Benedict v. . Pincus , 191 N.Y. 377 ( 1908 )

This action was brought to recover commissions as a broker for services alleged to have been rendered in procuring a tenant for the defendants' premises. The agreement, as alleged in the complaint, is in substance that the defendants employed the plaintiff as a real estate broker to lease the defendants' premises for the term of seven years from October or November, 1906, or to find or procure a lessee thereof; that the plaintiff, as such broker, did find one Robert Smith ready, willing and able to execute and fulfill the provisions of a lease, and that thereupon the following instrument was executed by the parties in the presence of the plaintiff:

"NEW YORK, Sept. 26th, 1902.

"We agree to execute a lease of premises No. 40 West 34th Str., to R. Smith, from October or November, 1902, for 7 years, at a rental of $18,000 per year, the lease, as to conditions, to be an exact copy of the lease we now hold on the above premises (by the conditions it means taxes, insurance) (if in lease) running expenses, etc., included; it is understood that at signing of lease — 6 mos. rent in advance is to be paid by R. Smith, this to draw 6% yearly in advance; L. A. Pincus is to secure R. Smith for above amount by the assignment of lease 40 West 34th St., now existing (provided this can be done), or other security. Lease to be executed and signed on or before October 10th, 1902."

Upon the trial, after the jury had been impaneled, the defendants moved for judgment upon the complaint, upon the ground that it did not state facts sufficient to constitute a cause of action, and that motion was granted.

The complaint contains no allegation that Smith ever executed a lease or that he was willing to execute a lease on the 10th day of October, 1902, the time fixed for the execution thereof. The plaintiff contends that he fully performed his part of the agreement when he procured Smith to execute the paper in question, and that then he became entitled to his commissions; while on the part of the defendants it is claimed that they contracted for a lease, or a person who would execute a lease, and not for a lawsuit; that the paper in question was a mere option unenforceable, and that the commissions were not earned by the plaintiff until a lease, such as was contemplated by the parties, had been executed.

The question thus presented for our determination is as to whether the paper in question is a binding contract between the parties, or whether it is an option merely, without consideration and not binding upon Smith. The first sentence to which our attention is called is: "We agree to execute a lease * * * to R. Smith." The words "We agree" unquestionably have reference to the defendants Louis and Alexander Pincus and do not include Smith by requiring an acceptance or the performance of any act on his part. Indeed, nothing is to be found in the entire instrument in which he is required to execute a lease to pay any rent or perform any act with reference thereto unless it is found in the following: "It is understood that at signing of lease six months rent in advance is to be paid by R. Smith." It is now contended that the word "understood" is to be given the meaning of the word "agreed" and that Smith, by signing the instrument, has, therefore, bound himself not only to execute the lease but also to pay six months' rent in advance. It may readily be conceded that there are cases in which the word "understood" is used synonymously with that of "agreed" and that contracts become mutual by reason of its being so used; but ordinarily the word "understood" is not properly used in a contract as expressing the agreement of parties. It is only when it is accompanied with some expression which shows that it constituted a meeting of the minds of the parties upon the subject of the contract, indicating their intent to be bound thereby, that it is given the force and meaning of the term "agreed." (Camp v. Waring, 25 Conn. 520,527; Ward v. Zborowski, 31 Misc. Rep. 66.) What is the fair and reasonable construction that should be given to this sentence? It is "understood" that six months' rent is to be paid in advance. When? At the signing of the lease. But who has agreed to sign the lease? The defendants have so agreed, as is apparent from the first sentence appearing in the instrument, but Smith has not agreed to sign it; for he only understands that, at the signing of the lease, or in case he signs the lease, he is to pay six months' rent in advance. No consideration is expressed in the instrument or claimed to have been paid. My conclusion, therefore, is that the instrument was but an option merely, without consideration and was not an enforceable contract. It follows that the plaintiff had not earned his commissions by the producing of a person who was ready and willing to execute a lease upon the terms mentioned.

The judgment should be affirmed, with costs.

CULLEN, Ch. J., GRAY, WERNER and HISCOCK, JJ., concur with VANN, J.; CHASE, J., concurs with HAIGHT, J.

Judgment reversed, etc.