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O'Connor-Sullivan, Inc. v. Otto

Supreme Court of New York, Appellate Division

January 27, 1954

O'CONNOR-SULLIVAN, INC., Appellant,
v.
EARL OTTO, Respondent.

Page 270

APPEAL from an order of the County Court of Albany County at Special Term (SCHENCK, J.), entered June 22, 1953, which denied a motion by plaintiff for summary judgment under rule 113 of the Rules of Civil Practice.

COUNSEL

Bernard Ellenbogen and Meyer A. Jeneroff for appellant.

Milton B. Knox for respondent.

Per Curiam.

This is an appeal from an order of the Albany County Court denying the plaintiff's motion for summary judgment under rule 113 in an action for real estate commissions.

The defendant entered into an agreement with the plaintiff giving the plaintiff an exclusive agency for the sale of certain real property in the city of Albany. The brokerage agreement was executed upon a printed form prepared by the plaintiff, which provided for the payment of commissions 'upon the transfer, sale or exchange of said property by whomsoever made or effected'.

The plaintiff procured a purchaser who entered into a contract with the defendant on May 17, 1952, for the purchase of the premises at a price and upon terms acceptable to the defendant. The contract provided that the transfer of title was to take place on October 31, 1952, and further provided: 'Premises are to be vacated by the seller and all his tenants and possession of the entire premises to be delivered on day of transfer of title'. A subtenant of part of the premises refused to vacate and the defendant was unable to deliver possession of the premises upon the closing date or within a reasonable time thereafter. The purchaser thereupon rescinded the contract and demanded the

Page 271

return of his $500 deposit. This deposit had been paid over to the plaintiff and, upon the plaintiff's refusal to refund it, the defendant paid the sum of $500 to the purchaser; he has interposed a counterclaim in this action for the recovery of that sum.

The plaintiff's theory, as set forth in the complaint and in the affidavits upon this motion, is that the plaintiff became entitled to commissions immediately upon procuring a purchaser and upon the purchaser executing the contract of sale. However, as noted above, the brokerage agreement stated that the commissions were payable 'upon the transfer, sale or exchange' of the property. The defendant's answer and affidavits assert that it was orally agreed that no commissions would be payable unless the purchaser 'actually purchased said premises'. The plaintiff, on the other hand, contends that the word 'sale' in the printed agreement referred to the execution of the contract of sale rather than to its consummation.

The brokerage agreement was, at best, ambiguous and, since it had been prepared by the plaintiff, any ambiguity should be resolved against it ( Shubert Theatrical Co. v. Gallagher, 200 A.D. 596). It may be noted that the agreement was so drawn as to entitle the plaintiff to commissions even if the sale was effected by others. Presumably, in this context, the word 'sale' referred to an actual consummation; the plaintiff would hardly expect to be paid commissions if the defendant had merely entered into a contract to sell the premises to a purchaser procured by someone else and the sale had failed of consummation. In any event, the language being ambiguous, parol evidence is admissible to show the intention of the parties and to resolve the ambiguity (Restatement, Contracts, § § 231, 238). This issue of itself requires a trial and precludes the possibility of awarding summary judgment to the plaintiff upon the basis of its interpretation of the agreement.

It is true that, even if the brokerage agreement is construed as requiring actual consummation of the sale, as a condition precedent to the obligation to pay commissions, the plaintiff may ultimately be successful in recovering commissions if it can establish that the failure of consummation was attributable solely to the defendant's fault. But, if the plaintiff shifts to this theory, the burden will rest upon it, both to plead and to prove that the defendant was at fault and that the performance of the condition precedent was therefore deemed to be excused or waived (Stern v. Gepo Realty ...


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