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Lustig v. Hutchinson

OPINION FILED OCTOBER 22, 1952

HERBERT N. LUSTIG, APPELLEE,

v.

J.J. HUTCHINSON AND JOHN F. CUNEO, DEFENDANTS.



Appeal by defendant from the Superior Court of Cook county; the Hon. L.P. HARRISS, Judge, presiding. Heard in the third division of this court for the first district at the April term, 1952. Affirmed. Opinion filed October 22, 1952. Rehearing allowed November 7, 1952. New opinion filed January 14, 1953. Released for publication January 30, 1953. MR. JUSTICE FEINBERG DELIVERED THE OPINION OF THE COURT.

Rehearing allowed November 7, 1952

Plaintiff sued defendants Hutchinson and Cuneo for a brokerage commission for procuring a purchaser, ready, able and willing to buy upon the terms of sale submitted to plaintiff. A trial without a jury resulted in a finding and judgment in favor of Cuneo and a finding and judgment for plaintiff, against defendant Hutchinson, from which he appeals.

The complaint alleged that Cuneo owned the property in question; that on November 10, 1945, Hutchinson represented to plaintiff that he was exclusive broker for Cuneo and warranted to plaintiff that Cuneo authorized Hutchinson to employ plaintiff to procure a purchaser for said property and to contract for payment of commission; that Cuneo, through Hutchinson, contracted with and engaged plaintiff as broker for the sale of said real estate; that the price was fixed at $135,000; that the purchaser was to pay one-half in cash and give back a purchase money mortgage for the balance; that possession would be surrendered on or before May 1, 1946; that Hutchinson told plaintiff if such a purchaser were procured, plaintiff would receive one-half of the usual brokerage commission, and Hutchinson would retain the other one-half as exclusive agent for Cuneo; that on January 1, 1946, Hutchinson notified plaintiff that the purchase price was raised to $150,000, but the balance of the terms would remain the same; that plaintiff undertook said hiring and employment from November 1945, through April 1946, performed services and procured a purchaser, willing and able to purchase upon said terms; that on April 3, 1946, said purchaser signed a contract upon said basis, a copy of which was attached to the complaint as Exhibit "A"; that the purchaser deposited $5,000 earnest money with the plaintiff; that the contract and earnest money were delivered to defendant Hutchinson; that Hutchinson, as agent for Cuneo, accepted the contract and earnest money, told plaintiff he had done a good job and was entitled to his one-half commission; that Cuneo made new proposals of sale directly to plaintiff's purchaser and negotiated a new contract for the sale of said premises with the purchaser, and that plaintiff was entitled to his commission of $3,750.

The complaint was not challenged as to sufficiency by any motion under the present Civil Practice Act, but an answer was filed by each defendant. The answers of Cuneo and Hutchinson were almost identical, in which they denied the allegations in the complaint except that they admitted Cuneo wrote the letter to plaintiff's alleged purchaser, as set up in the complaint. In this letter Cuneo said the contract in the main was satisfactory and made new proposals.

The evidence clearly establishes that plaintiff, after he was employed by Hutchinson, rendered services over a period of nearly a year in his effort to procure a purchaser upon the terms submitted by Hutchinson, and expended a substantial amount in advertising the property. That he procured a contract upon the terms submitted by Hutchinson is undisputed. That the earnest money and the contract were delivered by plaintiff to Hutchinson, who in turn delivered the same to Cuneo, is undisputed. Cuneo thereafter negotiated directly with said purchaser. Plaintiff was not consulted in the subsequent negotiations, which resulted in a redraft of the contract by Cuneo and signed by plaintiff's purchaser. The terms of the latter contract were never discussed with plaintiff. Plaintiff then demanded of Hutchinson the commission due him. No demand on Cuneo was made by plaintiff. It appears from the evidence that Cuneo refused to consummate the sale. Whether Cuneo was justified in this refusal is not involved on this appeal.

The principal ground for reversal urged by defendant is that the complaint having alleged Hutchinson was the agent, and the principal having been disclosed, plaintiff cannot recover, since there is no personal liability of an agent where the principal is disclosed and where the agent has not personally obligated himself. Quoting defendant's statement of his position, it is: "Defendant, Hutchinson, did not claim a variance between pleading and proof, but asserted throughout that plaintiff's pleadings stated Hutchinson was the agent and John F. Cuneo the principal, and that plaintiff's proof, although insufficient to prove his case, conformed to his pleadings." Defendant makes no point in his briefs or upon oral argument that the complaint wholly fails to state a cause of action against defendant.

It must be borne in mind that plaintiff alleged and proved that Hutchinson represented to him that he had authority from Cuneo to employ plaintiff to procure a purchaser. Hutchinson offered no proof upon the trial that he had such authority from Cuneo, and there is no evidence in the record that he had such authority.

We think that the law is well settled in this State, as in other jurisdictions, that an agent, representing an owner of property to offer the same for sale, has no implied authority to employ a broker to procure a purchaser; that the burden is upon the agent who employs the broker to establish such authority, and that in the absence of proof of such authority, the agent becomes personally liable for the broker's commission, where the broker has procured a purchaser, ready, able and willing to buy upon the terms submitted by the agent.

In Willoughby v. Brown, 190 Ill. App. 51, suit was brought against the agent and the principal, by the broker, who was employed by the agent. The suit was dismissed as to the principal, and the agent was held personally liable to the broker. It was there said:

"Mary E. Ryan was the owner of the real estate and had given Brown a power of attorney to sell and convey the same. The power of attorney did not give authority to lease, nor did it give authority to employ a broker. Brown stated to plaintiffs that he was authorized to lease said real estate. Authority to sell or lease does not imply authority in the agent to employ a broker. Doggett v. Greene, 254 Ill. 134.

"The promise by Brown to pay defendant for this service in finding a man ready, able and willing to accept a lease was binding on him individually. Sadler v. Young, 78 N.J. Law 594.

"It was not necessary that Brown have any interest in the property placed by him in the hands of plaintiffs, to bind him personally by a promise to pay commissions." (Citing Doggett v. Greene, 254 Ill. 134, 139.)

In Reeb v. Bronson, 196 Ill. App. 518, 524, the court approved the following statement of the law:

"`It is perfectly well settled, that if a person undertake to contract as agent for an individual or corporation, and contracts in a manner which is not legally binding upon his principal, he is personally liable. * * * And the agent, when sued upon such a contract, can exonerate himself from personal liability only by showing his authority to bind those for whom he undertakes to act. It is not for the plaintiff to show that he had not authority. The defendant must show affirmatively that he had.' The definition given is quoted with approval by our Supreme Court in Wheeler v. Reed, 36 Ill. 91; also in Frankland v. Johnson, 147 Ill. 525. The personal liability of agents ...


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