Carnegie v. Abrams

Steuer, J. Plaintiff has recovered in an action for brokerage commissions and we believe rightfully so. Defendant’s testator (herein defendant) engaged plaintiff to find a buyer for two buildings located on East 11th Street, Manhattan. The terms given plaintiff were $250,000 payable $50,000 in cash, $100,000 by assumption of an existing mortgage and $100,000 by a 10-year purchase-money mortgage. When plaintiff produced a buyer able and willing to purchase on those terms defendant decided that he wanted $100,000 in cash and a $50,000 mortgage. The proffered buyer agreed to this change. Defendant then decided that he did not wish to sell. The defense is that there had been no agreement on the interest or amortization rates on the proposed mortgage. When defendant first advanced this reason in calling off negotiations he was asked what rates he desired and the buyer stated he was agreeable to any customary rates. Defendant refused to state what terms he desired. Defendant did not thereafter sell the property. It is quite true that a brokerage commission is not earned until the broker has produced a buyer ready, willing and able to purchase on all of the terms specified by the seller so that there is a complete meeting of the minds on the sale. It is equally true that a failure to agree cannot be predicated on an afterthought. The question is always whether there is a genuine lack of consensus or a deliberate attempt to escape liability by attributing the failure of negotiations to such cause. The expression used is whether the defendant acted in good faith. In many cases this lack of good faith has been established by the fact that the owner 329 later sold the property to a higher bidder. The dissenters appear to believe that this is the sole criterion of good faith and that absent such a subsequent sale, the proposed seller can change his mind at will even though the term relied on was neither really in dispute nor of material consequence. We believe in this case bad faith was established. The order of the Appellate Term should be affirmed, with costs.