Robert Engel, Pittsburgh, for appellant.
Henry E. Shaw, Scales & Shaw, Greensburg, for appellees.
Before Hirt, Acting P. J., and Ross, Gunther, Wright, Woodside and Ervin, JJ.
[ 176 Pa. Super. Page 143]
This is an action in assumpsit to recover a real estate broker's commission. The case was tried on stipulated facts resulting in a decree dismissing the complaint and entering judgment in favor of the defendants.
The property involved in this case was conveyed by deed dated August 15, 1951 to Frank J. Fidei and George Deaunovich, who executed and delivered a purchase money mortgage dated August 31, 1951 in the amount of $18,000 to Ralph R. McWilliams and Sarah S. McWilliams, his wife. George Deaunovich later conveyed his entire interest in the property to Frank J. Fidei by deed dated January 17, 1952 subject to the aforesaid purchase money mortgage which the grantee fully assumed and agreed to pay. The purchase money mortgage became in default on February 29, 1952 when the mortgagor was unable to make
[ 176 Pa. Super. Page 144]
the principal payment of $500 then due plus interest from August 31, 1951. Shortly thereafter, on March 26, 1952, Frank Fidei and Lucille Fidei, his wife, entered into an agreement with John Whiteman, a real estate broker, trading as John Whiteman & Co., whereby the broker was given the exclusive right to sell the property known as Levelgreen Supermarket, Levelgreen, Westmoreland County, Pennsylvania, prior to July 1, 1952. This agreement also provided that 'If a sale or an exchange is made or a purchaser procured by said John Whiteman & Co. or by any of the undersigned or by any other person during said period prior to expiration date set forth herein or said property is sold or exchanged within such period whether negotiated by John Whiteman & Co. or not, the undersigned agree to pay said John Whiteman & Co. a commission of ten percent for sale of said property or of five percent of lease amount.' The agreement was signed by Frank and Lucille Fidei and was accepted by the broker on March 26, 1952. On May 13, 1952 the mortgagees, through their attorney, gave the defendants written notice that unless the delinquent payment was made or a reconveyance of the property was made on or before May 21, 1952, foreclosure proceedings would be instituted. Unable to make the payment of principal and interest in accordance with the terms of the mortgage prior to May 21, 1952, the defendant, Frank Fidei, did execute a deed which reconveyed the property to the mortgagees for a nominal consideration shown on the deed in the amount of $1. However, it was stipulated the true consideration was the payment of $1,000, and the release by the mortgagees to Frank Fidei of the latter's indebtedness to them in the amount of the unpaid balance of the mortgage and the interest in the amount of $18,600, and the satisfaction of the same mortgage on
[ 176 Pa. Super. Page 145]
the record and satisfaction of all liability by the defendants on the bond accompanying the mortgage. Upon learning of the conveyance of the property to the mortgagees, Whiteman, the broker, demanded his commission, based upon the amount of the mortgage in default, plus accrued interest, plus $1,000. Defendants refused to pay, Whiteman brought suit, and now appeals from the entry of judgment in favor of the defendants.
The sole question for determination is whether the conveyance of the property by the owner to the mortgagees in return for cancellation of the mortgage and bond, plus payment by the mortgagees to the owner of $1,000, constituted a or exchange' within the terms of the contract between the owner and his wife and the broker.
In McElhinney v. Belsky, 165 Pa. Super. 546, 550, 551 69 A.2d 178, 180, in discussing the term 'sale or exchange' it was stated: 'Blackstone's definition of 'sale or exchange' is still followed as evidenced by the opinion in Helvering v. Nebraska Bridge Supply & Lumber Co., 8 Cir., 115 F.2d 288, 290: 'When used together, the words 'sale or exchange' comprehend a 'transmutation of property ...