Weller v. Phillip Gross Realty Co.

• Decision Date: 11 January 1921
• Citation: 180 N.W. 927,173 Wis. 447
• Parties: WELLER ET AL. v. PHILLIP GROSS REALTY CO.
• Court: Wisconsin Supreme Court

173 Wis. 447

180 N.W. 927

WELLER ET AL.

v.PHILLIP GROSS REALTY CO.^a1

Supreme Court of Wisconsin.

Jan. 11, 1921.

Appeal from Circuit Court, Milwaukee County; John J. Gregory, Judge.

Action by William B. Weller and another against the Phillip Gross Realty Company. Judgment for the plaintiffs, and defendant appeals. Reversed and remanded, with instructions.

This action was brought to recover a commission claimed to be due the respondents. The action was tried to the court and a jury. After the evidence was in both parties moved for a directed verdict. Thereupon the jury was dismissed, and the court made findings of fact and conclusions of law pursuant to which judgment was entered for respondents in the sum of $10,517.89, from which judgment the defendant, appellant here, appeals.

The appellant is a corporation and owned a 99-year lease with the Jacobs estate, lessor, covering land known as Nos. 126-128 Grand avenue, Milwaukee, upon which property a store building occupied by Phillip Gross Hardware & Supply Company was located. The Jacobs estate is the owner of the fee. The lease was signed November 9, 1911, and the term commenced January 1, 1912, ended December 31, 2010. The rentals were made January 1, 1912, to April 30, 1915, $5,000 yearly, and for the remainder of the term $13,000 yearly, and the lessee was required to pay taxes and assessments on both land and improvements and water rents, etc., from the date of the lease. Lessee was also required by the terms of the lease to erect a new building at a cost of not less than $100,000 and complete same before January 1, 1920, and to give a bond of the sum of $50,000 for the erection of a new building which bond was to be secured by real estate mortgage, which real estate was subject to first mortgage of $12,500, lessee having the right to substitute other security satisfactory to the lessor. Prior to the razing of the present building for the purpose of erecting a new one lessee was required to deliver to lessor an additional bond of $50,000.

The Jacobs lease in question does not prohibit subletting, but does provide that assignment may be made without the consent of the lessor upon certain conditions, one of which is the execution and delivery of a $50,000 bond to the lessor.

The Jacobs lease also provides for a $100,000 bond on the destruction of the proposed new building.

Lawrence A. Olwell, Olwell, Durant & Brady, and Bernard V. Brady, all of Milwaukee, for appellant.

Benjamin Poss and Herbert E. Toelle, both of Milwaukee, for respondents.

KERWIN, J. (after stating the facts as above).

The appellant excepted to the findings of fact, and the main controversy in this case turns on whether the facts found by the court below are supported by the evidence.

A great amount of testimony was taken in the case, much of which had little bearing upon the questions at issue. That an agency to sell the property in question was created is not denied, but the vital question is: Did the plaintiffs produce a person ready and willing to buy the property in accordance with the terms of the agency?

1. The following facts appear to be established without substantial dispute: The defendant, Phillip Gross Realty Company, and the Phillip Gross Hardware & Supply Company were corporations whose stock was owned by Phillip Gross, his son, Arthur Gross, and his son-in-law, Chas. E. Mueller, all residents of Milwaukee. The defendant realty company owned as lessee a 99-year lease upon a piece of property on the north side of Grand avenue. The owners of the fee, lessors, were Jacobs and others, of Madison, and are referred to in the testimony as the Jacobs estate, and the lease as Jacobs lease.

In February, 1913, the hardware company occupied the building on the property covered by the Jacobs lease, and the realty company desired to dispose of that lease. The plaintiffs, Weller and Brachman, acted as agents for the realty company under the following contract of agency:

“Milwaukee, Wis., 1/14/14.

Mr. W. B. Weller, City--Dear Sir: We hereby agree to lease the premises known as 126 and 128 Grand avenue--42 1/2x100 feet--on the following terms and conditions:

Rent to be $16,500.00 net per year to us for the balance of the term of ninety-nine (99) years as per lease now on said premises, payable quarterly in equal installments, rent to start upon possession of present building. Conditionssimilar and to conform to present lease. Your parties must immediately upon possession commence erection of new building to cost not less than $100,000.00. During construction your people are to have an acceptable bond of $50,000 deposited with us until new building is erected. Taxes for first year to be adjusted.

This proposition must be closed on or before February 16, 1913. Yours truly, Phillip Gross Realty Company, Phillip Gross, President. Chas. E. Mueller, Secretary.”

The agreement of agency is referred to in the printed case as Exhibit 1. Under the agency the plaintiffs sought to interest one Adolph Spiegel, who was in business in Milwaukee. Verbal proposals were carried back and forth between the realty company and Spiegel, and during the negotiations the realty company consented to a reduction of rent to $16,000 net per year.

The plaintiffs went to Spiegel with some concessions, and Spiegel's lawyer drew an instrument which purported to accept the verbal terms and was signed in the name of Public Drug Company, a corporation controlled by Spiegel, and contained a blank space and appropriate wording for acceptance by the realty company. The plaintiffs took this writing to the realty company on February 15, 1913, and presented it together with a check of $1,000 which Spiegel had given them to induce acceptance of a previous offer on his part. The following is a copy of the instrument of acceptance, referred to in the case as Exhibit 3:

“Milwaukee, Wis., February 15, 1913.

To the Phillip Gross Realty Company, Presented--Gentlemen: The undersigned accepts the proposition made on your behalf by Mr. W. B. Weller for the leasing of the premises known as 126 and 128 Grand avenue, Milwaukee, Wisconsin, and herewith delivers to Mr. Weller check for one thousand ($1,000) dollars to bind the bargain. Rental to be sixteen thousand ($16,000) dollars net per year during the term; term of lease to be for ninety-nine (99) years, commencing November 1, 1913, or before if you deliver possession after thirty days written notice to that effect. One thousand ($1,000) dollars herewith deposited with Mr. Weller to be applied toward the payment of the first month's rental; check to be held until form of agreements are agreed upon. Your present interest in the lease you have with Jacobs and Robbins dated the 9th day of November, 1911, to be assigned to the undersigned no later than January 1, 1919. On delivery of possession, twelve thousand five hundred ($12,500) dollars to be deposited with you to be held in trust until after the completion of the building which is to be erected before January 1, 1920; you to pay five (5) per cent. interest per annum on such sum of $12,500.00 from the time of its deposit, semiannually, and the said $12,500.00 to be applied on the first year's rental after the completion of the said building.

Taxes and insurance to be adjusted and prorated, lessee only to pay for the proportion of the year after possession.

Lessee shall have the privilege of making repairs and alterations. and doing all things in connection therewith as if he were the owner of the present building. Yours, etc., Public Drug Company, by Adolph Spiegel, President.”

When this instrument, Exhibit 3, was presented to the officers of the realty company, they refused to consider it until their attorney, Mr. Baker, had been consulted. After Mr. Baker examined it, he declared it too indefinite to warrant acceptance and advised that some instrument covering all the obligations to be assumed by each party should be executed. Mr. Baker, defendant's attorney, stated he could not do it that day, and it was suggested by Mr. Weller, plaintiff, that Mr. Gold, Spiegel's attorney, might do it. It was finally left to Mr. Gold to draw the paper.

On February 18, 1913, Mr. Gold submitted a draft of the proposed lease which did not meet the approval of Mr. Baker. Afterwards, on February 19, 1913, Mr. Baker submitted, at the solicitation of plaintiffs, a draft of a proposed lease, and on February 22, 1913, Mr. Gold submitted certain suggestions in the form of a letter, and on February 25, 1913, Mr. Gold and Mr. Glicksman submitted proposals with modifications. The matter of agreeing on “the form” of the lease or transaction had been left by the parties with their attorneys.

Nothing further seems to have been done by the parties to agree upon “the form” of lease or transaction at that time. In the language of counsel the negotiations “were in a state of suspended animation--still alive, but not actively pressed.”

Rumors came to Mr. Spiegel that the defendant was negotiating with other persons, whereupon Mr. Gold commenced an action for specific performance in favor of Mr. Spiegel and filed notice of lis pendens. While the specific performance action was pending Mr. Baker suggested that they continue negotiations, and drew and delivered to Mr. Gold a proposed escrow agreement, and assured Mr. Gold of the continued willingness of the realty company, defendant, to carry out in good faith the terms it had given to Spiegel.

Thereafter, on January 9, 1914, Mr. Gold, without notice to Mr. Baker or the defendant, withdrew the specific performance suit and refused to resume further negotiations with the defendant or Mr. Baker unless the defendant would give his client an option for a definite period so that his client might go East and consult other parties whom he might wish to interest in the deal. This ended negotiations in the matter, and the defendant realty company was left with the lease on its hands.

After the day on which plaintiff...