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Brinkman v. Urban Realty Co.

Decided: September 24, 1951.

EDITH BRINKMAN, ET AL., PLAINTIFFS-APPELLANTS,
v.
URBAN REALTY CO., INC., TEANECK GARDENS, INC., SIDNEY SARNER, RALPH J. SOLOW AND GEORGE L. MARCUS, DEFENDANTS-RESPONDENTS



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

Brennan

[15 NJSuper Page 356] Defendant, Teaneck Gardens, Inc., constructed apartments in Teaneck, Bergen County, financed by a $1,592,000 bank mortgage. The mortgage was insured under the National Housing Act which originated in chapter 847 of Act of June 27, 1934 (48 Stat. 1246; Title 12 U.S.C.A., secs. 1701, et seq.). To qualify the mortgage for insurance within the regulations of the Federal Housing Administration, the certificate of incorporation of Teaneck Gardens, Inc., included a provision that,

without prior approval of the holders of a majority of its preferred stock (that is, the Federal Housing Administration) the corporation would not "permit the occupancy of any of the dwelling accommodations of the corporation except at or below the rents fixed by the schedule of rents provided hereinafter." On July 27, 1948, a rental schedule submitted by the corporation was approved by the Federal Housing Administration.

Defendant, Urban Realty Co., Inc., was organized in March, 1948, and shortly thereafter entered into an agreement with defendant, Teaneck Gardens, Inc., by which Urban was named exclusive rental agent for the apartments.

The plaintiffs are numerous tenants who entered into leases during the months of April through August, 1948. Each lease was for three years and recited a rental at the maximum stated in the approved schedule. However, before his lease contract was consummated each tenant was required to pay Urban a "commission" of 5 per cent of the gross three-year rental in accordance with an agreement with Urban signed by the tenant when applying for an apartment. The agreement reads as follows:

"I, or We, the undersigned, hereby employ Urban Realty Co., Inc., to act as my or our Agent and Real Estate Broker, to procure an apartment in Teaneck Gardens, Inc., and hereby agree to pay a commission at the rate of (5%) Five Per Cent on the gross rental in the event that the undersigned shall have secured an apartment in the said Teaneck Gardens, Inc.

This agreement to pay commission shall in no way be construed as a bonus or gratuity for the securing of the said apartment."

The plaintiffs' suit is to recover damages equal in amount to the "commissions" so paid, which were stipulated to aggregate $22,525.50. Their actions were dismissed at the close of their proofs, and they appeal from the ensuing judgment.

We are concerned on the appeal only with one of the two theories of plaintiffs' action, the other having been abandoned. The second count of each complaint charges that the individual defendants organized the two corporations and caused

Teaneck Gardens, Inc., to give Urban the exclusive rental agency as steps of a conspiracy, that is,

"In order to avoid the restriction contained in the certificate of incorporation of Teaneck Gardens, Inc., against exacting a rental for apartments owned by Teaneck Gardens, Inc., in excess of the schedule of rents as limited by the Federal Housing Administration as a condition for the insuring by said administration of the mortgage loan aforesaid, and as limited by said certificate of incorporation, said Sarner, Solow and Marcus, without the knowledge or consent of the preferred stockholders of Teaneck Gardens, Inc., conspired and agreed among themselves to require as a condition to obtaining for rental of any apartment in the building owned by Teaneck Gardens, Inc., that each person obtaining an apartment therein should be required to ...


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