Rheinberger v. Security Life Ins. Co. of America

47 F. Supp. 196, 1942 U.S. Dist. LEXIS 2251
CourtDistrict Court, N.D. Illinois
DecidedOctober 9, 1942
DocketNo. 11683
StatusPublished
Cited by1 cases

This text of 47 F. Supp. 196 (Rheinberger v. Security Life Ins. Co. of America) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rheinberger v. Security Life Ins. Co. of America, 47 F. Supp. 196, 1942 U.S. Dist. LEXIS 2251 (N.D. Ill. 1942).

Opinion

LINDLEY, District Judge.

Claimant has filed a claim against the trustee for the Security Life Insurance Company to recover commissions allegedly owing him for the leasing of a certain trust asset known as the Lumber Street property. In response to an advertisement by the George Lurie Company, claimant, a real estate broker, contacted that company, and discussed numerous properties that it was then offering, including that involved here. Following this, claimant showed one Mar-wick the premises, and arranged a meeting with the trustee on October 29, 1940, when a sale of the property was discussed. The parties failed to reach any agreement.

The testimony is somewhat conflicting as to the purpose of the conference, claim[198]*198ant alleging that his buyer was both a potential prospective purchaser and lessee. The testimony of Marwick, the trustee, and another indicates, however, that the question of leasing was not mentioned and that Marwick was only a prospective purchaser. There was some discussion of a sale being made on the basis of rental payments, but no agreement was reached.

Shortly later, claimant wrote to the trustee that he hoped to make a definite proposal soon. That was the only communication emanating from him until April 4, 1941. Claimant had one or two conversations with Marwick shortly after the conference of October 29 but since he had nothing satisfactory to offer, Marwick thereafter treated the negotiations as ended. Schlaes, representing the Lurie Company, twice called claimant in November, when the latter said he had nothing to offer and indicated that the negotiations were at an end. Claimant made no further move until April, 1941, when he learned of a lease having been made shortly earlier between the trustee and Marwick. He then wrote respondent, demanding a commission.

On February 23, 1941, Marwick advertised in the Chicago Tribune seeking to lease industrial property. In response, Neuberg, a real estate broker connected with the Lurie Company, talked to Mar-wick, and when certain property suggested by Neuberg proved unsatisfactory to the latter, he mentioned the Lumber Street property. Negotiations were begun and the property was eventually leased to Mar-wick for ten years, with a rental of $10,-000 a year. Neuberg received a commission for bringing about consummation of the lease. Claimant now insists that he is entitled to the commission since he was the person who originally brought the parties together.

The fact that the seller or another broker consummates a sale, or that it is made upon terms different from those proposed to the broker, does not necessarily deprive the latter of compensation. If it appears that the purchaser was induced to apply to the owner through the instrumentality of the broker or through means employed by him or that the sale was effected through information derived from the broker, the broker is entitled to his commission, although the sale was consummated and the deal closed finally by the owner. Ogren v. Sundell, 1921, 220 Ill.App. 584; Hafner v. Herron, 1911, 165 Ill. 242, 46 N.E. 211; Rounds v. Victoria Hotel Co., 1914, 184 Ill.App. 500, 501.

But that a sale or lease is finally brought about through the efforts of the principal or another broker with a person with whom the first broker had previously negotiated without success, does not furnish basis for commission to the first broker, if it appears that the latter has for a long time ceased negotiation with the purchaser and abandoned all efforts to induce him to take the property. Lipe v. Ludewick, 1883, 14 Ill.App. 372; Davis v. Gassette, 1888, 30 Ill.App. 41; Carlson v. Nathan, 1891, 43 Ill.App. 364; West End Dry Goods Store v. Maun, 1907, 133 Ill.App. 544; Savage v. Stewart, 1922, 226 Ill.App. 388; Sheppard v. Cade, 1922, 227 Ill.App. 110.

The question presented then is whether, on the basis of the facts presented, there was an abandonment of the transaction by claimant so as to preclude his recovery of compensation for bringing the parties together. If, in the meeting in October, 1940, a lease had been made between Mar-wick and the trustee, claimant would probably have been entitled to a commission, even though his purpose in bringing the parties together was to arrange for a sale. Davis v. Gassette, 1888, 30 Ill.App. 41, 44. However, there was a lapse of approximately four months, before the lease between the parties was made, with Neuberg acting as broker. Was there an abandonment of the negotiations by claimant during this time?

Careful examination of the testimony is convincing that all parties -treated the negotiations as abandoned. Claimant’s actions after the first month indicate strongly that he had lost all hope of consummating a sale. He had written trustee once after the meeting, stating merely that he hoped to arrange a satisfactory offer. Yet at no time after that did he communicate with the trustee in an attempt to arrive at a satisfactory arrangement between the parties. There was some evidence that claimant had attempted to see the trustee in December and January, but there is nothing to show that claimant made any effort to follow up these unsuccessful attempts either personally or by mail.

Claimant had some conversation with Marwick and Schlaes shortly after the meeting in October, but after that did not talk with them or make any attempt to [199]*199arrive at terms for either a sale or lease. The trustee, Marwick, and Schlaes stated that they considered the negotiations with claimant at an end. This conclusion is strongly supported by the fact that the lease was consummated as a result of Marwick’s voluntary advertising for rental property in February, 1941.

The evidence does not show that Marwick was induced to make the lease through claimant’s actions. All parties treated the negotiations as at an end. Nothing indicates that if Marwick had not advertised for space and Neuberg had not met him and mentioned the Lumber Street property, the lease would have been made. The length of time following claimant’s last attempts to negotiate between the two parties, and the latter’s subsequent inactivity, show clearly that claimant was not the procuring broker, and that he is, therefore, entitled to no commission. Murawska v. Boeger, 1921, 219 Ill.App. 241; Watts v. Howard & Calkins, 1893, 51 Ill.App. 243; West End Dry Goods Store v. Maun, 1907, 133 Ill.App. 544; Savage v. Stewart, 1922, 226 Ill.App. 388; Obrien & Co. v. Newhouse, 1916, 196 Ill.App. 39.

In Lipe v. Ludewick, 1883, 14 Ill.App. 372, the parties could not agree on terms, and, for a period of six months, negotiations ceased, with the broker making no effort to complete the sale. After six months, the buyer happened to meet the seller, and they arranged for a sale on different terms. The court held that the broker had abandoned the negotiations.

In West End Dry Goods Store v. Maun, 1907, 133 Ill.App. 544 a broker arranged a meeting between the principals. The parties could not agree and, after some effort by the broker to produce a satisfactory offer, nothing was done for six months, when the parties got together without the aid of the broker and agreed. There was evidence that, shortly prior to the signing of the lease, the seller saw the broker, asked if his principal would rent the property, and received the reply, “They might take it, but I don’t think we can do business with you at all.” The court held the negotiations abandoned.

In Davis v. Gassette, 1888, 30 Ill.App. 41 the broker sought to negotiate a sale between buyer and seller.

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Bluebook (online)
47 F. Supp. 196, 1942 U.S. Dist. LEXIS 2251, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rheinberger-v-security-life-ins-co-of-america-ilnd-1942.