Summary
In Lippincott v. Content, 123 N.J.L. 277 (E. A. 1939), the language was much the same: "said commission to be paid in consideration of services rendered in consummating this sale; said commission to become due and payable upon closing title."
Summary of this case from Richard v. FalletiOpinion
Argued May 19, 1939 —
Decided September 22, 1939.
1. The principle is well established that an agent becomes entitled to the commission when he has procured a purchaser able and willing to conclude the transaction on the terms authorized by the owner, and that in such circumstances a clause to the effect that the commission is payable upon closing title merely fixes the time for payment of the commission; but the parties are free to insert their own limitations in the contract, subject only to legality of purpose and considerations of public policy, and are necessarily bound by the express conditions they choose to incorporate in the contract.
2. Plaintiff real estate agent sued for commissions on a sale of property, the agreement providing that he was to be paid for his services in consummating the sale "upon closing of title." The original contract between the owner and proposed purchaser was later modified to provide for the filing of suit to quiet title by the owner so as to assure good title, failing which the deposit would be returned and the agreement of sale be at an end. The suit resulted adversely, and the sale was not consummated. Held, that since actual passing of title was a necessary condition to fulfillment of the right to the commission, omission of that element left the claim of the agent incomplete, and verdict in favor of the owner was properly directed below.
On appeal from the Supreme Court.
For the defendant-appellee, McCarter English ( George W.C. McCarter).
For the plaintiff-appellant, Parsons, Labrecque Borden ( Theodore D. Parsons).
This appeal is from a judgment entered on a verdict directed by the trial court for the defendant, as owner of property, in the suit of plaintiff, a real estate agent, for a commission with respect to sale of the property. The controlling facts are not disputed. The case primarily involves construction of phraseology in the agreement relating to the commission.
The original contract between the owner and the proposed purchaser of the property was later modified to arrange for the filing by the owner of a suit in Chancery to quiet title, so as to give assurance of good title if that was possible, with the provision that if the owner was unsuccessful in the suit, the deposit should be returned and the agreement of sale be at an end. A subsequent stipulation further extended the time for closing. The suit to quiet title was decided against the owner, and the decree was affirmed on appeal. Content v. Dalton, 122 N.J. Eq. 425 . Through notice by the purchaser of termination because of such uncured defect in the title, the contract thereupon expired, and the sale was not consummated.
The agreement of sale contained the following language concerning the agent's commission:
"And the Seller hereby agrees to pay to G. Howard Lippincott a commission of 5% on the purchase price aforesaid, said commission to be paid in consideration of services rendered in consummating this sale; said commission to become due and payable upon closing title."
The subject of real estate commissions has been considered in numerous cases. The principle is well established that an agent becomes entitled to the commission when he has procured a purchaser able and willing to conclude the transaction on the terms authorized by the owner, and that in such circumstances a clause to the effect that the commission is payable upon closing title merely fixes the time for payment of the commission. Hinds v. Henry, 36 N.J.L. 328; Dermody v. New Jersey Realties, 101 Id. 334; Kram v. Losito, 105 Id. 588 ; Steinberg v. Mindlin, 96 Id. 206; Feist Feist, Inc., v. Taub, 105 Id. 237 . Persons, however, are free to insert their own limitations in the contracts they make, subject only to legality of the purpose, and the consideration of public policy. Contractees are necessarily bound by the express conditions they themselves choose to incorporate in a contract. When construction becomes an issue, the significance ascribed by the parties to the mooted language, or plainly to be inferred from their conduct, is strongly influential in determining the meaning which was intended between them, and that course is usually adopted by the court to be binding on the parties, since of their own accord they have made it obligatory on themselves. Albert v. Ford Motor Co., 112 Id. 597; Corn Exchange National Bank v. Taubel, 113 Id. 605; Thomsen v. Riedel, 114 Id. 379 .
It would doubtless have been possible in this instance to indicate more clearly that closing of title was a condition precedent to payment of the commission. Though the phrasing does not possess the fullest degree of precision, it nevertheless appears from the reservation in the agreement that the commission was "to be paid —" for services "in consummating this sale" and "upon closing title." A case in point is Simon v. Garber, 3 N.J. Mis. R. 150, wherein somewhat similar language was used stipulating for payment of the commission on consummating the sale and delivery of the deed, which was held to make payment of the commission contingent on passing of the title. While that case was in the Supreme Court, the ruling is sound, and it is adopted by this court.
By the specific clauses of the contract in the present case the closing of title was made not simply a chronological marking, but constituted a part of requisite performance. That this is the interpretation which the parties themselves placed on the agreement was evidenced by correspondence between them, and by their acts and attitude. Their conduct and the wording of the agreement suffice for the conclusion that the parties intended the commission to be payable only if there were transfer of title to the purchaser. Since actual passing of title to the property was a necessary condition to fulfillment of the right to the commission, omission of that element left the claim of the agent incomplete. Direction of a verdict in favor of the defendant owner was therefore appropriate.
The judgment is accordingly affirmed.
For affirmance — THE CHANCELLOR, CHIEF JUSTICE, PARKER, CASE, BODINE, HEHER, PERSKIE, PORTER, HETFIELD, DEAR, WELLS, WOLFSKEIL, RAFFERTY, HAGUE, JJ. 14.
For reversal — DONGES, J. 1.