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Chiagouris v. Continental Trailways

JUNE 15, 1964.




Appeal from the Superior Court of Chicago; the Hon. HERBERT R. FRIEDLUND, Judge, presiding. Judgment affirmed.


The defendants appeal from a judgment entered by the Superior Court in a non-jury trial awarding plaintiff, a licensed real-estate broker, a commission in the amount of $11,760 and costs, in an action to recover for services in procuring a tenant on a fourteen-year sublease. It is defendants' theory that as a matter of law the plaintiff had no contract of employment nor was he the procuring agent of the sublease.

[1-3] Before proceeding to an account of the evidence it would be well to consider the tests laid down by previous decisions with regard to what constitutes a contract of employment. It is the law of this State that no particular form is required for the creation of a brokerage contract to sell real estate. Ordinarily all that is necessary is that the broker act with the consent of the principal, which may be given in writing, orally, or implied from the conduct of the parties. 5 ILP Brokers § 22. The broker becomes the compensable procuring agent when he has produced a purchaser, seller, or subtenant, as the case may be, who is ready, willing, and able to buy, sell, or lease, on the terms stated by the principal. Camp v. Hollis, 332 Ill. App. 60, 74 N.E.2d 31. The broker's right to a commission depends upon whether the sale was procured or effected through his efforts or through information derived from him, and cannot be defeated by the owner's making a sale himself or through another broker, and it is not necessary that the purchaser be actually introduced to the owner by the broker. Glass v. Liberty Nat. Bank of Chicago, 326 Ill. App. 251, 61 N.E.2d 167 (Abst.).

Although the testimony of the parties is the same as to some points, it varies as to crucial factual matters at issue. The trial judge believed the testimony of the plaintiff, and unless such a decision was clearly contrary to the manifest weight of the evidence or was palpably and manifestly erroneous, we will be required to use the facts so elicited as the basis for our inquiry into the conclusions of law reached by the trial court. Eleopoulos v. City of Chicago, 3 Ill.2d 247, 120 N.E.2d 555, 2 ILP Appeal and Error § 788. The evidence presented by the plaintiff may be summarized as follows:

Defendants, Continental Trailways and Transcontinental Bus System, Inc., are the lessees of premises located at 20 East Randolph Street, part of which is occupied as a bus depot. George Chiagouris, plaintiff, a licensed real-estate broker for over forty years, testified that in March or April of 1961, he heard that the defendants were seeking a subtenant for the premises. He contacted Arne Leander, who was the manager of the bus company and whom he knew, and Leander told him they were expecting to move their station to La Salle Street Station and if they did they would sublease the premises. Following this conversation Chiagouris related this information to George Alex, who is not a real-estate broker, but specialized in selling restaurant businesses, and with whom he shared office space. Alex told Chiagouris about James Verros and Abe Karns, who operated a chain of restaurants, and the four of them met on June 19th, 1961, at the offices of Chiagouris and Alex. After advising Verros and Karns that the location in question was going to be available the prospective lessees told them of their interest in the location and directed Chiagouris to get the particulars and blueprints.

Chiagouris further testified that he phoned Leander about an appointment, and a meeting was arranged for July 25th or July 27th at the Bismarck Hotel, at which time Mr. G.G. Rountree, a vice president of one of defendants' parent corporations, would be in town. At this meeting Chiagouris told Rountree that he was a real-estate broker, gave him his card, and informed him that he had submitted the premises to restaurateurs Verros and Karns. In response to his inquiry Rountree told him that they wanted $42,000 for rental on a fourteen-year lease. Chiagouris said he wanted blueprints showing the space, size of the main floor, and basement. Rountree told Leander to get a blueprint and send it to Chiagouris. Leander sketched the premises at this time and gave the rough sketch to Chiagouris. Chiagouris said Rountree told him "to go ahead and go to these people and try to rent the place. The place was for rent." He further testified that after many phone calls he received the blueprints on about August 8th. He gave a copy of the blueprints and other rental information to Verros and Karns. He testified that when he could not get a definite date for another meeting he informed the defendants, by letter dated September 11, 1961, that "[i]n reference to the leasing of the stores at 20 E. Randolph Street, Chicago, as per your Blue Prints, we wish to inform you that we have submitted said stores to Mr. Abel Kearns and James Verros who are running a number of eating shops in Chicago and who will be good tenants." Chiagouris said he subsequently spoke to Rountree in October seeking an appointment, but was unsuccessful. He testified on cross-examination that he spoke to Leander after sending his letter of September 14th, inquiring when they would close the lease and he was told they were working on it. He did not remember Rountree telling him that there were many other real-estate brokers, including Fred Windchy, working on the deal. The testimony of plaintiff's witness, George Alex, substantially corroborates this testimony.

Rountree was called as an adverse witness under sec 60 of the Civil Pratice Act. He admitted that he attended the meeting at the Bismarck Hotel in July of 1961. Rountree testified that he told Chiagouris at the July meeting that he wanted $60,000 for the entire premises and denied that Chiagouris mentioned Karns and Verros as prospective tenants. He said the first time Chiagouris ever mentioned Karns and Verros was in the letter of September 12th, which he said he didn't answer. He admitted that he never told Chiagouris to discontinue his efforts to get a subtenant. He said that after many discussions and negotiations with the Fred Windchy Real Estate Agency and Karns and Verros, the latter parties increased their offer of $36,000 to $42,000, and a leasing agreement was consummated with them for a rental of $42,000 and a commission paid to the Windchy Agency.

The defendants produced five witnesses on their behalf. Rountree was recalled and testified that he began negotiations with the Fred Windchy Agency for the rental of the premises at 20 East Randolph Street in March of 1961; that he again met with Mr. Windchy on the same day and prior to seeing Mr. Chiagouris at the Bismarck Hotel. He said he told the plaintiff at that time that he had talked to other real-estate brokers, but that, "I want you to bring me the best clients with the most money." Finally he testified that Karns and Verros were first brought to his attention by the Windchy Agency during the week of his visit to Chicago in July of 1961, and that Chiagouris had not participated in any of the negotiations leading up to the final signing of the leasing agreement.

Arne Leander, the terminal manager of defendants' local bus company, testified that he operated their depot under the supervision of Rountree. His testimony substantially corroborated the evidence given by Rountree. He admitted that the July meeting with Chiagouris took place at the Bismarck Hotel. He said he met Chiagouris earlier in the spring of that year and they had lunch together on several occasions and discussed the leasing of 20 E. Randolph Street. He testified that on the morning of the July meeting, he and Rountree met first with McKenna of Windchy Agency and then with Karns, at which time Karns made an offer of $36,000 rental. After this meeting they met with Chiagouris. Both of these meetings took place at the Bismarck Hotel. He said that Chiagouris stated that he would be able to obtain a tenant for the premises, but he denied that he mentioned the names of Verros and Karns and he didn't think any price was discussed. He also stated that Rountree told Chiagouris that there were many other real-estate agents involved. He acknowledged that blueprints were sent to Chiagouris and admitted receiving the September 11th letter mailed to his office, but said he never responded because he had no authority to do so.

The defendants then offered the testimony of the two men who subsequently rented the premises at 20 E. Randolph Street, and whom the plaintiff alleged he had procured. Their testimony was contradictory on some of the major points at issue. James B. Verros testified that they dealt with the Windchy Agency in connection with this lease from about April or May. He said they went to the office of Chiagouris on June 19th, and on several occasions after that, and generally discussed locations for restaurants, but it was not until much later that Chiagouris mentioned the 20 E. Randolph Street premises, and this was after they had given the Windchy Agency a deposit. He said he never authorized Chiagouris to represent him in this deal, and that Chiagouris never gave him any plans nor did he discuss any price with him.

Abe Karns testified that he and Verros operate five restaurants. He said they first discussed the premises with Windchy in April or May and that at the meeting with Rountree and Windchy in July a deal was made and the contract was executed in November. He said they met with Chiagouris frequently and they discussed many deals and that Chiagouris may have mentioned the involved premises, but they did not authorize him to represent them. He didn't tell Chiagouris about Windchy and he let Chiagouris think they were interested in the deal because "I didn't want to find some competitive bidding going on because I knew if I told him I wasn't interested he would get some other customers involved in these so I just told him I would let him know. I just carried him along that way until my position would be clear with Rountree on the figure I gave him." On cross-examination he admitted receiving plans from Chiagouris before he made a deposit on the premises.

The final witness for the defendants was Fredrick O. Windchy. Windchy testified that he is a real-estate broker and that he submitted Karns and Verros as tenants in the month of May after having discussed the matter with Rountree in the early part of that year. He related that they negotiated for some time and that he ultimately closed the deal and received his commission.

Defendants contend that plaintiff had no contract of employment with them. They argue that although defendants were encouraged to find a lessee there is no claim that plaintiff had an exclusive listing or that he brought lessees together with defendants or that he engaged in any negotiations between lessees and defendants, and therefore he is not entitled to a commission. Defendants also insist that since the Fred Windchy Agency was in fact the procuring and consummating agent the judgment in favor of plaintiff was erroneous and should be reversed.

The sole issue before us is whether, considering all the evidence and the inferences that could be reasonably drawn from it most favorable to the plaintiff, there was a total failure to prove the necessary elements of plaintiff's claim. The trial judge, in holding that plaintiff was entitled to a broker's commission, orally characterized the conduct of defendants as acting in bad faith towards plaintiff and stated . . ." [f]rom the revelations that were given here, it seems that the lessees dealt with him absolutely in a fraudulent manner, but it's the Court's opinion that when a real-estate man is handed plans and asked to procure prospects, and he goes out and does so, and he ...

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