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Snyder v. State-Wide Properties Inc.

November 15, 1962

CLINTON B. SNYDER, PLAINTIFF-APPELLEE,
v.
STATE-WIDE PROPERTIES, INC., A CORPORATION, DEFENDANT-APPELLANT



Author: Castle

Before DUFFY, KNOCH, and CASTLE, Circuit Judges.

CASTLE, Circuit Judge.

Clinton B. Snyder, plaintiff-appellee, instituted this diversity action in the District Court against State-Wide Properties, Inc., defendant-appellant, to recover commission alleged to be due for services as a real estate broker in producing a buyer alleged to have been ready, willing and able to purchase defendant's property at the price and on the terms and conditions stipulated by the defendant. The cause was tried to a jury which returned a verdict for the plaintiff upon which the trial court entered judgment against the defendant for $152,800. The defendant appealed.

The defendant contends the trial court erred in denying defendant's motion for directed verdict as renewed in its motion for judgment notwithstanding the verdict, in rulings on evidence, in the giving and refusing of instructions, and in denying defendant's alternative motion for a new trial.

In the posture in which the case reaches us we conceive that the defendant's contentions in support of the claims of error it makes on appeal combine to precipitate the following basic contested issues:

(1) Whether provisions of the Illinois Real Estate Brokers and Salesmen Act or of the Municipal Code of the City of Chicago, Illinois (§§ 113-22 to 113-29 inclusive), preclude recovery by the plaintiff.

(2) Whether an issue as to the applicability of the municipal ordinance, on the evidence adduced, involved a question of fact required to be submitted to the jury for resolution.

(3) Whether there is any evidence to support a jury finding that the plaintiff produced a buyer ready, willing and able to purchase at the price and on the terms and conditions stipulated by the defendant.

(4) Whether the District Court's refusal to grant a new trial on the claim of newly discovered evidence constituted an abuse of discretion.

Defendant's contention that Section 2b of the Illinois Real Estate Brokers and Salesmen Act (Ill.Rev.Stat. 1957, ch. 114 1/2, par. 2b)*fn1 and Section 113-29 of the Chicago ordinance*fn2 bar the plaintiff from recovery is grounded on the fact that for the most part the negotiations with the defendant's president, Maurice H. Kamm, and the prospective purchaser, Charles P. Ryan, a New York real estate investor, were carried on in behalf of the plaintiff by Max Seigel, a New Jersey resident and New York real estate broker, who was not registered under the Illinois statute as a real estate broker or salesman, and that neither the plaintiff nor Seigel were licensed under the Chicago ordinance as a real estate broker, although the plaintiff, a New Jersey resident, did have a certificate of registration or license as an Illinois real estate broker issued to him under the Illinois statute.*fn3

But Section 1 of the Illinois statute (ch. 114 1/2, par. 1) expressly provides that:

"* * * nothing in this Act contained shall prohibit the cooperation of, or a division of, commissions between a duly registered broker of this State and a non-resident broker having no office in this State."

Seigel had no office in Illinois. He was a New York broker. His activities in connection with the negotiations on behalf of plaintiff, a licensee of Illinois, therefore neither required that he possess an Illinois registration nor preclude a recovery by plaintiff. Moreover, neither § 2b of the statute nor any other provision thereof purports to deny recovery by an Illinois licensee because of his employment or utilization of an unlicensed person's services. If it be assumed that Seigel's activities were prohibited by the statute, § 2b precludes any recovery by him not by plaintiff. The interdiction of the section is limited to recovery by unlicensed persons. Cf. C. B. Snyder Realty Co. v. Sherrill-Noonan, Inc., 3 Cir., 261 F.2d 269, 272.

In so far as the Chicago ordinance is concerned it is clear from the record that neither plaintiff nor Seigel was engaged in the real estate brokerage "business" in Chicago. Neither maintained an office there and there was no evidence that either had acted as broker in Chicago in connection with any other real estate transaction occurring in Chicago or involving Chicago real estate. And, the Chicago ordinance, unlike the state statute,*fn4 does not require a broker's license for an isolated transaction. This has been the construction placed on the ordinance by the Illinois courts when such question was in issue. O'Neill v. Sinclair, 153 Ill. 525, 39 N.E. 124; Greenburg v. Nyberg Automobile Works, 162 Ill.App. 504; Vossler v. Earle (Abst.Op.), 194 Ill.App. 522, aff'd 273 Ill. 367, 112 N.E. 687. Cases such as Bicek v. Royal, 307 Ill.App. 504, 30 N.E.2d 747; Usher v. McGowan, 20 Ill.App.2d 201, 155 N.E.2d 830 and In re Winston v. Kaspar American State Bank, 36 Ill.App.2d 423, 184 N.E.2d 725, do not hold that the ordinance precludes recovery by an unlicensed person in the case of an isolated transaction. In those cases it does not appear that any claim was made that the transaction was but an isolated one - or that the unlicensed person denied recovery was not engaged in the brokerage "business" in the City of Chicago. We are bound by the construction the Illinois courts have placed on the Chicago ...


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