APPEAL from the Appellate Court for the Second District; heard
in that court on appeal from the Circuit Court of Du Page County;
the Hon. GORDON MOFFETT, Judge, presiding.
MR. JUSTICE SCHAEFER DELIVERED THE OPINION OF THE COURT:
Rehearing denied June 1, 1973.
The plaintiff, H.G. Cunningham, an Indiana real estate broker, brought this action in the circuit court of Du Page County against the defendant, Roger C. Aeschliman, to recover a commission on the sale of a house which the defendant owned in Munster, Indiana, as well as certain cleaning and painting expenses the plaintiff had incurred in preparing the house for sale. A jury was waived, and the trial court entered judgment in favor of the plaintiff in the sum of $4080, representing the commission, and $379 representing the refurbishing expenses. The Appellate Court, Second District, reversed as to the commission but affirmed as to the expenses (Cunningham v. Aeschliman (1971), 1 Ill. App.3d 386), and we allowed the plaintiff's petition for leave to appeal.
The defendant had invested about $6500 in the Indiana house, which was subject to a mortgage. He then moved to Wheaton, Illinois, and wanted to sell the Indiana house. To that end he entered into an exclusive home-listing agreement with the plaintiff on June 14, 1967. The agreement provided that for a period of 90 days the plaintiff was to have the exclusive right to sell the defendant's home for the sum of $75,000, "or with my or our consent for a lesser sum or on other terms." The agreement further provided: "If, during said period the property is sold, or if you, or any member of the Multiple Listing Service of the Calumet Area, Inc., produce a purchaser ready, willing and able to purchase the property; or if within six (6) months after the expiration of said period, a sale is made to any person, directly or indirectly, whom you or any other member of the Multiple Listing Service of the Calumet Area, Inc. may have interested in the property, I or we agree to pay you a commission of 6% of the gross sales or exchange price thereof, provided, however, that this extension clause shall not be applicable and binding during the term said real estate is relisted with some other licensed Realtor under an exclusive listing contract upon or after the term of this listing agreement." The agreement fixed September 1, 1967, as the date upon which possession would be delivered.
After the agreement was executed, the plaintiff advertised the house for sale and showed it to a number of persons who responded. One of them was accompanied by the wife of the ultimate purchaser, Dr. Vincent Santare. On July 10, 1967, the plaintiff took to the defendant in Illinois Dr. Santare's first offer, which was to purchase for $70,000 on a contract basis, payable $7,000 down and the balance at $500 per month, with interest at 5 1/2%. $500 was paid down with the offer. The defendant rejected that offer and counter-offered to sell for $73,000 on the same terms. Dr. Santare then increased his offer to $71,500. That price was acceptable to the defendant, but he asked for a $10,000 down payment instead of the $7,000 stated in the offer.
Dr. Santare had become concerned about what appeared to be a water problem in the basement of the house, and he hired an engineer who examined the house and recommended that certain corrections be made, including installation of drain tile, reinstallation of window wells, opening an exterior basement wall, tuck-pointing and regrading. These recommendations were communicated to the plaintiff, and on July 17 he set them forth in a letter to the defendant which indicated that Dr. Santare would not buy the house until the corrections were made. Estimates which Dr. Santare had obtained indicated that these corrections would cost $3500. On August 3 Dr. Santare submitted to the plaintiff another offer to purchase for $71,500 with $10,000 down, conditioned on the defendant's making eight of the ten corrections originally recommended by the engineer. The defendant rejected this offer.
During the month of August, relations between the plaintiff and the defendant deteriorated. The plaintiff testified that he had a meeting with the defendant during which the defendant was very antagonistic and accused him of being inept and causing damage to a chair which he had had cleaned. The defendant was also dissatisfied because the plaintiff had not had the basement walls painted, so that the water marks upon them would not show. The plaintiff testified that he nevertheless continued to try to sell the house until early September when he was informed that the Santares had started to move in. The defendant, on the other hand, testified that his last meeting with the plaintiff took place in the defendant's home in Illinois shortly after August 21, during which he expressed his extreme displeasure with the plaintiff's services and told him that he was "through with the house and I didn't want anything to do with him anymore."
It is undisputed that another written offer of Dr. Santare was transmitted by the plaintiff to the defendant. It was dated August 21, and by its terms was to expire on August 28. This offer proposed purchase for $68,000 and eliminated the requirement that corrections be made. The defendant did not accept this offer, and on August 28 the plaintiff recorded a "Notice of Intention to Hold Mechanic's Lien" against the defendant's property in the amount of $379. By letter dated August 29, the plaintiff returned the $500 earnest money to Dr. Santare, who thereafter inquired of the plaintiff to learn why his offers had been rejected.
Dr. Santare then called the defendant and arranged to meet with him at an unspecified time during the Labor Day weekend. At the meeting the principal topic of discussion was the engineer's report concerning the alleged defects in the house. As a solution, the possibility of a lease with an option to purchase was apparently suggested by the defendant, who was familiar with the tax advantages of a lease. Dr. Santare testified that this suggestion interested him because it would give him an opportunity to live in the house for a period of time to determine if the asserted defects existed, and then to decide whether or not to buy.
The matter was referred to their respective attorneys, and a lease with an option to purchase was drawn up. The lease was for one year, commencing October 1, 1967, at a rental of $6000 per year, with a privilege to renew for an additional year at $7200 per year. In the lease the owner undertook to make certain corrections, which, as the trial court found, "for the most part were identical with those contained in" Dr. Santare's earlier offer to purchase. Attached to the lease was an option to purchase for $68,000, exercisable after October 1, 1968.
The lease and option to purchase were signed by Dr. and Mrs. Santare, and acknowledged by a notary public on September 5, 1967, which was seven days prior to the expiration of the exclusive listing period. The blanks for the dates of the signatures of the sellers are not filled in, nor are their signatures acknowledged. The defendant testified that he signed these instruments on some unspecified date after the exclusive period expired on September 12. He also testified that the attorneys for himself and Dr. Santare were in the process of negotiating the lease and option prior to September 12, and the trial judge found that "a lease and option to purchase the real estate in question were entered into during the life of the exclusive listing agreement with the plaintiff broker." The Santares moved into the house in late September and exercised the option to purchase about one year later on September 19, 1968. On October 17, 1968, a deed was recorded conveying the home to the Santares for a purchase price of $68,000.
The parties agree that the brokerage contract must be construed under the law of Indiana since it was executed there by persons who were then Indiana residents, and the contract involved the performance of duties in that State with respect to real estate situated there.
While we have found no Indiana cases involving closely similar factual situations, there are Indiana decisions which are of assistance. The agreement required that the broker "produce a purchaser" or that a sale be made to one whom the broker "may have interested in the property." In Platt v. Johr (1894), 9 Ind. App. 58, 60-61, 36 N.E. 294, 295, the court stated:
"Whether a broker is to `introduce' a purchaser, or to `find' or `procure' one, or whether he is to do all these things combined, his duties remain practically the same. The words `find,' `procure,' `introduce,' are generally used synonymously in the making of such contracts, and, whether used conjunctively or disjunctively, the essential thing they require the broker to do is to secure a customer who is or will become a purchaser. The logical result of this rule is that the sale must be traced to the introduction of the purchaser to the owner by the agent. Of course, if, after such introduction and as a proximate result thereof, the owner makes the sale himself, either personally or by another agent, it will not exonerate such owner from the payment of commission to ...