Greenebaum Mortgage Co. v. Town and Garden Associates

• Decision Date: 28 November 1967
• Docket Number: No. 16066.,16066.
• Citation: 385 F.2d 347
• Parties: GREENEBAUM MORTGAGE COMPANY, Plaintiff-Appellee, v. TOWN AND GARDEN ASSOCIATES, Jack P. Schleifer, and Arthur G. Cohen, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

385 F.2d 347 (1967)

GREENEBAUM MORTGAGE COMPANY, Plaintiff-Appellee, v. TOWN AND GARDEN ASSOCIATES, Jack P. Schleifer, and Arthur G. Cohen, Defendants-Appellants.

No. 16066.

United States Court of Appeals Seventh Circuit.

October 24, 1967.

Rehearing Denied November 28, 1967.

Louis A. Lehr, Jr., Paul L. Leeds, Chicago, Ill., for defendants-appellants, Arnstein, Gluck, Weitzenfeld & Minow, Chicago, Ill., and Rubin, Wachtel, Baum & Levin, New York City, of counsel.

Edwin A. Rothschild, Thomas C. Homburger, Chicago, Ill., for plaintiff-appellee, Sonnenschein, Levinson, Carlin, Nath & Rosenthal, Chicago, Ill., of counsel.

Before DUFFY, Senior Circuit Judge, and SWYGERT, and FAIRCHILD, Circuit Judges.

SWYGERT, Circuit Judge.

This diversity action was commenced by Greenebaum Mortgage Company, an Illinois corporation, against Town and Garden Associates, a New York limited partnership, as well as Jack P. Schleifer, Arthur G. Cohen, and Eugene L. Colman, citizens of the State of New York and general partners of Associates. The complaint sought recovery of a commission allegedly due for the issuance of a mortgage loan commitment to the defendants. Plaintiff's motion for summary judgment was granted, and after dismissing Colman as a defendant, the court entered judgment for $11,000 against the remaining defendants. The defendants' motion for rehearing was denied. In this appeal the principal question concerns the propriety of the granting of summary judgment by the district court.

Associates owned improved real estate in Chicago, known as Old Town Garden Apartments. On May 26, 1965, Associates submitted to the plaintiff an "amended" application for a first mortgage loan of $1,100,000. The application irrevocably authorized Greenebaum for thirty days or thereafter until the application was withdrawn to either procure a commitment for the loan or issue a commitment itself, in which event Associates agreed to pay a commission of one per cent ($11,000). The plaintiff purportedly accepted the application and issued its commitment for the loan by a letter to the defendants, dated June 24, 1965. The defendants refused to complete the loan or pay the commission.

The defendants opposed the plaintiff's motion for summary judgment on the ground that their delivery of the loan application to the plaintiff was conditioned upon obtaining a subordination of a prior lien on the property. In this appeal, defendants assert for the first time an additional objection to the granting of summary judgment, that the so-called commitment letter of June 24, 1965 constituted a counteroffer which was never accepted, rather than an acceptance of the amended application.

In granting the motion for summary judgment on the ground that no genuine issue of material fact existed in respect to the alleged conditional delivery of the loan application, the district court had before it a variety of materials. Among them were the following: (1) the defendants' answer to the complaint in which they denied that there was a contract entitling plaintiff to $11,000; (2) a letter dated May 5, 1965 written to Associates by Greenebaum stating that, in preparing the mortgage papers, the file revealed certain existing liens on the property and requesting that a subordination of these liens to the proposed loan be obtained. Associates was also informed that a "supplemental `Application for Loan'" was enclosed with the letter; (3) the "amended" application for a "first mortgage" loan submitted on May 26, 1965 in which Associates warranted that the property was "free and clear of all liens"; (4) the letter of June 24, 1965 wherein Greenebaum wrote Associates: "Based on the representations you have made and subject to the terms and conditions below, we are pleased to advise you we have accepted your amended loan application. * * * The undersigned will require in connection with this loan the following: * * * A Mortgagee's ALTA Policy in the full amount of the loan insuring the Trust Deed to be a first and prior lien * * * with any restrictions or exceptions shown on the policy subject to the approval of counsel for mortgagee. * * * It will be necessary that a copy of this letter be accepted by the Mortgagor and returned to the undersigned at once"; (5) an affidavit by Eugene L. Colman, president of Hanover Equities Corporation (the owner of a majority interest in Associates). Colman's affidavit stated that it "was expressly understood" by him and those acting for...