Nirenstein v. George A. Horvath, Inc.

• Citation: 143 N.Y.S.2d 833,286 A.D. 409
• Parties: Nathan NIRENSTEIN, respondent, v. GEORGE A. HORVATH, Inc., George A. Horvath, defendants, and Lawrence Diamond and Robert Gilman, appellants.
• Decision Date: 30 June 1955
• Court: New York Supreme Court — Appellate Division

Page 833

143 N.Y.S.2d 833

286 A.D. 409

Nathan NIRENSTEIN, respondent, v. GEORGE A. HORVATH, Inc., George A. Horvath, defendants, and Lawrence Diamond and Robert Gilman, appellants.

Supreme Court, Appellate Division, Second Department.

June 30, 1955.

Peter H. Kaminer, New York City (William W. Karatz, New York City, with him on the brief), for appellants.

Samuel Shapiro, New York City, for respondent.

Before NOLAN, P. J., and WENZEL, SCHMIDT, BELDOCK and MURPHY, JJ.

NOLAN, Presiding Justice.

The original complaint in this action alleged four causes of action. In substance it alleged that respondent had been employed by Messrs. Myers, Donna and McCormick, as agents for certain stockholders in a corporation known as Monument Mills, Inc., to obtain a purchaser for such stockholders' shares at a price of $60 a share; that respondent subsequently entered into an agreement with appellant Diamond under which he and Diamond agreed to endeavor jointly to obtain a purchaser of said stock and to divide any brokerage commission received by reason of such sale; that thereafter a sale of the stock to defendant Horvath, Inc., was effectuated through Diamond; that Diamond, as a result of such sale, had received or was entitled to receive as commission the sum of $50,000; that respondent was entitled to receive one half of such commission; and that appellant Gilman and defendants Horvath and Horvath, Inc., joined Diamond in a fraudulent scheme to deprive respondent of his share of such commission.

The first cause of action based on these allegations was against Diamond for breach of his agreement to share his commission with respondent. The trial court dismissed it with respondent's consent after the court had questioned his proof regarding any benefits received by Diamond from the alleged sale. The second cause of action was for breach of contract against Horvath, Inc., as the purchaser of the stock in question. It also was dismissed upon consent, respondent conceding failure of proof. The third cause of action was based on an alleged conspiracy among Diamond, Gilman, Horvath and Horvath, Inc., to deprive the respondent of his commission. It also was dismissed upon consent. The fourth cause of action was one for money had and received. It also was dismissed upon consent.

Only the fifth cause of action, which was added at the opening of the trial, was submitted to the jury. The allegations of this cause of action are that in March and April of 1948 the agreement between the agents for the Monument Mills stockholders and respondent as well as that between Diamond and respondent was modified; that under the modified agreement between respondent and the stockholders' agents he was entitled to a commission of $3 per each share of stock sold at $53 a share or such other price as might be accepted by the agents; that under the modification of his agreement with Diamond, respondent and Diamond were to become cobrokers and if a sale of the Monument Mills stock should be brought about at a price acceptable to the stockholders' agents, respondent and Diamond would divide equally the $3 a share commission paid by the seller to the brokers; that Diamond interested Horvath, Inc., in the purchase of the stock and that Horvath, Inc., purchased the same; and that Diamond, Gilman, Horvath and Horvath, Inc., conspired to cheat respondent out of the benefits from the agreements summarized above by inducing the Monument Mills agents to commit a breach of their agreement and Diamond to breach his agreement with respondent to his damage in the amount of $25,000.

There does not appear to have been any answer to the allegations of this cause of action. However, the parties proceeded to trial upon the apparent assumption that these allegations had been denied, and the case was submitted to the jury with instructions that in order to recover, respondent was required to prove certain of the allegations heretofore referred to. Respondent makes no point in this appeal that there was no issue raised with respect to his pleading, and in accordance with the apparent understanding of the parties we shall consider appellants' answer as amended, at least to the extent sufficient to raise the issues submitted to the jury. Cf. Farmers' Loan & Trust Co. v. Housatonic R. Co., 152 N.Y. 251, 254, 46 N.E. 504, 505; Sweeney v. City of New York, 225 N.Y. 271, 274, 122 N.E. 243, 244; Pattison v. Pattison, 301 N.Y. 65, 68, 92 N.E.2d 890, 891; Thorne Neale & Co., Inc., v. New York Southern Coal Terminal Corp., 270 App.Div. 816, 817, 59 N.Y.S.2d 833, 834, affirmed 295 N.Y. 977, 68 N.E.2d 56.

It was established on trial that on February 5, 1948, Messrs. Myers, Donna and McCormick wrote respondent two letters. The first letter authorized him to undertake to bring about the sale of not less than 8,000 and not more than 14,000 shares of the stock of Monument Mills at a gross cash price of $60 a share subject to certain conditions. The second letter stated that if such sale should be effected at such price and subject to all conditions mentioned, respondent was to receive $3 a share so that the net price received by the shareholders, the principals of the writers of the letter, would be $57 a share. The first letter specifically provided that respondent's authority to bring about such sale was limited to a period of ninety days from the date of the letter, which was February 5, 1948. Thus, respondent's written authority to act as broker expired on May 5, 1948, more than four months prior to the actual sale of the Monument Mills stock.

Respondent testified that in addition to this written agreement he had an oral understanding with Myers, which was arrived at some time in March of 1948, pursuant to which he was authorized to submit to Myers the best offer he could obtain and that if he submitted a satisfactory offer he was to be paid a commission of $3 a share, upon the sale of the stock.

Thereafter, respondent was informed by Gilman that one Shikiarides was interested in purchasing the stock. Shikiarides made an actual offer for the purchase of the stock which was embodied in a document dated April 6, 1948, addressed to Messrs. Myers and Donna and signed by Diamond. That paper contained an offer to purchase 14,000 shares of the outstanding stock of Monument Mills at $53 a share. The writing states that Diamond is the agent for the proposed buyer of the stock, that respondent is the seller's agent, and that each is to get a commission of $1.50 a share payable by the seller. The attorney who drafted the offer testified that it was prepared at the request of Mr. Shikiarides, who was a client of his firm. He also testified that the document was prepared only for this particular transaction. The offer was not accepted.

It was appellants' contention, on trial, that, after the attempted sale to Shikiarides failed to materialize, they had no further interest in or connection with the transaction and that the only arrangement they ever made with respondent with respect to brokerage is contained in the letter of April 6th. It is respondent's contention, however, that this letter is evidence of an agreement which he claimed to have made with Diamond, to the effect that they should join in an effort to sell the stock, and that if either should effect a sale, a commission of $3 a share would be divided between them. While the evidence is not entirely clear as to this agreement, we shall assume that it was sufficient to permit a finding by the jury that if Diamond produced a purchaser for the stock, he was to share with respondent the commissions which he might collect for his services.

About five months after the submission of the offer from Shikiarides, there was made to all Monument Mills stockholders a written offer to purchase all shares which should be deposited pursuant to its terms. The price offered was $50 a share. The offer was made by Horvath, Inc., whose president testified without contradiction that it thus acquired all the outstanding shares of Monument Mills. The number of shares so acquired was 15,882. The written offer for the purchase of the stock also provided that the buyer was to pay Myers as compensation for his services $1 a share for each share of stock deposited pursuant to the offer, and also that, in the event that the deal should not be consummated, Myers was to receive $.50 a share for all shares deposited with him prior to a certain date. The offer made no mention of Diamond or Gilman or respondent in any connection whatsoever. Concededly, respondent had nothing to do with the bringing about of the sale of the stock to Horvath, Inc.

Diamond and Gilman testified that they had no further part in any negotiations for the sale of any Monument Mills stock after the Shikiarides deal fell through. There is no evidence that any commissions of any kind were paid to Gilman or Diamond by reason of that sale.

Horvath, on trial, testified that Diamond brought the Monument Mills to his attention and there is further evidence of a conversation between respondent and Diamond (denied by Diamond) which might be considered an admission by Diamond that he had brought about the sale of the stock to the Horvath corporation. There is no evidence, however, that Diamond ever notified Myers that he had interested Horvath in the purchase of the stock, or that he took any part in the negotiations leading up to the sale. Neither is there any evidence that Myers recognized Diamond as the broker who brought the sale about.

In charging the jury, the trial court stated that in order to recover against appellants, respondent was required to establish that he had a contract with Myers and his associates, pursuant to which he would be entitled on a sale of the stock to a commission of $3 a share. He further charged that respondent 'must prove, in order to succeed in this particular case, that he entered into a further agreement with Diamond to the effect that from...