Geo. H. Beckmann, Inc. v. Charles H. Reid & Sons, Inc.

• Decision Date: 08 March 1957
• Docket Number: No. A--758,A--758
• Citation: 44 N.J.Super. 159,130 A.2d 48
• Parties: GEO. H. BECKMANN, Inc., a corporation of the State of New Jersey, Plaintiff-Appellant, v. CHARLES H. REID & SONS, Inc., a corporation of the State of New Jersey, Defendant, and Thomas E. Gill and Eileen A. Gill, his wife, Defendants-Respondents. . Appellate Division
• Court: New Jersey Superior Court — Appellate Division

Page 159

44 N.J.Super. 159

130 A.2d 48

GEO. H. BECKMANN, Inc., a corporation of the State of New Jersey, Plaintiff-Appellant, v. CHARLES H. REID & SONS, Inc., a corporation of the State of New Jersey, Defendant and Thomas E. Gill and Eileen A. Gill, his wife, Defendants-Respondents.

No. A--758.

Superior Court of New Jersey Appellate Division.

Argued Feb. 18, 1957.

Decided March 8, 1957.

Thomas S. O'Brien, Ridgewood, argued the cause for plaintiff-appellant (Greene & O'Brien, Ridgewood, attorneys).

David M. Beckerman, Newark, argued the cause for defendants-respondents Thomas E. Gill and Eileen A. Gill, his wife (Sanford Silverman, Newark, attorney).

Before Judges CLAPP, JAYNE and FRANCIS.

The opinion of the Court was delivered by

CLAPP, S.J.A.D.

This action, so far as we need deal with it, was brought in a county district court by the plaintiff, a real estate broker, against the defendants Thomas E. Gill and Eileen A. Gill, his wife, the purchasers of a certain house and lot, which they bought directly from Charles H. Reid & Sons, Inc., the owner. The theory of the action is that the Gills deliberately induced the owner to believe that no broker was involved in the matter. The case was tried without a jury, and judgment was rendered in favor of the Gills. Plaintiff appeals.

In February or March 1954 Reid orally authorized the plaintiff to act as its broker in the sale of the property; besides it listed the property with other brokers and also reserved to itself the right to sell. In the course of its business plaintiff showed the premises to a number of prospective purchasers and on at least two occasions secured a deposit from a purchaser. To Gill it showed the property several times. In August or September 1954 the Gills gave plaintiff a deposit of $100 and signed a short form binder containing an agreement on their part to buy the place for $14,500, and also a statement fixing plaintiff's commission at 5%. Later the Gills induced the plaintiff to refund the $100 and destroy the binder, probably because they could not raise the necessary funds. A month later and (Gill denies this) possibly also in the Christmas holidays, plaintiff showed the Gills the house again. In early 1955 Reid posted a sign on the premises bearing Reid's name and telephone number and stating that the property was for sale. On February 28, 1955 Gill went back (as he admits) For the purpose of looking at the house (incidentally passing plaintiff's office on the way) and, seeing the sign, called Mrs. Reid directly, making an oppointment to inspect the place. In March 1955 the Gills entered into an agreement with Reid for the purchase of the property for $13,750.

Gill testified that he asked Reid on two occasions whether plaintiff was still concerned with the sale of the property and that Reid's answer was 'no.' He also testified that he felt that due to the interval existing between the time he last contacted the plaintiff and the time he first saw the house with the Reids, plaintiff had no right to commissions. The court itself then interposed, asking him why, if that was his feeling, had he asked Reid whether plaintiff had any interest in the matter. Contradictorily Gill replied that he was 'not that dumb'; he knew plaintiff would be entitled to a commission in view of the fact that it first showed him the house.

Opposed to these claims of Gill that he inquired of Reid whether plaintiff had an interest in the matter, is the story of Mr. and Mrs. Reid, who were called by plaintiff on rebuttal (they were not parties, and the case had by then been dismissed as against the Reid corporation on the corporation's motion). The Reids testified that Gill never in any of his dealings referred to the plaintiff. Moreover Mrs. Reid said that when the Gills were shown the house by the Reids on March 1, 1955, they acted as though they were seeing it for the first time. We believe the Reids' version of the matter, largely because of a subsequent incident. On the day title closed in July 1955 plaintiff first learned of the transaction and forthwith made a claim for commissions. Reid's attorney then questioned Gill, asking him if he (Gill) had ever told Reid that it was the plaintiff who originally had shown him the house. Gill, when on the stand, testified in effect that to that question he answered 'yes.' However, the attorney, called by the plaintiff on rebuttal, contradicted him, saying that Gill then professed that plaintiff had not shown him the house originally. Gill, in giving his testimony, apparently falsified an important part of his story.

We think it probable, therefore, that the Gills, knowing plaintiff's interests in the matter, and in order to obtain a reduction in the price of the property, purposely took steps to prevent plaintiff from securing a commission. This constitutes a tort. The leading case in the state dealing with the subject is Louis Kamm, Inc., v. Flink, 113 N.J.L. 582, 175 A. 62, 99 A.L.R. 1 (E. & A.1934). Further see McCue v. Deppert, 21 N.J.Super. 591, 91 A.2d 503 (App.Div.1952), and cases cited. It is to be noted that Gill himself arranged with Mrs. Reid for the inspection of the premises; that Gill and his wife looked through the house in the company of the Reids, and later he and his father called on Reid; and that the Gills by their own conduct--that is, by all these goings on, without the intervention in any way of a broker--definitely made it appear that they had found their way to the property without the aid of a broker. In addition to that, it is set forth in the record that when the Reids showed them the house, they 'acted' as though they were seeing it for the first time; however, since we do not know precisely what actions justify this conclusory statement, we shall attach no weight to it. In any event it appears that the Gill's own conduct in these transactions induced the owner to believe that no broker was involved in the deal.

The parties' briefs agree upon one point, namely, that the Gills are not relieved of liability merely because plaintiff's authority was oral and its claim to commissions is therefore unenforceable as against the owner. N.J.S.A. 25:1--9. The authorities almost unanimously hold that the statute of frauds was enacted for the benefit of a party to the transaction and is not available to strangers who tortiously interfere with contractual or advantageous relations created by the transaction. Louis Kamm, Inc., v. Flink, 113 N.J.L. 582, 591, 175 A. 62, 99 A.L.R. 1 (E. & A. 1934); Louis Schlesinger v. Rice, 4 N.J. 169, 180, 72 A.2d 197 (1950); Weinstein v. Clementsen, 20 N.J.Super. 367, 371, 90 A.2d 77 (App.Div.1952); McCue v. Deppert, 21 N.J.Super. 591, 596, 91 A.2d 503 (App.Div.1952); cf. Louis Schlesinger Co. v. Wilson, 22 N.J. 576, 585, 127 A.2d 13 (1956); cf. also Aalfo Co. v. Kinney, 105 N.J.L. 345, 347, 144 A. 715 (E. & A.1929); contra C. B. Snyder Realty Co. v. National Newark, & Essex Banking Co., 14 N.J. 146, 164--165, 101 A.2d 544 (1953). For cases in other jurisdictions, Jackson v. Stanfield, 137 Ind. 592, 36 N.E. 345, rehearing denied, 37 N.E. 14, 15, 23 A.L.R. 588 (Sup.Ct.1894); Vaught v. Jonathan L. Pettyjohn & Co., 104 Kan. 174, 178 P. 623, 624 (Sup.Ct.1919); Cumberland Glass Mfg. Co. v. DeWitt, 120 Md. 381, 87 A. 927, 930 (Ct.App.1913), affirmed 237 U.S. 447, 35 S.Ct. 636, 59 L.Ed. 1042 (1914); Royal Realty Co. v. Levin, 244 Minn. 288, 69 N.W.2d 667 (Sup.Ct.1955); Nokol Co. of Missouri v. Becker, 318 Mo. 292, 300 S.W. 1108, 1119 (Sup.Ct.1927); Rice v. Manley, 66 N.Y. 82, 84 (Ct.App.1876); Childress v. Abeles, 240 N.C. 667, 84 S.E.2d 176, 185 (Sup.Ct.1954); Leibovitz v. Central Nat. Bank, 75 Ohio App. 25, 60 N.E.2d 727, 729 (Ct.App.1944); Ringler v. Ruby, 117 Or. 455, 244 P. 509, 510, 46 A.L.R. 245 (Sup.Ct.1926); Duckett v. Pool, 33 S.C. 238, 11 S.E. 689, 690 (Sup.Ct.1890); Bitzke v. Folger, 231 Wis. 513, 286 N.W. 36, 40 (Sup.Ct.1939); Restatement, Contracts, § 218, Illust. 1; Restatement, Torts, § 766c; 2 Corbin, Contracts, § 289 (1950); 2 Williston, Contracts (rev.ed.1936), § 530. As stated in Prosser, Torts (2d ed.), 726, speaking of the tort we are now dealing with,

the law 'indulges in the assumption that even unenforceable promises will be carried out if no third person interferes. Accordingly, it usually is held that contracts which are voidable by reason of the statute of frauds, formal defects, lack of consideration, lack of mutuality, or even uncertainty of terms, still afford a basis for a tort action when the defendant interferes with their performance.'

1 Harper and James, Torts, § 6.7 (1956) observes:

'* * * it would seem that the rule (imposing liability on the tortfeasor) is the sound view. The object and policy of the law of contracts in denying an action on a contract within the provisions of the statute of frauds, obviously has little application to an action for inducing a breach, and the defendant's conduct, if unjustifiable in a case of an enforceable contract, is quite as reprehensible when the contract is unenforceable.'

We turn next to one of the Gills' principal contentions. They claim that since the complaint charges them with having interfered with a 'contractual relationship' between plaintiff and Reid, they cannot be held in this action, because the plaintiff at the trial sought to establish that they interfered with a Prospective contractual relationship between the persons stated. It is quite true, as the Gills say, that the listing of the property with the plaintiff, under the circumstances presented here, amounted merely to an offer by the owner to pay the plaintiff a commission if the plaintiff produced a purchaser able and willing to buy. When the broker produces the purchaser, a unilateral contract arises. Skene v. Carayanis, 103 Conn. 708, 131 A. 497, 498 (Sup.Ct.Err.1926); Mechem, Outline of Agency (4th ed. 1952), § 560; cf. 2 Mechem, Agency (2d ed.), 2039. There is however nothing to the Gills' contention...