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Bright v. Miller & Son


NOVEMBER 17, 1971.




APPEAL from the Circuit Court of Cook County; the Hon. WAYNE OLSON, Judge, presiding.


The plaintiffs, W.P. Bright, William G. Grant and Hilda Vanneman, brought an action as trustees of a dissolved Georgia corporation for a brokerage commission, arising out of the placement of a mortgage loan. The plaintiffs allege that the commission was due from the defendant, Max E. Miller & Son, Inc., for services performed by Wilbur MacArthur, the plaintiffs' alleged agent. The defendant filed a counterclaim in which it alleged that MacArthur was negligent in furnishing complete information to the defendant, counter-plaintiff, and the lenders, the United Insurance Company of America as to the various circumstances surrounding the borrowers and the real estate, which was to secure said loan, such as the changes in the character of the neighborhood, changes in adjoining real estate and inaccurate financial data. The counterclaim was based on the counter-plaintiff's assumption that MacArthur was the plaintiffs' agent.

The trial court sitting without a jury, entered a judgment in favor of the plaintiffs in the sum of $5,250. At the close of the counter-plaintiff's case, the court sustained the counter-defendants' motion for a directed verdict denying the counterclaim. The issue on review is whether MacArthur was an agent of the plaintiffs in his dealing with the defendant. A brief statement of the facts follows:

MacArthur was president of Etheridge and Vanneman, Inc. (hereinafter called E & V) from July 1960 to September 1962. MacArthur was also president of Commercial Trust Co., a subsidiary of E & V from July 1960 to February 1962. (E & V moved down the street to the Candler Building.)

In February 1962, MacArthur told Joseph Miller, the defendant's president, that he had a client, Memorial Drive Properties, Inc., who desired to secure $350,000 for the construction of a bowling alley. On February 8, 1962, MacArthur and Miller had a telephone conversation wherein it was agreed that MacArthur was to receive a commission of 1 1/2 per cent of the $350,000 loaned. On February 9, 1962, MacArthur submitted a loan application to Miller who directed correspondence to MacArthur at the Commercial Trust Co. The MacArthur phone number called by Miller was the same as E & V's phone number.

Later MacArthur got into a dispute with E & V, and on February 9, 1963, asked Miller for his commission on the Memorial Properties, Inc. loan. In an attempt to obtain the commission from the defendant, MacArthur sent a letter of indemnification to Miller.

• 1 The defendant contends that MacArthur was not the plaintiffs' agent when MacArthur negotiated the loan for Memorial Drive Properties, Inc. The plaintiffs had the burden in the trial court to prove MacArthur's agency.

No testimony was offered by the plaintiffs to explain why the two loan applications were executed by MacArthur as a principal or why MacArthur signed an indemnity agreement which reaffirmed in writing that he dealt with the defendant as a principal.

Miller testified that he dealt with MacArthur in MacArthur's capacity as a principal. Miller's correspondence was addressed to MacArthur at Commercial Trust Co., but Commercial Trust Co. dealt only in small loans, not financing large projects such as the bowling alley in this case.

The plaintiffs' chief witness, W.P. Bright, testified that Donald Vanneman was involved in a real estate project in an individual capacity while he was a full time employee of E & V. It was not an uncommon practice for persons employed by the plaintiffs to deal in real estate and related matters in their individual capacity and to personally retain the commissions earned thereby. Bright's testimony revealed his lack of first hand knowledge of MacArthur's relationship with E. & V and of the loan transaction with the defendant.

• 2 The record does not support the trial court's determination that MacArthur was the plaintiffs' agent when he dealt with the defendant. The finding of the trial court was contrary to the manifest weight of the evidence.

• 3 Since we find that MacArthur was not the plaintiffs' agent in dealing with the defendant for the mortgage loan, we affirm the trial court's order sustaining the counter-plaintiff's motion for directed verdict denying the counterclaim.

The judgment of the trial court in favor of the plaintiffs is reversed and its order denying the defendant's counterclaim is affirmed.

Affirmed in part and reversed in part.

STAMOS and DIERINGER, JJ., concur.


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