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Solomon v. Goldberg

December 28, 1950


McGeehan, Jayne and Wm. J. Brennan, Jr. The opinion of the court was delivered by William J. Brennan, Jr., J.A.D.


Plaintiff's complaint was brought in the Chancery Division and sought an accounting for one-half of the net profits realized by the individual defendants from the sale of lands title to which was in the corporate defendant, their personal holding corporation. Plaintiff obtained a judgment against the individual defendants who have appealed.

Plaintiff and defendant-appellants are next door neighbors in Englewood. Defendant Michael E. Goldberg is in the lumber business. In 1946 Goldberg was in the market for a lumber yard and plaintiff located one in Cresskill and, as a favor to Goldberg and without any understanding he was to be compensated for his services, negotiated its purchase for Goldberg who took title December 20, 1946, in the name of defendant Eleanor Holding Company, the personal holding corporation.

A few months later Goldberg decided to sell the property. Plaintiff testified Goldberg came to him and proposed plaintiff try to find a buyer, "I would like to get my money back." Plaintiff told Goldberg he thought the property was "worth at least three times the price you paid for it," and Goldberg said, "If you feel that way about it, let's go partners;" "You

don't have to put anything up;" "You go ahead and see what you can get for that property, and everything over and above my costs, we are fifty-fifty." The property was sold largely through plaintiff's efforts and defendants realized a net profit of $6,772.70. It is the alleged breach of the oral agreement to divide this profit which is the subject of plaintiff's action.

Defendants argue the judgment cannot be sustained because the contract is a real estate brokerage agreement and plaintiff can have no action for its breach for the reasons, (1) plaintiff was not a licensed real estate broker authorized to conduct the transaction as required by R.S. 45:15-1 et seq. , and (2) the oral contract was not confirmed by a writing in the manner required by the statute of frauds, R.S. 25:1-9.

Plaintiff admitted at the trial he was not a licensed real estate broker. We agree the contract was a brokerage agreement for breach of which plaintiff as an unlicensed broker can have no recovery and that the judgment must be reversed. We have no occasion, therefore, to consider the question of the contract's enforceability in light of the statute of frauds.

Plaintiff's services were limited to the listing of the property with a number of brokers as available for sale and of conducting negotiations with the ultimate purchaser. The trial court in its opinion filed January 20, 1950, found plaintiff's services were intended to be and were in fact confined to "his efforts in selling the property." Thus plaintiff's services actual and contemplated were only such as are performed by a mere broker within the definition of broker found in R.S. 45:15-3, "* * * a person * * * who for a fee, commission or other valuable consideration, lists for sale, sells * * * or offers or attempts to negotiate a sale * * * of real estate * * * for others." The measure of his compensation upon a profit-sharing basis, as distinct from a percentage commission, does not save the contract from classification as a brokerage agreement. Mendles v. Danish , 74 N.J.L. 333 (Sup. Ct. 1907).

Plaintiff maintains R.S. 45:15-4 applies. This section excepts from the licensing provisions "* * * any person,

firm, partnership, association or corporation who, as a bona fide owner or lessor, shall perform any of the aforesaid acts with reference to property owned by him. * * *." The proofs established the property was owned by defendants through their nominee, the personal holding corporation. Plaintiff had no ownership in the property and manifestly he cannot bring himself within this exception. Annotations , 137 A.L.R. 6, at p. 125; see Gingarelli v. Gingarelli , 124 N.J.L. 299 (Sup. Ct. 1940).

Moreover, plaintiff does not come under the protection of the decisions holding that real estate brokerage licenses are not necessary where services beyond those of a mere broker are to be performed. Agreements requiring services beyond the mere listing for and negotiating of sale of the real estate of another may be actionable when the facts support an inference the one rendering these services is not a mere broker but a promoter; Montgomery v. East Ridgelawn Cemetery , 189 Misc. 99, 68 N.Y.S. 2d 836 (Sup. Ct. 1947); affirmed, 75 N.Y.S. 2d 287 (App. Div. 1946), construing R.S. 45:15-3 of New Jersey statute; or a developer whose services also require him to improve the owner's lands, Ruta v. Werner , 1 N.J. Super. 455 ...

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