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Leon v. Max E. Miller & Son

OCTOBER 8, 1974.




APPEAL from the Circuit Court of Cook County; the Hon. DANIEL J. COVELLI, Judge, presiding.


Rehearing denied November 7, 1974.

Defendant, Max E. Miller & Son, Inc. (hereinafter Miller & Son), appeals from a summary judgment entered in favor of plaintiff, Melvin H. Leon, for the sum of $45,471 and against defendant on its counterclaim.

Plaintiff brought this action to recover monies due under an employment contract. In his complaint and affidavits filed in support of the motion for summary judgment, plaintiff alleged that defendant is in the business of mortgage banking and that in May 1965, he entered into an oral contract of employment with defendant whereby plaintiff was employed as an administrative executive in the capacity of vice-president at an annual salary of $20,00 plus 25% of all commissions received from either borrowers or investors on all matters solicited, negotiated, or otherwise administered by plaintiff in the ordinary course of business. After plaintiff commenced his employment, he repeatedly requested a written agreement setting forth the terms of his compensation, as had been promised by Joseph Miller, the president of, and principal shareholder in, Miller & Son. After repeatedly being "put off," plaintiff had an agreement prepared, and on November 19, 1965, presented it to Joseph Miller who signed it in plaintiff's presence and retained a copy. The agreement read:


It is agreed and understood that in addition to the annual salary of Twenty Thousand (20,000) Dollars and reimbursed expenses to be paid by Max E. Miller & Son, Inc., 33 North LaSalle Street, Chicago, Illinois, Melvin H. Leon is to receive as additional compensation twenty five (25%) percent of all commissions and finders fees received from either the borrower or investor on all matters solicited by, or negotiated by, or otherwise administered by Melvin H. Leon in the ordinary course of handling such transactions.

This additional compensation is to be paid to Melvin H. Leon upon receipt of such funds by Max E. Miller & Son, Inc.

Max E. Miller & Son, Inc. By: (s) Joseph R. Miller ____________________________ Joseph R. Miller, President ____________________________" Melvin H. Leon

During the course of plaintiff's employment he repeatedly made requests of defendant for the payment of commissions pursuant to the terms of the agreement. Some commissions were paid, while others were not. Finally, after numerous refusals of payment by defendant, plaintiff resigned from defendant's employ in October 1968 and brought this action.

In its answer, defendant admitted that plaintiff was employed at an annual salary of $20,000 under an oral agreement, but denied all other material allegations. Further, as an affirmative defense, defendant alleged that the written document upon which plaintiff based his recovery was prepared by plaintiff's counsel and was presented to Joseph Miller in November of 1965; that Joseph Miller directed plaintiff to deliver the document to a certain law firm for review and a legal opinion; that, subsequently, plaintiff falsely represented and warranted to Joseph Miller that the document had been submitted to and approved by said law firm and that it was their recommendation that Joseph Miller should execute the document on behalf of the corporate defendant; that, in fact, plaintiff had never exhibited the document to said law firm; and that no member of said law firm either approved the document or recommended its execution. Plaintiff filed a reply denying that he was directed to deliver the agreement to defendant's attorney or that he ever represented to Joseph Miller that defendant's attorney had approved it.

In his deposition, Joseph Miller testified that "he directed Leon to show to his lawyer a piece of paper which he had not read and did not know what its contents were"; that after returning with the document, Leon stated that "[e]verything looks fine." Miller further stated in his deposition that he could not recall exactly what was said by Leon. He testified that although he had no recollection of signing the document that was presented at that time, he "may" have signed it, and the signature appeared to be his own. In his affidavit, Miller stated that he most probably signed the document, but explained that he often signed documents without reading them when presented to him by an employee whom he trusted. He further stated that he did not have a conversation with his attorney relative to that document prior to the commencement of the present lawsuit; and that the first time he was aware of the contents of the document was in October 1968 when plaintiff presented it to him and demanded payments under the contract. At this time, Miller stated that he fired Leon "because of his general attitude that everything was due him and he had to perform nothing for it."

As an alternative defense, defendant alleged that if the document memorialized an agreement of the parties, it was terminated shortly thereafter by the establishment of a new employment relationship. *fn1 As a second alternative affirmative defense, defendant alleged that the contractual phrase — "all matters solicited by, negotiated by, or otherwise administered by Melvin H. Leon in the ordinary course of handling such transactions" — is ambiguous and subject to construction under the principle of ejusdem generis and by looking to the conduct of the parties and ascertaining the construction they themselves have placed upon the ambiguous terms. (See Street v. Chicago Wharfing & Storage Co., 157 Ill. 605.) Defendant admitted that it had agreed to pay a 25% commission to plaintiff when the latter solicited either a borrower or an investor on any one transaction, and contended that the phrase — "negotiated by, or otherwise administered by" — is to be construed as referring, under the above-mentioned constructional rules, only to matters "solicited" by plaintiff.

Defendant asserts that the language is ambiguous because under the words "administered by," Leon could claim commissions on all business in which he participated in any manner. This, defendant maintains, is inherently unreasonable and therefore ambiguous. To further demonstrate the ambiguity of the language and the "lack of equity," defendant refers us to the nature of the business and the consequences of allowing plaintiff to recover commissions on business merely administered by him.

Joseph Miller, as principal shareholder and president of Miller & Son, conducted a small mortgage banking business, and employed two vicepresidents, Harold Leifer and Melvin Leon, who did substantially the same work and received substantially the same form of compensation — an annual salary and a 25% commission on all business solicited by them. Because of the small nature of the business, each of the officers at one time or another would "administer" in some way almost every item of business engaged in by Miller & Son. Thus, if plaintiff would be entitled to a commission on all business which he ...

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