APPEAL from the Circuit Court of Cook County; the Hon. ARTHUR
L. DUNNE, Judge, presiding.
MR. PRESIDING JUSTICE GOLDBERG DELIVERED THE OPINION OF THE COURT:
Nathaniel C. Hamilton (plaintiff) brought action against American Gage & Machine Corporation (American Gage) and Wallace E. Carroll (Carroll), chairman of its board of directors, seeking a judgment for services as a finder in connection with a corporate merger in which American Gage was involved. After trial without a jury, the court entered judgment for plaintiff and against both defendants for $163,130. The court denied interest prior to the date of judgment and attorney's fees. The defendants have appealed. Plaintiff has filed a cross-appeal concerning denial of prejudgment interest.
Count I of plaintiff's complaint sought declaratory relief fixing the terms and conditions of the alleged agreement between the parties and their rights and liabilities. Plaintiff prayed allowance of interest and attorney's fees. Count II sought recovery of a reasonable fee based upon the value of the services rendered which the complaint fixed as 1 1/2% of the value of the entire transaction, or $279,990.72.
Many of the facts are undisputed so that the issues presented to this court have accordingly been narrowed by the parties. Defendants contend that there is no evidentiary basis for determination of the reasonable value of plaintiff's services so that the judgment award was not based on the evidence but was a compromise, thus requiring reversal. Plaintiff contends that the amount found due and owing by the trial court was correct and that the result reached is supported by the evidence. Plaintiff further contends that the trial court erred in not allowing prejudgment interest.
Plaintiff brings possibilities of corporate merger and acquisition to interested parties. In return for these services, plaintiff is paid compensation, sometimes referred to as a finder's fee. Defendant Carroll was an incorporator of American Gage which has acquired some 10 other enterprises. Plaintiff communicated with Carroll and directed his attention to a possible corporate merger or acquisition between American Gage and Katy Industries, Inc.
The details of the corporate transaction need not be related. The dealings between plaintiff and Carroll and the negotiations concerning the merger continued, with a degree of intermittence, from June of 1967 until May of 1970. It is undisputed that the matter progressed to the point that an acquisition of American Gage was consummated in exchange for Katy corporate stock. The total price for the transaction was determined by the closing quotations of Katy stock on the New York Stock Exchange on May 10 and May 11, 1970. These figures were 10 1/8 dollars per share on the first day and 9 3/4 dollars on the second day. It appears that the transaction involved 1,828,671 shares of Katy stock at the above prices and options granted to the selling shareholders for purchase of 73,600 additional shares at a price of $5.571 per share.
• 1 As shown, the sole contention raised by defendants is an alleged lack of evidentiary basis for the amount of the judgment so that the result reached by the trial court was a compromise. In this situation we need not consider and determine whether plaintiff's right to recovery is based upon an express contract or an implied or quasi contract. It is undisputed that plaintiff's services were accepted by defendants and that the transaction was completed by defendants in due course. Where there is no family relation between the parties, and where the services are completed and accepted without any reason to infer that they were gratuitous, a presumption arises that the defendant is liable to pay the reasonable value of the services. In re Estate of Pomeroy, 21 Ill. App.3d 648, 653, 316 N.E.2d 231.
• 2 The record here shows without objection a concession of indebtedness by defendants to plaintiff. Defendant Carroll offered plaintiff $100,000 and thereafter $125,000 as payment for his services. As our summary of the evidence will indicate, the court could have found defendants liable upon an express oral contract or upon a contract implied by law. In such case amendment of pleadings is not necessary to convert the action from a suit upon an express contract to recovery upon quantum meruit. (Nardi & Co. v. Allabastro, 20 Ill. App.3d 323, 328, 314 N.E.2d 367, leave to appeal denied, 56 Ill.2d 587.) We therefore conclude that the analysis by defendants is correct and that the only issue here is one of fact regarding sufficiency on the proof as to the amount of compensation to which plaintiff is entitled.
On this point, plaintiff testified that he had a conversation with Carroll in June of 1967. He told Carroll that his compensation would be calculated on the amount involved in the transaction: 5% of the first million; 4% on the second; 3% on the third; 2% on the fourth and 1% on the balance. Plaintiff testified that Carroll told him that in some acquisitions in the past they had paid commissions from 2% to 5%, "and that was okay." This evidence was not denied by Carroll except in a general manner when he testified that he made no agreement with plaintiff at that time.
Plaintiff also testified to a telephone conversation with Carroll on or about December 12, 1967, in which Carroll objected to the percentage schedule. Plaintiff suggested that the schedule be reduced to 5%, 2 1/2% and 1% respectively on the first three units of $1 million each and one half of 1% on the balance, to which Carroll agreed. On December 14, 1967, plaintiff wrote a letter to Carroll, received in evidence, in which plaintiff stated this understanding as a result of the telephone conversation. Carroll admitted receiving this letter to which he made no response and testified that he had no recollection of the telephone conversation outlined by plaintiff.
Plaintiff also testified that about January 28, 1969, Carroll called him on the telephone as a result of which they had a meeting. He stated that while speaking to Carroll plaintiff suggested reduction of the fee schedule so that if the transaction exceeded $20 million, plaintiff's fees would be fixed at one half of 1% of the total gross amount. On February 1, 1969, plaintiff wrote to Carroll specifically confirming the understanding and mutual agreement to this effect. The letter requested a confirmation thereof from Carroll by letter. Carroll admitted receipt of this letter but testified that he had no recollection of the telephone conversation to which it referred.
Plaintiff also testified that he discussed his fees with Carroll during November 1969, and Carroll offered to pay him $100,000. On January 19, 1970, Carroll wrote a letter to plaintiff in which he confirmed the understanding that plaintiff would receive a $100,000 finder's fee with the option reserved to Carroll to pay this fee in Katy stock. On January 31, 1970, plaintiff wrote to Carroll in reply. He rejected Carroll's offer as not representing the true value of his services. He suggested that "when the deal is finally consummated we sit down and try to work out something that will be agreeable to both of us." Carroll testified that he and plaintiff met with their respective attorneys some time thereafter; perhaps in May 1970 after the transaction was completed. Carroll offered plaintiff $100,000 and then $125,000 but no agreement was reached.
Plaintiff further testified that on May 25, 1971, he spoke to Carroll on the telephone and Carroll offered to pay $125,000. On that same day plaintiff wrote Carroll a letter setting this forth and stating that the offer was unacceptable because it was not consistent with "our first written agreement dated November 1, 1967, and our second modified agreement drawn on February 1, 1969." On May 26, 1971, plaintiff's attorneys wrote to defendants and stated that his claim was for $163,130 plus interest or for $279,990.72 plus interest. In this letter, plaintiff demanded commission of $165,771.83. Plaintiff received no response to this letter. It should be noted here that there never was any written agreement between the parties and no letter dated November 1, 1967, although plaintiff did write to Carroll on February 1, 1969, as above stated. Upon being questioned by the court, plaintiff testified that the total amount involved in the acquisition was $16 million and then stated that the amount was $16,700,000. Plaintiff also stated that under the agreement between the parties, as set forth in his letter to Carroll dated February 1, 1969, the amount due would be approximately $165,000. This amount results from a calculation based upon the value of the transaction as alleged in plaintiff's complaint and the percentages of compensation contained in both of plaintiff's letters to defendants (December 14, 1967, and February 1, 1969).
• 3 In due course the trial judge made an oral statement to the parties in which he found that plaintiff was entitled to recover but that there was no agreement between the parties regarding compensation so that he would permit recovery upon a quantum meruit basis in the amount of $163,130. Several days thereafter, the court entered a draft order in which he found that there was a valid oral employment contract between the parties upon which plaintiff was entitled to recovery. This finding by the court is amply justified by the evidence. Defendant Carroll's lack of recollection and his vague denials failed to overcome plaintiff's clear and definite testimony and the letters in evidence concerning the agreement for plaintiff's compensation. The court found the value of the services rendered by the plaintiff "as measured by said contract" was $163,130 and entered judgment accordingly. We are not concerned with the statements made by the able trial judge or with the basis for the judgment. It is the result reached and not the statements or reasons given which are before us for review. ...