Platt v. Kohler

Patterson, J.

The plaintiff sued to recover compensation for services alleged to have been rendered by him as a broker in negotiating an exchange of property situated on Staten island, and belonging to the plaintiff, for real estate in the city of New York owned by one Morganthaler. The allegations of employment of the plaintiff by the defendant, of the rendition of service, and agreement to pay therefor, are denied by the answer. The cause was referred; the referee reported in favor of the plaintiff; and from the judgment entered on the report, the defendant appeals. The employment was fully proven, as was also the amount of compensation to be paid the plaintiff if he performed the service for which he was so employed; but the evidence does not show that the plaintiff has earned his commission, and does not justify the referee’s findings in that regard. In the transaction of the proposed exchange the plaintiff dealt with Messrs Hoye, the brokers of Morganthaler. The basis of the dealing was that the defendant should, in addition to conveying his Staten island property, pay $1,750 in money, and take a house on Lenox avenue, subject to a mortgage of $13,000. John O. Hoyt testified that the plaintiff and defendant came together to his office in the early part of July, 1891, and the plaintiff spoke of having, as broker, a place of the defendant on Staten island, to which Hoyt replied he had a house on Lenox avenue he would trade. He states that afterwards his principal (Morganthaler) agreed to accept $1,750 as the cash consideration to be paid, and on the 21st July the consent of the defendant to that was given, the latter stating he would give that amount in money and the Staten island property, and take the Lenox avenue house, with the mortgage on it. Thus far the parties were in accord, and it is clear no other terms were ever contemplated by the defendant. The disagreement or misunderstanding results from what followed. Hoyt drew a written contract containing other terms than those mentioned. Morganthaler signed it. On the 22d July, Kohler and the plaintiff called at Hoyt’s office. Conversation was had respecting the contract. It was then signed by Kohler, but on the express understanding that it was not to be considered as binding the defendant, nor as a delivered instrument, until Mr. Van Name, the defendant’s attorney, could examine it the following day. The plaintiff, as well as Hoyt, testifies substantially to that. It is also testified to that the defendant criticised the contract as drawn, but limited his declared objection to the shortness of time allowed for the completion of the transaction. It is also true that the defendant signed a letter, (Exhibit No. 2,) in which he states that the terms of the trade are correctly set forth in the contract; but we are convinced that he is right in further stating that he did not observe that he was required by that contract to pay $2,250 instead of $1,750, and it is fully admitted by Hoyt that the contract was incorrectly drawn, for he says that he subsequently offered to have the $500 applied on account of the $1,750. The defendant is not bound by that letter, and to the plaintiff’s own knowledge the contract was not to be operative until Van Name examined and approved it. When it was discovered by the defendant’s attorney that the contract contained different and more onerous terms than those verbally agreed upon, the defendant had the right to refuse to be bound by it, and he did so. So far as now appears the negotiations of the plaintiff with Morganthaler virtually terminated at that point, and as no enforceable agreement was ever made between Morganthaler and the defendant, and the latter was not at fg,ult, the plaintiff is not entitled to commissions. The brokers and the defendant had verbally agreed, but Morganthaler had not become bound. The plaintiff’s right to payment depended upon his procuring a person ready and willing to contract in such a way as to be legally bound to perform. His service was incomplete until that was done. Nothing was accomplished of any benefit to the defendant, who could not compel Morganthaler to perform, nor recover damages for nonperformance, and nothing of subsequent occurrence changed the relations between the parties. On the facts and circumstances disclosed by the proof, the referee erred in the conclusion at which he arrived. The case differs essentially from Barnard v. Monnot, *42 N. Y. 203, and like cases, cited by the referee to sustain his decision. Where a principal refuses to carry out a transaction made by his broker on terms duly authorized, the broker may recover, for he is not to be deprived of his compensation because the principal retreats or changes his mind. The broker has then done all he can; but where the principal stands ready to perform,—to enter into a contract on conditions he has authorized,—and the party produced by the broker refuses to conform thereto by entering into a binding obligation, the broker has failed to effect the purpose of his employment. He has not found a person ready and willing to take on the agreed terms, and his principal is not liable for commissions. The judgment must be reversed, and a new trial ordered before another referee to be appointed by this court, with costs to the appellant to abide the event. All concur.