Benenson Management Co. v. Banner Holding Corp.

Appeal from order of the Supreme Court at Special Term, entered February 7, 1961, in New York County, which denied a motion by defendants for summary judgment under rule 113 of the Rules of Civil Practice and granted a cross motion by plaintiff for an order to serve an amended complaint. Per Curiam. The plaintiff sues on a brokerage contract in connection with the sale of real estate. The complaint contains one cause of action, based on the contract. The contract provision contains the usual clause, now generally referred to as a waiver clause, that if the deed and full consideration therefor fail to be delivered, the broker waives all claims for any commission. Defendant moved for summary judgment upon the conceded facts that no contract was ever entered into with the proposed buyer produced by the plaintiff. Plaintiff did not contest the motion for summary judgment but moved instead for permission to serve an amended complaint in accordance with the. proposed amended complaint attached. Special Term granted plaintiff’s motion and denied defendant’s motion. The proposed amended complaint sets out no eventual facts which add anything in legal effect to the original complaint. The identical waiver clause has been held valid (Wenger v. Lefrak, 279 App. Div. 993, affd. 305 N. Y. 656). The provision allowing an owner to contract for a waiver of commissions even in the event of his own fault is permissible (Elliman & Co. v. Sterling Garage, 304 N. Y. 846). Here the claim is that because the alleged default took place prior to the execution of the contract of sale, the clause is by its terms without application, The intent of the brokerage contract is clearly that any default which resulted in a failure to transfer title to the real estate barred recovery of commissions. In the Wenger case (supra) the dissenting opinion of Shientag, J., makes clear that a default prior to execution of the contract would, in any event, prevent recovery. Heller & Henretig v. 3620-168th St. (302 N. Y. 326) relied on by the plaintiff, is not to the contrary. There the waiver clause distinguished between a default prior to contract and one thereafter. Before contract, any default prevented plaintiff from asserting a claim; after contract, a default by the seller would not be a bar. The default occurred prior to contract and the action was held barred. [930] It is true that the cited cases in which waiver clauses have received interpretation have been concerned with the policy of allowing a seller to contract against his own default. Here that policy is not questioned and the emphasis is on whether the contract so provides. Inherent in the answer to that question is that the greater includes the lesser. A default after execution of a contract of sale is a default after the negotiations and after the entire work of the broker has been completed. If that default is waived, any default in the earlier stages must necessarily be included in the waiver. The order should be reversed on the law, and motion granted and cross motion denied.