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Harris v. Perl

Decided: February 3, 1964.

FLORENCE HARRIS, PLAINTIFF-APPELLANT AND CROSS-RESPONDENT,
v.
HERMAN PERL AND RUTH PERL, DEFENDANTS-RESPONDENTS AND CROSS-APPELLANTS, AND JOHN D. CRONIN AND UNION COUNTY TRUST COMPANY, ETC., DEFENDANTS-RESPONDENTS



For reversal in part and affirmance in part -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. Opposed -- None. The opinion of the court was delivered by Weintraub, C.J.

Weintraub

Plaintiff, Florence Harris, is a licensed real estate broker. Knowing that defendant Cronin wished to sell his home, plaintiff suggested the property to the defendants Perl. Plaintiff arranged with Cronin for inspection of the property by the Perls and they visited the premises on three occasions, June 5, July 2, and July 18, 1959. In negotiations through plaintiff, Cronin came down from a demand of $175,000 to $135,000, while the Perls moved from an offer of $100,000 to $125,000, at which point Perl told plaintiff that if she was "a smart girl," she would reduce her commission.

Meanwhile, on July 2, the defendant Union County Trust Company recorded a deed from Cronin to it, dated May 26. The deed probably was not delivered until on or after June 22. It appears that Cronin and his father were indebted to the bank for some $600,000, secured by a mortgage on a number of properties including the one in question and that the conveyance was made to satisfy that obligation in part. By an agreement dated June 22 the Cronins were permitted to remain in possession on a rental basis until December 31, with the express understanding that the bank could show the property to interested buyers at all times. Thus Cronin was the owner during only part of the period of the negotiations.

On September 3 Mrs. Cronin telephoned plaintiff. According to plaintiff, Mrs. Cronin said she felt her husband would accept $125,000 if the Perls were still willing to pay that sum. Mrs. Cronin says she called only to find out if the property was or would be sold because she had the problem of enrollment of her children for the ensuing school year. Whatever the conversation, plaintiff that day telephoned Perl, who abruptly said he was too busy to talk with her but would after the Labor Day weekend. In fact Perl did not intend any further discussion. The reason was that, having learned the day before through a Dr. Wallach that the bank had title, Perl had hurriedly submitted an offer directly to the bank for $125,000, free of brokerage to anyone. A contract on that

basis was signed by the bank on September 4, the day after plaintiff's call.

Plaintiff learned of the contract when she telephoned Mrs. Perl on September 8, the day after Labor Day. It was then that plaintiff discovered that Cronin had conveyed to the bank. Prior thereto she knew only that the bank held the mortgage and that a lis pendens indicated foreclosure proceedings had been instituted in 1957, but there was no reason for plaintiff to suppose that Cronin could not complete a sale.

Plaintiff sued Cronin, the bank, and the Perls. There were numerous cross-claims among the defendants.

Plaintiff's claim against the bank was on the thesis that Cronin was its agent, and the Perls cross-claimed against the bank charging the bank had fraudulently represented to the Perls that Cronin was not its agent. On motion the bank obtained summary judgment with respect to plaintiff's claim and the Perls' cross-claim, the finding being that Cronin was not the agent of the bank. The Perls sought but were denied leave to cross-claim against the bank on the further basis that, if the Perls were liable, then the bank should contribute as a joint tortfeasor.

Upon trial without a jury the court found in favor of plaintiff against the Perls and in favor of Cronin both on plaintiff's complaint and the cross-claim of the Perls.

The Appellate Division (1) affirmed the judgments in favor of Cronin; (2) reversed plaintiff's judgment against the Perls; and (3) did not reach the appeal of the Perls from the denial of leave to cross-claim against the bank for contribution. We granted certification. 40 N.J. 499 (1963).

I.

The issues as between plaintiff and the Perls are (1) whether they breached a duty owing to plaintiff, and (2) whether the breach in fact deprived plaintiff of commissions on the sale. The Appellate Division did not decide the ...


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