Goldmann, Freund and Kilkenny. The opinion of the court was delivered by Kilkenny, J.A.D.
The defendant appeals from a judgment of the Superior Court, Law Division, after a trial, without a jury, awarding the plaintiff Richard Abeles $69,500, as a broker's commission, for obtaining a lender, ready, willing and able to make an institutional loan to the defendant.
The plaintiff Richard Abeles sued as the assignee of the rights of William Atwill, Jr., individually, and his corporation, Atwill & Company, Inc., based upon a written agreement, hereinafter set forth, signed by defendant's president.
One Jack I. Levkoff, a Miami broker, who also rendered services in obtaining the willing lender, joined as a party plaintiff, but his claim was dismissed at the trial because he was not a party to the original agreement or the assignment. Levkoff does not appeal from that dismissal.
The plaintiff cross-appeals for interest on the award from the time of the alleged breach to the effective date of the judgment.
The defendant is a Florida corporation with its principal office in Miami. Charles Silvers is the president of the corporation. He and his family own approximately 89% of the issued and outstanding shares, although the record does not disclose how much of this 89% Silvers personally owns. The remaining 101,251 shares are held publicly by about 400 different stockholders.
The defendant, a relatively new corporation, was interested in obtaining long-term substantial financing. Atwill, one of its directors and a member of defendant's finance committee, and the sole owner of Atwill & Company, Inc., which had underwritten previous stock issues of the defendant,
discussed with Silvers the securing for defendant corporation of an institutional loan.
Atwill, who admittedly was not familiar with this type of financing, contacted Levkoff, who, as Atwill was informed, had successfully concluded such loans with insurance companies. Levkoff in turn contacted the plaintiff, Abeles, a Newark broker. Abeles started negotiations with Prudential Life Insurance Company for the desired loan. In the interim, Atwill had informed Silvers that the brokerage fee for obtaining the loan would be 6% to be divided equally among Atwill, Levkoff and Abeles. The latter two did not participate in the fee arrangement with Silvers. Silvers protested at first that the commission was too high, but eventually acceded to a request for a written memorandum to cover the matter. Accordingly, Silvers wrote to Atwill on August 9, 1957 as follows:
"[Letterhead of Adams Engineering Co. Inc.]
This will confirm our telephone conversation of Wednesday, August 7, 1957.
If you are successful in concluding a fifteen-year institutional loan in the amount of $1,600,000.00, upon terms to be mutually agreeable to both parties, this company agrees to pay you a brokerage of six percent (6%) of the amount of the loan.
This fee is to cover all costs, whether legal, filing, recording, accounting, etc.
Adams Engineering Co., Inc.
Thereafter, several written outlines of loan terms were sent to Silvers by Prudential between September and November
1957 which were rejected. However, on November 26, 1957 Silvers approved in writing an outline providing for a loan of $1,250,000 with specified terms and returned it to Prudential. This outline made no mention of any requirement that Silvers take out personal life insurance as a condition to the loan. At this stage the loan was expressly subject to the approval of Prudential's Finance Committee. The Committee decided that the loan as outlined would be acceptable, provided it was further secured by a five-year term, $500,000 life insurance policy on the life of Silvers.
Donald Knab, the Prudential representative in these dealings, thereupon telephoned Levkoff and informed him of the additional insurance requirement. Levkoff testified that he in turn phoned Silvers to notify him of this new life insurance demand and that Silvers replied that it was "okay." This was categorically denied by Silvers in his testimony. There was no written confirmation by defendant although all previous drafts of the proposed loan terms had been in writing.
Silvers testified that he first became aware of the $500,000 life insurance requirement in December 1957, after defendant's lawyer, Clemen Ehrlich, to whom Prudential's first draft of the final loan agreement had been sent for review, informed him thereof. Silvers testified further that at this point he protested this new factor to Ehrlich and instructed Ehrlich to discontinue all further activity in connection with the loan. The loan was scheduled to close December 31, 1957. Silvers' testimony in this regard was corroborated by Ehrlich.
On January 14, 1958, the loan not having closed, a meeting was held in Silvers' office which was attended by Levkoff, Abeles, Knab and Silvers. Levkoff testified that prior to the meeting on January 14, 1958 Abeles had told him that Silvers was not going through with the loan because "he didn't want to take out the life insurance." But Abeles testified that he did not know of this until
after that meeting. At this juncture, however, it is clear that Prudential or Knab was not aware of Silvers' unwillingness to agree to the insurance requirement, nor was any mention made of it at the meeting. Silvers claimed that he did not mention it on the advice of Atwill that it would be impolitic and harmful, since Abeles was "going to go over Knab's head" to convince the Prudential home office to remove the objectionable clause. Hence, Silvers merely temporized at the meeting and spoke of other plans.
This resulted in Knab writing a letter to Silvers dated January 15, 1958, referring to the previous day's conference, and to Silvers' having talked about negotiating the sale of his stock in defendant company, and reminding Silvers that Prudential was dealing with the corporation and not with Silvers personally, that Prudential's commitment was firm ...