Risser v. Hirshhorn
| Decision Date | 12 November 1952 |
| Docket Number | No. 50,Docket 22422.,50 |
| Parties | RISSER v. HIRSHHORN et al. |
| Court | U.S. Court of Appeals — Second Circuit |
Milton M. Rosenbloom, New York City (O'Brien, Driscoll & Raftery and Arthur F. Driscoll, all of New York City, on the brief), for plaintiff-appellant.
Abraham N. Davis, New York City (Davis & Heffner, New York City, on the brief), for defendant-appellee Joseph H. Hirshhorn.
Emerson F. Davis, New York City (Duer, Strong & Whitehead and Charles F. Houghton, all of New York City, on the brief), for defendant-appellee R. H. Kress.
Before AUGUSTUS N. HAND, CHASE and CLARK, Circuit Judges.
Plaintiff, a real estate broker, brought this action against both the seller and the buyer of certain realty to recover a brokerage commission on its sale. Her complaint alleged the seller's contractual obligation to pay the commission and also charged the seller and the buyer jointly with conspiracy to deprive her of the commission. In a trial to the jury the district court dismissed the complaint against the seller on the merits at the close of the plaintiff's case. At the same time, the court in effect1 dismissed the conspiracy claim against both defendants, but permitted plaintiff to amend her complaint to allege misrepresentation by the buyer, and to continue the case against him. This amended complaint was dismissed on the merits at the close of the entire case after presentation of evidence by the buyer and rebuttal by the plaintiff. Plaintiff now appeals from both orders of dismissal.
The evidence, viewed in the light most favorable to plaintiff, tended to establish the following: Defendant Hirshhorn had long been interested in selling his estate in the Pennsylvania Poconos. For this purpose, he entered into a written agreement on December 15, 1944, with Previews, Inc., an organization engaged in marketing real estate by circulating information on available properties to brokers and the public. In the agreement Hirshhorn stipulated: The sales price was set at $137,500, unfurnished.
Previews thereupon prepared a brochure on the property which Hirshhorn approved. In July, 1947, the plaintiff, Mrs. Risser, obtained copies of this brochure from Previews and, later in the month, sent several of these to Schreiber, a nephew of defendant Kress. Schreiber had expressed interest in Pocono properties on behalf of a party who did not want his name publicized. This party, he confided to Mrs. Risser, was Kress. After inspecting the brochure, Schreiber undertook to pass it on to Kress. Several days later Schreiber contacted Mrs. Risser to inform her that Kress was favorably impressed with the property and that he wanted Schreiber to inspect it. This inspection took place on July 20, 1947, and was reported to Kress by Schreiber. The following day Lewis, a Previews official, wrote Hirshhorn of the inspection, identifying the prospect as Schreiber. Lewis knew that Schreiber was acting for Kress, but, in view of the injunction of secrecy, made no reference to Kress in this letter. The letter also mentioned Mrs. Risser's participation in the inspection, though it did not explicitly describe her as a broker.
Kress himself visited the property several times during the summer and autumn of 1947 and negotiated directly with Hirshhorn. These negotiations culminated in a contract, dated October 17, 1947, for the sale of the property, including most of the furnishings, for $100,000. In this contract the parties agreed "that there are no brokers involved in this sale." Hirshhorn at no time informed Previews or Mrs. Risser of his dealings with Kress and did not inquire of either to ascertain whether or not Kress had any connection with them. Kress had apparently represented to Hirshhorn that he discovered the property through an advertisement which Hirshhorn had placed in Barron's Weekly on July 20, 1947.
Mrs. Risser and Previews did not learn definitely of the sales agreement until March, 1948. During the preceding November, after the contract was signed but before the deed was executed on January 12, 1948, Schreiber reported to Mrs. Risser that progress had been made in the Hirshhorn-Kress negotiations. Upon receipt of this information Mrs. Risser wrote to Kress offering her assistance as broker in concluding the sale. On December 23, Lewis, on behalf of Previews, sent a letter to Hirshhorn similarly offering their help and stating explicitly that Schreiber had acted for Kress and that Mrs. Risser was the broker involved. Neither of these letters was acknowledged. A similar fate met Mrs. Risser's letter to Hirshhorn of March 17, 1948, in which she enclosed a bill for the brokerage commission. Mrs. Risser thereupon brought this action.
This case, in which federal jurisdiction is based on diversity of citizenship, is governed by New York law. The contract between Hirshhorn and Previews was executed in New York, and any contractual obligation from Hirshhorn to Mrs. Risser stems from this agreement. The decisive negotiations between Hirshhorn and Kress also took place in New York, so that any tortious conduct by Kress must likewise have occurred in that state.
Under the New York decisions a real estate broker is entitled to a commission if he is the procuring cause of the sale, that is, if he brings seller and buyer together and a sale consequently results. Lloyd v. Matthews, 51 N.Y. 124; Sussdorff v. Schmidt, 55 N.Y. 319; see also Wylie v. Marine National Bank, 61 N.Y. 415. The right to collect the commission is not lost because the broker does not participate in the negotiations, Lloyd v. Matthews, supra; see also Jungeblut v. Gindra, 134 App.Div. 291, 118 N.Y.S. 942; or because the final terms of sale are not identical with those originally presented to the broker. Colvin v. Post Mortgage & Land Co., 225 N.Y. 510, 122 N.E. 454. And the broker may recover from a seller who did not actually know of the broker's connection with the transaction if, in the exercise of reasonable diligence, the seller could have ascertained this fact. Lloyd v....
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...See Tehran-Berkeley Civil and Envtl. Eng'rs v. Tippetts-Abbett-McCarthy-Stratton, 888 F.2d 239, 242 (2d Cir.1989); Risser v. Hirshhorn, 199 F.2d 917, 919 (2d Cir.1952); Resnick v. Sikorsky Aircraft, 660 F.Supp. 415, 417 n. 3 (D.Conn.1987). New York law mandates strict judicial scrutiny of i......
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