George H. Beckmann, Inc. v. (Zinke's) Rainbow's End, Inc.

• Decision Date: 08 May 1956
• Docket Number: No. A--206,A--206
• Citation: 40 N.J.Super. 193,122 A.2d 519
• Parties: GEORGE H. BECKMANN, Inc., Plaintiff-Appellant, v. (ZINKE'S) RAINBOW'S END, Inc., and Kerwin Von Hoff and Fred T. Porter, Defendants-Respondents. . Appellate Division
• Court: New Jersey Superior Court — Appellate Division

Page 193

40 N.J.Super. 193

122 A.2d 519

GEORGE H. BECKMANN, Inc., Plaintiff-Appellant, v. (ZINKE'S) RAINBOW'S END, Inc., and Kerwin Von Hoff and Fred T. Porter, Defendants-Respondents.

No. A--206.

Superior Court of New Jersey Appellate Division.

Argued April 30, 1956.

Decided May 8, 1956.

Warren Dixon, Jr., Hackensack, argued the cause for appellant.

George F. Losche, Hackensack, argued the cause for respondents (Francis L. Boyle, Closter, attorney).

Before Judges CLAPP, JAYNE and FRANCIS.

The opinion of the court was delivered by

JAYNE, J.A.D.

The fundamental rules and principles of law relative to a broker's right, if any, to commissions are so firmly established in our jurisprudence that the controversial issues of modern litigation in that field ordinarily concern the application of the acknowledged law to the facts of the particular case.

It is the basic legal rule that in the absence of some qualifying or oppugnant expression in the contract of employment, a broker who is duly engaged earns his commission when he procures for the owner a purchaser ready, able, and willing to comply with the terms specified in the authority thus conferred, or with other or different terms which, however, are satisfactory to the owner. Marschalk v. Weber, 11 N.J.Super. 16, 21, 77 A.2d 505 (App.Div. 1950), certification denied 6 N.J. 569, 80 A.2d 146 (1951); Alnor Construction Co. v. Herchet, 10 N.J. 246, 253, 90 A.2d 14 (1952); Todiss v. Garruto, 34 N.J.Super. 333, 112 A.2d 285 (App.Div.1955), certification denied 18 N.J. 549, 114 A.2d 796 (1955), in all of which citations of the earlier decisions appear.

It must be recognized that the services of a broker merit compensation where he secures a buyer not necessarily on the terms originally propounded by the seller, but on terms ultimately settled by agreement between the seller and buyer. Steinberg v. Mindlin, 96 N.J.L. 206, 114 A. 451 (E. & A.1921); Houston v. Siebert, 129 N.J.L. 468, 30 A.2d 35 (E. & A.1943) ; Weinstein v. Weinstein, 10 N.J.Super. 68, 76 A.2d 532 (App.Div.1950).

It is also to be realized that in the present action we are interested in two contractual obligations, the executed contract of sale between the vendor and vendee, and the agreement between the vendor and the broker.

Of the several terms and provisions of the April 26, 1954 contract of sale of the corporate defendant's restaurant and bar together with the parcel of real estate on which it was conducted at the corner of Tappan Road and Blanche Avenue, Norwood, Bergen County, for the purchase price of $60,000, the following is of present pertinency:

'Subject to * * * purchaser's accountant verifying a gross business of $70,000 for the year 1953.'

Following the conclusion of the contract of sale is the brokerage agreement, to which Von Hoff, the president, and Porter, the secretary of the corporate seller, subscribed their signatures. It reads:

'We agree to sell the above mentioned property at the above mentioned price and terms and agree to pay Geo. H. Beckmann, Inc., a commission of 7 1/2% Of the selling price.'

Upon an examination of the seller's business accounts the disclosure eventuated that the gross business for the year 1953 did not exceed $53,000, hence the purchaser declined to consummate the sale and the seller refused to pay the broker's commission.

The broker, the plaintiff herein, prosecuted the present action to recover its commission from the corporate seller, or in the alternative from the two individuals who personally signed the brokerage agreement without patently indicating that they did so as officers of the corporate owner, all the capital stock of which was owned by them and their respective wives.

The trial judge sitting without a jury concluded that the specification of the gross business during the year 1953, to the verification of which the contract of sale was subject, constituted a condition of the contract of sale, and the plaintiff broker 'having then procured a conditional purchaser, he could not become entitled to the commission until the condition of sale had been met.' A judgment was rendered in favor of the defendants, from which the plaintiff appeals.

There is no doubt that a broker may, by a special agreement, conditionally make his compensation entirely dependent on a contingency. Hinds v. Henry, 36 N.J.L. 328 (Sup.Ct.1873); Richard v. Falleti, 13 N.J.Super. 534, 81 A.2d 17 (App.Div.1951); Todiss v. Garruto, supra. In that manner the broker's client can legally modify his obligation.

Not uncommon exemplifications of such special engagements are those brokerage agreements in which the accrual of the commission is expressly made contingent upon the actual fulfillment of the contract of sale. Illustrative expressions are 'we shall be liable only in the event of passing of title' (Murray Apfelbaum, Inc., v. Topf, 104 N.J.L. 343, 140 A. 295, 296, 56 A.L.R. 910 (E. & A.1928)); 'said commission to become Due * * * upon closing title' (Lippincott v. Content, 123 N.J.L. 277, 8 A.2d 362 (E. & A.1939)); 'which commission * * * shall be payable if, as and when title actually closes and not otherwise' (Alexander Summer Co. v. Weil, 16 N.J.Super. 94, 83 A.2d 787, 788 (App.Div.1951)); 'this commission is contingent upon the transaction being consummated and in the event that said transaction is not consummated then and in that event no commission shall be payable to said brokers' (Todiss v. Garruto, supra) (34 N.J.Super. 333, 112 A.2d 286).

Initially it is to be observed that no expression or signification whatever is embodied in the instant brokerage agreement itself indicative of an intent to render the obligation to pay the commission contingent upon the complete consummation of the sale.

The existing state of the evidence also promotes the deduction that had the contemplated verification of the gross business ensued, the purchaser was ready, able, and willing to perform his contractual obligations.

Indeed, within the area of controversy at the trial the only implicated contingency of a future complexion affecting the completion of the sale was the reserved opportunity of the buyer to Verify the accuracy of information then particularly if not exclusively within the seller's knowledge.

The trial judge announced his persuasion that no legitimate inference could be logically derived from 'the form and wording of the conditional clause of the contract' of sale indicating that the officers of the seller represented the gross business of the restaurant and bar to have been $70,000 during the year 1953. We do not concur in that conviction.

Our conclusion is that the evidence, uncontroverted and undiversified at the trial, generated the logically permissible inference that the seller at least impliedly represented that the operations of the restaurant and bar had As an already demonstrated fact attracted a gross business of $70,000 during the previous year of 1953. Thus, in consequence and in ultimate resultant effect, the seller had engaged the plaintiff to procure a purchaser of the premises and of the business thereon of that volume. The plaintiff did so. Cf. Kruse v. Ferber, 91 N.J.L. 470, 103 A. 409 (Sup.Ct.1918); Klipper v. Schlossberg, 96 N.J.L. 397, 115 A. 345 (Sup.Ct.1921). Coleridge remarked that 'veracity does not consist in saying but in the intention to communicate truth.'

The failure of the actual sale seems so far as appears from the evidence received to have been attributable to the seller's exaggeration. Contrast, Cohen v. Scola, 13 N.J.Super. 472, 80 A.2d 643 (App.Div.1951).

Even where the principle relative to a special contingent brokerage agreement enunciated in Hinds v. Henry, supra, and in succeeding concordant decisions is applicable, the principle is not permitted to be utilized by a vendor unjustly to escape liability to the broker where, in consequence of the false and deceptive representation of the vendor, the truth or falsity of which is unknown to the broker, the consummation of the contract of sale is frustrated. Vide, ...