:40:45.163047+00
Date Added: 2024-06-11T08:29:30.912195
License: Public Domain

Martin, J.
(dissenting). The plaintiff, a licensed real estate broker, in the early part of 1930 met Henry V. Stebbins, an attorney, at the office of Otto & Lyons, 60 Broad street, New York city, and was introduced to him as a real estate broker and trader. Mr. Stebbins stated that he represented the estate of Anna Lang and was interested in obtaining an appraisal of a piece of property at 2227 Metropolitan avenue, Middle Village, Queens county.
Thereafter, in the first part of June, 1930, the plaintiff visited the property for the first time and had a talk with Ernst Hahn, the tenant who occupied the premises. As a result of that conversation and on July 16, 1930, the plaintiff wrote a letter to Mr. Stebbins in which he asked if Mr. Stebbins would consider an offer of $15,000 for the property and if so would he kindly let the plaintiff know the terms. This letter was written upon a letterhead bearing the following caption:
“ Bernard B. Barrett
Licensed Real Estate Broker
554 West 161st Street
New York.”
In a letter dated July 25, 1930, which the plaintiff received from Mr. Stebbins, it stated in part that his client would take $15,000 in cash for the property.
Upon receipt of the letter the plaintiff again visited the premises and spoke to Mr. Hahn and then forwarded to Mr. Stebbins a letter dated July 28, 1930, notifying Mr. Stebbins that he had consummated the sale of the premises for $15,000, and that the tenant Hahn was the purchaser and inclosed a check for $100 as a deposit on account.
Mr. Joseph Quinn, an. attorney, stated that on or about July 28, 1930, he was retained by Mr. Hahn to represent him in negotiations then pending for the purchase of the property. The testimony of Mr. Hahn, the tenant, called by the plaintiff as a witness, was that on or about July 28, 1930, he gave the plaintiff a certified check for $100 and simultaneously executed the plaintiff’s Exhibit No. 5 which reads:
*43“ July 28, 1930.
“ I hereby offer $15000 cash for the property & house known as 7825 Metrop. Ave. on the corner of Furman Ave. in the County of Queens City & State of N. Y.
“ ERNST HAHN
“ EMMA HAHN.”
Mr. Hahn testified that he thereafter purchased the property for $18,500 in cash.
Demand was made by the plaintiff for a commission at the prevailing rate in the particular vicinity, which was conceded to be $750, or five per cent of $15,000. This action was then brought upon the refusal of the defendants to pay the plaintiff any commission.
The court held that the proof adduced by the plaintiff was sufficient to show that the Hahns, the prospective purchasers, were ready, able and willing to purchase for $15,000, and actually bought the property for $18,500 in cash. The complaint, however, was dismissed by the court on the theory that plaintiff had failed to prove either an express or implied contract of employment.
The documentary evidence was sufficient to show that the plaintiff had authority to purchase the property and made an offer which the defendant Stebbins represented he had a right to accept. There may have been a question about the authority of Stebbins to offer the property for sale or to accept the offer made by the plaintiff, in which event the first cause of action must fail. If the defendant Stebbins offered the property without any authority to do so, he is personally hable for damages and the second cause of action should not have been dismissed. If a broker produces a buyer and his efforts are rendered futile through his employer’s fault, any damages sustained by the broker may be recovered from the employer. The proper form of action under the circumstances here disclosed, where there is a doubt, is to sue both the agent and the principal. (Civ. Prac. Act, § 213; Jamison v. Lamborn, 207 App. Div. 375.)
In Harriss v. Tams (258 N. Y. 229) the court held that an agent impliedly warrants his authority to make the representations through which he induces another to make a contract with the principal. For the breach of that implied warranty the agent is liable to the injured party for all damages which flow naturally from reliance upon the agent’s assertion of authority.
In Moore v. Maddock (251 N. Y. 420) the court held that if a person attempts to make a contract on behalf of a corporation, without authority, the loss occasioned by there being no contract *44must be borne by him. A warranty of authority will, therefore, be implied and where the assertion of authority is intended and understood to be a continuing assertion the warranty of its truth must, from its nature, be a continuing warranty. At page 425 the court said: “An action for breach of warranty rests upon a contract which the law implies. The cause of action accrued when the wrong to the plaintiff was complete, not, as in an action for fraud, when the wrong was discovered. The cause of action is not upon the contract itself, made in the name of his principal, but upon the defendant’s implied warranty or promise. (New Georgia Nat. Bank v. Lippmann, 249 N. Y. 307.) Breach of the implied promise or warranty of the defendant, rather than the repudiation or breach of the agreement which the defendant purported to make as agent of a corporate principal, should, on principle, fix the time when the plaintiff’s cause of action against the defendant must be deemed to have accrued. We have found no judicial decision opposed to the principle.
“ * * * If the defendant attempted to make a contract on behalf of the corporation without authority, then according to a long line of judicial decisions, it is but just that the loss occasioned by there being no contract with the principal, should be borne by the agent who acted without authority. As a device by which that loss may be placed upon the agent, the courts have held that a promise or warranty must be implied.” (Cases cited.)
In New Georgia Nat. Bank v. Lippmann (249 N. Y. 307) the court held that under section 39 of the Negotiable Instruments Law a person who signs an instrument containing or to which he adds words indicating that he signed for or on behalf of a principal or in a representative capacity, is hable on the instrument if he has signed without authority.
As negativing the contention of the respondents that there was no employment of the plaintiff in the present case, we have the fact that Mr. Stebbins, the lawyer for the estate and the man with whom the plaintiff communicated, knew that the plaintiff was a real estate broker. Mr. Stebbins had hired the plaintiff to appraise the property in question and had written that payment would be made for those services. It follows, therefore, that when the plaintiff asked if an offer of $15,000 would be considered by Mr. Stebbins for the property, the plaintiff was offering his services, and it is reasonable to believe that he expected to be paid for them. In addition to this, we have the fact that some months after the prospective purchasers, Mr. and Mrs. Hahn, were introduced to Mr. Stebbins, an actual sale of the premises to them took place to them, at a higher price.
*45A contract of employment may be implied when the circumstances indicate that the broker reasonably expected to be compensated for his services and that the principal with full knowledge of the facts availed himself of the broker’s labors. (West v. Mills, 83 App. Div. 629.) In the present case Mr. Stebbins knew that the plaintiff was a broker, and in accepting the offer made by the plaintiff, he availed himself of the broker’s labors.
In Knotts v. Lake Shore & Michigan Southern R. Co. (172 Ill. App. 550, 555) the court said: “ While it is true that a mere volunteer cannot recover compensation for services rendered without any contract of employment, or rendered in spite of the refusal or against the wish and desire of the owner [cases cited], yet, where it appears that the owner knows that the alleged volunteer is a broker, that he is endeavoring to effect a sale to a prospective buyer and expects to receive compensation for his services if successful, and where it also appears that with such knowledge on the part of the owner, the broker was encouraged by the owner to aid in the sale, and led by the owner to believe that he would receive compensation, a contract to pay compensation will be implied, if the sale is thereafter consummated through the efforts of such broker. * * * By such conduct, the owner impliedly approves the agency of the broker.
“ In Story on Contracts, 5th Ed., Sec. 491, it is said: ‘ So also the silence of either party will import assent to the terms of the contract whenever it would have been incumbent on him to express his dissent if he did not agree thereto, or where his silence is explicable only by the presumption of his assent.’ ”
In Sibbald v. Bethlehem Iron Co. (83 N. Y. 378) the court said: “ Nor do we see any fault in the charge of the court in this connection, that it was immaterial whether the broker was originally employed, or whether, after he had brought the thing about, the principal availed himself knowingly of the fruits of the action of the broker. This is only saying that the contract of employment may be established either by proof of an express and original agreement that the services should be rendered, or by facts showing, in the absence of such express agreement, a conscious appropriation of the labors of the broker. Indeed, the learned counsel for the defendant very fairly and justly concedes that the contract may be established in some cases ‘ by the mere acceptance of the labors of a broker.’ ”
In this case the plaintiff met the situation by pleading the contract and also anticipated that the defendants might assert that there was no authority in Mr. Stebbins to make the contract, and pleaded a cause of action against him personally. That cause *46of action, the second, was properly pleaded, and on the proof the defendant Mr. Stebbins is hable to the plaintiff for his commissions. There is implied in Mr. Stebbins’ letter the fact that the property was for sale and that he had authority to sell it for $15,000. When Mr. Stebbins repudiated that letter and contended that he had no authority, he became personally hable to the plaintiff.
The judgment dismissing the complaint in so far as it affects the second cause of action should be reversed, with costs, and judgment entered in favor of the plaintiff against the defendant Stebbins upon said cause of action, with costs; and in other respects the judgment should be affirmed, with costs to the defendants other than the defendant Stebbins against the plaintiff.
Judgment affirmed, with costs.