First Capitol Mortg. Corp. v. Talandis Const. Corp.

• Decision Date: 29 March 1977
• Docket Number: No. 58657,58657
• Citation: 7 Ill.Dec. 781,365 N.E.2d 66,47 Ill.App.3d 699
• Parties: , 7 Ill.Dec. 781 FIRST CAPITOL MORTGAGE CORPORATION, an Indiana Corporation, Plaintiff-Appellant, v. TALANDIS CONSTRUCTION CORPORATION, an Illinois Corporation, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 66

365 N.E.2d 66

47 Ill.App.3d 699, 7 Ill.Dec. 781

FIRST CAPITOL MORTGAGE CORPORATION, an Indiana Corporation Plaintiff-Appellant, v. TALANDIS CONSTRUCTION CORPORATION, an Illinois Corporation Defendant-Appellee.

No. 58657.

Appellate Court of Illinois, First District, Second Division.

March 29, 1977.

Rehearing Denied April 19, 1977.

John Bernard Cashion, Paul F. Davidson, Chicago, for plaintiff-appellant.

Morgan, Lanoff, Cook & Madigan, Chicago, for defendant-appellee; John A. Cook, Chicago, of counsel.

STAMOS, Justice:

Plaintiff, First Capitol Mortgage Corporation, filed this suit against defendant, Talandis Construction Corporation, seeking a declaratory judgment and payment of a 1% Brokerage fee pursuant to their written contract. Following a bench trial, the trial court entered judgment in favor of plaintiff and against defendant in the amount prayed, $19,403. Thereafter, pursuant to motion by defendant, the trial court vacated the judgment in favor of plaintiff and entered judgment in favor of defendant. When plaintiff's motion to vacate the judgment in favor of defendant and to reinstate the prior judgment in favor of plaintiff was denied, this appeal was perfected.

On appeal, defendant-appellee appeared but neglected to file a brief, although it had been given ample opportunity to do so. Without addressing the merits of the controversy, we reversed pro forma the order of the trial court due to defendant's failure to file a brief, and the cause was remanded to the circuit court with directions to reinstate the prior judgment in favor of plaintiff. First Capitol Mortgage Corporation v. Talandis Construction Corporation (1975), 28 Ill.App.3d 684, 329 N.E.2d 412.

On appeal to the supreme court, the court noted that a uniform practice had not developed in Illinois for the disposition of an appeal in a case where the appellee failed to file a brief. After distinguishing the situation in which a court of review could properly dismiss an appeal upon the appellant's failure to file a brief, the supreme court held:

"However, the judgment of a trial court should not be reversed pro forma for the appellee's failure to file its brief as required by rule. A considered judgment of the trial court should not be set aside without some consideration of the merits of the appeal." (63 Ill.2d 128, 131, 345 N.E.2d 493, 494.)

Consequently, the case was remanded to this court, and we will now consider the merits of the appeal. To assist us in our review of the issues raised herein and the applicable authorities, appellee has now filed a brief.

In seeking a reversal of the vacation order entered by the trial court and a remandment of the cause with directions to reinstate the prior judgment in favor of plaintiff, plaintiff presents three issues: (1) whether the findings of the trial court were against the manifest weight of the evidence when the court vacated the judgment it originally entered in favor of plaintiff and entered judgment in favor of defendant; (2) whether the terms of a written "Procurement Agreement" entered into by the parties require that a fee be paid to plaintiff by defendant; and (3) whether the principle of either ratification or waiver should operate to render a fee payable to plaintiff.

Plaintiff filed its complaint on June 7, 1971 and alleged therein that it was engaged as an agent of defendant in April of 1968 for the purpose of negotiating and procuring a loan for the construction of a multiple unit apartment complex. The legal document entered into by the parties whereby this purported agency was created and defined provides in pertinent part as follows:

PROCUREMENT AGREEMENT

THIS AGREEMENT made and entered into this 9 day of April, 1968, by and between FIRST CAPITOL MORTGAGE CO., INC., hereinafter referred to as FIRST CAPITOL; and TALANDIS CONSTRUCTION CORPORATION, an Illinois corporation, hereinafter referred to as TALANDIS,

WITNESSETH:

That in consideration of the mutual promises herein set forth, the parties agree as follows:

1. That TALANDIS does hereby appoint FIRST CAPITOL as exclusive agent for a period of sixty (60) days after TALANDIS supplies specified exhibits, to negotiate and procure a loan in the amount One Million Four Hundred Forty Thousand ($1,440,000.00) Dollars for a period of twenty (20) years at interest not to exceed Seven (7%) Per Cent with the right to refuse any unsatisfactory commitment. No unreasonable delays will be made in pay outs. Said loan is to be used for an apartment complex and shall be secured by a note and mortgage on the following described real-estate:

(legal description of real estate)

2. That TALANDIS agrees to pay FIRST CAPITOL, a fee of One (1%) per cent of the amount of said loan for its services of acting as TALANDIS' agent in negotiating and procuring said loan, which amount shall be due and payable at the office of FIRST CAPITOL out of the first disbursement of said loan.

3. In the event that TALANDIS does not accept the loan commitment furnished by FIRST CAPITOL, TALANDIS shall not be obligated to FIRST CAPITOL for any payments due under this agreement. However, TALANDIS agrees to pay FIRST CAPITOL the One (1%) per cent fee in the event TALANDIS, subsequent to this agreement, obtains said loan from the source furnished by FIRST CAPITOL at any time within one year from the date of this agreement.

In an attempt to establish its right to the fee described in the procurement agreement, plaintiff alleged in its complaint that as a direct result of services performed by it, a loan commitment in the amount of $1,940,300 was issued on March 4, 1969 by the Department of Housing and Urban Development of the Federal Housing Administration (hereinafter referred to as the "FHA") covering the expenses of defendant's planned project; that pursuant to this commitment, defendant secured a mortgage in the amount of $1,940,300 through Dovenmuehle, Inc. (hereinafter referred to as "Dovenmuehle") and constructed said project; and that even though plaintiff performed its services in compliance with the procurement agreement, defendant refused to pay any fee whatsoever to plaintiff. Plaintiff prayed for judgment in the amount of $19,430 as payment of its fee pursuant to the terms of the contract and for an adjudication of the respective rights of the parties.

By its answer to plaintiff's complaint, defendant disputed plaintiff's characterization of the action taken by FHA. Defendant asserted that FHA issued a "commitment to insure a loan," not a loan commitment as alleged by plaintiff and as required by the procurement agreement. Furthermore, defendant denied that plaintiff procured on defendant's behalf either a loan commitment or a commitment to insure a loan, and consequently, no fee was owing to plaintiff under the provisions of the contract.

Defendant also advanced four affirmative defenses to plaintiff's complaint. First, defendant alleged that the contract terminated sixty days after its creation due to plaintiff's failure to satisfy the provisions contained in paragraph 1 of the contract. In accordance with defendant's interpretation of the contract, plaintiff was required to procure a loan commitment for defendant within " . . . sixty (60) days after (defendant) supplies specified exhibits, . . . ". Only after the fulfillment of this condition precedent to the applicability of paragraph 3 of the contract could plaintiff earn a fee subsequent to the expiration of the initial sixty day period. Second, defendant alleged by way of defense that it entered into the procurement agreement solely upon the fraudulent representation of plaintiff that plaintiff could obtain a substantial loan commitment for defendant within a short period of time. This representation prompted defendant to accept the terms of the procurement agreement since defendant desired to commence the project as soon as possible in order to minimize escalating construction costs. The final two affirmative defenses advanced by defendant pertained to plaintiff's status as an Indiana corporation and its standing to commence this lawsuit. Defendant asserted that plaintiff was unauthorized to conduct business in Illinois and that plaintiff was not in existence as a corporation at the time of filing its complaint.

After entertaining arguments of counsel pertaining to the third and fourth affirmative defenses, the trial court declined to dismiss the case on these grounds. Without further elaboration on the pre-trial proceedings in this cause, suffice it to say that this matter was adjudicated at a bench trial commencing on June 21, 1972. Following the testimony of three witnesses, the introduction of numerous exhibits, and the arguments of counsel, the court entered judgment in favor of plaintiff for the full amount of the commission payable pursuant to the terms of the procurement agreement.

Some two months subsequent to the entry of judgment, the trial court entertained defendant's motion to vacate the judgment. After hearing arguments of counsel, the court allowed defendant's motion, setting aside the judgment previously entered in favor of plaintiff and entering judgment in favor of defendant. However, since a court reporter was not present at that proceeding, the arguments advanced by counsel and the findings of the court on that date are not contained in the record.

On October 30, 1972, the trial court considered and denied plaintiff's motion to vacate the judgment entered in favor of defendant and to reinstate the prior judgment entered in favor of plaintiff. At this proceeding, reference to the previous hearing was made by the court and by counsel for plaintiff. According to these comments, one of the motivating factors which prompted the court's vacation of the original judgment was that the court determined the procurement agreement did not envision the payment by defendant of a double commission, a situation which would occur if defendant paid a 1% Fee to plainti...