Greene v. Hellman

New York Court of Appeals · 1980 · Corporations

51 N.Y.2d 197 (1980)

Updated August 22, 2026

CorporationsAgencyBrokerage CommissionsApparent AuthorityProcuring Causeostensible authorityactual authorityprincipal manifestations

Facts

Driscoll told Greene in October 1974 that he wanted a buyer for a shopping center and sent Greene operating statements for the property. Greene then informed Gordon, acting for I. Gordon Realty Corporation, that the property was for sale and gave him a photocopy of the statement, but Greene assumed Todd, not Heilman, owned the property and treated Driscoll as acting for Todd. Heilman was the actual owner as a matter of public record, and the record contained no proof that Heilman knew of or authorized Driscoll's dealings with Greene. About a year later, after Heilman's accountant independently suggested Gordon as a potential buyer, Heilman and Gordon negotiated directly and completed the sale.

Issue

Whether Heilman was bound by Driscoll's arrangement with Greene under actual or apparent authority, and whether Greene was the procuring cause of the ultimate sale so as to be entitled to a commission. The case also raised whether the purchase offer's reference to Greene created any obligation by Heilman to pay him a commission.

Rule

Actual authority requires a grant of authority by the principal, directly or indirectly. Apparent authority exists only where the principal's words or conduct reasonably create the appearance of authority in the third party, and the third party relies on that appearance. A broker is not entitled to a commission merely because he first called the property to the purchaser's attention; absent a special agreement, the broker must be the procuring cause of the sale by establishing a direct and proximate, not indirect and remote, link between his efforts and the completed transaction.

See the holding & full analysis

Create a free KwikCourt account to unlock the rest of this brief — and practice the case.

The court's holding and reasoning
Doctrine tests, pitfalls & exam hypotheticals
10 practice questions + 4 AI-graded essays on this case

Free sample · practice this case

Test yourself

One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Buffalo, Nora Feld, a real estate broker, was told by Evan Pike that a warehouse was available for purchase. Evan had previously served as an officer with owner Leo Maren in several closely held property companies, but Leo never spoke with Nora or sent her any documents. Nora believed Evan was acting for one of those companies rather than for Leo personally, and Leo later sold the warehouse directly to a buyer Nora had once contacted.

Can Nora most likely hold Leo to Evan's brokerage arrangement on a theory of apparent authority?

Explanation. Apparent authority depends on the principal's words or conduct creating the appearance of authority, the third party's awareness of those manifestations, and reliance on them. Shared corporate relationships alone do not create authority over another person's personal property. Here Leo made no manifestation to Nora, and Nora in fact believed Evan acted for a different entity, so reliance on an appearance of Leo's authorization is missing.