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Johnson v. Schuberth

APRIL 8, 1963.

ARTHUR F. JOHNSON, DOING BUSINESS AS ARTHUR F. JOHNSON & COMPANY, PLAINTIFF-APPELLEE,

v.

ELMER H. SCHUBERTH, DEFENDANT-APPELLANT.



Appeal from the Superior Court of Cook County; the Hon. DONALD S. McKINLAY, Judge, presiding. Affirmed.

MR. PRESIDING JUSTICE BURMAN DELIVERED THE OPINION OF THE COURT.

Defendant appeals from a judgment on the pleadings entered against him in the Superior Court affirming a decision and award made by the Reference and Arbitration Committee of the Chicago Real Estate Board.

The pleadings indicate that plaintiff and defendant are real estate brokers licensed by the State of Illinois. In August, 1961, a farm located outside Chicago was sold and defendant was paid a real estate commission. Plaintiff contended he was entitled to $9,125 being one-half the commission. Plaintiff and defendant were unable to resolve the dispute and in September plaintiff submitted the matter to the Reference and Arbitration Committee of the Chicago Real Estate Board. The Board's bylaws provide for the mandatory arbitration of disputes over commissions among members. Plaintiff alleged, in his complaint, that both he and defendant were members of the Board and bound by the bylaws providing for arbitration of disputes over commissions.

Notification of the arbitration proceedings was sent to defendant, but he refused to submit to arbitration and did not appear before the Committee. An ex parte proceeding was held and the Committee found that plaintiff was entitled to the $9,125 he claimed. On October 18th a letter was sent to defendant notifying him of the award. A copy of the award was enclosed. The award recited that defendant was a member of the Board, but had written two letters to the Committee tendering his resignation and requesting the Committee to decline taking any action in the case. The tender of resignation was not accepted.

Defendant refused to pay the award and plaintiff then instituted this action to enforce the award and to recover the $141.96 arbitration costs. The complaint, in addition to the allegations set forth above, included the bylaw provisions requiring the arbitration of disputes over commissions and set forth the arbitration award and attached, as Exhibit A, the letter of October 18th.

Defendant's answer admitted that both he and plaintiff were real estate brokers, admitted that he refused to submit to arbitration, and admitted receipt of the letter of October 18th which gave notice of the award. Defendant asserted the bylaws set forth in the complaint were incomplete, but did not set forth any additional bylaws nor did he assert that the quoted bylaws were misquoted or erroneous. Defendant specifically denied that "any bona fide dispute or controversy" had arisen between the parties, but asserted that plaintiff had asserted a "baseless claim." All other allegations were met by general denials except that defendant pleaded he had no information as to whether or not plaintiff was a member of the Board.

Defendant's answer then pleaded three affirmative defenses and also set up a counterclaim in equity seeking to enjoin the Board from acting on its award and to make it a party defendant. The first affirmative defense alleged that the "award is based upon false and perjured testimony, and constitutes arbitrary, capricious, erroneous, and improper action by the said Chicago Real Estate Board, and its committee on Arbitration." The second and third affirmative defenses were based on the old Illinois Arbitration Act. (Ill Rev Stats, c 10, §§ 1-18, repealed by Laws 1961, p 3844, § 23, August 24, 1961.) The counterclaim, which sought to set aside the arbitration award, was also based on the old arbitration statutes.

Several motions were made and argued prior to the entry of the judgment appealed from. Prior to making his answer to the complaint, defendant appeared before Judge McKinlay and moved to strike the complaint. Defendant's sole argument in support of this motion was that the old arbitration act was controlling and under it the proceedings before the Arbitration Committee were void. Plaintiff then presented a motion for judgment on the pleadings. After argument, Judge McKinlay denied both motions and defendant filed his answer set forth above. After the filing of the answer, including the counterclaim, defendant presented a motion to Judge Ward to transfer the cause to the Chancery division. Judge Ward referred this to Judge McKinlay. Defendant then presented a petition for change of venue which Judge McKinlay denied. Plaintiff then presented another motion for judgment on the pleadings and this was granted.

Defendant makes three arguments on this appeal. The first is that the Reference and Arbitration Committee was without jurisdiction to enter the award. This argument is based on defendant's contention that he is not a member of the Chicago Real Estate Board and had not consented, in writing, to jurisdiction. The second argument is that the old Illinois Arbitration Act is controlling in this situation and under this act, the instant arbitration award is invalid. The third contention is that Judge McKinlay erred in not granting the petition for change of venue.

Whether or not defendant was a member of the Chicago Real Estate Board at the time the arbitration procedure was instituted is a question of fact and the law is clear that rendering judgment on the pleadings while an issue of fact remains undisposed of necessitates a reversal and remandment. Waxenberg v. J.J. Newberry Co., 302 Ill. App. 128, 142, 23 N.E.2d 574. The question then is whether defendant, by his answer, raised this issue.

Section 40 of the Civil Practice Act (Ill Rev Stats, c 110, § 40) provides:

(1) General issues shall not be employed. Every answer and subsequent pleading shall contain an explicit admission of denial of each allegation of the pleading to which it relates.

(2) Every allegation, except allegations of damages, not explicitly denied is admitted, . . . .

(3) Denials must not be evasive, but must fairly answer the substance of the allegation denied.

Plaintiff properly alleged that defendant was, at all relevant times, a member of the Chicago Real Estate Board.

Paragraph 1 of the complaint stated:

That the plaintiff and the defendant at all times hereinafter mentioned were engaged in business as Real Estate Brokers, were duly licensed as such Brokers pursuant to Certificates of Registration issued by the Department of Registration and Education of the State of Illinois, and were members in good standing of the Chicago Real Estate Board.

Paragraph 5 of the complaint stated:

That, however, under the said Bylaws the defendant, as a member of the Chicago Real Estate Board, was absolutely and finally bound by the findings of the said Reference and Arbitration Committee.

Paragraph 6 of the complaint set forth the Decision and Award of the Committee. The award stated:

The Reference and Arbitration Committee heard and considered the above named case on Monday, October 9, 1961, pursuant to official notice previously given to all parties. The Committee heard evidence submitted on behalf of complainant, a member of the Chicago Real Estate Board. Defendant, also a member of the Chicago Real Estate Board, did not ...


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