Fry v. George Elkins Co.

FOX, P. J.

Plaintiff brought this action to recover a deposit of $4,250 that he made in connection with his contemplated purchase of a home from defendants Miller. The court, however, awarded him a judgment for only $937.50. Plaintiff has appealed.

On May 20,1956, plaintiff made an offer in writing, through defendant George Elkins Company, real estate broker, to purchase the Miller home for $42,500. Plaintiff put up his cheek for $4,250. The offer contained this provision: “This offer is further conditioned upon the buyer obtaining $20,-000.00 loan at 5% for 20 years.” The buyer was advised at that time that there was a 5 per cent loan on the property on which there was a balance of $16,650; that this loan was held by Western Mortgage Company; that arrangements could likely be made to refinance the loan in line with the buyer’s desire but that a loan upon the required terms could not be obtained from a bank. The owners immediately accepted Pry’s offer and agreed in writing to pay the broker a 5 per cent commission, or one half of the deposit in the event the same was forfeited by the purchaser. A 30-day escrow was opened the next day. It recited the loan above mentioned and then provided: “The completion of this escrow is subject to buyer being able to refinance said loan to $20,000.00 at 5% per annum, maturing over a period of 20 years.”

The buyer did not contact Western Mortgage either personally or by telephone relative to refinancing the loan. At the instance, however, of a representative of the Elkins organization, Mr. Reed, on behalf of Western Mortgage, mailed a loan application on May 28th to Pry, together with a letter stating that his company would consider a $20,000 loan at 5 per cent over a 15-year period. Reed contacted Pry twice regarding this loan by telephone but at no time did the latter ask whether Western Mortgage would make the loan for a 20-year term. He did, however, complain about the 2 per cent prepayment provision in the loan application in the event of payment within the first three years. On June 11th, Reed, having been told by the broker’s representative, that a 20-year loan was essential to a sale, sent Pry another letter stating that Western would consider making the loan 'for that term. During the early part of June Mrs. Lynch, of

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the Elkins organization, with whom Fry had had his initial dealings for the purchase of the house, assured him there was a $20,000 loan at 5 per cent for 20 years waiting for him at Western Mortgage and advised him to get down as quickly as he could and sign the papers. Fry was also told about the same time by both Mr. and Mrs. Miller that the required loan on the stated terms was available at Western Mortgage if he would just file the application papers. Fry, however, failed to file any application therefor. Reed’s testimony indicates that if such application had been made by Fry the loan would have been made. It was approximately at this time that Fry told Mrs. Lynch, according to her testimony, that he had lost all interest in the house; that he had changed his plans; and that he was going to Hawaii as he had planned originally. Fry had in the meantime applied to two banks where he was known for the desired loan. Both banks, however, had rejected his application. Fry thereupon wrote the Millers attempting to rescind the deal because of his inability to obtain the loan on which the transaction was conditioned.