Colvin v. Post Mortg. & Land Co.

• Citation: 225 N.Y. 510,122 N.E. 454
• Court: New York Court of Appeals Court of Appeals
• Decision Date: 25 February 1919
• Parties: COLVIN v. POST MORTGAGE & LAND CO.

225 N.Y. 510

122 N.E. 454

COLVIN

v.POST MORTGAGE & LAND CO.

Court of Appeals of New York.

Feb. 25, 1919.

Appeal from Supreme Court, Appellate Division, First Department.

Action by George A. Colvin against the Post Mortgage & Land Company. From a judgment of the Appellate Division (173 App. Div. 85,159 N. Y. Supp. 361), reversing a judgment entered on a verdict directed by the court in favor of plaintiff, the latter appeals. Reversed.

Cardozo, J., dissenting.

Samuel Seabury and Joseph I. Green, both of New York City, for appellant.

Sol. Cohn, of New York City, for respondent.

ANDREWS, J.

This is an action by a broker to recover his commissions on the sale of real estate concededly brought about by him. His employment by the defendant is also conceded. The dispute is an to whether these commissions are yet due. At the close of the testimony the trial court directed a verdict in the plaintiff's favor for $16,996. The Appellate Division has reversed the judgment subsequently entered and dismissed the complaint.

[1] From the testimony before it the jury might have found that the defendant claimed to own some 16,500 acres of wild land in New Jersey. In 1909 it employed the plaintiff to sell this property for practically $150,000 on a 5 per cent. commission basis. Some negotiations were had but no sale resulted. Finally in 1913, the plaintiff produced a customer whose intentions were more serious. Upon this, it was agreed that if the sale was completed for $150,000 the plaintiff's commissions were to be increased from 5 per cent. to 10 per cent. But the customer, one Tilney, evidently was not prepared to pay the $150,000 in cash or upon the terms usual in cases of such sales. Therefore, the defendant might have rejected his offer, and if it had done so it would be under no liability to the plaintiff. Ordinarily, to earn his commissions, a broker must accomplish what he undertook to do in his contract of employment. Yet, even failing to do so, if he produces a buyer with whom the owner is satisfied and who contracts with the owner at a price and upon terms satisfactory to the latter, the broker is entitled to compensation. Sibbald v. Bethlehem Iron Co., 83 N. Y. 378, 38 Am. Rep. 441;Gilder v. Davis, 137 N. Y. 504, 33 N. E. 599,20 L. R. A. 398.

[2] The measure of this compensation under such a contract as the one before us we need not determine; the parties have reached an agreement upon it. After negotiations between the defendant and Mr. Tilney, possibly after they had substantially reached an understanding but before any binding contract was made, a contract was executed between the plaintiff and the defendant. After reciting that the former had negotiated a sale to Mr. Tilney for $150,000, it was agreed that Mr. Colvin's commissions should be 10 per cent. of the purchase price ‘payable pro rata from each installment of the purchase price as and when the same is received’ by the defendant; the final installment to be due when the final cash payment and a bond and mortgage securing the balance is turned over. No commission is earned, however, until Mr. Tilney has signed a contract of sale, and, if for any cause he terminates this contract, the plaintiff's right to further commissions terminates also.

In his complaint the plaintiff alleges that such contract was without consideration. This the defendant denies. It is right. Each party surrendered something. Mr. Colvin postponed the payment of his commissions and abandoned them entirely or partly in certain contingencies. The defendant surrendered the claim that the contract under which the broker was entitled to 10 per cent. had never been fulfilled, and that, therefore, at most he could recover but the reasonable value of his services, and in reliance upon this agreement as plaintiff intended it should do entered into a contract of sale which the plaintiff must have understood contemplated payments in installments, and one which, therefore, might never actually be carried out.

The next day the defendant and Tilney entered into a contract of sale. The price was $150,000. Sixty thousand dollars was to be paid in cash installments extending from the date of the contract to January 1, 1916, when a purchase-money mortgage for $90,000 was to be given. As installments were paid, parts of the property were to be conveyed to the purchaser. An allowance was to be made for the failure of title to an unimportant portion of the tract; but, if a New Jersey trust company reported a substantial failure of title, the agreement was to be canceled. At any time after Mr. Tilney had paid $4,000 he might terminate the contract keeping the land already conveyed to him but forfeiting what he had apid, or he might assign it and thereby relieve himself from further personal liability. He was also to furnish the defendant such surveys as were necessary to carry out the contract, this clause having reference apparently to the delimitations of the plots to be conveyed to him as the installments were paid.

On the execution of this contract, Mr. Tilney paid $1,000. Of this the plaintiff received 10 per cent. No further payments have been made. Mr. Tilney has never terminated the contract. Indeed, he seems to have been anxious to complete it, and the defendant insists it is still pending. The difficulty seems to have been that there was a cloud upon the title of a substantial part of the property, which the defendant has been seeking to remedy, so far unsuccessfully, although it claims that the delay was caused by the failure of Mr. Tilney to obtain and examine the search. There is some evidence to support this contention. Whatever the cause, extensions of time within which to complete have been given from time to time. Of these the plaintiff had no knowledge and he never consented to them. In fact, he testified that he was refused all information as to the contents of the contract of asle itself.

[3] The contract we are called upon to construe is that between the plaintiff and the defendant. The contract of sale is material only so far as it is referred to therein expressly or by inference and in so far as it assists in such construction. Peculiar provisions, inserted in it without Mr. Colvin's knowledge or consent, are unimportant in view of the circumstances disclosed here.

Ordinarily, when the seller has accepted...