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Tanenbaum v. Sylvan Builders Inc.

Decided: June 2, 1958.


Goldmann, Freund and Conford. The opinion of the court was delivered by Goldmann, S.j.a.d.


Plaintiffs, J. J. Tanenbaum, trading as Property Analysis Associates, a real estate broker licensed in New York but not in New Jersey, and A.P. Levin, Inc., a licensed New Jersey broker, sued defendants Sylvan Builders, Inc., Frank Joy, Sr., and Frank Joy, Jr., to recover brokerage commissions of which they were allegedly deprived by reason of defendants' fraud, deceit and tortious interference with plaintiffs' rights. Sylvan Builders is the Joy family corporation. The Law Division granted defendants' motion for summary judgment, and plaintiffs appeal. There was a third-party action against Benjamin Scher and Warren Mack, but it is not involved in the present appeal. (For an earlier action involving a suit for real estate brokerage commissions by Mack against the owner of the same property, see Mack v. Revicki , 47 N.J. Super. 185 (App. Div. 1957)).


Revicki was the owner of about 29 acres of land in New Jersey. Tanenbaum, the New York broker, was successful in interesting Scher, a resident of Long Island, New York, in buying the property. Scher entered into a contract of purchase with Revicki on May 5, 1955, the agreement being executed at the office of Revicki's attorney in New Jersey and $20,000 deposited in escrow with the attorney, the balance to be paid by purchase money note and mortgage. The contract was subject to the existing tenancy of one Zilenske; however, by separate letter (post) of the same date the sale was made contingent upon Zilenske's vacating the premises within one week. Attached to the contract was

a rider which provided that the contract was expressly conditioned, among other things, upon approval by the local planning board of a subdivision map to be prepared by the purchaser and to contain a minimum of 100 building lots of 7,500-square-foot area each, on or before August 31, 1955 or such further extension as might be consented to by the seller in writing; and a maximum cost of $25,000 for drainage and fill. In the event of the breach of any of the conditions of the agreement, Scher was given the option of giving Revicki written notice of the abandonment of the contract, whereupon Scher was to be entitled to the return of his deposit. The deed was to pass on or before August 31, 1955. The rider makes specific reference to a separate agreement between Revicki and Tanenbaum providing for a brokerage commission.

The complaint is in two counts. The first alleges that Tanenbaum obtained Scher as a buyer and Revicki agreed to pay him a real estate commission; that Scher subsequently engaged "plaintiffs" -- i.e. , Tanenbaum and Levin -- to resell the property and agreed to pay them a commission; that plaintiffs obtained defendants as prospective purchasers and entered into negotiations for the sale of the property and the assignment of Scher's purchase contract; that defendants "surreptitiously and with the intent of defrauding the plaintiffs of their commission and intending that the said Benjamin Scher should not pay the commission due the plaintiffs," entered into an arrangement with Revicki and Scher whereby defendants agreed and did pay to Scher $6,000, the Scher-Revicki contract was rescinded, and defendants entered into a new contract of purchase with Revicki; further, that defendants falsely represented that plaintiffs were not the brokers, that they did not know plaintiffs and no commissions were due them, and that as a result plaintiff Tanenbaum did not receive his agreed commission of $13,338 in connection with the sale to Scher. Tanenbaum demanded judgment in that amount.

The second count repeats the allegations of the first count, and that "plaintiffs were unlawfully deprived of their agreed

commission of $11,000 for sale of the property to the defendants," and demands judgment in that sum.

The defense set up in the answer was the existence of a remedy at law against Revicki and/or Scher for any commissions that might be due, and accord and satisfaction with Revicki and/or Scher, waiver of commission, and estoppel. In the pretrial order the defendants further contended that Tanenbaum, not being a licensed New Jersey real estate broker, was not entitled to a commission, and also raised the additional defense of the statute of frauds.

The complaint does not indicate whether the second count, insofar as it states a demand on behalf of Tananbaum, is intended as an additional claim or as an alternative claim to that made in the first count. However, at the oral argument Tanenbaum claimed he was entitled to recover both commissions.

Defendants' motion for summary judgment was supported by two affidavits. The first, by Frank Joy, Sr., alleged Mack was the sole broker to negotiate the sale to Sylvan Builders, Inc., and plaintiffs were in no way connected with the purchase. The second, by Scher's New Jersey attorney, Fasolo, states that the contract between Revicki and Scher was to be held in escrow "until satisfactory arrangements were made and a separate agreement was signed by" Revicki and his tenant regarding the date the tenant would vacate the premises, and that the escrow conditions were not met and the contract not consummated. He also states that the contract contained certain conditions precedent which were impossible of fulfillment, one being that the cost for drainage and fill would not exceed $25,000, and that the cost, according to the estimates of certain engineers, would be far in excess of that amount. Fasolo's affidavit further alleges that when his client, Scher, was advised of the drainage and fill cost, he refused to continue with the contract and demanded that the transaction be terminated; that he accordingly demanded the return of the $20,000 escrow deposit from the seller's attorney, and the matter

was finally adjusted, even after the seller had made time of the essence, and the $20,000 deposit returned to Scher.

In opposition to the motion for summary judgment, plaintiffs presented the affidavit of Alfred P. Levin, president of A.P. Levin, Inc. This affidavit states that A.P. Levin, Inc., is a licensed New Jersey real estate broker; that Tanenbaum had requested Levin to assist in finding a purchaser for the land Revicki had sold to Scher, Scher being interested in disposing of his contract; that as a result of a telephone call by Frank Joy, Sr., late in March 1956 advising that he was interested in buying land for development purposes, Levin had his salesman, Groll, arrange for an appointment; that Groll showed Joy various tracts, including the Revicki property; and that Joy came to his office on April 12, 1956, at which time they discussed the Revicki property and Joy offered $2,200 a building lot. As a result, Tanenbaum, Joy and Groll met with Levin in his office four days later. Levin states that Tanenbaum advised Joy that the deal would involve an assignment of a contract of purchase. Among other matters discussed was the amount of the mortgage the seller would take, engineering matters (Tanenbaum lent Joy an engineering report which Scher had had made), and certain municipal requirements, and Joy then agreed to a price of $2,450 a lot if everything else proved satisfactory. Levin alleges that Joy thereafter made an appointment for May 2, 1956, which he never kept. Shortly thereafter Levin learned that the property had been sold to defendants.

In addition to the pleadings and affidavits the trial judge also had before him the depositions of Fasolo and Joy. Fasolo testified to the execution of the May 5, 1955 contract between Revicki and Scher, with its escrow arrangement, and produced a letter written by Revicki's attorney on that date, addressed to him, stating that the agreement was to be held in escrow pending delivery of the tenant's consent to vacate, and in the event that such agreement was not ...

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