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Rothman Realty Corp. v. Maclain

Decided: November 1, 1951.

ROTHMAN REALTY CORP., A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF,
v.
RAY V. MACLAIN AND ARTHUR WARREN MACK, DEFENDANTS



Grimshaw, J.s.c.

Grimshaw

Plaintiff is a corporation engaged in the real estate business in Bergen County. Both defendants were salesmen employed by the plaintiff under a contract which reads as follows:

"In consideration of employment by the Rothman Realty Corp., I * * * agree and covenant that in the event I separate myself,

or am discharged, and no longer remain active in organization, that I shall not remove or make use of any sales or rental listings gained while in said employment, or secured by my own efforts and solicit any prospects or listings secured through my association with this firm. Further, I, as an employee covenant not to engage in the real estate business for a period of one year after the date of my termination of employment with the Rothman Realty Corp., within Bergen County, State of New Jersey.

Further, I, as an employee, in consideration of employment, do hereby agree that I shall be duly liable for any representations or misrepresentations that I make in the sale, rental or negotiation of any real estate. That I as salesman for the firm of Rothman Realty Corp., shall devote my entire time, skill, labor and attention for said employment during the time that I shall be employed by the Rothman Realty Corp.

The employee shall receive a commission of 40% on the net commissions of the transactions which are consummated through the direct efforts of the salesman. Any percentage of the commission is payable only when and if the title is passed or the lease is signed, or fully earned. The employer may terminate this contract of employment at any time, upon the payment to the employee what is coming to him on the evening of the day of his actual termination.

The employer shall be the sole judge of what the salesman is entitled to, on the termination of this contract. Any advancements to the salesman by the Rothman Realty Corp., towards commissions, should be in the form of a loan and repayable upon demand of the employer."

Defendant MacLain severed his connection with the plaintiff on September 15, 1950. Mack's employment ended on October 15, 1950. Immediately following the severance of his relationship with the plaintiff, each of the defendants became associated with a rival concern doing business in Bergen County. Plaintiff thereupon sought an injunction restraining the defendants from violating the covenant in the contract under the terms of which they had agreed not to engage in the real estate business in Bergen County for one year following the termination of their employment by the plaintiff. Upon an appropriate showing the injunction was granted.

It appeared, however, that at the time defendants left plaintiff's employ there were pending several contracts for the sale of real property which had been negotiated by the defendants but which had not been consummated by the

passing of title. Therefore, the injunction was conditioned upon the payment by the plaintiff to the defendants of the commissions which would have been due had defendants' employment not ceased. The payment was made with a reservation of plaintiff's right to dispute defendants' title to these commissions. MacLain received $1,400. Mack was paid $640. Defendants' right to retain these commissions is the matter for determination.

Ordinarily the right of a broker to commissions is complete when he has procured a purchaser able and willing to conclude a bargain on the terms on which the broker was authorized to sell. The broker may, however, by special agreement, make his right to compensation dependent on a contingency which his efforts cannot control. Such a contract is binding and no action can be maintained until the contingency has ...


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