MacCarthy v. Skelcher

GOLDENHERSH, J. Plaintiff appeals from the judgment of the Circuit Court of Williamson County entered in favor of defendants following a trial before the court and without a jury. Plaintiff’s complaint alleges he is a licensed real estate broker, that he and defendants entered into a written agreement under the terms of which defendants agreed to pay him the sum of $15,000 as compensation “for his services and procuring a purchaser” for certain property owned by defendants, he procured a purchaser for the property “in accordance with the said contract,” and the same was consummated by defendants. Defendants answered alleging no sale was consummated, plaintiff did not procure a purchaser ready, willing and able to buy, the alleged purchasers were defendants’ customers not procured by plaintiff, and alleging four special defenses which will be discussed only to the extent necessary to this opinion. The agreement attached to plaintiff’s complaint provides that defendants agree to pay plaintiff $15,000 for selling the Lake View Hunt Club for $165,000 to one of his clients, and if defendants sell the club themselves to someone who is not plaintiff’s client, no commission will be owed. The agreement was to be in force for a period of 45 days commencing on October 16, 1967. Although the testimony is conflicting as to the details, the evidence shows that defendant, Marshall Skelcher, put plaintiff in touch with individuals with whom Skelcher had been dealing. On November 3, 1967, a document headed “OFFER TO PURCHASE AND DEPOSIT RECEIPT” was executed by plaintiff as “broker” acknowledging receipt from “Devil’s Kitchen Hunt Club, Inc., a proposed corporation,” of a note in the amount of $90,000 to be secured by a first mortgage on the premises, and indicating that $75,000 in cash was to be paid in 120 days. The instrument is executed on behalf of the “proposed corporation” by its secretary (presumably also proposed) and the offer is accepted by defendants. On November 8, 1967, defendants as sellers, and Jack P. Gibbs, Robert T. Turnage and William L. Grindle as buyers, executed a document headed “Contract for Purchase Agreement” in which defendants agree to convey to “Devil’s Kitchen Hunt Club Incorporated, party of the second part” real estate described, “Provided and on condition that the party of the second part shall pay or cause to be paid to the party of the first part, as purchase money for said Real Estate, the sum of One Hundred Sixty-five Thousand ($165,000) dollars payable as follows: $90,000.00 first mortgage and notes with the Bank of Illinois, Mount Vernon, Illinois at 7% interest and 3 points for 120 days; and a $75,000.00 second mortgage at 7% interest and no points for (one year, MLS RRT) . . . payable to Marshall L. Skelcher and Martha E. Skelcher, Route 1, Makanda, Illinois. The first mortgage of $90,000 and the second mortgage of $75,000 will be signed for the Devil’s Kitchen Hunt Club Incorporated. Taxes for 1967 payable in 1968 will be prorated. “Marshall L. Skelcher and Martha E. Skelcher will place a warranty deéd in escrow with the Bank of Illinois to be surrendered when final payment is made. In case said purchasers, party of the second part, refuse or neglect to enter into this contract within five days from date, this contract will be null and void.” The agreement also contained a provision that Gibbs, Turnage and Grindle would sign as “accommodation makers with respect to $15,000.00 of the $90,000.00 first mortgage indebtedness.” Thereafter on November 15, 1967, defendants executed and deposited with the Bank of Illinois at Mt. Vernon, a warranty deed conveying the land to Devil’s Kitchen Hunt Club, Inc. A mortgage purporting to secure a note in the amount of $92,700, due on March 15, 1968, naming Bank of Illinois as mortgagee, was executed by Devil’s Kitchen Hunt Club, by its president and secretary. A second mortgage executed by Devil’s Kitchen Hunt Club, Inc. to the same mortgagee, purportedly secures a note in the amount of $75,000, due November 15, 1968. Neither mortgage bears the imprint of a corporate seal and it cannot be determined from the record whether, in fact, such a corporation came into existence and if so, the State of incorporation. Gibbs, Turnage and Grindle executed a guaranty to the extent of $15,000. An escrow agreement between Devil’s Kitchen Hunt Club, Inc. and Bank of Illinois was executed on November 15, 1967, which provides for the escrow of funds to be received from subscribers to the stock of an Illinois corporation to be known as Devil’s Kitchen Hunt Club, Inc. It appears from the testimony that the deed and mortgages were placed of record. It does not appear that any stock was sold, and no funds were deposited with the Bank of Blinois under the escrow agreement. Plaintiff testified that defendant, Marshall Skelcher, told him of the prospective purchasers and he proceeded to negotiate the transaction-which resulted in the execution of the documents. Defendant Marshall Skelcher testified plaintiff had stated he knew prospective investors for the deal. He stated that in his conversation with plaintiff it was agreed that if plaintiff “found investors who contributed toward the $165,000.00 or paid it he was to receive a commission of $15,000.00,” otherwise he was not to receive a commission. Plaintiff testified he knew the purchasers did not have the money to complete the transaction, but in view of the agreement for the execution of the two mortgages, no money was necessary. The trial court found: “(1) That the purchasers were the clients of Skelcher; “(2) That the services of MacCarthy were accepted by Skelcher after the clients were known, by MacCarthy, to be Skelchers; “(3) That MacCarthy knew or should have known of the promotion plan and organization involved in this transaction and that he accepted the risk of his fee with this promotional arrangement; “(4) That MacCarthy thus became a participant in this promotion and his fee became contingent upon its success; “(5) That the promotion plan failed. MacCarthy’s prayer for a fee must be denied; and, therefore, enters judgment in favor of the defendants and against the plaintiff.” and entered judgment for the defendants. Plaintiff contends that the court erred in admitting, over his objection, testimony of the alleged agreement with respect to the promotion of investment funds. He argues that the admissible evidence shows the only modification of the listing agreement to be defendants’ waiver of the provision that no commission was due if the buyers were their prospects or customers. He contends that by accepting the purchasers, and entering into a valid and enforceable contract, defendants made a determination of the purchasers’ ability to perform, plaintiff’s commission became due and payable, and failure of either party to carry out the contract does not affect his right to the commission. He argues that he produced purchasers with whom defendants were satisfied, and their ability to perform is therefore not material. Plaintiff’s evidence shows an oral waiver of the specific provision of the agreement between the parties, and defendants’ evidence of the terms upon which the provision was waived was properly before the court. In order to recover, plaintiff was required to prove that he produced a purchaser ready, willing and able to consummate the purchase upon the terms and conditions which, under plaintiff’s agreement with the defendants, entitled him to a commission, Oliver v. Sattler, 233 Ill 536, 84 NE 652. There is an evidentiary basis for the trial court’s finding that the transaction, and plaintiff’s right to a commission, were contingent upon success of the promotional scheme, and we cannot say it is so manifestly erroneous as to require reversal. The judgment of the Circuit Court of Williamson County is therefore affirmed. Judgment affirmed.