- The question at the center of the discussion in this application is the second question – is there a cause of action by virtue of which Kestenbaum, who was ostensibly not a party to the brokerage agreement, is obligated to pay the brokerage fees that Koffler took upon himself in the framework of the brokerage agreement? In my view, this question should be answered in the affirmative, similar to the decision of the courts below.
Thus, As the District Court held, The partnership between Koffler and Kestenbaum has the power to obligate Kestenbaum, who ultimately purchased the property on his own, to the obligation that Koffler undertook in the brokerage agreement. Section 14 To the Ordinance Partnerships [New Version], 5735-1975, states that the actions of each partner in the partnership are binding on the other partners:
"Each partner is an agent of the partnership and of its other partners in all matters of the partnership's business; And the actions of each partner, when he conducts business of the kind that the partnership of which he is a member, will bind the partnership and its partners, unless in fact he does not have permission to act on behalf of the partnership in that business and the person with whom he negotiated knows that the partner is not authorized to do so, or does not know, or does not believe, that he is a partner."
In our case, it is clear that Koffler's engagement in a brokerage agreement, in which Kestenbaum and Koffler are partners in the intention to purchase the property (as determined by the District Court), is an action "in the usual way" (in which the exception of lack of authorization does not exist). Therefore, in this action, Koffler acted as an agent of the partnership, and his action is binding on the partnership and the other partners. Therefore, Koffler's engagement in the brokerage agreement binds Kestenbaum, and in any case, when Kestenbaum purchased the property, he is liable for the brokerage fees that were determined.