Louis Schlesinger Co. v. Wilson, No. A--34

• Court: United States State Supreme Court (New Jersey)
• Writing for the Court: BURLING
• Citation: 127 A.2d 13,22 N.J. 576
• Parties: LOUIS SCHLESINGER COMPANY, a New Jersey corporation, Plaintiff-Appellant, v. William H. WILSON, Defendant-Respondent.
• Docket Number: No. A--34
• Decision Date: 19 November 1956

Page 576

22 N.J. 576 127 A.2d 13 LOUIS SCHLESINGER COMPANY, a New Jersey corporation,
Plaintiff-Appellant,
v.
William H. WILSON, Defendant-Respondent. No. A--34. Supreme Court of New Jersey. Argued Oct. 15, 1956.
Decided Nov. 19, 1956.

Page 578

[127 A.2d 14] Alan V. Lowenstein, Newark, argued the cause for plaintiff-appellant (Lowenstein, Del Tufo & Callahan, Newark, attorneys; Howard T. Rosen, Newark, on the brief).

Charles L. Bertini, Wood Ridge, argued the cause for defendant-respondent (Robert K. Hartmann, Hasbrouck Heights, on the brief).

The opinion of the court was delivered by

BURLING, J.

In 1953 defendant Wilson posted a sign on a 60-acre tract of land in Wayne Township, New Jersey, indicating a desire to sell the same. He and his wife owned the land by the entireties. Roger Williams, a salesman

Page 579

employee of the plaintiff corporation (dealing in real estate brokerage) was attracted by the selling opportunity and with Wilson's consent showed the property to several prospects between September 1953 and December of 1954. It was not until the latter month that the parties entered into an agreement whereby plaintiff undertook to procure a purchaser for the land. The resultant accord was entirely oral and it is agreed that Wilson promised to pay plaintiff 10% Of the purchase price as a commission if its efforts were successful.

Unknown to plaintiff or its employee Williams was the fact that Wilson on November 30, 1954 had granted an option of purchase on the same property to Raymond Builders. Nevertheless, Wilson saw fit to withhold this information when the oral agreement was made and in fact subsequently[127 A.2d 15] represented to plaintiff that it was within his power to consummate a sale of the 60-acre tract. It was not until January 6, 1955, when plaintiff had produced a purchaser and the parties had, according to the special jury verdict herein, agreed upon the terms of purchase and sale, that plaintiff and the purchaser were informed of the outstanding option. Only a few days before Wilson, through his attorney, sought to extinguish the option by returning the sum paid to the optionee on the ground that the property was not owned by Wilson's corporation which had granted the option but by Wilson and his wife individually, and the latter had indicated her unwillingness to convey her interest.

Considerable disappointment pervaded the atmosphere when this revelation was disclosed after the purchaser and Wilson had agreed to the purchase terms. Plaintiff advised Wilson that its agreement had been fulfilled and demanded a $7,200 commission. (The agreed purchase price was $72,000.) This was refused and suit initiated.

The complaint was in two counts, the first seeking recovery upon the basis of an oral contract and the second sounding in tort for deceit. The parties reached a remarkable degree of accord in the pretrial order by stipulating not only the oral agreement but also the amount of damages,

Page 580

if any, at $7,200. At the close of plaintiff's case the defendant moved to dismiss the first count because the agreement was not in writing, and the second, evidently, for a failure of proof. The trial court granted the motion as to the deceit count but withheld action on the first count. Defendant then made his presentation and himself supplied and deficiency in the evidence on the second count. On cross-examination Wilson stated:

'Q. I show you that same deposition and point to a portion of your testimony and ask you now did you state to a representative of Louis Schlesinger Company that it was within your power to consummate a sale of that sixty-acre tract in Wayne Township if terms and conditions agreeable to you were arrived at? A. Yes.

'Q. When did you say that? A. I said that during the conference and I also said it in negotiations prior to the conference on January 6.

'Q. You said it to Mr. Williams? A. Yes.

'Q. And at the time you said it to Mr. Williams prior to the conference was the purported option in favor of Raymond Builders then outstanding? A. Yes.'

A motion to reinstate the second count was denied; special interrogatories were submitted to the jury which found specifically that Wilson had agreed to the offer and terms made by the purchaser. The trial court then granted defendant's motion to dismiss the first count because R.S. 25:1--9, N.J.S.A., pertaining to brokerage commissions had not been fulfilled. The appeal was brought before this court by our certification prior to a review by the Superior Court, Appellate Division.

Three questions are presented:

1--Was the agreement required to be in writing under R.S. 25:1--9, N.J.S.A.?

2--If so, does the alleged fraud of defendant remove the bar of the statute?

3--Was it error to dismiss the second count of the complaint?

R.S. 25:1--9, N.J.S.A., provides, Inter alia:

'Except as herein otherwise provided, no broker or real estate agent selling on exchanging real estate For or on account of the owner shall be entitled to any commission for such sale or exchange, unless his authority therefor is in writing, signed by the owner or his authorized agent * * *.' (Emphasis supplied.)

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[127 A.2d 16] Plaintiff argues that Wilson is not 'the owner' within the statutory meaning, and therefore the agreement need not be in writing to entitle it to a commission. The reasoning is that Wilson is a tenant by the entirety and that although husband and wife together would be 'the owner,' neither can assert that status individually. There is support for and against this proposition in our case law--a conflict which should be resolved.

This statute was originally enacted as chapter 215 of the Pamphlet Laws of 1873 (p. 50). It was not part of the English Statute for the Prevention of Frauds and Perjuries passed in 1677 as 29 Chas. II (see R.S. 25:1--5, N.J.S.A.) but represents an extension of the underlying doctrine of that statute to the field of real estate commissions. 2 Corbin on Contracts (1950), sec. 295, p. 77; 12 C.J.S., Brokers, § 62, a, p. 140; cf. Conklin v. Kruger, 79 N.J.L. 326, 75 A. 436 (Sup.Ct.1910). The statute has been twice amended (L.1911, c. 331; L.1918, c. 273), both times to relieve the statute of a decided harshness toward real estate agents. The first amendment permitted recovery of commission where a written agreement was executed either before or after sale of the property. The second amendment incorporated a five-day notice provision whereby the agent or broker, following...