Court Opinion

ID: 3620473
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:02:23.743752+00
Date Added: 2024-06-11T13:46:39.968532
License: Public Domain

The defendant Lorber on August 19, 1938 entered into a written contract with the defendant Dry Dock Savings Institution for the purchase of an apartment house owned by the bank. The purchase price was $480,000. The plaintiff is a real estate broker who had been authorized by *Page 307 
the owner to offer the property for sale. He did offer the property to Lorber, but concededly Lorber never authorized him to carry to the seller an offer to buy the property. The contract of sale recites that Geller Realty Associates are the brokers who brought about the sale. The usual brokerage commissions payable upon the sale of an apartment house for $480,000 would be $8,200, and the defendant savings institution paid that amount by check dated September 10, 1938, payable to Geller Realty Associates. The check was immediately endorsed by the brokers to the order of Lorber, the buyer, and the net amount which Geller Realty Associates actually received for any services they may have rendered in connection with the sale of the real property was $1,200. The plaintiff, claiming that he had been employed by the seller to procure a purchaser for the property; that he had induced the defendant Lorber to purchase the property upon terms which the seller was willing to accept, and that the defendants — buyer and seller — had conspired "to deprive this plaintiff of the commissions which would become due to him," brought this action to recover the amount of such commissions. The plaintiff can establish his cause of action only by proof that the defendants have wrongfully conspired to deprive him of commissions which would otherwise have become due to him.
Upon the trial of the action the jury found a verdict in favor of the plaintiff for the amount of the commissions he claimed and judgment was entered upon that verdict. By the verdict of the jury all disputed questions of fact were resolved in favor of the plaintiff, and upon the appeal to this court the plaintiff is entitled to the most favorable inferences which can be drawn from the evidence.
I shall state as briefly as I can the facts thus established in plaintiff's favor. In September, 1937, the defendant bank employed the plaintiff as broker and agreed to pay the plaintiff the usual brokerage commissions if plaintiff brought to it an acceptable offer to purchase its property. In May, 1938, the plaintiff called the property to the attention of the defendant Lorber. Plaintiff sought to bring about a meeting of the minds of the seller and prospective buyer. The prospective buyer said that he was satisfied with the terms which the seller had stated it would be willing to accept, but the buyer insisted that he would *Page 308 
not go any further with the proposed purchase unless the broker gave him $7,200 out of the brokerage fee. On the following day the plaintiff informed Mr. Burrucker, the "real estate officer" of the bank, that the defendant Lorber refused to make an offer for the property unless he received almost ninety per cent of the brokerage commissions. A few weeks later Lorber and the bank entered into the contract of purchase and sale upon substantially the terms which Lorber had told the plaintiff were satisfactory to him.
Mr. Burrucker, the real estate officer of the bank, died before the trial of this action. The plaintiff testified: "I told Mr. Burrucker, `Now, Mr. Burrucker, I know of Mr. Lorber and I known of his tricks, how he treats brokers,' and I says `if he ever comes around here to get this property without me, I expect you to protect me in the matter.' Mr. Burrucker said, `I will bear in mind.'" The jury might reasonably conclude from this testimony that Lorber refused to authorize the plaintiff to carry to the defendant bank his offer to buy the property, upon terms satisfactory to the bank, only because the plaintiff refused to pay to Lorber the larger part of the brokerage commission which the plaintiff would receive; that Lorber thereafter arranged that Geller Realty Associates should carry the offer to the bank and should act as ostensible brokers though as brokers they had done nothing to earn the commissions; and finally that the defendant bank paid Geller Realty Associates the usual brokerage commission with knowledge that they were called into the transaction by Lorber to act as ostensible brokers only for the purpose of enabling Lorber to obtain for himself the brokerage commissions which the bank was willing to pay. The jury might perhaps find too that the bank concealed from the plaintiff the fact that through other brokers it had received a satisfactory offer from Lorber. The question remains whether from such premises the ultimate conclusion may be drawn that the parties have joined in a wrongful conspiracy which caused damages to the plaintiff for which they must respond.
The plaintiff could earn the compensation which the defendant bank agreed to pay him only by performing the services required by the agreement and procuring a purchaser for the property placed in brokers' hands for sale. As the trial judge charged, at the time the plaintiff ceased to perform any services as broker, *Page 309 
he had failed to procure such a purchaser; for the defendant Lorber had refused to offer to pay the purchase price demanded unless the broker would agree to reimburse him for part of the purchase price by paying to him the major portion of the brokerage commissions. The amendment of section 442 of the Real Property Law, prohibiting splitting of commissions by a broker with a purchaser, became effective only on April 25, 1941. (L. 1941, ch. 719.) Prior to that time a person negotiating for the purchase of real property might lawfully refuse to proceed with the proposed purchase unless the broker would agree to pay over to him all or part of the brokerage commissions — at least unless the expectant buyer had expressly or impliedly employed the broker to induce the seller to reduce his price and had agreed with the broker that he would pay the price if the broker obtained a reduction. (Cf. Grossman v. Herman, 266 N.Y. 249.) Here the plaintiff has not pleaded a cause of action based upon such an agreement and in his brief the plaintiff expressly disclaims any right to recover upon such theory. Only when the defendant Lorber found real estate brokers willing to agree to pay him seven thousand dollars out of commissions which the brokers might receive was Lorber willing to purchase the property upon terms satisfactory to the seller, and since the plaintiff had failed to bring about a meeting of the minds between the proposed purchaser and the seller, the seller breached no contract with plaintiff by refusing to pay to the plaintiff commissions which plaintiff never earned. It violated no duty owed to the plaintiff by paying commissions to the brokers who brought the seller a satisfactory offer from Lorber and by concealing such payment from the plaintiff. (Clinchy v.Grandview Dairy, Inc., 283 N.Y. 39.) It might have been unable to sell the property if it had acted differently.
We are told, however, that the plaintiff would have earned the commissions if the defendants — buyer and seller — had not conspired to refrain from dealing with the plaintiff and thus to prevent him from earning the commissions. For the purpose of this appeal I assume without further consideration that such an agreement would be an actionable wrong giving rise to liability for any damages resulting from it. The difficulty still remains that the record is devoid of evidence that the defendants, singly or together, refrained from dealing with the plaintiff. *Page 310 
Both desired an agreement for the purchase and sale of the real property upon satisfactory terms, and the price demanded by the seller was satisfactory to the buyer only if he could obtain partial reimbursement from the broker. The seller never offered to reduce his price. Only when a more complaisant broker was found did the minds of buyer and seller meet upon the terms of sale. Since the plaintiff did not bring that about he has no right of action against the parties for reaching an agreement which was satisfactory to the buyer only upon conditions which the plaintiff was unwilling to meet.
The judgments of Special Term and Appellate Division should be reversed with costs in all courts and the complaint dismissed.
RIPPEY, LEWIS and CONWAY, JJ., concur with FINCH, J.; LEHMAN, Ch. J., dissents in opinion in which LOUGHRAN and DESMOND, JJ., concur.
Judgment affirmed. (See 290 N.Y. 855.)