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06/09/88 Century 21 Castles By King v. First National Bank of

June 9, 1988

CENTURY 21 CASTLES BY KING, LTD., PLAINTIFF-APPELLEE

v.

FIRST NATIONAL BANK OF WESTERN SPRINGS, DEFENDANT-APPELLANT



APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

524 N.E.2d 1222, 170 Ill. App. 3d 544, 121 Ill. Dec. 174 1988.IL.911

Appeal from the Circuit Court of Du Page County; the Hon. S. Keith Lewis, Judge, presiding.

APPELLATE Judges:

JUSTICE REINHARD delivered the opinion of the court. LINDBERG, P.J., and UNVERZAGT, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE REINHARD

Defendant, First National Bank of Western Springs (the Bank), appeals from a judgment following a bench trial in favor of plaintiff, Century 21 Castles by King, Ltd. (Century 21), awarding Century 21 $18,000 as a real estate broker's commission for the sale of commercial property owned by the Bank.

The following issues are raised on appeal: (1) whether Century 21 was only entitled to a finder's fee rather than a broker's commission; (2) whether the trial court erred in admitting expert testimony as to the reasonable and customary real estate broker's commission; (3) whether Century 21 properly pleaded an implied in fact contract claim; and (4) whether Century 21 proved an implied in fact contract for a real estate broker's commission.

Century 21's amended complaint against the Bank was entitled "complaint in assumpsit on quantum meruit " in count I and "breach of contract" in count II. At trial, evidence was adduced that, on January 29, 1983, Century 21 and the beneficiaries of a land trust, for which the Bank held legal title, entered into a listing agreement whereby Century 21 was engaged as the listing broker for a piece of commercial property in Hinsdale, Illinois. The agreement provided for a commission of 10% of the sales price. David Hill, a real estate salesman working through Century 21, eventually contacted Wayne and Joyce Ishler, who, on March 12, 1984, submitted an offer to purchase the property for $165,000. Hill called one of the beneficiaries, Terry Drane, told him of the offer, and mailed a copy of the offer to Drane's attorney.

The Bank had made substantial loans to the beneficiaries that were in default. In March 1984, the Bank learned Drane might file bankruptcy and took an assignment of the entire beneficial interest in the trust. At the time the assignment was executed, Drane also disclosed to the Bank president, for the first time, that he was attempting to sell the property, that he had a listing agreement with Century 21, and that a potential buyer had been found by Century 21. The Bank president, William O'Meara, also an attorney who had specialized in real estate law, testified that he could not recall if he was told the name of the prospective purchaser, how to locate him, or if he was given the offer to purchase. O'Meara called Hill on or about March 14, 1984, and asked him to contact the Ishlers and bring them to the Bank because the Bank was now the owner of the property through the assignment of the beneficial interest. Hill testified that O'Meara said he would honor the commission agreement. O'Meara testified that he only asked Hill to bring the Ishlers to the Bank and told Hill not to be involved further. Hill also stated that O'Meara mentioned that he had a copy of the contract offer made to the beneficiaries.

On March 21, 1984, Hill brought the Ishlers to the Bank to meet with O'Meara. O'Meara proposed a $180,000 purchase price and offered to reduce the financing charges to make it attractive to the Ishlers. The Ishlers said they would think it over and left. The next day, Hill, after Discussion with the Ishlers, prepared a revised offer to purchase, which reflected the negotiations of the previous day between O'Meara and the Ishlers. The revised offer was delivered to the Bank. Hill testified that, in several subsequent conversations with O'Meara, O'Meara requested the original listing agreement with the beneficiaries and, after receiving it, told Hill that he would pay him a $5,000 or $6,000 commission. O'Meara testified that he intended to compensate Hill, offered Hill $6,000 for bringing the parties together, and Hill refused to accept the money. Further negotiations between Hill and the Bank ceased, and the Ishlers' attorney prepared the offer to purchase which was accepted by the Bank. Hill was not present at the closing.

In finding for Century 21, the trial court rejected the express contract theory and found for Century 21 on "an implied contract generated . . . by . . . O'Meara." The court awarded Century 21 $18,000 on a quantum meruit basis relying on testimony of what the reasonable broker's fee for a commercial real estate sale was in the community.

We address initially the Bank's contention that the trial court erred in basing its judgment on a contract implied in fact because that theory was not pleaded in the amended complaint or properly presented in a post-trial amendment to the complaint. Although Century 21 advances several arguments in response, we need only consider its contention that the amended complaint sufficiently states a contract implied in fact.

While count I of the amended complaint is labeled as a "complaint in assumpsit on quantum meruit," which would ordinarily signify a contract implied in law, the facts alleged in that count clearly plead acts and conduct which create a contract implied in fact. The only difference between an express contract and a contract implied in fact is that in the former the parties arrive at their agreement by words, either oral or written, while in the latter, their agreement is arrived at by a consideration of their acts and conduct. (Mowatt v. City of Chicago (1920), 292 Ill. 578, 581, 127 N.E. 176.) Thus, a contract implied in fact arises not by express agreement but, rather, by a promissory expression which may be inferred from the facts and circumstances which show an intent to be bound. Heavey v. Ehret (1988), 166 Ill. App. 3d 347, 354, 519 N.E.2d 996; Gary-Wheaton Bank v. Burt (1982), 104 Ill. App. 3d 767, 775, 433 N.E.2d 315.

On the other hand, a contract implied in law exists from an implication of law that arises from facts and circumstances independent of an agreement or consent of the parties; the intention of the parties is entirely disregarded. (Board of Highway Commissioners v. City of Bloomington (1911), 253 Ill. 164, 173-74, 97 N.E. 280.) A contract implied in law is not a contract at all and is sometimes referred to as a quasi contract or constructive contract, and, historically, there being nothing else available, courts have allowed the action of assumpsit as a basis for recovery. (Gaslite Illinois, Inc. v. Northern Illinois Gas Co. (1976), 46 Ill. App. 3d 917, 924, 362 N.E.2d 725.) The term quantum meruit means literally "as much as he deserves" and is an expression that describes the extent of liability on a contract implied in law; it is predicated on the reasonable value of services performed. (Edens View Realty & Investment, Inc. v. Heritage Enterprises, Inc. (1980), 87 Ill. App. ...


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