Nadal v. Childs Securities Corp.

• Decision Date: 23 April 1963
• Parties: Carlos G. NADAL, Plaintiff-Appellant, v. CHILDS SECURITIES CORPORATION, Defendant-Respondent.
• Court: New York Supreme Court — Appellate Division

Page 959

239 N.Y.S.2d 959

18 A.D.2d 375

Carlos G. NADAL, Plaintiff-Appellant, v. CHILDS SECURITIES CORPORATION, Defendant-Respondent.

Supreme Court, Appellate Division, First Department.

April 23, 1963.

David M. Palley, New York City, for appellant.

Robert D. Levin, New York City, of counsel (Joel J. Spector, New York City, with him on the brief, Demov & Morris, New York City, attorneys), for respondent.

Before BREITEL, J. P., and RABIN, VALENTE, EAGER and BERGAN, JJ.

BERGAN, Justice.

Plaintiff seeks to avoid the effect of a release signed by him for a good consideration, which in terms discharged defendant, on the ground of defendant's fraud in misrepresenting the instrument of release. The Court at Special Term has dismissed the complaint pursuant to Rule 107(6) of the Rules of Civil Practice.

Plaintiff has a claim against the owners of real estate in the sum of $25,000 as a finder's fee. He settled the claim for $7,500 upon the execution of an agreement between the owners and defendant as purchaser.

The agreement recited that the owners (sellers) should pay plaintiff a finder's fee of $7,500 and by addendum provided that the defendant should indemnify the sellers from any claim by plaintiff in excess of $7,500. It also provided that the defendant should be responsible if any other demand of brokerage or for a finder's fee were made based on a claimed furnishing of information to defendant.

Attached to the agreement between the owners and defendant was a release executed by plaintiff. In the instrument of release plaintiff agreed to the contract provisions between sellers and buyers for the payment by the sellers of $7,500.

The text of the release was as follows: 'Payment of the same shall constitute a full and complete settlement of all claims, finders' fee, brokerage commission or any other claim of the undersigned and shall act as a complete and general release to all parties of this Agreement and to the property which is the subject of this Agreement.'

Plaintiff claims that he was 'told and I believed' that the agreement was 'between myself and the sellers' and that the receipt of $7500 'would release the sellers and only the sellers and no one else.' He further claims that the statements 'as to the meaning and import of that agreement' were made by an officer of defendant corporation and that he 'relied solely upon' such representations.

The agreement is plainly not an agreement 'between myself and the sellers' and it is not a release of 'the sellers and only the sellers'. It is an agreement among several parties, including the defendant, and it expressly releases 'all parties to this agreement' and the property the 'subject of' the agreement.

No man who could read and understand English was entitled to accept a 'meaning and import' of these words diametrically opposed to the text. A different rule applies to the illiterate or the person unfamiliar with the English idiom (Pimpinello v. Swift & Co., 253 N.Y. 159, 170 N.E. 530), but that rule does not embrace this plaintiff (cf. Northridge Cooperative Section No. 1, Inc. v. 32nd Ave. Corp., 2 N.Y.2d 514, 528, 161 N.Y.S.2d 404, 412, 141 N.E.2d 802, 808), and the ordinary result obtains that he is 'conclusively bound' (Pimpinello, 25o N.Y. p. 162, 170 N.E. p. 531).

Although, of course, there may sometimes be open factual questions on the scope of a general release and the intent with which it is executed, a release and disavowal of liability expressed as part of a contract and manifestly tied in to the very subject matter of the contract and affecting its parties leaves open no such factual question (Oxford Commercial Corp. v. Landau, 12 N.Y.2d 362, 239 N.Y.S.2d 865, 190 N.E.2d 230).

Moreover, after the release had been executed by plaintiff and he was in possession of the sellers' check for $7,500 which contained this legend, 'Payment in full for all compensation and expense in connection with sale * * * as per agreement * * * between Sellers and Childs Securities Corporation and release heretofore given by payee', plaintiff wrote the defendant's representative that 'I cannot accept the check in the amount of $7,500 bearing the endorsement, paid in full for all compensation.'

Nevertheless with clearly grasped knowledge then of the scope of the release and the effect of the endorsement and collection of the check, he presented it and it was paid. This amounted to a ratification of the release. (Nassoiy v. Tomlinson, 148 N.Y. 326, 42 N.E. 715).

It is suggested from certain rather obscure words in the plaintiff's affidavit that there was some sort of novation or new agreement effected between the plaintiff and defendant, quite independent of the finder's fee basis of the original claim. These words indicate that to induce plaintiff to sign the release pursuant to which the sellers were to pay plaintiff $7500, defendant undertook to pay plaintiff another $7500 for signing the release.

This aspect of plaintiff's affidavit rests on these paragraphs:

'The sellers refused to pay me a finder's fee in the sum of $25,000; they agreed to pay only $7500. and the contract so provided. The sellers also insisted that I sign an agreement with them agreeing to accept a finder's fee of $7500.

'In order to induce me to accept the $7500. fee from the sellers, Mr. Aird [defendant's representative] told me that Childs Securities Corporation would pay me $7500. and he also reaffirmed at that time that I would be employed to supervise the construction for which I was to receive a fee of 5% plus 1% for expenses.'

That there was a separate liability effected by an agreement by defendant to pay $7500 to induce plaintiff to sign the release is not argued by plaintiff in his brief in this court. Such a theory of separate liability is not only not pleaded in the complaint; it is quite inconsistent with the complaint and ruled out of consideration by the words of the pleading itself.

The complaint alleges that defendant's agreement to pay $7500 was for a finder's fee and was made before negotiations were entered into for the sale of this property to defendant and hence, of course, could not possibly be the basis of a consideration of inducement to plaintiff to sign the release.

Specifically, the complaint (par. eighth) describes the agreement by defendant to pay $7500; and then (per. ninth) pleads that 'thereafter' defendant entered into negotiation for the purchase. The independent consideration for the delivery of a release; or the exclusion from the scope of a release of matters or claims maturing in the future, considered in such cases as Andrews v. Brewster, 124 N.Y. 433, 26 N.E. 1024; Cahill v. Regan, 5 N.Y.2d 292, 184 N.Y.S.2d 348, 157 N.E.2d 505; and Farnham v. Farnham, 204 App.Div. 573, 198 N.Y.S. 771 have no relevancy here.

The order and judgment dismissing the complaint should be affirmed with costs.

Order and judgment dismissing the complaint affirmed with costs to the respondent.

All concur except RABIN and EAGER, JJ., who dissent in opinion by EAGER, J.

EAGER, Justice (dissenting).

I would reverse the order of Special Term. From the record here, it is clear that there are issues of fact precluding summary dismissal, as a matter of law, of the complaint at this time.

This action was brought to recover for a breach by the defendant of contracts whereby, as the buyer of land in Florida, he is alleged to have agreed to pay plaintiff a finder's fee and also to employ plaintiff to supervise the construction of an apartment house upon the premises and to pay him for his services in this connection 5% of the cost of construction plus a fee of 1% to cover expenses. The defendant, on this motion pursuant to Rule 107(6) of the Rules of Civil Practice, contends that the plaintiff's claims are barred by a release executed and delivered on the receipt by him of $7500 from the sellers of the premises. The plaintiff did have a separate claim against the sellers for a finder's fee, real estate commissions or other form of compensation which had been fixed at $7500, and it is the plaintiff's contention that the release, though purporting to release all parties from all claims and demands, was intended solely as a release of all demands in connection with his said separate claim against the sellers.

It is settled with certainty that 'a release may not be read to cover matters which the parties did not desire or intend to dispose of.' (Cahill v. Regan, 5 N.Y.2d 292, 299, 184 N.Y.S.2d 348, 354, 157 N.E.2d 505, 510). Accordingly, 'the courts look behind the release when an issue is raised with respect to what the parties intended to release.' (Pascoe v. Electromatic Mfg. Corp., 3 A.D.2d 818, 161 N.Y.S.2d 365). That such an issue exists here is clearly apparent from the documents and affidavits, and consequently, we may not, at this juncture of the action, summarily deprive the plaintiff of the opportunity to litigate the same.

By the terms of the written agreement for the sale of the Florida property and the written addendum thereto, it was provided that the sellers should pay a finder's fee of $7,500 to the plaintiff at or prior to the closing and that he defendant, as purchaser, should indemnify and save harmless the sellers from any claim against them by the plaintiff for any amount in excess of the said $7,500. So, there was here a fixed liability on the part of the sellers to the plaintiff for the said sum of $7,500, and the defendant's agreement in connection therewith was limited to the obligation to indemnify the sellers from any liability to plaintiff for any sum in excess of the $7,500. Based upon these premises, the plaintiff executed the agreement of release which was annexed to the agreement of sale and the addendum thereto. Most significantly, the opening words of this agreement by plaintiff stated that he, 'C. G. Nadal, agrees to the provisions of the foregoing Agreement and Addendum thereto which provides for the payment to him at the...