Levy v. Lacey

239 N.E.2d 378, 22 N.Y.2d 271, 292 N.Y.S.2d 455, 1968 N.Y. LEXIS 1294
CourtNew York Court of Appeals
DecidedJune 6, 1968
StatusPublished
Cited by39 cases

This text of 239 N.E.2d 378 (Levy v. Lacey) is published on Counsel Stack Legal Research, covering New York Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Levy v. Lacey, 239 N.E.2d 378, 22 N.Y.2d 271, 292 N.Y.S.2d 455, 1968 N.Y. LEXIS 1294 (N.Y. 1968).

Opinion

Burke, J.

By agreement dated July 17, 1962, the defendants contracted to sell to one James R. Frazer for $130,000 certain real property located in Hicksville, New York, owned by the defendants. The contract was conditioned upon the ability of the sellers to obtain the abandonment of a street which was indicated on a filed map of the subject premises but which was not in actual existence. Closing of title was to take place “ on or about ” 30 days after notice of the successful completion of the abandonment proceeding. The contract recited the parties’ agreement that Arthur C. Levy, a licensed real estate broker and the plaintiff in this action, “ brought about this sale ” and the seller’s agreement to pay Levy a commission at the rate established or adopted by the Board of Real Estate Brokers in the locality where the property was situated, which in this case was 5%, or $6,500. It did not, however, specify when or under what conditions plaintiff’s commission was payable.

The abandonment proceeding was successful but a subsequent title search revealed certain clouds on defendants’ title to the land in the abandoned street and the prospective purchaser, after being informed of this, stated to the defendants that he desired to cancel the agreement if the defects in title could not be cured within 30 days. In reply the defendants gave the purchaser a choice of maintaining legal proceedings to remove the defects, which proceedings they estimated would take 90 days to complete, or of annulling the contract. Frazer chose the latter course and plaintiff was never paid his hoped for commission.

Plaintiff has now brought the instant action to recover this commission, alleging in his complaint that he “ duly performed all the terms and conditions ” of his brokerage agreement with the defendants and that the defendants failed and refused to complete the sale ” of their property to the purchaser procured by plaintiff. Thus far plaintiff has prevailed, having been awarded judgment in the amount sought by the Supreme Court, Nassau County, following a trial without a jury and having had this award affirmed, without opinion, by the Appellate Division, Second Department, but we are of the opinion [274]*274that the decisions below were erroneous and that reversal and a new trial are required.

The decision of the trial court indicates that the court’s award of judgment in plaintiff’s favor was grounded on its view that upon the signing of the contract of sale between the defendants and Frazer plaintiff had earned his commission. This is the result that would ordinarily obtain where a brokerage agreement makes no mention of terms or conditions affecting the broker’s right to a commission (see Wagner v. Derecktor, 306 N. Y. 386, 390, and the cases cited therein) but the parties to a brokerage agreement are free to add whatever conditions they may wish to their agreement, including a condition that the contract of sale actually be consummated before the broker is deemed to have earned his commission, although an agreement that the broker is not entitled to his commission where the failure of the sale to be completed was due to the seller’s default will be found only where such a result appears to have been clearly intended (id., pp. 390-391). And, while in the instant case the defendants do not claim that they could avoid liability to plaintiff if failure of the sale to be consummated was due to their own fault (as indeed they could not argue on this record), they do claim, and here the record seems clearly to support them, that it was the understanding of the parties that plaintiff’s right to a commission was conditioned upon title being closed.

Defendants’ contract with the plaintiff was oral and its terms, both express and understood, were never subsequently reduced to writing in any kind of formal memorandum, except to the extent that plaintiff’s role in the transaction was acknowledged in the contract of sale. Their agreement that the plaintiff should represent them as broker was expressed by the defendant Lacey in the course of a telephone conversation with the plaintiff, who had phoned Lacey to solicit a listing of the property, with none of the terms of the brokerage agreement discussed during this conversation other than the amount of plaintiff’s commission. Nevertheless, plaintiff himself testified on the trial of this action that it was his understanding that he was to receive his commission on the closing of title. Plaintiff further testified, in explanation of this, that by “ on the closing ” he had reference only to the date on which his commission would be paid but in [275]*275legal effect such language in a brokerage agreement imports also the notion that closing of title is a condition precedent to the broker’s being entitled to a commission. (Aimes v. Wesnofske, 255 N. Y. 156,161-162.) Whether or not such a meaning ought generally to be given to such language where used, to describe a contract entered into as casually as this one was, there is in this case other, very persuasive evidence, indicating the parties ’ understanding that plaintiff ’s right to a commission was contingent upon title closing, which warrants attributing such significance to plaintiff’s testimony.

This evidence consists of a letter sent to plaintiff by defendants’ attorney in connection with plaintiff’s retention of am attorney to represent the defendants in the abandonment proceeding, a proceeding which was entered into at the instance of Frazer, the prospective purchaser. Initially neither plaintiff nor the defendants had .contemplated the bringing of such a proceeding and when it was originally proposed to defendants they indicated their unwillingness, to be bothered with it but were assured by plaintiff that he would retain a lawyer to handle the matter and that its cost should be deducted from Ms commission. It was in tMs connection, then, that defendants’ attorney, before the contract of sale was ever executed, wrote to plaintiff, stating that it was defendants’ understanding that plaintiff alone was to be personally responsible for this other attorney’s fees and disbursements and that defendants would pay the attorney, out of plaintiff’s commission, only “ if, as and when” the abandonment proceeding was successful and their deal [was] actually closed. ” This letter could, conceivably, have referred only to defendants’ potential liability to the attorney retained by plaintiff in the event the abandonment proceeding was unsuccessful, in which event, of course, the “ deal ” would not have closed, but the plaintiff conceded on the trial that he had testified at an examination before trial that he understood this letter as meaning that he, the plaintiff, would be paid a commission only if the sale was consummated. Plaintiff at no time before the trial of this action raised any objection, to this letter, to which he had given this reading, and this circumstance, taken with plaintiff’s own acknowledgment that he was not to be paid a commission until the closing of title, compels, we believe, the conclusion that the parties’ understand[276]*276ing of this agreement was that plaintiff’s right to a commission was conditioned upon the sale’s actual consummation.

As was pointed out above, however, such an agreement will not absolve the seller of the obligation of paying a commission where the sale fails of completion through the seller’s own fault and, therefore, if, upon the new trial that must be had here, plaintiff can show that it was through defendants’ fault that the contract of sale was never consummated, he must prevail.

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Bluebook (online)
239 N.E.2d 378, 22 N.Y.2d 271, 292 N.Y.S.2d 455, 1968 N.Y. LEXIS 1294, Counsel Stack Legal Research, https://law.counselstack.com/opinion/levy-v-lacey-ny-1968.