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Spindler v. Krieger

JANUARY 27, 1958.




Appeal from the Circuit Court of Peoria county; the Hon. JOHN T. CULBERTSON, JR., Judge, presiding. Decree affirmed.


This is a suit for an accounting to recover alleged secret profits which defendant is charged with having obtained wrongfully while acting as a real estate broker in behalf of plaintiff in the purchase of certain real estate in the city of Peoria. The cause was referred to the Master in Chancery of the Circuit Court of Peoria county. The evidence consisted almost entirely of the testimony of plaintiff and defendant, together with some seventeen writings placed in evidence. The report of the master in chancery found the issues in favor of plaintiff and granted him the relief he sought. On exceptions to that report, the chancellor confirmed and approved the report of the master in chancery. From that decree this appeal is taken by defendant.

Defendant contends that the decree of the chancellor was erroneous for two reasons: First, because there was no agency relationship between plaintiff and defendant, but rather a vendor-vendee relationship; secondly, because under the parol evidence rule it was error to admit extrinsic evidence concerning the transaction and the relationship of the parties in the face of two instruments in writing, a so-called offer to purchase and a subsequent letter signed by both parties.

This suit arose out of the acquisition by plaintiff of a parcel of real estate at the southwest corner of Knoxville and Nebraska Avenues in the city of Peoria. The defendant had been a licensed real estate broker for a number of years and was sole owner of the business known as the Marquette Real Estate Company in Peoria. He advertised extensively and held himself out to the public as being engaged in the business of buying and selling real estate for the public generally. Plaintiff was a substantial investor in Peoria real estate. In the past plaintiff had been represented in real estate transactions by various real estate brokers, including one prior transaction with defendant.

About February 15, 1955, plaintiff initiated discussions with the defendant, Krieger, concerning the purchase by plaintiff of the property in question, plaintiff mistakenly believing that defendant had the property listed for sale. Plaintiff stated to defendant that he would pay not to exceed $35,000 for the property. Defendant testified: "I told him (plaintiff) it was not listed with me but I would find out how he could buy it." Defendant at that time did not know the owners. Subsequently on or about March 6, 1955, the plaintiff again contacted the defendant at the latter's office and advised him that he would only pay up to $32,000 for the property, plus assumption of $400 in special assessments then a lien on the real estate and that that sum would have to include the real estate commission. On that occasion the defendant filled out in longhand a so-called offer to purchase on a standard form. The offer to purchase, containing most of the usual printed clauses found in such forms, named defendant Orville W. Krieger as seller and plaintiff Carl J. Spindler as purchaser, called for a purchase price of $32,000 with $3,000 as earnest money deposit, but specified no date of possession nor expiration date for the offer to purchase. The instrument was signed by plaintiff but not by defendant, bore no date, and incorrectly referred to the real estate as the "S.W. Corner of Linn & Knoxville Ave., Peoria, Ill.," whereas it was actually at the southwest corner of Nebraska and Knoxville Avenues in that city. At defendant's request plaintiff executed and delivered to defendant a counter check payable to Marquette Real Estate Co. for $3,000 as earnest money, but plaintiff asked defendant to hold the check until he would replace it with his personal check which he did some ten days later. At that time defendant had no listing for the property, had not contacted the owners, and had no connection with them. Sometime between March 15, 1955, and March 25, 1955, defendant Krieger contacted the owners of the premises or their representative, a Mrs. Hartman, in Florida, by telephone. Mrs. Hartman informed Krieger that she did not want to do business on the phone and that there was no sense in his coming down unless he would pay a specified price, variously fixed at $30,000 or $35,000 by defendant's testimony. Defendant thereupon flew to Tampa, Florida, and contacted Mrs. Hartman and her husband relative to purchase of the premises. The first time defendant talked to or called any of the owners of the property in person was three days before he entered into a contract with them for the purchase of the premises in his own name on March 28, 1955. In evidence was a written contract, dated March 28, 1955, wherein defendant agreed to purchase the property from Dorothy T. Hartman and others, for $26,500 with $1,000 down payment and no real estate broker's commission.

On the following day, March 29, 1955, defendant sent a telegram from Tampa, Florida, to plaintiff at Peoria as follows: "Hi Carl: Trip successful after 2 days. Leaving 1st plane out. Weather really nice, Orville." In early April, 1955, defendant summoned plaintiff to his office and told him that he had contacted the owners of the property, at which time he or his secretary had written out a letter for the plaintiff in which plaintiff stated he would pay $32,000 less the $3,000 which he had paid down and would also assume the special assessments. Plaintiff and defendant both signed this letter. Defendant told plaintiff that he had seen "the people" and in response to plaintiff's inquiry, defendant said that with commissions and extras the cost of the property would run plaintiff $32,000. The purpose of the letter, as stated by defendant, was to reconfirm what plaintiff and defendant had originally agreed. "I did not want to buy the property and have him not go through with the deal. I had already bought it for $26,500." On this occasion defendant asked plaintiff how he wanted title taken and both decided not to take it in plaintiff's name, but in defendant's name because on previous occasions defendant had failed to get the property when the seller knew plaintiff was buying it.

On April 27, 1955, defendant, Krieger, took title to the property by deed from the owners and on that day wrote a letter to plaintiff stating, among other things: "We closed our deal today on the Knoxville property. Would like to wait about thirty days now before we sell the property to you. However, this I will leave entirely up to you. I have the two properties on Knoxville to talk to you about when you next come into the office." On May 13, 1955, plaintiff took title to the property by deed from defendant and his wife, paying him a total price of $32,000 less an amount for tax prorations, by checks made payable to Marquette Real Estate Co. On May 3, 1955, defendant addressed a post card to plaintiff from Chicago reading: "Dear friend Carl — I sure appreciate your letting me paint sign on wall. I ordered it — Here's wot it will say — This entire corner sold by Marquette Real Estate Co. — Proving its the SOLD sign that counts. OWKrieger. — Carl — I had to take insurance on buildings. Took $20,000 — Don't want to get short rated — I'd like to bid on your insurance. I represent Michigan Mutual Co. Dividends come back to you each year. ORV." Sometime after plaintiff took title, he received a brief letter from defendant which stated: Friend Carl — Completely forgot to relate to you the interesting details in the acquisition of the Nebraska & Knoxville site for you. Will tell you next time I see you. Really quite unusual. Will be back Wed. or Thurs. Regards. ORV."

After he had taken title, plaintiff learned for the first time that defendant had purchased the property for $26,500. Thereafter, on July 18, 1955, plaintiff's attorney addressed a letter to defendant: "Dear Orville: Carl Spindler has discussed with us the question of accounting in connection with your purchasing for him the property at the corner of Knoxville and Nebraska. If you desire, we shall be glad to discuss this matter with you at your convenience. Yours very truly, Galbraith & Baymiller by Carroll Baymiller." On July 28, 1955, defendant Krieger mailed a picture post card to plaintiff from out of town, reading: "Friend Carl — Was in office Sat. Rec'd. letter from Carol [plaintiff's attorney] — Wot do U want me to tell him? Where were you? Will you be in all next week — have another Knoxville deal — ORV" It is undisputed that defendant never told plaintiff how much he actually paid for the property.

According to defendant's testimony, at a time when the two were viewing some other real estate, plaintiff volunteered that he would pay $35,000 for the property in question. Defendant testified that when defendant asked plaintiff, "Will you buy it for $35,000?" and plaintiff replied affirmatively, defendant stated: "Well, I will look into it for you, but will you pay me a commission if I can buy it for $35,000?" By defendant's testimony, Spindler said, "No, $35,000 is my total price." According to defendant's testimony, he replied, "Well, I will check into it, Carl."

Defendant himself testified that when Mr. Spindler first discussed this property with him, in the former's office, he told plaintiff that he "would find out if it could be purchased — I told him it was not listed with me, but I would find out how he could buy it."

On a later meeting, according to defendant, plaintiff reduced his offer to $32,000, stated that he would not pay Krieger a commission in addition, but agreed to pay $32,000 if Krieger bought the property and resold it to plaintiff for $32,000. Plaintiff categorically denied any such agreement that defendant should purchase the property on his own account and then resell it to plaintiff.

The two parties were the only witnesses to most of the negotiations. Their testimony, together with the writings offered as exhibits, comprise the record in this case. In the foregoing paragraphs, we have summarized the evidence in the record, which we have examined carefully and in detail.

Defendant relies in a very large measure on two written instruments, the offer to purchase and letter dated April 6, 1955, "confirming" the terms, which he insists not only require application of the parol evidence rule, but constitute a binding contract by which he agreed to sell the realty to the plaintiff and the plaintiff agreed to buy it from defendant. He urges that the relationship of the parties as thus established was that of buyer and seller and not principal and agent. Defendant has devoted a considerable portion of his brief and argument to the proposition that the parol evidence rule is applicable to the case, and, therefore, ...

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