Sanders A. Kahn Associates, Inc. v. Maidman

• Citation: 69 Misc.2d 90,329 N.Y.S.2d 121
• Parties: SANDERS A. KAHN ASSOCIATES, INC., Plaintiff, v. Irving MAIDMAN, Defendant.
• Decision Date: 24 June 1971
• Court: New York Supreme Court

Page 121

329 N.Y.S.2d 121

69 Misc.2d 90

SANDERS A. KAHN ASSOCIATES, INC., Plaintiff, v. Irving MAIDMAN, Defendant.

Supreme Court, Trial Term, New York County, Part XV.

June 24, 1971.

Fribourg & Fribourg, New York City (Jack Strauss, New York City, of counsel) for plaintiff.

Lipper, Keeley, Katcher, & Dannenberg, New York City (Aaron Lipper, New York City, of counsel) for defendant.

ARNOLD L. FEIN, Justice.

Defendant orally engaged plaintiff, a licensed real estate broker, to secure a purchaser for defendant's real property, at a price of $475,000, terms all cash over mortgages, commission to be at real estate board brokers' rates. No time limit was fixed for performance. On being advised by plaintiff that it had a purchaser on these terms, defendant requested the broker to provide a letter to that effect from the prospective purchaser. Plaintiff obtained and on July 16, 1965, sent defendant a letter from the prospective purchaser's attorneys, addressed to plaintiff, dated July 15, 1965, reading in pertinent part:

'Our client has authorized us to advise you that they are prepared, subject to the execution and delivery of a formal agreement of purchase and sale satisfactory to us, to purchase the above entitled premises for $475,000 by payment of 10% Thereof on signing of the contract, $127,500 at closing and the balance by taking subject to the existing first mortgage in the sum of $300,000, said mortgage being due on March 31, 1966, with provision for annual payment of $25,000 which includes interest at the rate of 6%.

'When the contract of sale is prepared, please forward the same to us and we will communicate with you or counsel for the seller thereafter.'

Defendant turned the letter over to his attorney, who prepared a formal contract incorporating these precise terms, and indicating in the usual form that plaintiff was the broker. The attorney gave a copy to plaintiff late in the afternoon of July 22, 1965, to forward to the prospective purchaser's attorneys. Plaintiff mailed it to them the following day.

By letter dated July 27, the prospective buyer's attorneys advised plaintiff that the contract contained 'of course, a number of provisions which raise serious questions', which had to be discussed with their client. What these 'serious questions' were was not developed at trial. The prospective purchaser's attorneys were not called as witnesses. The attorneys' letter also stated they would arrange with defendant's attorney for 'an inspection' of 'the survey and the lease', and requested an opportunity to inspect a prior title report if one existed. On July 28, plaintiff forwarded a copy of this letter to defendant, after reading it to him over the phone. On July 27 or July 28, prospective buyer's attorney and defendant's attorney had a telephone conversation relating to the contract. In a letter to prospective buyer's attorneys, dated July 29, defendant's attorney stated:

'This contract was subject to immediate acceptance.

'Having received no communication from you during this period, I must therefore assume that we have no deal and accordingly request that the contract the returned to me.'

This was the first time that either plaintiff or the prospective purchaser was advised that the deal was subject to 'immediate acceptance' of the formal contract.

On Friday, July 30, defendant advised plaintiff the contract would have to be signed by the following Monday, August 2, or the deal was off. On the same day, July 30, the prospective purchaser's attorneys wrote defendant's attorney confirming their telephone conversation setting up a meeting for Tuesday, August 3, 1965. That meeting never took place. Thereafter, despite the pleas of plaintiff and the prospective buyer, defendant refused to go further with the deal. No formal written contract of sale was signed and no sale took place.

There is no merit to the defense founded upon the portion of the prospective purchaser's attorneys' letter which stated that their client was prepared to purchase the property 'subject to the execution and delivery of a formal agreement of purchase and sale satisfactory to us'. In an action for brokerage commission the right to recover turns upon whether the broker has performed his agreement with his principal, not on consummation of the sale, or execution of the contract, unless expressly so conditioned. The standard by which the broker's performance is to be measured is to be found in the brokerage agreement, not the agreement or proposed agreement between buyer and seller. (Lane-Real Estate Dept. Store v. Lawlett Corp., 28 N.Y.2d 36, 319 N.Y.S.2d 836, 268 N.E.2d 635; Hecht v. Meller, 23 N.Y.2d 301, 206 N.Y.S.2d 561, 244 N.E.2d 77; Levy v. Lacey, 22 N.Y.2d 271, 292 N.Y.S.2d 455, 239 N.E.2d 378; Arnold v. Schmeidler, 144 App.Div. 420, 129 N.Y.S. 408). As these and other cases hold, when the owner fixes the precise price and terms upon which he will sell, the broker earns his commission when he produces a buyer ready, willing and able to buy at such price and terms, unless the brokerage agreement conditions the right to brokerage upon some other condition or event, such as the execution or performance of the contract of sale, delivery of the deed, or payment of the agreed consideration.

Kaelin v. Warner, 27 N.Y.2d 352, 318 N.Y.S.2d 294, 267 N.E.2d 86, relied on by defendant, is not to the contrary. There, the price was fixed, but 'with terms to be arranged'. In denying recovery to the broker, because the prospective purchaser and the owner were unable to agree as to the essential, basically financial terms, the court was careful to lay down the...