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Kagan v. Berman

Decided: February 8, 1954.


On appeal from the Superior Court, Appellate Division, whose opinion is reported in 27 N.J. Super. 20.

For reversal -- Justices Heher, Oliphant, Burling and Brennan. For affirmance -- Justice Wachenfeld. The opinion of the court was delivered by Oliphant, J.


Plaintiff, an attorney-at-law of this State, instituted suit against the defendants in which he sought the reasonable value of legal services allegedly rendered by him in connection with the sale of defendant's property located in Rahway. The first count of the complaint demanded damages for the so-called legal services while a second count demanded damages as a broker's commission. The services of the plaintiff, as set forth in the first count of the complaint, were to consist of "negotiating sale of certain land owned by the defendants * * *." One of the defenses pleaded was that the alleged agreement for the payment of compensation was not in writing and therefore unenforceable in law. Before trial of the issue judgment was entered in favor of the defendant Lillie Berman, and at the pre-trial conference plaintiff abandoned his second count to recover commissions for the sale of the real estate.

The trial resulted in a jury verdict in favor of the plaintiff in the sum of $4,000, on which judgment was duly entered. On appeal to the Appellate Division the judgment below was affirmed, 27 N.J. Super. 20, and on defendant's petition we granted certification. 13 N.J. 360.

Defendant had been anxious to sell his property, had had a few nibbles for it, but nothing had come of these so he

called the plaintiff and asked him "whether it was possible for me to do anything about securing a large business development on Main Street that would enable him to dispose of his property." This resulted in a meeting between the parties at which plaintiff informed defendant that he did not have sufficient frontage "for a commercial development." The "feasibility of tying in other properties" was discussed and defendant said to plaintiff "you bring this transaction about whereby you can bring this whole deal to a conclusion, and bring in a commercial development and I will be glad to pay you what the thing is worth, or whatever reasonable figure that you think the thing is worth." Plaintiff finally assembled three properties, that of the defendant, one owned by Mr. and Mrs. Fox, and another by the Allen Realty Corporation, in which plaintiff was an officer and the majority stockholder. He engaged an engineer to prepare a sketch of the project and distributed that to real estate chains and brokers. On the sketch was the notation, "A Choice Location In The Heart Of The Business Section Ripe for Commercial Development. For details contact George M. Kagan," followed by the address of his law office. Later, plaintiff was advised by one Roe, a real estate broker, that he had a prospective buyer, but defendant then declined to sell for the price he had originally set of $500 per front foot. Finally he did agree to sell for the sum of $1,000 per front foot or $50,000 net. An obstacle to the sale then arose by reason of a term lease which one Treadwell held on defendant's property, whereupon plaintiff negotiated with Treadwell, removed that obstacle, the sale was consummated, and defendant received the sum of $52,500, of which $2,500 was paid to Roe, the broker. Immediately after the closing plaintiff sent defendant a bill for $5,000 for services rendered "in negotiating sale of premises owned by you * * *."

Admittedly plaintiff did perform some incidental legal services for the defendant in connection with the sale of the property such as drawing some options and the negotiating or changing of the Treadwell lease to a month-to-month

tenancy, but it is significant that Berman was represented by an attorney of his own choosing and he signed no papers in connection with the deal without first consulting him.

The question before us resolves itself into whether the services rendered by the plaintiff and which he was engaged to perform were so predominantly "brokerage" that his legal activities were purely incidental so that the whole constituted an indivisible contract for which there can be no recovery because of the statute of frauds, R.S. 25:1-9, which provides that no real estate agent selling real estate shall be entitled to any commission unless his authority be in writing.

The agreement between the parties can best be gleaned from the mouth of the plaintiff himself and it, we think, resolves the question.

Defendant first asked plaintiff what he could do "about effecting the sale of this property," he being anxious to dispose of it, and then the following testimony was given on questioning of the plaintiff by the court:

"Q. Will you tell us the subject matter of that call again? A. To repeat the subject matter of the telephone call, he told me they had a nibble to his property, and that nothing had happened to it. He asked me whether I wouldn't represent ...

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