55 N.Y.2d 550 (1982)
When a contract’s meaning must be determined without extrinsic evidence due to a party’s failure to provide admissible proof, the court must interpret the contract based on the fair and reasonable meaning of its terms, aiming to realize the parties’ reasonable expectations.
Summary
Sutton, an executor, sued East River Savings Bank to recover a brokerage commission based on a written agreement. The agreement stipulated a commission for the broker if the bank sold a property or assigned its mortgage to McDonald’s Corporation. McDonald’s nominee acquired the property at a foreclosure sale. The bank refused to pay, arguing the agreement’s conditions weren’t met and offering affidavits as extrinsic evidence. The court found the affidavits insufficient, interpreted the contract without extrinsic evidence, and ruled in favor of Sutton, holding that the foreclosure sale was within the agreement’s contemplated alternatives. The court focused on the overall intent to liquidate the bank’s interest in the property.
Facts
The East River Savings Bank was foreclosing on a property. Sutton, a real estate broker, and the Bank entered a letter agreement regarding a commission. The agreement stated that Sutton would receive a $10,000 commission if the property was sold or the mortgage assigned to McDonald’s Corporation. McDonald’s Corporation, through its nominee, Franchise Realty Interstate Corporation, acquired title to the property by bidding at the foreclosure sale. The price covered the bank’s mortgage. The bank refused to pay Sutton the commission.
Procedural History
Sutton, as executor of the broker’s estate, sued the bank to recover the commission. Special Term ruled against Sutton. The Appellate Division reversed, granting summary judgment for Sutton. The bank appealed to the New York Court of Appeals.
Issue(s)
Whether the Appellate Division erred in granting summary judgment to the Plaintiff, when the bank professed to have evidence confirming their interpretation of the agreement, and in the case that they did not, was the Appellate Division’s construction of the agreement erroneous.
Holding
No, the Appellate Division did not err. The extrinsic evidentiary facts presented by the bank were insufficient to defeat the motion for summary judgment and the Appellate Division’s construction of the agreement was reasonable because, in the absence of sufficient evidentiary proof, the agreement was construed as a whole and the purchase that occurred was considered one of the alternatives reasonably contemplated by the agreement.
Court’s Reasoning
The Court of Appeals affirmed the Appellate Division’s decision, holding that the affidavits submitted by the bank were insufficient to raise a triable issue of fact. One affidavit was from the bank’s counsel without firsthand knowledge, and the other was from a bank officer offering conclusory assertions. Because the bank failed to provide admissible extrinsic evidence, the court was left to interpret the agreement itself. The court stated that in searching for the probable intent of the parties, the goal must be to accord the words of the contract their “fair and reasonable meaning.” (Heller v Pope, 250 N.Y. 132, 135). The court reasoned that the agreement’s primary goal was the satisfactory liquidation of the bank’s interest in the property. The sale to McDonald’s nominee through foreclosure was a reasonable means of achieving this goal. The dissent argued that Sutton hadn’t presented a prima facie case of performance, as the agreement didn’t explicitly cover a foreclosure sale and Sutton hadn’t explained his actions to facilitate the sale.