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Rosenthal v. Art Metal Inc.

Decided: April 21, 1967.

LAWRENCE H. ROSENTHAL, INDIVIDUALLY AND T/A INDUSTRIAL REALTY, AND FEIST & FEIST, A NEW JERSEY CORPORATION, PLAINTIFFS,
v.
ART METAL, INC., A NEW YORK CORPORATION AUTHORIZED TO DO BUSINESS IN NEW JERSEY, AND GENERAL DYNAMICS CORPORATION, A DELAWARE CORPORATION, AUTHORIZED TO DO BUSINESS IN NEW JERSEY, DEFENDANTS



Owens, J.s.c.

Owens

[95 NJSuper Page 11] Plaintiffs' action for real estate broker's commission was tried to a jury and at the close of all the evidence defendant General Dynamics Corporation (General Dynamics) moved for judgment. The motion was denied and the case submitted to the jury. The trial resulted in a mistrial due to the inability of the jury to reach a verdict. Defendant brings this motion pursuant to R.R. 4:51-2.

The relevant facts as presented at trial are that on the morning of April 22, 1963 plaintiff Rosenthal telephoned defendant General Dynamics informing it of the availability of the Art Metal plant in Woodbridge, New Jersey. Rosenthal was not solicited by General Dynamics but called because of his knowledge that a fire had destroyed the General Dynamics plant and that Feist & Feist, a licensed real estate broker and his former employer, was one of the six brokers chosen by Art Metal to procure a purchaser for its Woodbridge property.

Rosenthal spoke with Mr. Kahn of Feist & Feist the same morning, requesting the plans and further information about the Art Metal property. After informing Kahn of the prospective purchaser he was given a plot plan and a listing sheet. At this time Feist & Feist agreed with Rosenthal to co-broker the property -- that is, if Rosenthal effectuated the sale of the Art Metal property, Feist & Feist would divide its commission with him. Rosenthal forwarded the plot plan and other information to General Dynamics the same day.

These were the only acts done by him in regard to the sale of the property. At no time did Feist & Feist take any steps to procure General Dynamics as a purchaser of the Art Metal property. Sometime later Art Metal sold its Woodbridge plant to General Dynamics, no commission being paid to Rosenthal or Feist & Feist.

Rosenthal had terminated his employment with Feist & Feist sometime in the middle of February 1963, and on April 22 and 23 was not employed by a licensed real estate broker. Therefore, by reason of N.J.S.A. 45:15-14 and 45:15-1, he would not be entitled to a commission unless he was a licensed real estate broker. See Cohen v. Scola, 13 N.J. Super. 472, 476 (App. Div. 1951); Kenny v. Paterson Milk & Cream Co., 110 N.J.L. 141 (E. & A. 1933); Solomon v. Goldberg, 11 N.J. Super. 69, 72 (App. Div. 1950).

At the time Rosenthal made the telephone call and mailed the letter, he was not a licensed real estate broker. He had taken the New Jersey Real Estate Brokers examination on April 16, 1963. He had called the Real Estate Commission and been informed that he had passed the examination prior to making the call to General Dynamics. However, he did not receive his license until April 25, 1963. See N.J.S.A. 45:15-10.

Plaintiffs nonetheless contend this does not bar their recovery, citing as authority N.J.S.A. 45:15-3, which states:

"No person, firm, partnership, association or corporation shall bring or maintain any action in the courts of this State for the collection of compensation for the performance of any of the acts mentioned in this article without alleging and proving that he was a duly licensed real estate broker at the time the alleged cause of action arose."

To substantiate their claim plaintiffs cite Pound v. Brown, 140 N.W. 2 d 183 (Iowa Sup. Ct. 1966). In opposition, defendant relies on Bendell v. De Dominicis, 251 N.Y. 305; 167 N.E. 452 (Ct. App. 1929). Both cases interpret statutory sections almost identical to New Jersey's N.J.S.A. 45:15-3, but arrive at opposite conclusions.

Both Bendell and Pound involve situations where a defendant seller contracted directly with the "broker" for the sale of the property. In the present case Rosenthal and Feist & Feist claim to be co-brokers; the real issue is the validity of the co-brokerage agreement. Therefore, neither Bendell nor Pound is on point.

A real estate broker is the agent of either the buyer or seller, whoever hires him first, for the sole purpose of obtaining a seller or buyer for a property. Corson v. Keane, 4 N.J. 221 (1950). Feist & Feist was the broker, or agent, of Art Metal. Thus, the co-brokerage agreement between Feist & Feist and Rosenthal is ...


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