APPEAL from the Circuit Court of Cook County; the Hon. WALTER
P. DAHL, Judge, presiding.
MR. PRESIDING JUSTICE GOLDBERG DELIVERED THE OPINION OF THE COURT:
In a previous appeal herein, this court held we had no jurisdiction to review the issue concerning existence of a joint venture between these litigants. However, we did decide issues raised regarding the accounting between the parties. (Burtell v. First Charter Service Corp. (1978), 57 Ill. App.3d 198, 372 N.E.2d 941.) The Supreme Court of Illinois affirmed the result reached by us concerning details of the accounting (as will later be shown), but held this court had jurisdiction to review the issue regarding existence of the joint venture. The cause was accordingly remanded with direction that we consider that issue. (See 76 Ill.2d 427, 394 N.E.2d 380.) We have proceeded in accordance with that mandate.
Charles Burtell (plaintiff) is president and owner of Ben Garth Builders and Real Estate Developers. The stock in First Charter Service Corporation (First Charter) is 89 percent owned by Unity Savings of Park Forest, which is in turn a subsidiary of Bass Financial Corporation. Saul Bass and Howard Bass are directors and officers of First Charter. Ralph Liss is president. Plaintiff had previous dealings with Unity Savings and with Saul Bass.
In May 1972, plaintiff spoke to Saul Bass about acquisition of 22 townhouse buildings in Wheeling, Illinois. Plaintiff suggested a joint venture between himself and First Charter to remodel the property into 88 condominium units. Saul Bass referred plaintiff to his son, Howard Bass. Plaintiff and Howard Bass met and exchanged communications and drafts of agreements with reference to this investment. It is admitted a joint venture was entered into by the parties for this transaction. However, there was no formal written agreement.
The purchase of the Wheeling property was closed in August 1972. The beneficial interest in the trust holding title to the property was assigned to First Charter at the request of Howard Bass. Plaintiff contributed capital of $50,000 and First Charter contributed $212,000. To avoid a requirement of government approval of this investment, the records of First Charter showed no joint venture but only that plaintiff loaned First Charter the $50,000 as evidenced by three promissory notes. It was agreed by the parties that plaintiff would have a 50 percent joint interest in the venture and have a right to 50 percent of the profits.
Plaintiff was to manage the project and handle sales. Each party thereafter contributed additional amounts. Plaintiff contributed $10,000 and First Charter $18,000 to $20,000. Plaintiff's projections indicated all 88 units would be sold in 18 months. Three years later all units had not been sold. This transaction resulted in some tax losses which were used by First Charter.
In the summer of 1973, Harold Goslin, a real estate developer, approached First Charter to discuss possible acquisition of a 12.06-acre parcel of vacant land in Chicago know as the "Foster Dee" property. Goslin met with Ralph Liss to discuss a joint venture between Goslin's company and First Charter for this purpose. Goslin told Liss the lowest price the sellers of Foster Dee would accept was $1,750,000. At a subsequent meeting with Howard Bass and Ralph Liss, Goslin discussed his negotiations with the seller and the possible structure of the joint venture agreement. Goslin's company was to be the builder and developer and First Charter would handle the financing. The formal joint venture agreement was to be executed after the land was acquired.
Plaintiff was also then investigating acquisition of this same property. Plaintiff learned the property could be obtained for $1,500,000. Plaintiff formed a plan for development of the vacant land. He estimated his plan would eventually cost $20 million. Plaintiff testified he wanted "a working relationship with the Basses." He met with Saul Bass in July or August 1973. Plaintiff and Saul Bass discussed the Foster Dee property. Plaintiff testified Bass told him he was familiar with Foster Dee. Plaintiff asked if Goslin and his partner, Jim McNerney, were talking to Bass about the same property. Bass said McNerney and Goslin "had expressed an interest in it also." Plaintiff testified he "figured that since they [McNerney and Goslin] were there first, I was really dead in acquiring a lender and participator and coventurer, but when I mentioned the price of one million five, his [Saul Bass'] eyes lit up and he mentioned that they were at a much higher figure." Saul Bass told plaintiff to talk to Howard Bass "and start outlining some facts."
Plaintiff stated he met with Howard Bass a day or two later. Plaintiff explained his idea that the property could be obtained for $1,500,000 by way of a three-way trade of property. This method would be advantageous to the seller for tax reasons. Bass advised plaintiff to act quickly on the deal.
Plaintiff testified he then met with the Basses and Ralph Liss. They told him to prepare a contract for $1,500,000. Plaintiff had a contract prepared by his attorney for purchase of Foster Dee naming plaintiff as purchaser. Plaintiff took the contract to Howard Bass for approval. Plaintiff told Howard Bass their relationship "was to be on the same basis that I was a partner in Wheeling." Plaintiff testified Howard Bass "answered in the affirmative, yes." Plaintiff also told Bass that "I was prepared to put in $300,000." When plaintiff said "I", he meant himself and his two partners. Howard Bass agreed to these terms and the contract was submitted through the seller's broker. The broker called back a day or two later. He stated the price was acceptable to the seller but language was necessary in the contract to complete the three-way trade. Subsequently, Ralph Liss telephoned plaintiff to get plaintiff's approval to substitute First Charter as purchaser instead of plaintiff. Plaintiff said that would be acceptable to him.
On October 3, 1973, plaintiff met with Liss, Liss' attorney and the seller's attorney. Plaintiff negotiated a brokerage fee of $10,000 for the seller's broker. For this purpose the purchase price was raised $10,000 with the approval of Liss. The contract was signed by the parties with a purchase price of $1,510,000 and First Charter as the purchaser. Plaintiff, with the acquiescence of Liss, then ordered a soil test for the property. Plaintiff paid $2509 for the test. Plaintiff testified a broker would not normally pay for a soil test. Plaintiff never billed First Charter for this test. He did not attend the closing of the sale on October 22, 1973, and did not contribute any capital towards the purchase of Foster Dee.
Plaintiff's version of the events prior to the closing was contradicted in part by the testimony of Saul Bass, Howard Bass and Ralph Liss. Saul Bass admitted meeting with plaintiff and telling plaintiff, as he tells all speculators, to "tie it [Foster Dee] up and we will take a look at it and let you know if we are interested or not." However, Saul Bass stated he and plaintiff never discussed a joint venture regarding the Foster Dee transaction. Saul Bass dealt with plaintiff even though he had an agreement with McNerney and Goslin that "if they bought the property, they would enter into some kind of agreement with us." Saul Bass called either McNerney or Goslin and told them plaintiff could buy the property for less money than what McNerney and Goslin were planning to pay. Saul Bass stated McNerney and Goslin subsequently abandoned the Foster Dee transaction.
Howard Bass testified he discussed a possible joint venture with McNerney and Goslin in the summer of 1973. Howard Bass stated plaintiff first approached Liss and himself in September 1973. Plaintiff told them the Foster Dee property was available for $1,500,000. Howard Bass and Liss told plaintiff that "if he could obtain a contract for us to purchase the property for a million and a half dollars, he could earn himself a commission or some sort of fee arrangement." They had paid plaintiff finder's fees in previous transactions. Howard Bass testified the amount of such a fee was never discussed. Howard Bass and Liss did not discuss a joint venture with plaintiff at that meeting or at any time prior to the execution of the contract. When the Bass group called McNerney and Goslin to tell them about plaintiff's proposals, all parties agreed to give plaintiff a "chance to get a contract executed for the First Charter divider property [Foster Dee] at a million five."
Howard Bass specifically denied having a conversation with plaintiff in September 1973 in which he agreed their relationship was to be on the same basis as the Wheeling venture and in which plaintiff told him he was willing to invest $300,000. Howard Bass stated plaintiff volunteered to get the soil tests ...