Axilbund v. McAllister

• Decision Date: 13 March 1962
• Citation: 407 Pa. 46,180 A.2d 244
• Parties: Jacob H. AXILBUND, Arthur Balsam, Lester H. Krawitz and George M. Axilbund, individually and trading as Lanard & Axilbund, Appellants, v. D. Edward McALLISTER and 917 Filbert Street Corp.
• Court: Pennsylvania Supreme Court

Page 244

180 A.2d 244

407 Pa. 46

Jacob H. AXILBUND, Arthur Balsam, Lester H. Krawitz and George M. Axilbund, individually and trading as Lanard & Axilbund, Appellants, v. D. Edward McALLISTER and 917 Filbert Street Corp.

Supreme Court of Pennsylvania.

March 13, 1962.

Rehearing Denied May 3, 1962.

Allen J. Levin, Folz, Bard, Kamsler, Goodis & Greenfield, Philadelphia, for appellants.

George P. Williams, III, Schnader, Harrison, Segal & Lewis, Philadelphia, for appellees.

Before BELL, C. J., and JONES, COHEN, EAGEN, and ALPERN, JJ.

JONES, Justice.

This appeal challenges the propriety of the entry by the court below of a judgment n. o. v. in an assumpsit action instituted for the recovery of a real estate broker's commission.

Lanard & Axilbund ¹ [Axilbund] is a partnership engaged in the real estate business in Philadelphia. 917 Filbert Street Corporation [Filbert], of which D. Edward McAllister was the president and principal stockholder, was the owner of a building located at 24th and Locust Streets, Philadelphia. On September 24, 1957, Filbert sold that building to one Julius Gross for $295,000.

Axilbund then instituted this assumpsit action against McAllister ² and Filbert in the Court of Common Pleas No. 7 of Philadelphia County claiming that its efforts as real estate brokers constituted the immediate, efficient and procuring cause of the sale of the building to Gross by Filbert and, by reason thereof, it became entitled to a real estate broker's commission. After issue joined, the matter was tried before Judge Chudoff and a jury and the jury returned a verdict in favor of Axilbund and against Filbert in the amount of $17,644.00. ³ Filbert filed motions for a new trial ⁴ and judgment n. o. v. and the court granted the motion for judgment n. o. v. From the entry of that judgment this appeal has been taken.

In passing upon the propriety of the entry of this judgment n. o. v. 'the testimony must be read in the light most favorable to [Axilbund], all conflicts therein must be resolved in his favor, and [it] must be given the benefit of all facts and inferences from facts reasonably deducible from the evidence'. Kuhns v. Brugger, 390 Pa. 331, 335, 135 A.2d 395, 398, 68 A.L.R.2d 761 and cases therein cited.

In such light we examine the record facts. Prior to May, 1957, Axilbund had dealt with Filbert, having on one occasion represented the seller of a property which Filbert purchased and on another occasion rented some building space for Filbert. It is undisputed that, in the early part of May, 1957, Jacob Axilbund, at McAllister's invitation, met with McAllister to discuss the sale of the Filbert building and, at that meeting, Jacob Axilbund tried, without success, to secure from Filbert for Axilbund an exclusive sales agency for the building. Finally, as appears from a stipulation entered into at trial, McAllister, acting for Filbert, informed Axilbund that 'if they produced a purchaser for the premises for $300,000 net, ⁵ the usual brokerage commission would be paid.' At that meeting Jacob Axilbund told McAllister that Axilbund had a client named Julius Gross whom, he believed, could use the building and he said he would arrange to have Gross inspect the building.

At that time Axilbund, which two months previously had sold a property for Julius Gross, ⁶ was looking for a building suitable for purchase by Gross and to which he could move his printing establishment. Upon Jacob Axilbund's return from this meeting with McAllister, he informed his partner Balsam of the availability for purchase of the Filbert building and Balsam then contacted Gross. From that time on Jacob Axilbund had only three contacts with Filbert: (1) that same day to arrange for an inspection of the building; (2) several days later to inquire whether a parking lot in the rear of the Filbert building belonged to Filbert; (3) in the latter part of September or the early part of October, after learning of the sale to Gross, Jacob Axilbund visited McAllister, stating 'you sold that building to my customer and therefore I am entitled to my commission' to which McAllister replied 'I don't know anything about that. All I know is that Mr. Gross came to see me about this building.'

Balsam testified that, after being informed of the availability for purchase of the Filbert building, he contacted Gross by phone and arranged to meet him the next day and take him through the Filbert building. Balsam, George Axilbund and Gross the next day inspected the building during the course of that inspection, there was a discussion whether the height of the ceiling would preclude the use of Gross' heavy printing presses and whether this difficulty could be overcome by digging into the ground, the availability of a railroad siding and the ownership of the adjoining parking lot. Balsam at that time informed Gross that the purchase price would $315,000. ⁷ Gross said he would discuss the matter with his son and son-in-law. From that time on Balsam, although he did not see Gross, called him eight or nine times on the telephone between May and October, 1957. In the early conversations Gross told Balsam that his son and son-in-law were too busy at that time to look at the property but, on or about June 1, 1957, Gross told Balsam that he was not interested in the Filbert building and wanted a one-story building or a piece of vacant land. However, even after that, Balsam continued to call Gross.

The parties stipulated that Julius Gross, for the Julius Gross Investment Corporation, without Axilbund's knowledge, purchased the building from Filbert, directly and without the intervention of any broker, for $295,000.

Filbert's defense is two-fold: (1) that Axilbund did not procure the sale of the property but that the sale was induced by a direct contact between Gross and Filbert; (2) that, if there was any contract between Axilbund and Filbert (which the latter denies), the contract was a 'special contract', i. e. that Axilbund was retained by Filbert on a non-exclusive basis to sell the Filbert building for not less than $300,000 net, and, inasmuch as the building was ultimately sold for the gross price of $295,000, it is legally immaterial whether Axilbund did procure the sale because Axilbund had not performed its part of the contract.

In support of its defense, Filbert called several witnesses. William A. Corry, inside production man for Progressive Composition Company with which 'Gross' printing concern did business, testified that, in the late spring of 1957, Milton Gross, Julius Gross' son, came to see him concerning a typortional camera; while taking Milton Gross to see this camera which was on another floor of the building in which Corry worked, they passed a scale model of the Filbert building. After examining the model and questioning Corry who was familiar with the Filbert building, Milton Gross said that 'it would be an ideal building for their company' to which Corry replied that his company had 'first choice on it'. In the latter part of July or August, 1957 when Milton Gross came to see Corry in connection with another matter, the latter told him that his company was not going to take the Filbert building.

Milton Gross, corroborating Corry's testimony as to the time and circumstances when he learned of the Filbert building and its availability for purchase, stated that, while on his way to work following his conversation with Corry, he stopped to look at the building but could not get in. At Corry's suggestion, he contacted Robert McAllister and made arrangements for his father and himself to inspect the building. After their inspection of the building, Gross and Milton Gross met with the McAllisters at their office, told them they were interested in the building and ascertained the asking price was $300,000. Two days later an agreement was made by Gross with McAllister to purchase the building for $295,000.

Julius Gross corroborated Milton Gross' testimony as to when and how he learned of the availability for purchase of the building. He testified that he did not 'recollect' going with Balsam and George Axilbund to inspect the property, that Balsam gave him no price for the building, that as of June 1, 1957 he did not know of the availability of the building for purchase, that Balsam did not call him on the telephone about this building and that he had no dealings with anybody concerning this building, except with the McAllisters. He further stated that Axilbund did nothing to persuade him to buy this building and that it was Milton Gross who interested him in its purchase.

While we have recited in some detail the defense testimony, it is evident that the jury credited Axilbund's testimony rather than that of Filbert and the jury verdict resolves for us the facts arising by way of implication from that verdict.

The leading case ⁸ on the subject of real estate brokers' commission is Keys v. Johnson, 68 Pa. 42, 43, 44, written 91 years ago by Justice (later Chief Justice) Sharswood. In Keys it was said: 'Brokers are persons whose business it is to bring buyer and seller together. They need have nothing to do with the negotiation of the bargain: [citing a case]. A broker becomes entitled to his commission whenever he procures for his principal a party with whom he is satisfied, and who actually contracts for the purchase of the property at a price acceptable to the owner: [citing a case]. He must establish his employment as broker, either by previous authority, or by the acceptance of his agency and the adoption of his acts, and also must prove that his agency was the procuring cause of the sale; and when, being duly authorized to sell property at private sale, he has commenced a negotiation with a purchaser, the owner cannot, while such negotiation is pending, take it into his own hands and complete it either at or below the price first limited and then refuse to pay the commissions: Chilton v. Butler, 1 E.D.Smith 150. 'If...