Liebermann v. Princeway Realty Corp.

Per Curiam.

Plaintiff has been awarded a verdict of $25,000 in an action on a promise to the plaintiff made in July, 1954 by defendant through its president Samuel Frindel, Jr., to the effect that defendant would pay said sum to plaintiff upon the sale of premises owned by defendant known as and by the street number 568-578 Broadway, City and County of New York. The property was sold on November 4, 1960 and this action was commenced on November 16, 1960.

Prior to his death in 1952 Elias A. Cohen dominated several corporations including S. Frindel, Jr., Inc., and defendant. Cohen’s sister, Estelle, owned the capital stock of S. Frindel, Jr., Inc. Defendant’s capital stock was nominally in the name of Estelle. For some years prior to the death of Cohen in 1952, plaintiff was employed by S. Frindel, Jr., Inc. The latter corporation operated and managed various properties; included among them were premises 568-578 Broadway, owned by defendant. Defendant paid the Frindel corporation the usual management fee.

Plaintiff, a licensed real estate broker, devoted most of his time in the management of defendant’s said property. Subsequent to the death of Cohen, plaintiff was under the direction of Samuel Frindel, Jr., president of the Frindel corporation. Mr. Frindel was the husband of Estelle, the sister of Cohen.

After Cohen’s death his estate asserted ownership of defendant’s capital stock. The dispute between Cohen’s sister and his estate was negotiated to a settlement whereunder the ownership of said stock was equally divided between them.

Plaintiff’s testimony is that during July, 1954 he had a conversation with Mr. Frindel regarding his tenure with, the Frindel corporation. During 1954 Mr. Frindel was also president of defendant. Plaintiff then stated that his weekly salary of $75 was inadequate and he desired an increase. Mr. Frindel informed plaintiff that the income of the Frindel corporation was limited and further ‘ ‘ as president of the Princeway Realty Corp. that owns 568-578 Broadway, and my wife owns all of its stock, I want you to continue to work on it, do the same good job you have been doing, and when the property is sold, I will see that you are given $25,000 for all the good work that you have been doing, and we want you with us.” Mr. Frindel died in 1956.

Plaintiff was not in the employ of defendant during July, 1954. It was not until 1958 that defendant contributed $25 towards the weekly salary of plaintiff because of additional management duties assumed by plaintiff relating to premises other than 568-578 Broadway.

Plaintiff does not allege and the record disproves a promise or ratification by defendant’s board of directors of the promise relied on. Plaintiff’s right to recover rests entirely upon the authority of Mr. Frindel as president of defendant to bind defendant without the express consent or ratification of its board of directors. (Heaman v. Rowell Co., 261 N. Y. 229, 232.) Defendant’s president had the apparent power to “make such ordinary contracts as custom and the necessities of business would justify or require ”. (Hardin v. Morgan Lithograph Co., 247 N. Y. 332, 339.) It does not appear on this record that the gratuitous promise here involved to one not in its employ was either customary or necessary in defendant’s business; contrariwise, it was unusual and extraordinary. In the absence of express authority by its board of directors the promise was not binding on this defendant. (Noyes v. Irving Trust Co., 250 App. Div. 274, 276, affd. 275 N. Y. 520; see, also, Heaman v. Rowell Co., supra; Wen Kroy Realty Co. v. Public Nat. Rank & Trust Co., 260 N. Y. 84; Carney v. New York Life Ins. Co., 162 N. Y. 453; Bankers Trust Co. v. International Ry. Co., 207 App. Div. 579, 587, affd. 239 N. Y. 619; Schwartz v. United Merchants & Mfrs., 72 F. 2d 256 [L. Hand, C. J.].)

If we did not dismiss the complaint, we would order a new trial by reason of the erroneous exclusion of material evidence. The exclusion of evidence as to the custom and practice of defendant relative to severance pay and bonuses was prejudicial error, particularly in the light of the comment made by plaintiff’s counsel in summation as to what he conceived to be the purpose and significance of the defendant’s tender to the plaintiff of its check for $1,000 upon termination of plaintiff’s employment.

The judgment should be reversed, on the law, and the complaint dismissed, with costs to defendant-appellant.