Freishtat v. Callow

DlGGES, J., delivered the opinion of the Court. This case originated in the Superior Court of Baltimore City. David Freishtat, plaintiff-appellant, claimed a mortgage broker’s commission of $14,000 alleging he was the procuring cause of a $1,400,000 mortgage loan made to defendant corporation, Beltway Penn Construction Co., Inc. (Beltway). The same criteria to entitle a real estate broker to commissions as the procuring cause is applicable in determining whether a mortgage broker has earned agreed upon commissions.

Bregel v. Cooper, 161 Md. 416 , 157 A. 719 (1931). Judge Grady, sitting ⁵⁶⁶ without a jury, determined the facts in the case adverse to appellant’s contentions. Freishtat, a lawyer, acknowledges that in order to obtain a reversal he will have to demonstrate that the trial judge was clearly erroneous in his findings of fact. Maryland Rule 886.

In 1964 defendants Charles Callow and Francis Gaegler, also a lawyer, were joint venturers in obtaining several small parcels of land located in the immediate vicinity of Ramp D at the intersection of Pennsylvania Avenue and the Capitol Beltway, Prince George’s County, Maryland. Desiring financing for the project, they contacted Lawrence L. Mays who in turn introduced them to Freishtat. The testimony is in conflict as to the details of the conversation at this introductory meeting at Freishtat’s office. Callow and Gaegler testified they desired a loan on only two of the tracts, Armstrong and Sansbury, in order to consummate purchase of them.

Contrary to this statement Freishtat testified the two owners desired a mortgage of $1,200,000 on all their holdings located near Ramp D in order to fulfill several contracts, exercise options to purchase, and refinance at more favorable terms money borro wed,for prior land purchases. On May 28, 1964 Callow and Gaegler sent a letter to Freishtat reading: “Please consider this letter authority for Mr. Larry Mays and yourself to negotiate a loan on all properties of ‘Ramp D’ located at Westphalia Road, Pennsylvania Avenue and the Capitol Beltway, in the Spauldings District, Prince George’s County, Maryland. “We hereby agree to pay to David Freishtat and Larry Mays one (1%) of the face value of the mortgage loan. The aforementioned fee will be due and payable at the time of settlement.” Following this meeting Rreishtat contacted a lending institution, Merchants Mortgage Company through its vice president, Ralph Lubow. On July 31, 1964 a loan of ⁵⁶⁷ $400,000 was arranged to Beltway, secured by a mortgage on the Armstrong and Sansbury tracts, and personally guaranteed by Callow and Gaegler.

Prior to this loan Beltway was organized with Callow and Gaegler as sole stockholders. The testimony was that the corporation was formed so that an interest rate in excess of the rate permitted by the usury laws applicable to individuals, could be paid to the lender. There was no dispute that as a result of this loan Freishtat was paid $4,000 in accordance with the terms of the letter. Defendants contended that all existing agreements were terminated with this payment.

On October 14, 1965 Callow wrote Mays a letter to “authorize and employ Lawrence L. Mays to obtain for me a First Trust loan on the Forty Four (44) acres of land located on the Beltway & Pennsylvania Avenue intersection. I will accept the loan if terms and condition are acceptable. “This authorization is valid until I notify him in writing.” Callow cancelled this agreement by written notice to Mays dated November 1,1965. When Freishtat learned that on February 9, 1966, Beltway had secured a mortgage loan of an additional $1,400,000 from Merchants, he claimed a one per cent commission ($14,000) in accordance with the agreement and authorization of May 28, 1964, contending that the new loan resulted from his continuing efforts on behalf of the defendants and their corporation, Beltway. The present suit resulted from the failure of appellees to pay. 1 There was a trial of a full day with much conflicting testimony.

Appellant does not claim the trial judge erred in his understanding of the relevant law, but that his findings of fact under that law are so contrary to reasonable inferences as to be “clearly erroneous.” What we regard as a complete answer to this assertion is provided ⁵⁶⁸ by reference to the trial judge’s opinion,