On motions for summary judgment.
The question presented by these two motions for summary judgment is whether a real estate broker who, having arranged a sale, engages in the unauthorized practice of law by preparing the agreement of sale, should be held, by reason of such act alone, to forfeit his right to a sales commission.
The cases before the court are two actions by realtors for the payment of commissions. In each, the defendant moves for summary judgment of dismissal of the complaint. The cases arise out of separate transactions, but the principal issue upon which the motions for summary judgment are presented is common to both. Indeed, although incidental issues were presented by the parties, it is conceded that the issue above stated is the only one which could be dispositive of the cases on motion for summary judgment, and that, aside from this, the resolution of the differences between the parties must await a trial in each case on the merits. R.R. 4:58-3; Judson v. Peoples Bank & Trust Co. of Westfield , 17 N.J. 67 (1954).
In Jeffcott v. Erles the defendant Erles contacted the plaintiff, a licensed realtor trading as Jeffcott Realty Investment Company, for the purpose of listing with the plaintiff for sale a tract of land owned by the defendant. A listing agreement was signed by the parties on November 15, 1961, wherein the defendant granted to the plaintiff the "exclusive right to sell said property" until November 15, 1962 and agreed to pay a commission of 10% of the gross sale price in the event said property or any portion thereof should be "sold or exchanged" by the plaintiff "or any other person" during the term of the contract.
On November 10, 1962 the defendant signed an agreement of sale between himself as seller and Marion G. Jeffcott, wife of the plaintiff, as buyer whereby he agreed to sell the tract for the sum of $4,200. The agreement was drawn by the plaintiff Jeffcott. It appears from pretrial depositions that the plaintiff had succeeded in interesting one Beaver in the purchase of the tract, but that Beaver's interest was conditioned upon the removal of certain trailers from the property. Since the period of the exclusive listing agreement was about to expire, plaintiff drew the agreement in question, with the intent of having the sale by the defendant carried out, thus earning his commission, and then reselling the tract to Beaver at the same price.
The defendant, being unable or unwilling to procure the removal of the trailers, subsequently refused to carry out the agreement of sale and the transaction was never completed. Plaintiff then sued for his commission on the ground that he had performed his listing agreement according to its terms.
In Faherty v. Becker the plaintiff real estate broker on March 26, 1963 entered into an exclusive listing agreement with the defendant for a period of six months, covering the sale of premises which the defendants were themselves purchasing under an installment contract from the Veterans Administration. The listing agreement called for payment by the seller to the realtor of a commission of 6% if the property or any part thereof should be sold or exchanged by the broker.
On April 28, 1963 the plaintiff produced prospective purchasers for the property, namely Daniel C. Van Orden and Marie Van Orden, his wife. The plaintiff prepared an agreement of sale and arranged for its execution by the sellers and buyers. Neither the seller nor purchasers, at this stage, had the advice of attorneys.
The defendants subsequently refused or failed to perform because they could not arrange to be relieved of their obligation under their instalment contract with the Veterans Administration. Plaintiff's demand for payment of a commission being refused, this suit followed.
The principal ground upon which the defendants contend that summary judgment of dismissal should be granted in both these actions is the proposition that, since in each case the plaintiff real estate broker prepared the agreement of sale (which constitutes the unauthorized and unlawful practice of law), the real estate brokers are thereby barred from the right to claim and collect commissions. Defendants rely on the holding of the Supreme Court in N.J. State Bar Association ...