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Van C. Argiris Co. v. Caine Steel Co.

MAY 28, 1974.




APPEAL from the Circuit Court of Cook County; the Hon. WALTER J. KOWALSKI, Judge, presiding.


Rehearing denied July 15, 1974.

This appeal is from a judgment entered in a suit filed by Van C. Argiris Company, an Illinois-licensed real estate brokerage corporation, against Caine Steel Company, an Illinois corporation, to recover a real-estate commission. The issues arise from the following facts.

In May 1962, Van C. Argiris, president of the plaintiff corporation, learned that defendant's building at 5501 West Grand Avenue in Chicago was available for sale or a long-term lease at a price of $1,250,000. He went to the building, inspected it and discussed the terms with defendant's president, Leon Caine. Later, Argiris received plans of the building and, in due course, showed the property to several prospective buyers.

On May 15, 1962, Argiris wrote a letter to the Beardsley & Piper Division, Pettibone Mulliken Corporation, telling them about defendant's building. Thereafter, on July 2 and September 13, 1962, additional letters were written to Pettibone Mulliken calling its attention to the favorable features of defendant's building and urging the corporation to look into the possibility of acquiring the property. In January 1963, defendant temporarily withdrew its building from the market. Nonetheless, Argiris continued to communicate with Pettibone Mulliken concerning possible purchase of the property.

Then, in September 1964, defendant's president, Leon Caine, communicated with Argiris and again took up the sale of the building. Argiris suggested that his company be made defendant's exclusive agent for this purpose. This suggestion, however, was rejected. Instead, on October 15, 1964, defendant signed an agreement with Bennett & Kahnweiler, a firm of real estate brokers, under which it became exclusive agents to sell or lease defendant's building. For their compensation, the brokers, or they and any cooperating broker, were to receive a commission in the amount recommended by the Chicago Real Estate Board for sales or leases of industrial property. The agreement provided "[i]t is further understood that in the event the property is sold or leased within one hundred and twenty (120) days from the termination date of this Agreement, to a prospect to whom it was submitted by you during the continuance of said Agreement, or to anyone on behalf thereof, and whose name has been disclosed to us, then in that case we agree to pay you a broker's commission as stipulated above." By its terms, the exclusive agency was to remain in force until May 1, 1965, or "[t]hereafter until either party terminates said employment by written notice delivered to the other not less than thirty (30) days prior to the intended date of termination."

Argiris, on behalf of the plaintiff, acted as a cooperating broker under the Bennett & Kahnweiler exclusive. He wrote letters to the Pettibone Mulliken Corporation urging its interest in defendant's property. On November 5, 1964, and later in February 1965, he took officers of Pettibone Mulliken to defendant's building for inspections. Thereafter, he wrote letters to officers of Pettibone Mulliken concerning defendant's building and calling their attention to its attractive features, which Argiris thought met Pettibone's needs. Then, on May 4, 1965, defendant, by certified mail, terminated the exclusive agreement, effective June 4, 1965.

Despite this fact, Argiris continued his efforts to interest Pettibone Mulliken in buying defendant's building. On July 29, 1965, he prepared an inter-office memorandum in which he notified his sales staff that contacts for the sale of defendant's building were to be made directly with defendant's president, Leon Caine, or its assistant treasurer, Joe Shure. The memorandum stated that defendant was still asking $1,250,000, as it had when Bennett & Kahnweiler were exclusive agents. According to Argiris, on the day he prepared the memorandum, he spoke with Leon Caine who told him to find a buyer and deal directly with him. Argiris said it was Caine who suggested that the building be handled on an "open listing basis"; and that Argiris's company would be paid a commission if it procured a buyer. Argiris said he told Caine of Pettibone Mulliken's continued interest in the building; and thereafter, wrote that corporation three letters concerning defendant's property and kept in contact with it concerning possibility of a purchase. In the meantime, Argiris had numerous telephone conversations with Caine and with Shure. Three times after July 29, 1965, he met them at the building. On these occasions, Argiris told Caine of Pettibone's efforts, through a stock offering, to obtain financing in order to purchase defendant's building. Sometime early in November 1965, Argiris called Caine and told him he was going to Europe on November 4; therefore, Mr. Campbell of his office would follow through with contacts with Pettibone Mulliken because that corporation was only awaiting completion of the stock offering so it could make a firm offer to purchase defendant's building.

On November 18, 1965, Pettibone Mulliken wrote defendant a letter of intent by which it agreed to purchase defendant's building for $1,100,000. In a separate paragraph, Pettibone guaranteed "* * * that Caine Steel Company will not have to pay Van C. Argiris and or Bennett & Kahnweiler any brokerage commission." Defendant's building was purchased by Pettibone; and thereafter, plaintiff filed its suit for the brokerage commission it alleged became due from defendant when through its efforts Pettibone Mulliken became a purchaser of defendant's real estate. The case was heard by a jury which heard evidence, received instructions, and was given two special interrogatories submitted by defendant. The first asked, "Was the Plaintiff employed by the defendant after July 29, 1965 to procure a purchaser for the property located at 5501 West Grand Avenue, Chicago, Illinois?" The second asked, "Did the Plaintiff procure Pettibone Mulliken Corporation after July 29, 1965, as a purchaser for the property located at 5501 West Grand Avenue, Chicago, Illinois?" The jury answered both interrogatories in the affirmative and returned a verdict in favor of plaintiff, assessing its damages against defendant in the sum of $55,500.

Four issues are presented for our review. I. Whether the exclusive agency agreement with Bennett & Kahnweiler barred plaintiff's claim for a real-estate commission from the sale of defendant's real estate to the Pettibone Mulliken Corporation. II. Whether the trial court erred in allowing plaintiff to prove, by copies of letters, memoranda and conversations, all of its dealings with the defendant, including its showing of the real estate involved and its contacts with the Pettibone Mulliken Corporation that ultimately became the purchaser of defendant's real estate. III. Whether the trial court erred in giving and refusing certain instructions to the jury. IV. Whether the evidence supports the findings and verdict of the jury.


Defendant's agreement of October 15, 1964, with Bennett & Kahnweiler, created an exclusive agency under which, as its own broker, it could have sold the property but was prohibited from appointing another agent for that purpose. (Flynn v. La Salle National Bank, 9 Ill.2d 129, 139, 137 N.E.2d 71; Wozniak v. Siegle, 226 Ill. App. 619, I.L.P. Brokers § 31.) The employment relation it created was for a period ending on a certain date, unless either party gave a 30-day prior notice of termination. Plaintiff, as a cooperating broker, was bound by the terms of that agreement. (Smart & Golee, Inc. v. Delany, 65 Ill. App.2d 60, 213 N.E.2d 27.) However, it appears that plaintiff's theory of the case was not that plaintiff, in its capacity as a cooperating broker under the exclusive agency agreement between defendant and Bennett & Kahnweiler, was suing for breach by defendant of the said agreement; rather, its theory was that defendant requested plaintiff to continue and encourage negotiations between defendant and the Pettibone Mulliken Corporation; that plaintiff did so, with the result that it procured the sale of defendant's building.

• 1 The provision under which a broker's commission was payable if a sale or lease of defendant's building were made within 120 days after the agreement was terminated did not extend Bennett & Kahnweiler's exclusive agency; the post-termination obligation was merely one of the conditions of the employment relation. (See Minkoff v. McLean (1929), 295 Pa. 396, 145 A. 534.) Therefore, defendant's letter to Bennett & Kahnweiler, dated May 4, 1965, and giving notice of its desire, terminated the exclusive agency on June 4, 1965. (See Nicholson v. Alderson, 347 Ill. App. 496, 107 N.E.2d 39; 12 Am.Jur.2d Brokers § 58; I.L.P. Brokers § 28.) For these reasons, defendant's exclusive ...

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