Graff v. Billet

101 A.D.2d 355, 475 N.Y.S.2d 122, 1984 N.Y. App. Div. LEXIS 17825

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: May 7, 1984
• Status: Published

Opinions

OPINION OF THE COURT

Per Curiam.

In March, 1981, the plaintiff broker showed a prospective purchaser a vacant parcel of land listed with him by the defendant seller. The broker subsequently drew up an agreement under which, inter alia, he would earn a commission for selling the parcel of land “as, if and when title passes, except for willful default on the part of the seller”. The seller does not dispute the terms of this agreement. Before closing of title and before any written agreement was entered into between the prospective purchaser and the seller, the latter decided to accept a better offer from someone else. The broker then sued to recover his commission and Trial Term, after a Bench trial, entered judgment in his favor. For the reasons stated, we reverse and dismiss the complaint.

It is, of course, fundamental that in the absence of an agreement to the contrary a broker is entitled to his commission when he produces a buyer ready, willing and able to purchase on terms acceptable to the seller (see Lane-Real Estate Dept. Store v Lawlet Corp., 28 NY2d 36, 42; Hecht v Meller, 23 NY2d 301, 305; Levy v Lacey, 22 NY2d 271, 274). The broker’s right to receive a commission otherwise owed to him may, however, be varied by agreement as at bar where the parties agreed that the commission would be owing “if and when title passes” (see Lane-Real Estate Dept. Store v Lawlet Corp., supra, pp 42-43). Whatever preparatory work the broker did to produce a ready, willing and able buyer was irrelevant once he agreed to forgo his commission until passage of title. He bore the risk of the deal until the condition precedent was fulfilled, and that condition precedent simply never materialized (see White & Sons v La Touraine-Bickford’s Foods, 50 AD2d 547, affd 40 NY2d 1039).

Nor can the seller’s acceptance of a better offer be deemed a “willful default” as contemplated by the commission agreement, requiring payment of the brokerage fee. Unless the terms “as, if and when title passes” evince an intent on the part of the parties that the deal progress to some legally recognizable form before the commission was to be earned, the commission agreement would be nothing more than a reiteration of the general rule of earning a brokerage fee upon presentation of a ready, willing and able buyer and would therefore be of no real practical value. Clearly, the parties did not mean to enter into an unnecessary agreement, and the terms chosen were meant to impose upon the broker something more than presenting a ready, willing and able buyer. In any event, any ambiguity in the agreement on that score must be resolved against the broker who drafted it (see Rentways v O’Neill Milk & Cream Co., 308 NY 342; Universal No. 2 Corp. v Ainbinder, 25 Misc 2d 613). Consequently, since no deal between the prospective purchaser and the seller ever materialized in legal, written form, the seller could not be in default of the broker’s agreement and was free until then to negotiate with other prospective purchasers without becoming liable for a commission (cf. White & Sons v La Touraine-Bickford’s Foods, supra).

The dissent would hold the seller in default “whether [his alleged] repudiation of the transaction with the buyer occurred before or after the execution of the contract of sale”. Besides being contrary to the plain meaning of the agreement as already discussed, such an interpretation cannot be truly supported by the Court of Appeals cases the dissent itself cites. In those cases, unlike here, there was a sales contract in existence between seller and the prospective purchaser produced by the broker, and under those circumstances, the seller, who frustrated closing, was held liable for the commission (see Levy v Lacey, supra, p 273; Wagner v Derecktor, 306 NY 386, 391; Stern v Gepo Realty Corp., 289 NY 274, 276; Amies v Wesnofske, 255 NY 156, 158; Colvin v Post Mtge. & Land Co., 225 NY 510, 515). Furthermore, according to these cases, an agreement that the broker is not entitled to his commission when the failure to complete the sale is due to the seller’s action will be found only where such a result appears to have been clearly intended (see Levy v Lacey, supra, p 274; Colvin v Post Mtge. & Land Co., supra, p 516). In this case, the parties clearly intended that the broker would not be entitled to a commission prior to the execution of a contract of sale, and their agreement must be so construed, drafted as it was by the broker who could have drafted it otherwise.

Accordingly, we conclude that the seller was not in default of the brokerage agreement, no cause of action for a commission lay against him and Trial Term should have dismissed the complaint.