Herman v. Stern
Herman v. Stern
Opinion of the Court
Opinion by
The instant appeal arises from a suit by a real estate broker for a commission which he alleges was earned through the sale of property owned by James L. Stern, the appellant herein. Stern and his wife owned the land and building located at 1707 Walnut Street in Philadelphia. In May of 1954, Stern rented his building to John J. Shaw, Jr. Late in 1959, Shaw sought to be relieved of his lease. The Shaw lease did not expire until August 31, 1960. In order to find a
Both of these leases contain in paragraph 37 (B), the following clause: “In consideration of the services of Richard B. Herman & Company, Inc., in securing the execution of the above lease, the principal hereby authorizes Richard B. Herman & Company, Inc., as bis agents to collect the rent due or to become due thereunder during the continuance of the same, or for any renewal or renewals thereof, and to deduct and retain five percent (5%) of the amount collected each month, and for this purpose to retain possession of the lease during said period. ... In the event that, at any time while Lessee or any affiliate or successor to or assignee of Lessee is in possession of the demised premises . . ., the premises shall be sold to the Lessee, . . . Principal agrees to pay to Richard B. Herman & Company, Inc., a commission of 5% of the sale price . . . regardless of whether or not Principal shall have obligated himself to pay a commission on said sale to anyone else. Tbe provisions of this clause shall be binding on the assignees, . . . [etc.] of the Principal. The foregoing authority shall be considered one coupled with an interest in Richard B. Herman & Company, Inc. . . .”
The leases were signed by Herman as agent and the tenant. At the bottom of the lease appeared the sentence: “The principal of Richard B. Herman & Company, Inc., having examined the above lease and agreements, hereby agrees to them and ratifies and approves of the same in all particulars.” This was followed by the signature of James L. Stern and seal.
The complaint alleges that: “3. On or about October 23, 1959, plaintiff as agent for defendant entered into a certain Lease Agreement with Roslyn Sailor, a true and correct copy of which is attached hereto, made a part hereof, and marked Exhibit A. Defendant ratified and approved the same in writing on October 23, 1959, as appears therefrom.
“4. Said Lease Agreement in Section 37B thereof contains certain stipulations and agreements between plaintiff and defendant (the name ‘Richard B. Herman & Company, Inc.’ in Section 37 and in the signature being changed by Section 38 to read ‘Richard B. Herman & Company’) including an agreement that if at any time while Lessee should be in possession of the demised premises, having remained in possession uninterruptedly since the commencement of the term or any renewal or extension thereof or under any other agreement or arrangement, the premises should be sold
Defendant, in his answer and new matter, denied any obligation to pay a commission to the plaintiff on the sale of the property as the plaintiff had nothing to do with the sale, and for the further reason (a) that the plaintiff acted as agent for John J. Shaw, Jr., and as an accommodation to Shaw; (b) that through error and mistake paragraph 37 (B) was not stricken from the printed form before being signed as no arrangement or agreement or discussion was made with the plaintiff with respect to any payment of any commissions in the event of any sale; (c) the premises were sold through the effort of a person other than the plaintiff; (d) all interest and authority of plaintiff under the lease was cancelled by defendant paying the plaintiff in advance the entire amount of the commission on the rent to which he was entitled.
The lower court entered judgment for the plaintiff and against the defendant. Defendant appealed and asked that the judgment be reversed and that judgment on the pleadings be granted in favor of the defendant and against the plaintiff. The appellant argues (1) the plaintiff admits that no agreement was made for the payment of any commission in the event of a sale, and defendant is not liable even though such a clause was in the printed lease; (2) the plaintiffs reply to defendant’s new matter is vague, indefinite and not responsive, and under Pennsylvania Rules of Civil Procedure, admits facts pleaded by the defendant; (3) under the express terms of the lease, the broker was not entitled to commissions for the sale of the premises which did not result from his efforts, and that (a) any right which plaintiff may have had under the lease to receive
Appellant contends that the appellee has “admitted that the written provision in the lease dealing with the payment of commission in the event of a sale of the premises was never any part of the understanding or arrangement between the plaintiff and defendant”.
The foregoing averments in defendant’s answer and in new matter were not sufficient to meet pleading standards of Rules of Civil Procedure,
The appellant contends that through error and mistake the portion of paragraph 37 (B) was not stricken from the printed form. He does not point out by whose error or by whose mistake this was not done. The bald assertion of error and mistake falls far short of the requirement necessary for reformation of the contract. No place in the pleading is there any proper averment which would permit a court to allow evidence to show that the provision for payment of commission should be omitted. Pa. R. C. P. 1019(b). Without the proper averment, parol evidence could not he introduced to show that the provision as to payment of compensation was not part of any understanding or agreement between the parties. On the contrary, the lease agree
Appellant further contends that under the provision in paragraph 37 (B) that provides for the principal reserving the right to cancel the agent’s authority and to retake possession of the lease whereby the principal pays the amount of rental commission for the unexpired period of the lease, that this invocation of the lease agreement and compliance therewith extinguished the provision for the payment of a commission in the event of a sale of the property. There is no part of the lease agreement that would, under any conceivable notion, warrant this construction. The plain language of the provision for the payment of commission in the event of sale is to the contrary and unequivocal in its terms that a commission is due the agent, appellee, by the principal, appellant. The terms of this provision of the paragraph are unequivocal. The appellant, under the lease, had the right to make payment to the appellee in full of all claims on rental commission due under the lease. The appellee was compelled to accept payment in full of all commissions due on rentals when that provision was invoked by the appellant. The payment of the amount of commuted rental commission to which the appellee was entitled is not consideration for the release of the other claim for commission in the event of the sale of the property, particularly when the lease agreement does not provide for it to be such a release.
Appellant maintains that the appellee is not entitled to a commission in the event of the sale of the premises
Appellant says in his supplemental brief on reargument of this case that: “It is submitted that the clauses in the printed lease between the landlord and the tenant do not impose any obligation on the landlord unless he had agreed to the payment of a commission for the sale of the property. It is expressly provided in Section 35 of the lease that the lease sets forth '. . . all the promises, agreements, conditions, and understandings between the lessor and lessee . . .’. Nowhere is there any statement that the lease constitutes an agreement between the lessor and the broker. It is apparent that the contention of the Appellee is hanging upon the thread of fine print in the seven page lease agreement wherein appears the words Tease and agreements’. The approval therein contained refers only to the lease agreement made between the landlord and the tenant which contains many clauses. . . . Her
Appellee was not a party to the contract, he signed it as agent for appellant, and the provisions in the lease agreement are between the landlord, appellant, and tenant, Roslyn Sailor, trading as Roslyn Sailor Boutique, and do not impose any obligation on the landlord, unless he, the landlord, appellant, agreed to the payment of a commission on the sale of the property in the event of a sale to those persons enumerated in paragraph 37 (B). In section 35 of the lease agreement, it is provided: “. . . all the promises, agreements, conditions and understandings between the lessor and lessee . . .”, and no reference is made to any agreement between the lessor, appellant, and the broker, appellee. In paragraph 37 (B) of the lease agreement it is provided: “In consideration of the services of Richard B. Herman & Company, Inc., in securing the execution of the above lease, the principal hereby authorizes Richard B. Herman & Company, Inc., as his agents to collect the rent due or to become due thereunder during the continuance of the same, or for any renewal or renewals thereof, and to deduct and retain five per cent (5%) of the amount collected each month, and for this purpose to retain possession of the lease during said period. . . In the event that, at any time while Lessee or any affiliate or successor to or assignee of Lessee is in possession of the demised premises . . ., the premises shall be sold to the Lessee, .... Principal agrees to pay to Richard B. Herman & Company, Inc., a commission of 5% of
Appellee grounded his action on the foregoing provisions of paragraph 37 (B), and the following provision at the end of the lease agreement which provides: “The principal of Richard B. Herman & Company, Inc., having examined the above lease and agreements, hereby agrees to them and ratifies and approves of the same in all particulars. [Signed] James L. Stern (Seal) Philadelphia, Pa. Oct. 23, 1959”. Appellant contends this ratification and approval refers only to the lease agreement made between the landlord and the tenant, which contains many clauses.
May the appellee recover a commission for the sale of the premises to the lessee from the appellant in the instant situation?
Appellant obligates himself in clear and unambiguous language, for a recited consideration from the broker, under seal, to pay specific commissions. That this particular agreement is contained in the lease agreement between the lessor, appellant and lessee, Sailor, is neither unusual nor legally objectionable. Its presence in the document can be only to create a binding agreement between principal, appellant and agent, ap
The lease agreement contains two agreements, as the ratification and approval of appellant suggests in the use of the word “agreements”, that between the lessee and lessor, through his agent, and that between the lessor and his agent, which came into being upon signature by the lessor, appellant. When the lease agreement was tendered to the appellant for his approval, it consisted, in effect, of two offers: (1) an offer by the appellee to accept, in consideration of his services in procuring the lease (if appellant should approve it), a promise on the part of the appellant to pay the commission set forth in Section 37 (B) of the lease agreement : (2) an offer by the lessee to promise the payment of rent in return for the appellant’s promise to
Appellant maintains that the appellee was employed to lease the property and not to sell the property. This contention is not borne out by the plain, clear language of the document. Appellant also contends the provision for the payment of a commission on the sale of the property is in fine print in the document and, in addition, there had been no reference or discussion of the provision for the payment of a commission on the sale. An examination of the document reveals that with the exception of the part of the document that had been typed in on a typewriter and a rider, evidently prepared on a typewriter, all of the document provisions were of the same size and style type, and the provision appears directly over the end of the document containing the signatures.
Judgment affirmed.
Because we Rave motions for judgment on the pleadings from both parties, we must carefully delineate what pleadings we may consider. When we consider the plaintiff’s motion for judgment on the pleadings, we may consider only the complaint and the answer containing new matter. Luria Steel & T. Corp. v. Dittig, 414 Pa. 197, 199 A. 2d 465 (1964). However, when we consider the defendant’s motion for judgment on the pleadings, we must consider the complaint, the answer containing new matter, and the reply to new matter.
Appellant’s brief, page 6.
Paragraph 37(B) of lease agreement.
Pa. R. C. P. 1019(b) : “Averments of fraud or mistake shall be averred with particularity. Malice, intent, knowledge, and other conditions of mind may be averred generally.”
If the inclusion of 37 (B) was an error or mistake as Stern alleges, the mistake was unilateral in nature. The law is clear that a unilateral mistake will not void a contract. Restatement, Contracts, §502; Marmon Phila. Co. v. Blocksom, 103 Pa. Superior Ct. 542, 157 A. 510 (1931).
This case is thus distinguished from Cutler Corporation v. Latshaw, 374 Pa. 1, 97 A. 2d 234 (1953), where a confession of judgment clause was hidden in a mass of small print, smaller than the bulk of the agreement and hidden on the reverse sheet of the agreement pages.
Concurring Opinion
I join fully in the Court’s holding that appellee has adequately established his contractual right to the disputed commission. I feel constrained, however, to add a few brief observations.
The principal issue confronting this Court is whether the court below erred in denying appellant’s motion for judgment on the pleadings while at the same time granting appellee’s similar motion. We are compelled, therefore, to concern ourselves exclusively with the pleadings,
While agreeing in principle, the dissent urges that this Court reverse the judgment of the court below on the ground that appellee, irrespective of appellant’s answer, has failed to plead the “material facts” requisite to the averment of an enforceable contract. Since it is not contended by the majority that appellee’s right to recovery may be predicated on a third party beneficiary theory,
The record supports no such conclusion. I believe, as does the majority, that appellee has adequately averred the manner of his assent, and, therefore, that he is a party to the contract upon which he claims.
The contract which appellee has averred is a unilateral contract. That much appears evident from the pleadings.
It follows, then, in the instant case, that if appellee has adequately averred the performance of the requested act, the securing of a tenant under terms satisfactory to appellant, then he has properly averred that he is a party to the written contract upon which he claims. Cf. Restatement, Contracts, §12 (1932).
No searching examination of appellee’s pleadings is necessary to discern the required averment of performance. In his complaint, appellee alleges the execution of a lease which was ratified and approved by appellant, a matter which is not disputed. The conclusion which one is necessarily drawn to is that appellee has, through this allegation, averred the performance of the act requested by appellant and, by necessary implication, his assent to the written contract.
Appellant contends, inter alia, (1) that the sales commission was not part of any understanding or agreement between the parties, and (2) that the provision with respect to the disputed commission was not deleted from the executed agreement by reason of mistake.
As the majority has correctly stated, the allegation of mistake fails to conform to the rule that such allegations be pleaded with particularity. Pa. R. C. P. 1019(b); Lefkowitz v. Hummel Furniture Co., 385 Pa. 244, 248, 122 A. 2d 802, 804 (1956); 1 Goodrich-Amram §1019 (b)-1 (1960); 4 Standard Pennsylvania Practice §74 (1955). Lacking such particularity, appellant’s unsupported allegation is a mere legal conclusion and as such may be disregarded. Lefkowitz v. Hummel Furniture Co., supra; see Architectural Tile Co. v. McSorley, 311 Pa. 299, 166 Atl. 913 (1933); 4 Standard Pennsylvania Practice §125 (1955). It only remains to determine whether appellant’s denial that the sales commission was a part of the understanding of the parties is a barrier to the relief granted appellee by the court below.
Appellant neither disputes the authenticity of the lease nor its execution. The lease agreement contains in clear and uncertain terms the provision upon which appellee seeks recovery. In light of these facts, the crux of appellant’s averment can only be reduced to the contention that the agreement is legally unenforceable or that its inclusion was by reason of mistake. Neither averment, however, is sufficient to bar judgment on the pleadings. The latter allegation is insufficient for the reasons stated above. The former aver
Appellant, no less than appellee, is under an obligation to plead material facts, which if established, would constitute a barrier to the enforcement of appellee’s claim. Not having done so, appellant is not entitled to the trial of phantom issues. Having had the opportunity to raise an issue for trial and having failed to do so, appellant may not now complain of the granting of appellee’s motion for judgment on the pleadings.
Nederostek v. Endicott-Johnson, 415 Pa. 136, 138, 202 A. 2d 72, 73 (1964); Emery v. Metzner, 191 Pa. Superior Ct. 440, 445. 156 A. 2d 627, 630 (1959); Bogojavlensky v. Logan, 181 Pa. Superior Ct. 312, 320, 124 A. 2d 412, 416-17 (1956); 2 A Anderson. Penna. Civil Practice §1034.21 (Supp. 1964); 1 Goodrich-Amram §§1034(a)-1, 1034(a)-3, 1034(b)-1 (1960).
Nederostek v. Endicott-Johnson, 415 Pa. 136, 138, 202 A. 2d 72, 73 (1964); Smith v. Brown-Borhek Co., 414 Pa. 325, 331, 200 A, 2d 398, 400 (1964); Necho Coal Co. v. Denise Coal Co., 387 Pa. 567, 568, 128 A. 2d 771, 772 (1957); Cary v. Lower Merion School Dist., 362 Pa. 310, 312, 66 A. 2d 762, 763 (1949); 1 Goodrich-Amram §1034(b)-1 (1960).
On this point I venture no opinion as I see no need to reach the issue.
In his complaint, appellee averred that while acting in a representative capacity, as agent for appellant, he entered into a lease agreement with one Sailor, which lease agreement was ratified and approved in writing by appellant. He further alleged that the lease agreement contained, in a provision numbered paragraph 37(B), certain agreements between appellant and appellee in his individual capacity. Paragraph 37(B) of the written lease agreement, which appellee annexed to his complaint and which, thus, became part of his pleadings, see 1 Goodrieh-Amram §1019 (g)-2 (1960), provides: “In consideration of the services of . . . [appellee) in securing the execution of the above lease . . . [appellant] authorizes . . . [appellee] to collect the rent due . . . thereunder . . . and to deduct and retain five per cent (5%) of the amount collected each month .... In the event that ... the premises shall be sold to the Lessee . . . [appellant] agrees to pay to . . . [appellee] a commission of 5% of the sale price . . . .”
In my view, the practical effect of appellee’s incorporation of the lease agreement, and more particularly paragraph 37(B), is the averment that in consideration for appellant’s promise to pay the therein provided for commissions, appellee secured the execution of a lease agreement under terms satisfactory to appellant. Whether the contract should be more properly characterized as a so-called reverse unilateral contract, see Restatement, Contracts, §57 (1932); 1 Williston, Contracts §71 (3d ed. 1957), is of little
Appellant raises a number of other contentions which were summarily and properly disposed of by the majority.
Dissenting Opinion
Dissenting Opinion by
We note at the outset that our determination in this matter must comply with the rule that a judgment on the pleadings can be granted only in cases that are free and clear from doubt. Levin v. Blue Mountain Dairy, Inc., 407 Pa. 566, 180 A. 2d 908 (1962).
Herman, the plaintiff, alleged that, “as agent for defendant,” Stern, he entered into a certain lease agreement with Roslyn Sailor, as tenant, a copy of which he attached to the complaint; that “defendant ratified and approved the same in writing;” that “Section 37B thereof contain [ed] certain stipulations and agreements between plaintiff and defendant,” including an “agreement” that if the tenant purchased the property defendant would pay the plaintiff 5% of the sales price; that the tenant purchased the property; that plaintiff demanded that defendant pay him 5% of the sales price but that plaintiff refused.
In his answer the defendant, inter alia, admitted signing and approving the lease but in new matter averred, inter alia, that the 5% clause “was not part of any understanding or agreement between plaintiff and defendant,” and that “defendant agreed with the plaintiff to pay him only the regular real estate commission for leasing and no agreement was made to pay any additional amount in the event of a sale.” Plaintiff refused to reply to the former averment, deeming it irrelevant, and denied the latter averment stating that “the agreement between the plaintiff and the defendant is as set forth in Section 37B.” Plaintiff further replied that the “lease . . . contains the contract between the plaintiff and the defendant, upon which this suit was brought.” Both parties moved for judgment on the pleadings; plaintiff’s motion was granted.
Thus, it is plain beyond dispute that plaintiff is relying solely on the fact that the writing which he has incorporated into his pleadings and which defendant has admitted signing demonstrates in and of itself— without any other allegation — a contract between him and defendant. If the writing were a contract the case would be free and clear from doubt and would, therefore, warrant judgment on the pleadings for plaintiff; nevertheless, it is equally true that if the writing upon which plaintiff relies is not, in and of itself, a contract between plaintiff and defendant, then the defendant rather than the plaintiff is entitled to judgment on the pleadings.
“There must be at least two parties in a contract. . . .” Restatement, Contracts, §15 (1932).
Plaintiff asserts that within this written contract, negotiated and executed by him with the tenant on behalf of the defendant, there is another written contract — the one upon which he is suing. Allegedly, this contract is section 37(B). But section 37(B), while it states a promisor, a promisee, and consideration, it does not have two parties. There is no indication that plaintiff is a party to it, and thus there is not the required “manifestation of assent by the parties who form the contract to the terms thereof, and by every promisor to the consideration for his promise.” Id. Even if the defendant’s signature beneath the lease ratification clause (which in ordinary experience is only for the purpose of satisfying the statute of frauds, and to relieve the agent of any personal liability), can be taken as defendant’s manifestation of assent to the brokerage commissions clause in section 37(B), there is no similar manifestation on the writing by plaintiff. Plain
The majority’s analogy to a suit on a deed or note signed only by one party is erroneous. In order to make the signed writing a contractual obligation, there must be a delivery with the requisite intent. See Restatement, Contracts, §§95, 101, 102 (1932). In the complaint there is no allegation of delivery or facts from which a delivery may be inferred. By supplying missing allegations in order to sustain the judgment on the pleadings the majority has deprived the defendant the right to deny such supplied allegations — which denial would defeat the entry of judgment on the pleadings.
This analysis of the requirements of the formation of a contract is not a mere academic exercise, for it is defendant’s contention that section 37(B) did not form any part of any contract between plaintiff and defendant. Perhaps it is free and clear from doubt that it is a signed, written promise but it is also free and clear from doubt that it is not a contract between plaintiff and defendant. Defendant’s signature may be strong evidence that it is part of such a contract but plaintiff
That plaintiff has not alleged any contract between him and defendant is supported by Smith v. Watters, 38 Ohio App. 437, 176 N.E. 466 (1931). There the cpiestion was whether the Ohio Statute of Frauds, requiring brokerage contracts to be in writing, was satisfied. The writing adduced by the plaintiff-broker in that case was in one aspect a contract between defendant-principal in that case and one Dales for an exchange of properties owned by them. Also, “in that contract . . . there was a provision . . . that [defendant-principal] was to pay a commission to the plaintiff - [broker].” The court said: “The contract which was signed by the defendant-[principal] was not a contract with the plaintiff-[broker] but with Dales.” However, the writing was considered a sufficient memorandum under the Ohio Statute of Frauds.
It is instructive to note how the broker in Smith v. Watters proved a contract with the defendant. In the opinion of the court: “The oral evidence discloses . . . that . . . plaintiff negotiated . . . with Dales, and finally had a lawyer prepare a contract for the exchange by Dales of his property for the five parcels of property of the defendant and then took said contract to the defendant and called her attention to the fact that it was provided in said contract that the defendant should pay to the plaintiff a stipulated real estate commission; that defendant, knowing that said contract contained that provision, signed the contract, with the understanding that the plaintiff would present said contract so signed by the defendant to said Dales and
In his supplemental brief on reargument plaintiff attempts to supply allegations missing in his pleadings by arguing about how an offer and acceptance can be inferred from a tender of the document and other circumstances and conduct surrounding defendant’s signing of the writing. But a brief on reargument is not a substitute for a pleading. Again, it cannot be emphasized too strongly that we are confronted with a judgment on the pleadings; in his pleadings plaintiff rests solely on the allegation of the existence of a signed writing constituting a contract between plaintiff and defendant. There are no allegations regarding the circumstances or conduct surrounding the signing of the writing. Accordingly, the majority’s reliance on such unalleged circumstances is misplaced; at the same time it indicates that the actual allegations are insufficient.
In addition to the inadequacy of his pleadings, plaintiff’s suggestion in his brief that the tendering of the writing to his principal was an offer to contract regarding fees, which the defendant accepted by signing the writing, is of dubious legal validity. It needs no citation of authority to support the rule that an agent owes his principal a duty of loyalty and must deal with him in good faith. It also needs no citation of authority to support the agent’s right to engage in' arm’s length bargaining with his principal on the matter of his compensation. But an agent cannot wear both hats at once. An agent cannot rightly argue that in handing to his principal for his signature a document which on its face purports to be a lease, executed by him as agent for the principal, he is at the same
But irrespective of the soundness of the propositions advanced in plaintiff’s brief the plain fact remains that his complaint does not allege facts which if proven would show a contract between him and defendant. There is no allegation in the complaint of a promise made to the plaintiff by the defendant. There is no allegation of the delivery of the instrument so as to make it operative. Since the adequacy of his complaint depends entirely upon the existence of such a contract he should not have been granted judgment on
I dissent.
Dissenting Opinion by
As I read the record in this case, plaintiffs cause of action is based upon the existence of a reverse unilateral contract. While no Pennsylvania authority has thus far recognized the validity of such a contract, and the theory has been ignored in at least two other jurisdictions (see, Warner and Co. v. Brua, 33 Ohio App. 84, 168 N.E. 571 (1929), and Tomars v. Sanford Holding Corporation, 232 App. Div. 169, 249 N.Y. Supp. 982 (1931)),
Assuming arguendo that such a contract should be recognized in Pennsylvania, the question still remains: Does the lease agreement involved satisfy its requirements. I conclude that it does not.
Section 57 of the Restatement of Contracts states that a contract of this type is not complete until the offeree (the defendant) makes the promise requested. Section 58 further requires that the acceptance or promise be unequivocal. The mere fact that something is inserted into a lease agreement does not in itself constitute an acceptance. See, Cutler Corp. v. Latshaw, 374 Pa. 1, 97 A. 2d 234 (1953). For the acceptance to be binding in the present case, there must be present a definite acceptance of the demand for additional commissions phrased in unequivocal terms. On this point, the lease agreement is fatally defective. Nowhere
I would, therefore, reverse the judgment entered in the court below and enter judgment in favor of the defendant.
I further agree with Mr. Justice Cohen's observations concerning the absence of an adequate allegation ox delivery. This, in itself, defeats the right of the plaintiff to judgment on the pleadings.
Even, if he did. so allege it is doubtful that he would fit within the generally prevailing view of a third party beneficiary. This much is apparently conceded by the majority.
“A third party who is not a promisee and who gave no consideration has an enforceable right by reason of a contract made by two others (1) if he is a creditor of the promisee or of some other person and the contract calls for a performance by the promisor in satisfaction of the obligation; or (2) if the promised performance will be of pecuniary benefit to him and the contract is so expressed as to give the promisor reason to know that such benefit is contemplated by the promisee as one of the motivating causes of his making the contract. A third party may be included within both of these provisions at once, but need not be. One who is included within neither of them has no right, even though performance will incidentally benefit him.” 4 Corbin Contracts, §776 (1951).
It requires no extensive analysis to ascertain that Herman is not a third party beneficiary of the Stern-Sailor lease. The obligation purported to be created by section 37(B) would run directly from appellant to appellee. Mrs. Sailor is involved in this obligation only to the extent that her purchase of the leased property is made the prerequisite to the generation of Stern’s obligation to pay additional compensation. There is no intention, either expressed or implied to give plaintiff the benefit of any consideration flowing from appellant to Mrs. Sailor. See Restatement, Contracts, §133 (1932).
Restatement, Contracts, §§95, 101, 102 (1932).
“At common law no one could maintain an action upon a contract to which be was not a party. This rule is well established in this country, and is recognized by both the state and federal courts.” Howes v. Scott, 224 Pa. 7, 10, 73 Atl. 186, 187 (1909). This statement by Judge Mestiíf.zat more than half a century ago still expresses the foremost qualification which one must have in order to assert contractual rights. As a general rule only parties to a contract may enforce it and strangers to a contract acquire no rights thereunder. Williston on Contracts §347 (Jaeger ed. 1959); see 1 Corbin Contracts, §124 (1963). As noted in n. 1. supra, and the text thereat the exception to this rule for third party beneficiaries is not applicable here.
“A contract under seal or other sealed, instrument does not become operative as such until the party executing it does some overt act indicating that he intends it to be immediately operative. This act is called ‘delivery.’” 1A Corbin, Contracts §244 (1963).
Paragraph three of the complaint reads: . . plaintiff as agent for defendant entered into a certain Lease. . ."
Both courts apparently considered agreements similar to the present one as without effect because they lacked consideration on the part of the broker at the time they were executed.
Reference
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- Herman v. Stern, Appellant
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