Levine v. Susser

Bijur, J.

The complaint alleges that plaintiff was a real estate broker and agent; that defendant requested that he find properties for the defendant to purchase and to secure the asking price and terms; that defendant agreed that he would purchase these properties only through plaintiff as broker, and if defendant did not purchase such properties through plaintiff, or if plaintiff did not receive the commission on the sale from the seller, defendant would pay the plaintiff such commission. It is then alleged that a sale took place within the purview of the terms of this contract; that plaintiff did not receive a commission from the seller and that defendant, refused to pay .the same to him.

•Plaintiff’s testimony as to the contract was that defendant said to him: “ If you bring me some

property I like, I will buy it quick through you and yon get the commission. Even if I buy the property through other brokers and you don’t get the commission from the owner, the other side, I will pay from my own pocket the commission.”

The motion to dismiss, which was granted, was to the effect “ that it appears from the plaintiff’s own testimony that the plaintiff was serving two masters. That he was under an agreement with the Wally Contracting Company (the seller) to secure a purchaser, and that he undertook that employment without disclosing the agreement he had with the prospective buyer. * * * We have it from the testimony of the plaintiff himself that he was serving two masters at the same time; and he could not faithfully perform his duty to either one or the other; and such a contract as alleged here, without being disclosed to the other party, places him in the position of assuming incompatible duties, and; constitutes a contract against public policy, and is absolutely void.”

It is to be observed that there was nothing in the agreement as pleaded or as testified to whereby the plaintiff bound himself not to disclose to the seller the fact that he was to receive anything from the defendant. The contract was, therefore, on its face perfectly lawful. If we may indulge in any presumption it must be that the parties intended a lawful agreement, and if it be capable of two constructions, the one which indicates its validity must be adopted. As to the mode of executing the contract, plaintiff was not asked, either by his own counsel or the defendant’s counsel, whether he had actually disclosed the agreement to the seller. The statement in the motion to dismiss, therefore, that he had not disclosed the agreement to the seller was a pure assumption on the part of defendant’s counsel. I am cited by the respondent to no authority which places upon one party to a contract legal on its face the burden of excluding by proof the existence of all possible circumstances which might render the contract illegal in the mode of its execution.

If, however, we might hazard a guess that the plaintiff had not disclosed his agreement with the seller, we come to what may be regarded as the more substantial consideration, i. e., that the contract is in any event valid because it called for the exercise of no discretion by the plaintiff on behalf or in the interest of the defendant. If plaintiff’s version be accepted, defendant was desirous only of learning of opportunities to make good investments in the purchase of real estate and offered to plaintiff certain inducements in case he brought such investments to defendant’s notice. Respondent’s counsel seems to have sensed some such element in the contract because he was at pains to cross-examine plaintiff at great length in regard to the manner of conducting business as a broker, questioning him frequently as to whether it was not his duty on behalf of the seller to get the highest price possible and on behalf of the buyer to secure the property at the lowest price to which in substance plaintiff replied in the affirmative. Whether, however, this evidence be regarded as relating to the business of a real estate broker generally or as stating what plaintiff thought his duties might be under the agreement in question, it could not affect the very plain terms of that agreement, interpreted and illustrated as they were by what actually occurred in the transaction out of which the instant claim arises. It is clear to my mind that the agreement did not contemplate that plaintiff should use his efforts to secure terms for the buyer, defendant, and in fact he did not do so, but insisted, as suggested by the seller, that defendant should himself see the latter and negotiate the transaction to a close himself.

The difficulty of representing in the same transaction two employers with conflicting interests and the .unlawfulness of an agreement to do so in the absence of a full disclosure of the situation to both parties is well discussed in Empire State Ins. Co. v. Am. Central Ins. Co., 138 N. Y. 446, 449. Even where the broker is employed to exercise his discretion as to both parties their knowledge of all the facts will cure the vice. Knauss v. Krueger Brewing Co., 142 N. Y. 70, 77. That case, however, and many others, point out that the contract is perfectly sound as within public policy whether a disclosure be made or not if the so-called broker is not called upon to exercise his discretion in the transaction. It seems to me to be a plain corollary of that proposition that even though his relation to one party be such as to require him to exercise his discretion on behalf of that one, if as to the other he is a pure intermediary without the duties of a

fiduciary, the contract is valid. Indeed, an example of a valid contract of that very character is cited in Dickinson v. Tysen, 209 N. Y. 395, 400, except that the roles are changed from those in the instant case to the extent that it is to the seller rather than, as in this case, to the buyer that the broker is free from the obligation to exercise such discretion. Since, therefore, the contract in the instant case cannot properly be construed as subjecting the plaintiff to employment in a confidential capacity by two opposing interests, the judgment must be reversed and new trial granted with costs to appellant to abide the event.