Clapp, Jayne and Francis. The opinion of the court was delivered by Jayne, J.A.D.
The narrative of the transactions out of which the present litigation arose should perhaps begin with the prefatory information that on April 12, 1955 the defendants contracted in writing to convey to one Jack Gruber certain therein described premises situate in the Borough of Paramus, Bergen County, for the purchase price of $17,500. Embodied in the contract was an option accorded to Gruber to acquire by purchase an additional designated tract of land for the price of $22,500. Accompanying the contract of sale a written memorandum was executed by the defendants in which they covenanted to pay to one John M. Gabriel, a realtor, a commission of $1,250 upon the consummation of the sale pursuant to the contract and a commission of $1,750 to him "in the event that the option is exercised by the purchaser" to acquire the additional tract.
In conformance with the privilege expressly conferred by the contract of sale, the purchaser therein named duly assigned his interest in the contract to the plaintiff, and on June 28, 1955 the conveyance to which the contract pertained was made to the plaintiff. On the same occasion a more detailed and formal agreement for recording purposes was executed by the plaintiff and defendants evidencing the option granted by the defendants to the plaintiff to purchase the additional parcel.
It becomes significant to note in the option agreement the provision that the option to acquire the additional property is subject to the leasehold estate therein and an option to purchase, both held by Del-Ed, a corporation, by virtue of the terms of a recorded lease dated July 1, 1952 wherein the defendants and Ruta Sand and Gravel Co., a corporation, were the lessors and Del-Ed the lessee.
On September 29, 1955 the plaintiff announced to the defendants its acceptance of the option to purchase the additional premises, and the parties assembled for the consummation of the sale on November 10, 1955. Certain factual circumstances then became ascendant in consequence.
The lessee, Del-Ed, had already paid to the lessors the
rent of $150 for the month of November 1955. At the inception of the tenancy of the premises the lessee had deposited with the landlords the sum of $900, "a deposit as security for the performance of the terms and conditions" of the lease with the further understanding that "said deposit shall apply on the rent for the last six months of the term" (ten years). Then, also, the plaintiff presented an assignment to it by Gabriel of his brokerage commission of $1,750.
Counsel for the plaintiff put forward the following memorandum of the terms in conformity with which the plaintiff would consummate the sale pursuant to the exercise of the option:
Purchase price $22,500.00
Credit for deposit 900.00
Credit for brokers commission 1,750.00
Credit for rent 11/10-11/30 100.00
Purchase money mortgage ...