author: Mr. JUSTICE RECHENMACHER

text:
    Foss Park District, Plaintiff-Appellee, v. The First National Bank of Waukegan, as Trustee, et al., Defendants-Appellants.
    (No. 73-277;
    Second District
    May 28, 1974.

      Mark Drobnick, of Waukegan, for appellants.
    William R. Stanczak, Frank M. Daly, and Dennis Daly, all of Waukegan, for appellee.
   Mr. JUSTICE RECHENMACHER

delivered the opinion of the court:

The First National Bank of Waukegan, as trustee under Trust No. 616, and Joseph J. Drobnick, prosecute this appeal from an order of the Circuit Court of Lake County denying appellants’ petition for disbursement to them of certain funds held by the county treasurer.

This litigation arises out of a condemnation suit. On July 23, 1968, Foss Park District filed a petition to condemn certain pieces of real estate, title to which was held by The First National Bank of Waukegan, as trustee under Trust No. 616. At the condemnation trial the jury found the just compensation to be paid for the taking of said real estate was $75,202, for which amount the trial judge entered his order on May 2, 1969.

On the first appeal to this court the judgment of the trial court was affirmed (Foss Park District v. First National Bank of Waukegan (1970), 125 Ill.App.2d 276) and rehearing denied. The Supreme Court of Illinois denied leave to appeal and a writ of certiorari was denied by the United States Supreme Court. On July 29, 1971, Foss Park District deposited the just compensation of $75,202 with the county treasurer and on August 4, 1971, the trial court entered its order vesting title to the property in Foss Park and granted the Park District the right to enter upon the land condemned.

The appellants then prosecuted a second appeal to this court, specifically from the trial court’s order of August 4, 1971, citing in their notice of appeal that they were appealing from “the Order entered on or about August 4, 1971, vesting certain parcels of land or lots described as (here followed the legal descriptions) in fee simple title in the Foss Park District, a body corporate and politic and the entire contents of said Order, or any part of said Order”. On this second appeal (Foss Park District v. First National Bank of Waukegan (1973), 9 Ill.App.3d 560) this court approved the order of the trial court dated August 4, 1971, which vested title in fee simple in Foss Park District and set certain requirements by way of a verified application before the compensation would be released to the appellants.

After that decision was rendered the appellants submitted a petition to the trial court applying for withdrawal of the funds representing the compensation award. Upon a hearing and objections raised by Foss Park District the trial court on May 15, 1973, denied the appellants’ petition for the withdrawal of the funds on the ground that said petition “fails to comply with this Court’s Order of August 4, 1971, and is insufficient for this Court to determine, pursuant to provisions of Section 14, Eminent Domain Act, who is entitled to the proceeds in question.”

While the present (and third) appeal to this court is ostensibly an appeal from the trial court’s order of May 15, 1973, it is, in effect, an attempt to secure a review by this court of its previous decision of January 23, 1973, which affirmed the trial court’s order of August 4, 1971. This is apparent from the fact that the appellants do not contend that anything has changed since the previous decision or since the order of August 4, 1971, nor do they claim that they have complied, or in good faith attempted to comply, with the order of August 4, 1971. Since the trial court’s order of May 15, 1973, denying appellants’ petition to withdraw the funds is based squarely on appellants’ failure to comply with the order of August 4, 1971, it is obvious that it is that order which the appellants are really objecting to, specifically that part reading as follows:

“That the County Treasurer of Lake County, Illinois, pay said sums only to applicants who are parties entitled to receive the compensation adjudged in this case and only upon their verified application that they have not since the filing of the petition to condemn herein executed any deed, trust deed, mortgage or other instrument conveying any right, title or interest whatsoever in the property described in said petition to condemn and as described in the Judgment Order; that there are no liens, judgments, decrees, attachments or orders of any court whose judgments, decrees or orders constitute liens in or rights against said property and said compensation, and no proceedings in bankruptcy are now pending by or against applicants; that the described property and the money held by the County Treasurer are free and clear of any and all encumbrances or liens by attachment, trust deed, trust deed notes, notice, mortgage, decree, judgment or by statute, or by reason of any proceedings in any court, state or nation, or filed in the office of the Clerk of any county or court in this state, and all other liens of every kind and nature whatsoever, recorded or unrecorded and further that applicants represent that they have no knowledge of any parties who have an interest in this property or the compensation deposited with the County Treasurer or these proceedings other than themselves and that they have caused due notice of this application to be served upon all parties in interest to said real estate and aU parties in this proceeding.”

The order of the trial court dated August 4, 1971, has already been affirmed in the previous appeal, and we will not go into the propriety of that order in the guise of reviewing the trial court’s order of May 15, 1973. The latter merely, in effect, continued the order of August 4, 1971, and it is the order of substance involved here. A long line of Illinois cases holds to the well settled doctrine that a reviewing court will not again consider issues it passed on in a previous appeal. (Wetland Tool & Manufacturing Co. v. Whitney (1968), 100 Ill.App.2d 116, 241 N.E.2d 533; La Salle National Bank v. Wieboldt Stores, Inc. (1968), 102 Ill.App. 2d 339; Presbyterian Distribution Service v. Chicago National Bank (1962), 36 Ill.App.2d 1; Hammer v. Slive (1962), 35 Ill.App.2d 447.) As was said in the case of George v. Walters (1922), 224 Ill.App. 1, 3, “A case cannot be taken to a court of review by piecemeal.” Whatever issues could have been raised in the previous appeal as to the propriety of the court’s order of August 4, 1971, in affirming that order this court foreclosures further consideration of them, except on rehearing.

Had the appellants felt that the decision on the second appeal was in some respect erroneous or that some issue had not been considered, they should have petitioned for a rehearing. (Supreme Court Rule 367; Funk v. People (1910), 157 Ill.App. 614). The time for doing so long since expired.

The trial court’s order of August 4, 1971, having been affirmed by this court in the previous appeal (Foss Park District v. First National Bank of Waukegan (1973), 9 Ill.App.3d 560) is still valid and remains in effect. Since the order of May 15, 1973, merely adhered to the order of August 4, 1971, the issue presented in the appeal has already been passed on and the order appealed from is affirmed.

Judgment affirmed.

GUILD and HUNT, JJ., concur.


source: Caselaw Access Project

author: Mr. PRESIDING JUSTICE GUILD

license: Public Domain

text:
    Herbert Geist, Plaintiff-Appellant, v. Robert O. Lehmann et al., Defendants-Appellees.
    (No. 72-176;
    Second District
    May 29, 1974.

      Morrison & Nemanich, of Waukegan (Terrence Brady, of counsel), for appellant.
    Conzelman, Schultz, O’Meara & Snarski, of Waukegan, for appellees.
   Mr. PRESIDING JUSTICE GUILD

delivered the opinion of the court:

Herbert Geist, the plaintiff in a suit for rescission of a real-estate contract, appeals from the orders of the trial court which dismissed both his first and second amended complaint and denied his motion for summary judgment on his second amended complaint.

On June 4, 1969, the plaintiff Geist entered into a contract to purchase real estate from the defendant, Robert O. Lehmann. The property consisted of a 20-room Georgian house, a large swimming pool, and a pool house. The house was located upon two lots, all of Lot 7 and th.e north half of Lot 9. As borne out by the testimony and evidence at trial, the landscape of the property gave the appearance that the front grounds included all of Lot 9. The real estate contract, however, merely gave the address of the property, 500 North Green Bay Road, Lake Forest, Illinois, and only gave the approximate acreage, 314 acres.

During the week preceding the date set for closing (October 1, 1969), Geist’s attorney first received the legal description, the title-commitment letter, and the survey of the property. After the attorney examined the title, Geist apparently first became aware that the property he was about to purchase did not include all of Lot 9. In a letter to Lehmann’s attorney, dated September 29, 1969, Geist’s attorney stated that there would be no closing on October 1st and requested Lehmann either to correct the “title defects” or to rescind the contract and return the earnest money. Lehmann’s attorney replied in a letter dated September 30, 1969, that it would not be possible to obtain the other portion of Lot 9 and that Geist should be prepared to close on October 1.

On October 1, 1969, Lehmann stood ready to close but Geist did not close the transaction. On October 9, 1969, Geist filed suit for rescission of the contract. Geist based his suit for rescission upon a mistake of a material fact (the boundaries of the property) which was caused by the innocent misrepresentations of Lehmann and Gilbert Rayner Associates, the real estate brokers. Lehmann filed suit for specific performance and the two suits were then consolidated.

At trial, Geist testified that he was misled as to the boundaries of the property by a plat of the subdivision which was given to him by a realtor, Roberta Lieberman. Mrs. Lieberman had received the plat from Carmín Olson, a real estate broker employed by Gilbert Rayner Associates. Lehmann had earlier contacted Mrs. Olson in order to list the property with Gilbert Rayner Associates. The. plat introduced into evidence by the plaintiff showed the Lehmann property included all of Lot 9. Mrs. Lieberman testified that this plat looked like the plat she gave Geist.

This testimony was contradicted by Mrs. Olson who testified that all the plats given to Mrs. Lieberman showed that the Lehmann property included only the north half of Lot 9. Two plats, one which had been in the possession of Mrs. Lieberman and one plat which Mrs. Lieberman had subsequently returned to Mrs. Olson, were introduced into evidence by the defense. Both plats showed Lehmann’s property as including only the north half of Lot 9.

Geist further testified that when Mrs. Lieberman showed him the property, she pointed out the boundaries as including both lots. He also testified that neither Lehmann nor Mrs. Olson pointed out to him what the actual boundaries were, even though they both were aware that the property did not include all of Lot 9. Therefore, Geist testified he was misled by the visual appearance of the property. Mrs. Geist also testified that when she visited the property, one of Lehmann’s employees was mowing both halves of Lot 9.

Mrs. Lieberman, however, testified she never pointed out the boundaries to Geist. Mrs. Olson testified that she had told Geist a Mr. Fentress owned half of Lot 9. Furthermore, the real estate broker who had helped Geist prepare his offers, testified that when he attempted to explain the boundaries of the property, Geist said, “Look, I know all about the land. Let’s not fool around. Let’s get this offer in.”

All parties agreed that when the property was first listed on the master listing, the stated acreage of the property was 4 acres and the asking price was $225,000. At the time Geist submitted his final offer the acreage was changed to 3%, acres and the price reduced to $185,000.

Between the time of filing of the complaint for rescission on October 9, 1969, and the commencement of the trial on December 14, 1970, two fires caused extensive damage to the Lehmann house. The first fire occurred in August, 1970, and the second in September, 1970. During the course of the trial, Geist’s attorney tried to elicit testimony pertinent to the fire and the fire damage from the defendant in an effort to prove an additional ground for rescission. Lehmann’s attorney, however, objected. After a lengthy, discussion, the court and the parties agreed that if Geist should be denied rescission on the grounds of misrepresentation and Lehmann should be granted specific performance, then Geist would be permitted to file an amended complaint for rescission based on destruction of the premises.

On February 8, 1971, the trial court found for Lehmann, dismissing Geist’s complaint for rescission and entering judgment for specific performance of the contract. Accordingly, on February 8, 1971, plaintiff Geist filed his amendment to the complaint for rescission. In his answer Lehmann admitted material damage to the premises. On April 14, 1972, Geist filed a motion for summary judgment based on the contractual clause permitting the purchaser to treat the contract null and void if there were material damage of the premises prior to closing.

Defendant Lehmann, however, then filed a petition for the vacation of the decree of specific performance and the reaffirmation of the order dismissing Geist’s complaint for rescission. Lehmann set forth allegations of plaintiff Geist’s bankruptcy subsequent to the decree of specific performance, of defendant’s extensive negotiations with the fire insurance companies, of the companies’ position to pay proceeds only to the defendant, and of defendant Lehmann’s then present desire to elect forfeiture of the earnest money under the contract. Pursuant to this petition, on April 17, 1972, the trial court entered an order vacating the order for specific performance and reaffirming its order dismissing Geist’s complaint for rescission. The court denied Geist’s motion for summary judgment and, therefore, permitted Lehmann to elect forfeiture of the earnest mony.

The initial issue before this court is whether the trial court properly dismissed plaintiff Geist’s first amended complaint for rescission which was based on plaintiff’s mistake due to defendant Lehmann’s innocent misrepresentations of a material fact. If the trial court properly dismissed the amended complaint, the issue becomes one of what remedies are .available to the seller and the purchaser when the purchaser has delayed the closing and the property is materially damaged after the date set for closing but before the actual closing has taken place.

Rescission of a contract is proper where one party mistakenly enters into a contract because he reasonably relies on the other party’s innocent misrepresentations of a material fact. (Morel v. Masalski (1928), 333 Ill. 41, 164 N.E. 205.) Certainly, the size and boundaries of the subject property are material facts. (Winkelman v. Erwin (1929), 333 Ill. 636, 165 N.E. 205.) Therefore, if plaintiff-purchaser in this case proved at trial that the defendant-seller misrepresented the boundaries of the property to him and he reasonably relied upon these misrepresentations, he is entitled to rescission of the contract.

The evidence as to whether or not the defendant Lehmann and the realtor misrepresented the boundaries of the property to plaintiff Geist, however, is conflicting. In resolving this issue in favor of the defendant, the trial court must have believed the defendant’s witnesses and put greater weight on the defendant’s evidence. Where a cause is tiled by a court without a jury, a determination of the credibility of witnesses and of the weight of evidence is committed to the trial court. Therefore, where the evidence is conflicting we will not disturb the findings of the trial court unless they are manifestly against the weight of the evidence. (Northern Trust Co. v. City of Chicago (1954), 4 Ill.2d 432, 123 N.E.2d 330.) “This is particularly true in close cases where the findings must have been dictated to a large extent by the impressions of credibility received by the trial court from the observation of witnesses.” Hunter v. DeMay (1970), 124 Ill.App.2d 429, 435, 259 N.E.2d 291, 294.

After a careful examination of the record, we conclude that the trial court did not err in dismissing plaintiff’s first amended complaint for rescission based on misrepresentation. The finding of the trial court that the plaintiff did not prove his complaint for rescission was not against the manifest weight of the evidence.

After the fire and upon Lehmann’s petition, the trial court vacated its order requiring specific performance of the contract. It has long been recognized that when events subsequent to the execution of a contract produce a change of circumstances of such a nature as to cause a peculiar hardship or an inequitable result, a court of equity will refuse to grant specific performance. (Iglehart v. Vail (1874), 73 Ill. 63.) Accordingly, in determining whether to grant specific performance of a real estate contract, a court of equity can consider the fact that the property has been materially damaged by fire subsequent to the date set for execution of the contract but prior to the actual conveyance of the property. (See Annot., 11 A.L.R.2d 390 (1950) sections 2, 13.) When property has been materially damaged before its conveyance and prior to the transfer from the seller to the purchaser of any of the incidents of ownership, such as risk of loss or possession, a court of equity will not grant a seller’s request for specific performance. See Annot., 11 A.L.R.2d 390 (1950), sections 2, 13.

At the time of the fire, plaintiff Geist did not have any of the incidents of ownership. The risk of loss and possession still remained with the defendant-seller Lehmann. The parties provided for the risk of loss by inserting the clause.

“if prior to closing, improvements on said premises shall be destroyed, materially damaged by fire or other casualty, this contract at the option of Purchaser shall become null and void.”

By using the term “closing” the parties had intended to have the risk of loss pass to the purchaser whenever the sale was closed; that is, when title (and subsequent possession) had passed to the purchaser. The parties did not intend the term “closing” as used in the contractual clause to mean the date set for closing (October 1, 1969). If they had intended to use a specific date in order to determine the time the risk of loss shifts to the purchaser, they would or should have inserted the date in the clause. This reasoning is borne out in clause 7 of the contract which reads “possession shall be delivered on October 1, 1969 provided sale has been closed.” This clause clearly shows that both parties contemplated that there could be a possibility of the closing occurring on a date other than October 1, 1969. Since the sale has not been closed and the title and possession have not passed to the purchaser Geist, the seller Lehmann bore the risk of loss at the time of the fire.

While it is true that had it not been for the delay caused by the purchaser Geist the risk of loss would not have been upon the seller Lehmann at the time of the fire, Lehmann was not misled by Geist’s actions. Lehmann did not detrimentally rely upon the actions of the purchaser. The purchaser, Geist, informed Lehmann prior to closing that he would not close the transaction. Knowing that Geist would not close, Lehmann could have chosen to place Geist in default of the contract under the contract’s provisions. He did not. Instead, he chose to affirm and enforce the terms of the contract by instituting a suit for specific enforcement, and he is therefore bound by those terms which include the risk of loss provision. See Tinker v. McLellan (1958), 165 Cal.App.2d 291, 331 P.2d 464.

As the seller Lehmann bore the risk of loss, he may not obtain a decree of specific performance and the court properly vacated such decree. Although tire reasons given in the trial court’s order vacating the decree for specific performance are incorrect, nevertheless, the order vacating the decree of specific performance must stand. A court of review will not reverse a judgment which is a correct one even if it is based on an incorrect reason. Shibata v. City of Naperville (1971), 1 Ill.App.3d 402, 273 N.E.2d 690; Rosehill Cemetery Co., v. City of Chicago (1933), 352 Ill. 11, 185 N.E. 170.

We now turn to the issue of what remedies are available to the parties when the subject property has been materially damaged during the litigation. After instituting the suit for specific performance before the fire and obtaining judgment for specific performance after the fire, defendant-seller Lehmann now wants as his remedy forfeiture of the earnest money paid by Geist. Plaintiff-purchaser Geist wants rescission as permitted under the terms of the contract which place the risk of loss upon the seller.

Geist contends that Lehmann is precluded under the doctrine of election of remedies from seeking the remedy of forfeiture because he has pursued the remedy of specific performance to judgment. He argues that Lehmanns election to pursue specific performance is an election not to pursue other inconsistent remedies. Generally, where a party obtains a decision on the issues but fails to obtain satisfaction of his claim the party is precluded from seeking another remedy when the alternative remedy is inconsistent with the first remedy sought. (See Braude u. Wordy (1930), 340 Ill. 180, 172 N.E. 161; Fleming v. Dillon (1938), 370 Ill. 325, 18 N.E.2d 910). The remedies of specific performance in equity and forfeiture of a contract are inconsistent remedies. A suit for specific performance is predicated upon the continued existence of the validity of the contract after the breach. The remedy of forfeiture is based upon the disaffirmance of a contract at the time of the breach. See Wollenberger v. Hoover (1931), 346 Ill. 511, 179 N.E. 42; Ferino v. Protect-All-Shelters, Inc. (1970), 128 Ill.App.2d 477, 262 N.E.2d 349; Solomon Iron & Metal Co. v. Bradford (1962), 33 Ill.App.2d 452, 179 N.E.2d 697; Paoli v. Zipout, Inc. (1959), 21 Ill.App.2d 53, 157 N.E.2d 79.

The doctrine of election of remedies, however, presupposes a choice between two or more existing inconsistent remedies. Accordingly, if a party has but one remedy, a mistaken resort to an unavailable inconsistent remedy will not bar him from later choosing his correct remedy unless the other party has relied on the election of the first remedy. See Schenck v. State Line Telephone Co. (1924), 238 N.Y. 308, 144 N.E. 592; Braude v. Wardy (1930), 340 Ill. 180, 172 N.E. 161; Drainage District No. One v. Dowd (1907), 132 Ill.App. 499; 5 A. Corbin, Contracts §§ 1222, 1225 (1970); 25 Am.Jur.2d Election of Remedies §§ 9, 22 (1966). The law will not deprive a party of a meritorious claim merely because he attempts to collect it by inappropriate action. (Chicago Title & Trust Co. v. De Lasaux (1929), 336 Ill. 522, 168 N.E. 640.) Thus, courts of equity have granted the inconsistent remedy of damages for a total breach of contract in lieu of specific performance to a party who would have been entitled to specific performance except for intervening events, such as destruction of the property, which rendered the enforcement of the decree of specific performance inequitable or impossible. See Grummel v. Hollenstein (1962), 90 Ariz. 356, 367 P.2d 960; Wimer v. Wagner (1929), 323 Mo. 1156, 20 S.W.2d 650; 5 A. Corbin, Contracts (1973); § 1222 (1970); 71 Am.Jur.2d Specific Performance § 215 (1973); of. Alter v. Moellenkamp (1961), 23 Ill.2d 506, 179 N.E.2d 4.

We find in these situations there is no significant difference between granting the remedy of forfeiture and granting the remedy for damages for breach of contract in lieu of a decree of specific performance. Both forfeiture and damages are remedies for the same breach, i.e., a total breach which put an end to the contract upon the occurrence of the breach. (See 5 A. Corbin, Contracts § 1222 (1970).) The remedy of forfeiture merely sets the amount of damages for the breach before the breach has occurred. Furthermore, while courts of equity do not look upon the remedy of forefeiture with favor (see Brown v. Jurczak (1947), 397 Ill. 532, 74 N.E.2d 821), courts of equity will enforce a duly executed agreement containing a forfeiture clause. (See Powers v. Bridgeport Oil Co. (1909), 238 Ill. 397, 87 N.E. 381.) Therefore, a court of equity may grant forfeiture in lieu of specific performance to a party who sought but could not obtain specific performance because destruction of the property rendered the decree of specific performance inacceptable or unenforceable. See Yates v. Batteford (1932), 19 La.App. 374, 139 So. 37.

In this case, the parties agreed in the contract that in case of a breach by one of the parties, the remedy for such breach would be forfeiture of the earnest money paid rather than the payment of the actual amount of damages. As tire destruction of the property has rendered the decree of specific performance unenforceable under the terms of the contract the only remedy for Geist’s breach left to Lehmann is the mutually agreed upon remedy of forfeiture of the earnest money. Furthermore, Geist did not detrimentally rely upon Lehmann’s suit for specific performance. Geist decided to delay execution of the contract and file suit for rescission prior to the time Lehmann decided to sue for specific performance instead of seeking forfeiture. Accordingly, Lehmann is not barred from seeking forfeiture by the doctrine of election of remedies.

Lehmann is not limited to $2,179.99 damages he proved during his suit for specific performance. Such damages were only incidental to the decree of specific performance. When the order for specific performance was vacated these incidental damages were also vacated leaving Lehmann free to pursue forfeiture as provided in the real estate contract. Under the forfeiture clause in the contract Lehmann is entitled to the earnest money paid.

As Lehmann is entitled to damages for Geist’s breach which occurred before the fire, the trial court properly dismissed Geist’s second amended complaint for rescission which was based on the destruction of the property, and also properly denied his motion for summary judgment,

For the foregoing reasons, the orders of the trial court dismissing plaintiffs amended complaints, denying plaintiff’s motion for summary judgment, and vacating its order of specific performance are affirmed.

Affirmed.

T. MORAN, P. J., and SEIDENFELD, J., concur.


author: Mr. JUSTICE SEIDENFELD

text:
    Chicago Title and Trust Company, as Trustee, Plaintiff-Appellee, v. Exchange National Bank of Chicago, as Trustee, Defendant-Appellant—(Stephen T. Goode et al., Intervening Petitioners-Appellants.)
    (No. 72-343;
    Second District
    May 29, 1974.

      Charles F. Marino, of Chicago, for appellant.
    Albert Koretzky, of Chicago, for appellee.
   Mr. JUSTICE SEIDENFELD

delivered the opinion of the court:

The plaintiff, Chicago Title and Trust Company, as trustee, filed suit to foreclose a part-purchase-money junior trust deed against the defendant, Exchange National Bank of Chicago, as trustee of a land trust, the corpus of which was subject to the junior trust deed. A default order was entered. Defendant moved to vacate the order, and Stephen T. Goode and Rita C. Goode, sole beneficiaries of the land trust, petitioned to intervene. Both the motion to vacate and the intervention petition were denied and the court entered a foreclosure decree, from which the defendant and the Goodes appeal.

The foreclosure complaint was filed on August 12, 1971. Defendant’s attorney entered his appearance on September 23, 1971, and on December 10, 1971, the court required defendant to answer within 28 days. On March 9, 1972, plaintiff presented a motion for default. A lawyer who shared office space with defendant’s attorney appeared and requested a continuance. The accompanying affidavit alleged that defendant’s attorney was out of town and unable to appear until March 23, 1972, and that plaintiff’s attorney had been advised of these facts. The court, nevertheless, ordered that a default be entered and directed that the plaintiff prepare and submit a decree of foreclosure to the court on March 23, 1972, and that a copy be served upon defendant’s attorney.

On March 21, 1972, defendant presented its motion to vacate alleging that it had a meritorious defense to the complaint for the following reasons: (1) The Goodes, as beneficiaries of the defendant trust, had tendered the August 1, 1971, payment due under the note to Riis-Borg, Inc., the alleged holder of the note, by a check in the amount of $3,009.-75, which was the balance owing Riis-Borg after deducting a credit in the sum of $1,190.75 for reimbursement of monies expended to remedy a condition causing water to leak into the basement of the mortgaged premises in breach of the agreement between Riis-Borg and the Goodes; (2) the plaintiff failed to join Riis-Borg, Inc., the legal noteholder, as a party plaintiff; ($) the plaintiff failed to join the Goodes, the land trust beneficiaries in possession of the land, as party defendants; and (4) the transaction of business in Illinois by Riis-Borg, Inc. (as opposed to Riis Borg, Inc.), without having been incorporated or licensed in Illinois, barred collection on the note.

On the same March 21st date, the Goodes filed a petition to intervene alleging the same defenses. In denying both the motion to vacate and the petition, the court ruled that the defendant had not shown a meritorious defense. The court also denied defendant’s petition to require Riis Borg, Inc., to accept $8,400 instead of the entire accelerated amount due.

The initial question is whether a mortgagor can credit on installments due amounts owing from the mortgagee-seller arising from breach of a covenant in the real estate contract giving rise to the purchase-money notes, without incurring a default and acceleration of the entire mortgage indebtedness. The plaintiff contended, and the trial court found, that the Goodes were relegated to their legal remedies to file a contract action to recover for the alleged breach and could not set off the amount claimed to be due from the mortgage payment. We do not agree.

There is no default which would permit the mortgagor to accelerate the maturity of the debt when there is a setoff available which is equal to or exceeds the amount of the indebtedness due at the time of default. (Mason v. Griffith (1917), 281 Ill. 246, 256; Smith v. Niemann (1919), 216 Ill.App. 179, 186; see also Hanger v. Gates (1954), 42 Cal. 2d 752, 269 P.2d 609, 610-611.) The rule is based on the reasoning that it would be inequitable to permit one by his own act to cause a partial failure of the consideration for the mortgage without requiring him to credit the amount of such failure upon the indebtedness for the purchase price of the property. Brinton v. Johnson (1922), 35 Idaho 656, 208 P. 1028, 1031; see also State Bank v. Burr (1939), 372 Ill. 114, 117-118; Dunlap v. Peirce (1929), 336 Ill. 78, 184; Northern Trust Co. v. Sanford (1923), 308 Ill. 381, 387; Schmisseur v. Penn (1893), 47 Ill.App. 278, 285.

Here it appears from the allegations in the pleadings that on June 30, 1970, Riis-Borg, Inc., and Stephen T. Goode entered into a real estate contract for 41.5 acres of land and a residence thereon in McHenry County. By the terms of the contract, Stephen Goode agreed to purchase the property for $115,000. Riis-Borg, Inc. received all but $15,000 of the purchase price by the time of closing. The $15,000 balance was to be paid in five annual installments with interest to be secured by a second mortgage in that amount. The seller agreed, inter alia, to “remedy condition which permits water to leak into basement.” It also appeared that the seller owned the land in a land trust with the Exchange National Bank of Chicago under its Trust #22399. The contract provided that the seller could convey to Stephen Goode’s nominee.

At closing, Goode and his wife took title as beneficiaries of Land Trust #24079, in which the Exchange National Bank was retained as trustee. The junior trust deed and installment note expressly provided that it was payable only out of the property specifically described in the trust deed, and that no personal liability could be asserted against the trustee of the land trust or any beneficiaries. The first installment with interest was to be paid on August 1, 1971, about 1 year after closing.

Because of the leaky basement, difficulties ensued after closing but before the first installment became due. Although Riis-Borg, Inc., confirmed its agreement to remedy the defect and made some effort to do so, the basement continued to flood. After attempting to have Riis-Borg make the repairs the Goodes hired an outside plumber who made the repairs for which they paid $1,190.25, which they then credited or setoff on the first installment.

These allegations, assumed to be true for the purpose of determining whether a meritorious defense was stated, were sufficient to allege the defense. The purchaser was entitled to credit the cost of plumbing repairs after efforts were made to secure the seller’s compliance with its obligations under the real estate contract. A tendering of the balance of the installment and interest prevented the default and the acceleration of the entire mortgage indebtedness.

Plaintiff’s suggestion that defendant should have filed a counterclaim for setoff instead of a defense is without merit. The defense, if valid, shows the defendant is not in default and prevents acceleration of the entire mortgage indebtedness. Similarly, plaintiff’s' contention that it is deprived of a jury trial on the contract action is without merit since the contract determination is necessarily incidental to the determination of the right to foreclose.

The judgment of foreclosure must therefore be reversed and the cause remanded with directions to the trial court to vacate the decree of foreclosure and to permit the defendant to proceed with its defense.

We will rule, however, on the other issues raised by the defendant since they may remain material in the event defendant is unable to prove that it was entitled to the credits claimed at the time of the alleged default.

We do not agree with defendant’s purported defense that the legal noteholder under a trust deed is a necessary party to a foreclosure action. While the general rule is that all persons interested in the subject matter of a suit should be made parties thereto, there is an exception in the case of the foreclosure of a mortgage or trust deed when the noteholder is properly represented by the trustee who is made a party. White v. Macqueen (1935), 360 Ill. 236, 243.

The defendant also claims that the failure of the plaintiff to join the Goodes as the land trust beneficiaries in possession of the property which is the subject of the foreclosure suit, provides a further defense to the foreclosure. Under prior law, ordinarily a beneficiary of an Illinois land trust was not a necessary party to a foreclosure. Marshall v. Solomon (1948), 335 Ill.App. 302, 309.

Both parties in this appeal acknowledge that the Illinois Mortgage and Foreclosure Act enacted in 1961 excludes “a beneficiary of a trust in actual possession of the land or some part thereof” from its definition of “non-record claimant.” (Ill. Rev. Stat. 1971, ch. 95, par. 23.1.) Since the Act is designed to dispense with joining certain non-record claimants in foreclosure suits, an implication could possibly be drawn that land trust beneficiaries in possession are entitled to be joined as parties. We think a more persuasive argument, however, is that advanced by the plaintiff who contends that the Act neither confers nor denies joinder to land trust beneficiaries in possession. This position is supported by section 4 of the Act (Ill. Rev. Stat. 1971, ch. 95, par. 23.3), which requires resort to prior law to determine the necessity of joinder of persons other than non-record claimants.

As we have noted, under prior law, ordinarily the beneficiary of the land trust would not be a necessary party. We must then determine whether the fact that the beneficiary is also in possession alters this rule. Ordinarily a tenant in possession is a necessary party to a foreclosure action. (Richardson v. Hadsall (1883), 106 b593-5. 476, 479-480; South Side Bank & Trust Co. v. Sherlock Homes, Inc. (1955), 6 Ill.App.2d 138, 143; Chicago Title & Trust Co. v. Herlin (1939), 299 Ill.App. 429, 440-441.) Where, however, no possessory rights of the tenant are determined or disturbed by a decree of foreclosure the failure to make the tenant a party will not vitiate the action. See Bleck v. Cosgrove (1961), 32 Ill.App. 2d 267, 274; Chicago Title & Trust Co. v. Herlin (1939), 299 Ill.App. 429, 440.

A land trust beneficiary who occupies the land is not in the same position as an ordinary tenant. The tenant who is not made a party is in no way affected by the decree and can remain in possession; whereas, the beneficiary of the land trust who is in possession is bound by the acts of his trustee. We conclude, therefore, that the land trust beneficiary in possession is subject to the same rationale which we have expressed in regard to the legal noteholder under the trust deed. The land trust beneficiary in possession need not be joined as a necessary party to the foreclosure if the trustee can fully protect the beneficiary’s interests. When, however, it appears that the trustee may not be able to protect the beneficiary’s interests, the latter should have the option of intervening in the foreclosure proceeding. See Ill. Rev. Stat. 1971, ch. 110, par. 26.1.

Here the beneficiaries of the land trust are claiming a setoff or credit for a claim arising out of the sale and mortgage transaction and seek to introduce that claim into the foreclosure proceedings. The plaintiff takes the position that the defendant as a land trustee cannot defend on the ground of failure of consideration or claim the off-setting credit because it was not a party to the real estate contract; and that the land trust beneficiaries cannot intervene to raise the same defense because they are not parties to the trust deed or to the note secured by it. By defendant’s view nobody would have standing to raise a valid defense to the foreclosure.

In the circumstances of this case, the trustee is an appropriate party to raise the defense of failure of consideration by Riis-Borg, Inc., and to claim the off-setting credit in order to prevent default. The trustee signed the note in consideration for the realty, and in addition represents the beneficiaries who would be bound by any decree affecting the land and which would conclude their rights in it. Since the trustee can raise the defense, there is no need for the beneficiaries to intervene. Thus the denial of their intervention petition was not error. See White v. Macqueen, 360 Ill. 236, 243; Breed v. Baird (1907), 139 Ill.App. 15, 25-26.

In the event that the defense is not proved and the default is then confirmed by the court, we conclude that the acceleration of the entire balance on the note was properly ordered and relief from the acceleration of the balance due properly denied. Neither the trustee nor the beneficiaries of the land trust are in a position to show timely compliance with section 7 of the Mortgages Act. Ill. Rev. Stat. 1971, ch. 95, par. 57; see Paulauskas v. Rumsas (1971), 1 Ill.App.3d 460, 464; see also Curran v. Houston (1903), 201 Ill. 442, 445.

We, therefore, reverse the judgment below and remand the cause with directions to hear proofs relating to the claimed off-setting credit and to therefore reach a determination as to whether the mortgage is, in fact, in default, in accordance with the views expressed in this opinion.

In this view we do not reach the question of the propriety of the attorneys’ fees which were allowed.

Reversed and remanded with directions.

GUILD and RECHENMACHER, JJ., concur.

      It is not certain from the opinion that the beneficiaries were in possession of the subdivision involved, although there is a reference to the fact that “tenants or parties in possession” (page 304) were made parties as unknown owners.


text:
    Shabon L. Lawyer, Plaintiff and Counterdefendant-Appellant, v. Delmar C. Lawyer, Defendant and Counterplaintiff-Appellee.
    (No. 72-355;
    Second District
    May 29, 1974.

      Wadsworth, Hornsby & Williamson, of Dixon (David R. Williamson, of counsel), for appellant.
    Gunner, Keller & Magdich, of Dixon, for appellee.
   Mr. JUSTICE RECHENMACHER

delivered the opinion of the court:

Plaintiff (wife) appeals from a judgment granting a divorce to defendant-counterplaintiff (husband) awarding to the husband her interest in jointly owned marital real estate, granting to him custody of their minor son, Mark, and denying her any visitation rights for 1 year with respect to Mark, and from the trial court’s denial of a verified petition for a change of venue.

The wife filed a complaint for divorce on January 6, 1972, charging mental cruelty. On January 11 the husband filed his answer and the wife presented for hearing her motion before Judge James E. Bales for temporary alimony, child support, attorney fees, and exclusive possession of the marital home. At that hearing the wife included in her testimony statements concerning the husband’s conduct toward a minor son, Paul, his constant criticism of Paul and herself, his numerous accusations as to her “infidelity” and the effect of that conduct on Paul and herself in making her “nervous and upset”. The husband also testified at that hearing. On the following day Judge Bales filed a memorandum of decision, denying the wife’s motion, and on January 17 entered the order of denial.

After the husband served notice of his motion (to be heard February 16) for leave to file his counterclaim for divorce, wife filed her petition on that day for change of venue, alleging her belief that Judge Bales “is prejudiced” against her. In denying her petition Judge Bales stated in his memorandum of decision: “This court always allows a request for change of venue under the proper circumstances” but that in this case “the court has already heard testimony” and that to grant the petition now “would open the door to shopping’ for a change.” The wife’s petition for a change of venue was not filed until the trial court had heard testimony of the parties on substantial issues such as alimony, child support, custody, and the wife’s allegation of mental cruelty, and after the court by its ruling indicated his attitude with respect to the issues. Under such circumstances the petition for change of venue was not filed at the earliest practicable moment and was properly denied. Hildebrand v. Hildebrand (1968), 41 Ill.2d 87, 90; People v. Speck (1968), 41 Ill.2d 177, 187; Russell v. Russell (1947), 333 Ill.App. 68, 85; Peck v. Rockford Life Insurance Co. (1973), 9 Ill.App.3d 568, 570; People v. Savaiano (1973), 10 Ill.App.3d 666, 668; Miller v. Miller (1968), 94 Ill.App.2d 138, 141; Ill. Rev. Stat. 1971, ch. 146, par. 3.

The wife relies on Miller v. Miller (1963), 43 Ill.App.2d 214, 219. The opinion in that case does not reflect that the trial court had heard testimony on substantial issues. It merely refers to “appearances” in court regarding temporary alimony and child support prior to the filing of the petition for a change of venue. However, the court states that none of the “preliminary matters considered or ruled on by the court had any direct bearing on the substantive issues presented in the complaint.” That is a far cry from the instant case where the trial court heard direct testimony and made rulings on substantive issues.

The wife contends that the court erred in denying her complaint for divorce and in awarding a divorce to her husband. The husbands counterclaim for divorce on the ground of mental cruelty was amended by leave of court to add the charge of adultery, of which charge the trial court found her guilty. In our opinion no useful purpose would be served by reciting the evidence adduced in support of the charge. Suffice it to note that the trial court observed and heard the witnesses and we are unable to say, after a thorough review of the record, that the evidence does not support the court’s determination.

The wife also complains of the trial court’s award to the husband pf her interest in their jointly owned marital real estate. The husband’s counterclaim merely alleged as to that real estate that he was its “equitable owner” and asks that the wife “be barred from all interest in the real estate of the parties”. -

The parties were married in June 1959. The husband adopted his wife’s son, Paul, who was bom in 1957. In October of 1959 their son, Mark, was bom. In October of 1960 as “joint tenants” they entered into a contract for a deed to buy their marital home in Dixon. The husband made all payments on that house, as well as taxes and interest thereon. Upon the husband’s payment of the contract balance, title was conveyed to them as joint tenants by deed dated December 2, 1969 and was so held by them at the time of this proceeding.

The divorce decree awarding the marital real estate to the husband “barred” each party from asserting any claim to alimony. It made no finding of fact relating to the real estate. However, in the memorandum of decision the trial court stated that “it does not appear that the plaintiff [wife] contributed to the purchase of the real estate,” that the husband “financed” all repairs and improvements “as well as the purchase price and payments,” that the husband and Mark reside in the home, and therefore awarded the real estate to the husband. These are the only statements in the court’s memorandum bearing on the award to the husband of the marital real estate.

Those facts are not sufficient for a determination that the husband is the equitable owner of the interest of the wife in the marital home, title to which was taken in joint tenancy, and which was purchased by them in 1960 as joint tenants. The allegation in the husband’s counterclaim that he was the equitable owner was unsupported by any specific allegations of special equities to justify divesting the wife of her interest. To justify the conveyance of one spouse’s interest to the other in property, the special equities or special circumstances -must be specifically alleged in the complaint and established by the evidence. In the absence of such allegations relief cannot be granted. (Cross v. Cross (1954), 2 Ill.2d 104, 109; Persico v. Persico (1951), 409 Ill. 608, 610; Overton v. Overton (1972), 6 Ill.App.3d 1086, 1089-1090.) Even in Gilbert v. Gilbert (1922), 305 Ill. 216, relied on by the husband, there were allegations and proof of fraud by the husband in obtaining the deed. Likewise in Walsh v. Walsh (1939), 372 Ill. 254, and in Bissett v. Bissett (1941), 375 Ill. 551, 555, it was pointed out that specific allegations of fact must be made and proven to warrant relief.

When the husband voluntarily conveys property to his wife or provides therefor by conveyance by joint tenancy, as the husband did here, without fraud or coercion, a gift thereof is presumed notwithstanding the fact that the husband paid for the property with his own funds. (Larocco v. Larocco (1973), 10 Ill.App.3d 366, 368.) That presumption can be overcome only by clear, convincing and unmistakable evidence that no gift was intended. (Baker v. Baker (1952), 412 Ill. 511, 515.) There is nothing in this record- that indicated, either in 1960 when the parties as joint tenants contracted to buy the property, or in 1969 when tide was so conveyed to them, tiiat the wife was other than a dutiful wife. Subsequent acts of misconduct not shown to be in contemplation at the time of purchase or conveyance would not warrant cancellation of die wife’s interest in the marital home. (Baker v. Baker (1952), 412 Ill. at 516; Kratzer v. Kratzer (1971), 130 Ill.App.2d 762, 767.) The cases cited by the husband are therefore inapposite. The trial court erred in awarding to the husband the wife’s interest in the jointly owned marital home and in failing to award to her her one-half interest in that real estate.

Finally, the wife argues that the trial court abused its discretion in awarding custody of their minor son, Mark, to the husband and in restricting her visitation rights. The divorce decree awarded to the wife custody of the other minor son, Paul, and ordered the husband to make reasonable child support payments, but Mark’s custody was awarded to the husband with the denial of the mother’s visitation rights for 1 year. The record in this case and the trial court’s memorandum of decision clearly show that the trial judge gave thorough and careful consideration to the best interests of both children in determining custody and visitation rights. Moreover, both parties and their counsel stipulated prior to the court’s ruling on custody and visitation, that the court’s discussion with Mark, with a school social worker, and with a probation officer would be taken into consideration, along with all of the other evidence, by the court in deciding “the question of the mother’s visits with the boy.” We find nothing in the record to show that there was any abuse of discretion either in the award of Mark’s custody or in denying the wife’s visitation rights for 1 year, at the expiration of which the court would reconsider that subject. Mogged v. Mogged (1972), 5 Ill.App.3d 581, 589.

Therefore we affirm that portion of the judgment which awards the divorce to the husband on his counterclaim, awards Mark’s custody to the husband and restricts the wife’s visitation rights, but we reverse and remand that portion of the judgment which awards the wife’s interest in the marital home to the husband for further proceedings consistent with this opinion.

Affirmed in part, reversed in part, and remanded with directions.

T. MORAN, P. J., and GUILD, J., concur.

       The opinion in Miller (43 Ill.App.2d 214) states that the petition for a change of venue included an allegation that knowledge of the judge’s prejudice did not come to the petitioner until a date subseqeunt to the hearings, but makes no disclosures of any specifics of such knowledge.

       Thus the trial court’s award to the husband of the wife’s interest in the real estate must have been intended to be made not as alimony in gross under section 18 of the Divorce Act (Ill. Rev. Stat. 1971, ch, 40, par. 19) but under section 17 (Ill. Rev. Stat. 1971, ch. 40, par. 18). Section 17 provides, “Whenever a divorce is granted, if it shall appear to the court that either party holds the title to property equitably belonging to the other, the court may compel conveyance thereof to be made to the party entitled to the same, upon such terms as it shall deem equitable.”


author: Mr. JUSTICE SEIDENFELD.

text:
    Budget Rent-a-Car, Plaintiff-Appellee, v. Ruth C. Kirk, Defendant-Appellant.
    (No. 73-386;
    Second District
    May 29, 1974.
    Sullivan & Smith, for appellant.
    No brief for appellee.
   Opinion by

Mr. JUSTICE SEIDENFELD.


author: Mr. JUSTICE STOUDER

text:
    Keith Carlson, Plaintiff-Appellant, v. Donald Hudson, Defendant-Appellee.
    (No. 73-149;
    Third District
    May 20, 1974.

      Louis E. Olivero, of Peru, for appellant.
    Daniel Russell, of Johnson, Martin & Russell, of Princeton, for appellee.
   Mr. JUSTICE STOUDER

delivered the opinion of the court:

This is a negligence action brought by plaintiff, Keith Carlson, in the circuit court of Bureau County. After trial by jury judgment was entered on the verdict in favor of defendant, Donald Hudson.

Plaintiff Carlson was injured in a fall from a tree while cutting a limb with a chain saw. Plaintiff was on a ladder supplied by defendant Hudson. The tree was located on land rented by defendant and the plaintiff was cutting the limb at the defendant’s request Plaintiff’s theory is that defendant breached a duty owed to plaintiff by not warning plaintiff that the ladder which defendant provided had the bottom rung wired, was split and cracked on one side and was nailed together. The circumstances here indicate a possible breach of duty but we cannot say as a matter of law the jury had to find the plaintiffs injury was the result of defendant’s negligence. Implicit in plaintiffs own theory of the case are the questions of whether the defect in the ladder was patent or latent, whether in view of the condition any warning was required, and finally, whether it was the condition of the ladder which caused the plaintiff’s injury.

The main issue on appeal concerns the admissibility of testimony by defendant’s expert, a tree trimmer. Plaintiff’s first argument is that the testimony was inadmissible because ft was based only on conjecture, and not on facts which were in evidence. Such argument is contrary to the record because it shows the defendant’s expert’s testimony was based on his examination of defendant’s exhibits numbers one, two and three and that he identified from these exhibits an incomplete chain saw cut. It cannot therefore be said that defendant’s expert’s testimony was based solely on conjecture.

Plaintiffs next argument is based on the proposition that an expert cannot testify as to an occurrence where there are credible eyewitnesses to that occurrence. As we noted earlier, it is plaintiff’s theory that the cause of his injury was defendant’s failure to warn him of the defective ladder even though in plaintiff’s own testimony the relationship between the ladder and the fall is a matter of inference and not observation. The so-called occurrence witnesses arrived at the scene moments after the incident took place. The plaintiff himself did not see all that happened and his testimony, as well as that of his own expert, indicates that no one actually saw what happened.

The main issue on appeal derives from the proposition that an expert cannot testify as to matters of common knowledge. Plaintiff, relying on Ficht v. Niedert Motor Service, Inc., 34 Ill.App.2d 360, 181 N.E.2d 386, and Siltman v. Reeves, 131 Ill.App.2d 960, 269 N.E.2d 728, states the rule to be that experts are not permitted to express their conclusions in matters of common observation in which the lay mind is capable of forming a correct judgment. Defendant argues that the testimony here was not as to a matter of common knowledge and further argues that even if the subject matter here was a matter of such knowledge, they were matters which were difficult to comprehend and explain.

While we recognize the rule that the testimony of an expert is inappropriate when it relates to matters of common knowledge, we are unable to say that the expert’s testimony falls within that category in the context of this case. Even if such were the case, the trend of decisions is that an expert may testify as to matters of common knowledge where the expert’s testimony would be helpful to the jury. In Stanley v. Board of Education, 9 Ill.App.3d 963, 293 N.E.2d 417, the court held: “We think, therefore, the better rule would give a trial judge a wide area of discretion in permitting expert testimony which would aid the triers of fact in their understanding of the issues even though they might have a general knowledge of the subject matter.” In the Stanley case an 8-year-old boy had been injured while playing in a schoolyard. The issue concerned the question of the safety of tire playground. The trial court aHowed the testimony by a witness with training and experience in playground supervision and game safety. In Miller v. Pillshury Co., 33 Ill.2d 514, 211 N.E.2d 733, the court in affirming the judgment of the court below stated: “Whüe there has been a reluctance to permit expert testimony on many matters on the basis that it invades the province of the jury, confuses the issues and usurps the function of the jury, the trend is to permit expert testimony in matters which are complicated and outside the knowledge or understanding of the average person, and even as to matters of common knowledge and understanding where difficult of comprehension and explanation. The jury still may accept or reject such testimony.”

In the case at bar the testimony of the expert may be considered helpful in determining what was the cause of plaintiffs injury. The subject matter, i.e., the procedure for cutting a limb from a tree, including the use of a ladder in such activity, is of such a nature that an expert’s testimony could be helpful and appropriate in determining whether the cause of the plaintiffs injury was the defective ladder, as claimed by plaintiff, or another cause, as claimed by defendant.

For the foregoing reasons, we find no error in the judgment of the circuit court of Bureau County and the judgment is affirmed.

Judgment affirmed.

SCOTT, P. J., and ALLOY, J., concur.


author: Mr. JUSTICE SIMKINS

text:
    Storybook Homes, Inc., Plaintiff-Appellee, v. Hilding Dale Carlson, Defendant-Appellant.
    (No. 12312;
    Fourth District
    May 27, 1974.

      Robert I. Aider, of Aider Law Offices, of Champaign (Marc Ansel, Senior Law Student, of counsel), for appellant.
    Franklin, Flynn & Palmer, of Champaign (Leonard T. Flynn, of counsel), for appellee.
   Mr. JUSTICE SIMKINS

delivered the opinion of the court:

This appeal is based upon the interpretation of a memorandum of an oral profit sharing agreement between the plaintiff and defendant. A jury entered a verdict in favor of the defendant, but the trial court entered judgment n.o.v. in favor of the plaintiff for $3,884.08. Defendant appeals from that judgment.

On February 24, 1970, plaintiff. Storybook Homes, Inc., filed a complaint against defendant, Hilding Dale Carlson, allegmg that the defendant while employed by the company and while handling the accounting and record-keeping for the company had improperly disbursed to himself $3,884.08 in excess of the amount he should have received under the profit-sharing agreement. At the trial defendant stated that in January of 1968, he had a conversation with the president of the company, a Mr. Ozier, regarding the institution of a profit-sharing plan. Defendant then acknowledged writing a certain longhand memorandum during that particular conversation which read as follows:

“Profit Sharing Proposal
Storybook Homes, Inc. agree to Compensate Dale Carlson and Gerry Barker in the following manner.
1. A Living wage in the amount of $9000.00 shall be paid to each.
2. A Profit Sharing Plan shall be enacted in the following terms. Net Profit of Storybook Homes, Inc. will be computed in accordance with Generally Accepted Accounting Principals and will reflect the profit after deducting the $18,000.00 living wage paid. It will not be affected by Year End Commissions and bonuses paid to M. W. Ozier. The bonus shall be computed in the following manner 0 to $10,000 Net Profit — No Bonus; $10,000 to $20,000 a maximum of 5% shall be paid to both Dale Carlson and Gerry Barker; $20,000 and over a Maximum bonus of 22% shall be paid to each.”

Defendant stated that he thought the memorandum was simply a preliminary sketch to be sent to their attorneys to be later incorporated into a more formalized agreement. He then stated that the method of profit sharing agreed upon and the understanding reached was that the 22-percent figure would apply to the whole net profit figure should the sum of $20,000 be attained. He further testified that after the document was drawn he had copies made of it, sealed it up, placed it in his file cabinet, and kept it under his control until December of 1989. He also stated that on December 31, 1968, he computed the bonus due Barker and himself and in the process used the memorandum as the basis for bis calculations.

M. W. Ozier, president of the plaintiff corporation, testified that in January of 1968, he had a discussion with defendant lasting the entire afternoon concerning the proper formula for a profit-sharing plan. He stated that the agreement reached was that the percentages were applicable only to profits within the particular bracket and that the 22-percent figure was inserted as an incentive and was to be applied only to all net profit over $20,000. He further stated that there was never any discussion that this agreement would be incorporated into a formal written contract because they had always had a very warm and friendly relationship, and it had not been necessary to do anything like that in the past.

On September 13, 1972, the jury returned a verdict in favor of the defendant. On March 7, 1973, the trial court entered judgment n.o.v. in favor of plaintiff in the amount of $3,884.08. In its judgment the trial court specifically found 1) that the memorandum was the integrated agreement of the parties, 2) that the interpretation given to the agreement by the defendant would be an unbusinesslike and unlikely arrangement, and 3) that the rule of the “last antecedent clause” resolves the ambiguity and leaves no question for the jury. We agree.

The trial court finding that the memorandum of the profit sharing agreement was intended by the parties to be a final integrated agreement is clearly not against the manifest weight of the evidence. Whether a contract is integrated is a question of law, and “[i]f it imports on its face to be a complete expression of the whole agreement, — that is, contains such language as imports a complete legal obligation, — it is presumed that the parties introduced into it every material item and term, and parol evidence cannot be admitted to add another term to the agreement * * *." (Armstrong Paint & Varnish Works v. Continental Can Co., 301 Ill. 102, 106, 133 N.E. 711.) Despite the conflicting views in the instant case as to whether an integration was intended, neither party objected to the failure to have a more formal contract drawn nor did either party request that this be done at any time. Quite to the contrary, defendant sealed the memorandum he had prepared in January of 1968, had copies made of it, filed it, and kept it under his control until December of 1969. Defendant further testified that on December 31, 1968, while computing the bonuses due Barker and himself, he again reviewed the memorandum he had filed and used it as the basis for his calculations. Indeed, the testimony of both parties clearly reveals that the memorandum covers absolutely all the elements and details of the profit-sharing agreement and was intended to be the final, integrated agreement of the parties.

Since the memorandum here is the complete expression of the parties’ intent, parol or extrinsic evidence may not be used to alter, contradict or limit the writing in any fashion. However, parol or extrinsic evidence may be used to explain the terms of an ambiguous contract. (Aude v. Jones, 132 Ill.App.2d 133, 268 N.E.2d 555.) Whether an ambiguity exists is a question of law for the court. (Coney v. Rockford Life Insurance Co., 67 Ill.App.2d 395, 214 N.E.2d 1; Gaffney v. Burns Detective Agency International, Inc., 12 Ill.App.3d 476, 299 N.E.2d 540.) The court stated during the trial that there was sufficient ambiguity in defendant’s memorandum to allow parol evidence to explain its meaning. The court also stated in its final order granting a judgment n.o.v. that, “Since the memorandum does not expressly preclude this [defendant’s] interpretation, however, some ambiguity exists * * The trial court is obviously correct in this regard. Parol evidence was, therefore, admissible to explain the meaning of the ambiguity, and a rule of construction was properly applied to construe the somewhat ambiguous contract.

We are then dealing with an integrated contract containing an ambiguity on its face in that the profit sharing agreement can be interpreted in two conflicting ways. The parol evidence admitted, however, was highly contradictory. Plaintiff's president stated that it was intended that the agreement be interpreted one way, while defendant stated that it was intended that it be interpreted another way. It has been held that where an ambiguity exists in a contract and the extrinsic evidence is in conflict, a fact question is presented for determination by the trier of fact. (La Salle National Bank v. Wieboldt Stores, Inc., 60 Ill.App.2d 188, 208 N.E.2d 845.) Defendant thus contends that since the extrinsic evidence here as to the intention of the parties is totally contradictory, there is a question of fact for the jury to decide, and the trial court erred in granting a judgment n.o.v.

We do not think, however, that a per se rule can be adopted that every time there exists an ambiguous contract and contradictory extrinsic evidence is introduced, the case must always go to the jury. As was stated in Pedrick v. Peoria & Eastern R.R. Co., 37 Ill.2d 494, 510, 229 N.E.2d 504, “* * * verdicts ought to be directed and judgments n.o.v. entered only in those cases in which all the evidence, when viewed in its aspect most favorable to the opponent, so overwhelmingly favors movant that no contrary verdict based on that evidence could ever stand.” Such is the case here.

The trial court specifically found in granting judgment n.o.v. that the interpretation given to the agreement by the defendant “would be a most unbusinesslike and unlikely arrangement.” The conclusion that defendant’s interpretation and the parol evidence in support thereof was unreasonable is obviously correct if one considers the great disparities that a few dollars additional net profit would make under defendant’s interpretation, and the exceedingly large percentage of profit consumed by such an interpretation.

The trial court also applied the “last antecedent clause” rule of construction in interpreting the agreement. This grammatical rule of construction states that generally in the construction of all written instruments a qualifying phrase is to be confined to the last antecedent. (Zimmerman v. Willard, 114 Ill. 364, 2 N.E. 70; Hardware Mutual Casualty Co. v. Curry, 21 Ill.App.2d 343, 157 N.E.2d 793; Olsen v. Valley National Bank, 91 Ill.App.2d 365, 234 N.E.2d 547.) Although the origins of this rule are somewhat mysterious, it has been accepted by various courts and is expressly applicable to all written instruments. There is no reason why it should not also be applicable to the present written agreement which was correctly found by the court to be the complete integrated agreement of the parties. Hence, the qualifying phrase “a maximum bonus of twenty-two percent shall be paid to each” should be construed to qualify the last antecedent clause ($20,000 and over) only and should have no application to the other two brackets.

Therefore, when the unreasonableness of defendant’s interpretation is combined with application of the ‘last antecedent clause” rule of construction, the propriety of the entry of judgment n.o.v. is plain, for all the evidence, even when viewed in an aspect most favorable to the plaintiff, so overwhelmingly favors the plaintiff that no contrary verdict based on that evidence could ever stand.

Accordingly, for the reasons stated above the judgment of the trial court is hereby affirmed.

Judgment affirmed.

SMITH, P. J., and TRAPP, J., concur.


author: Mr. JUSTICE CRAVEN

text:
    Cyril T. Newman et al., Plaintiffs-Appellees, v. County Board of School Trustees of Vermilion County, Defendant—(Armstrong-Ellis Consolidated School District No. 61 of Vermilion County, Defendant-Appellant.)
    (No. 12345;
    Fourth District
    May 27, 1974.

      Wright, Young and Wright, of Danville (M. Eugene Wright, of counsel), for appellant.
    Dyer, Richmond, Moore & Nelson, of Hoopeston (Joseph C. Moore, of counsel), for appellees.
   Mr. JUSTICE CRAVEN

delivered the opinion of the court:

The plaintiffs petitioned the County Board of School Trustees of Vermilion County for detachment of a portion of the district in which they reside from Armstrong-Ellis Consolidated School District No. 61 and for ultimate annexation to School District No. 8 (hereinafter referred to as Rankin School District No. 8). After hearing, the County Board of School Trustees denied the petition. Upon administrative review, the circuit court reversed on the basis of the County Board of School Trustees’ decision being contrary to the manifest weight of the evidence. We affirm.

The tract of land which would be detached from the defendant district lies at the north end of the district and adjoins the southern boundary of Rankin School District No. 8. At the time the petition was filed, it had an assessed valuation of $636,370 and contained the residences of 11 students attending the defendant district. Due to overlapping districts, students from the tract attended Armstrong-Ellis Consolidated District No. 61 for elementary and junior high school, and then transferred to Rankin High School District No. 223 for their high school education. The tract had been part of the Ellis district which had joined with the Armstrong district to form Armstrong-Ellis Consolidated District No. 61.

The defendant district operates two school buildings. Grades 1 through 5 are in the Armstrong elementary building, which is 7 to TVz miles from the center of the tract in dispute. Grades 6 through 8 are held in the Ellis Junior High building, which is 4.3 miles from the Armstrong elementary building, although it is only 3Vz to 4 miles from the center of the disputed tract. Under the busing program in effect at the time the petition was filed, the junior high students from the tract covered in the petition were bused to the Armstrong elementary building and then changed buses for transportation to the junior high building. The Rankin elementary building is approximately 6 to 6% miles from the center of the disputed tract. The students living within the tract covered by the petition were being transported from a minimum of 4.4 miles to a maximum of 7.4 miles more each direction than they would have been if they were attending Rankin elementary school.

The educational opportunities offered by the two school districts are similar. The record indicates Rankins seventh and eighth grade boys receive industrial arts training. The Rankin seventh and eighth grade girls receive arts and crafts training. No evidence was presented of similar programs in the defendant district. Class size is larger in the Rankin system. The Rankin School District No. 8 employs a part-time school nurse. Armstrong-EHis Consolidated School District No. 61 has none. The Rankin district operated a kindergarten. When the petition for detachment-annexation was filed, the defendant district did not operate a kindergarten although one was scheduled for the following year.

Rankin School District No. 8 is conditionally recognized by the Superintendent of Public Instruction due to physical plant inadequacies that have been or are being corrected. Armstrong-Ellis Consolidated District No. 61 is fully recognized.

Several witnesses testified at the hearing on the petition that the Rankin elementary and high school district programs were more compatible than those of the defendant district and Rankin High School District No. 223. Under the present system, Rankin High School District No. 223 administrators must test eighth graders who will enter their high school system at both Rankin elementary school and at the defendant district's junior high school. The present structure also operates to preclude students from the tract in question from being elected class officers, student government officers, or athletic and cheerleading captains for ninth grade as the elections are held at Rankin in the spring before actual entry into the ninth grade.

The majority of the residents of the tract in question favored granting the detachment-annexation petition as their social and community ties were in Rankin. AdditionaUy, many residents supported the petition because they could not provide transportation for their children to extracurricular activities in three widely separated school buildings, i.e., Armstrong elementary, Ellis Junior High, and Rankin High School.

The superintendent and school board of the defendant district opposed the granting of the petition because it would have caused a loss of approximately $8000 in revenue to the district. The superintendent and board president testified this loss might require a curtailment of programs in the school with the music program being the most affected. It was also feared a return to split grade classrooms might become necessary if the petition were to be granted.

In denying the petition for detachment-annexation, the County Board of School Trustees of Vermilion County found that detachment would adversely affect educational conditions presently existing in the defendant district; that the proposed detachment would not be in the best interests of the educational welfare of either all of the students at the defendant district or of the pupils residing in the territory sought to be detached; that there had been no showing of substantial benefits to the pupils presently residing in Rankin School District No. 8 in the event annexation would be granted; that the loss of funds caused by detachment would materially damage the ability of defendant district to provide the best educational program to the pupils within that district without a corresponding educational benefit to Rankin School District No. 8, or its pupils; that the educational welfare of all pupils was of greater weight than the shopping, banking, social or school preference of the parents residing in the territory sought to be detached; and that it was in the best interests of the schools of the area and the educational welfare of the pupils in all of the areas involved that the proposed change in boundaries not be granted.

Under the Administrative Review Act (Ill. Rev. Stat. 1973, ch. 110, 264 et seq.), the findings and conclusions of the Board on questions of fact are prima facie true and correct The courts duty is to ascertain if the findings and decision of the administrative agency are against the manifest weight of the evidence. (Peterson v. Board of Trustees, 54 Ill.2d 260, 296 N.E.2d 721.) We must review the decision of the circuit court to reverse the County Board of School Trustees in light of this standard.

Under section 7 — 6 of the School Code (Ill. Rev. Stat. 1973, ch. 122, ¶ 7 — 6), the county board of school trustees is to hold a hearing on the petition for detachment-annexation. The board is to:

“* # * hear evidence as to the school needs and conditions of the territory in the area within and adjacent thereto and as to the ability of the districts affected to meet the standards of recognition as prescribed by the Superintendent of Public Instruction, and shall take into consideration the division of funds and assets which will result from the change of boundaries and shall determine whether it is to the best interests of the schools of the area and the educational welfare of the pupils that such change in boundaries be granted, and in case non-high school territory is contained in the petition the normal high school attendance pattern of the children shall be taken into consideration.”

The Illinois Supreme Court in Oakdale Community Consolidated School District No. 1 v. County Board of School Trustees, 12 Ill.2d 190, 145 N.E.2d 736, interpreted the above statutory language to establish the following test: Detachment-annexation petitions should be granted only where the benefit derived by the annexing and affected areas clearly outweighs the detriment resulting to the losing district and the surrounding community as a whole. The wishes and desires of the residents of the affected area may be considered along with the advantages and detriment to the districts involved, the educational programs of the entire area, and the educational welfare of the pupils involved, although personal preferences may not be the sole criteria. (McNary v. County Board of School Trustees, 64 Ill.App.2d 165, 211 N.E.2d 141; Board of Education v. County Board of School Trustees, 19 IH.App.2d 196, 153 N.E.2d 378.) Where the record shows neither district will be affected in any substantial measure, the determination to grant or deny the petition should be made to turn solely on the welfare of the pupils in the area to be detached. (Bowman v. County Board of School Trustees, 16 Ill.App.3d 1082, 307 N.E.2d 419.) The beneficial effects of attending a school within close proximity to the student’s home were recognized by this court in Richey v. County Board of School Trustees, 13 Ill.App.3d 68, 299 N.E.2d 609. Transportation time and costs, fatigue, and exposure to accidents are minimized. Additionally, a child’s identification with a school in his natural community center will lead to increased participation in school activities by the student and his family. The result is a salutary effect upon the educational welfare of the students and the area.

The only evidence of detriment to the defendant district’s educational programs concerns the loss of $8000 in revenue if the detachment were to be ordered. For this to be a valid basis for denial of a detachment-annexation petition, it must be shown that a serious depletion in the tax resources of the defendant district would occur. (Oakdale; Bowman. ) However, the tax base valuation loss and resulting loss of revenues can in no way affect educational facilities detrimentally unless the maximum legal tax rate is already being levied. If it is not, the loss of assessed valuation alone will not prevent detachment. Board of Education v. Scott, 105 Ill.App.2d 192, 244 N.E.2d 821; Bowman.

Rankin School District No. 8 had an assessed valuation of approximately $6,500,000, and was levying its maximum tax rates for both the educational and building funds. The Armstrong-EHis Consolidated School Distrct No. 61 had an assessed valuation of approximately $8,500,000. It was not levying its maximum educational fund tax rate. Therefore, it can be seen that any possible detriment to the defendant district was not of such nature as to support the denial of the detachment-annexation petition.

Based upon the evidence concerning similarities in the educational programs of the defendant district and the Rankin district, the normal high school attendance pattern of the children residing on the tract in question, the shorter bus rides required for their chffdren to attend the Rankin school system, the increased possibilities for participation in school and extra-curricular activities, and the personal preferences of residents of this tract for the Rankin school system, it is clear that the decisión of the County Board of School Trustees to deny the petition was against the manifest weight of the evidence. The judgment of the circuit court so holding should be, and is, affirmed.

Judgment affirmed.

TRAPP, P. J., and SIMKINS, J., concur.


author: Mr. JUSTICE SIMKINS.

text:
    Henry Geving et al., Plaintiffs-Appellants, v. J. R. Fitzpatrick, Defendant-Appellee.
    (No. 12321;
    May 27, 1974.
    Gillespie, Burke & Gillespie, P. C., of Springfield (Robert E. Gillespie, of counsel), for appellants.
    Edward F. Casey, of Casey & Casey, of Springfield, for appellee.
   Opinion by

Mr. JUSTICE SIMKINS.


author: Mr. PRESIDING JUSTICE SCOTT

text:
    William Manfield, Plaintiff-Appellant, v. The City of Sterling, Defendant-Appellee.
    (No. 73-245;
    Third District
    May 29, 1974.
    Lester S. Weinstine, of Morrison, for appellant.
    L. Vernon Frye, of Sterling, for appellee.
   Mr. PRESIDING JUSTICE SCOTT

delivered the opinion of the court:

William Manfield, plaintiff, brought an action to enjoin the City of Sterling from enforcing a zoning ordinance as to property owned by him as a partner. A temporary injunction was issued without notice against the defendant City of Sterling.

The defendant moved to dismiss the temporary injunction. This motion was denied, however, the defendant city was granted leave to file a cross-complaint for an injunction against the plaintiff for violation of the city zoning ordinance.

A cross-complaint was filed by the defendant city and the cause was heard by the trial court. After the plaintiff had presented his evidence he moved that his petition for an injunction be dismissed with prejudice and this motion was granted. The healing proceeded on the defendant city’s cross-complaint and when the hearing was concluded the trial court ordered that an injunction be issued against the plaintiff, whereby he would be enjoined from continuing to violate the zoning ordinance by maintaining a blacktopped parking area on city property, and that he would further cease and desist from placing a sign on the city-dedicated right-of-way bordering the front of the plaintiff’s property. Pursuant to the court’s order a writ of injunction was issued against the plaintiff.

The plaintiff at all times has acknowledged that he was in violation of the city zoning ordinance; however, it was his contention that the city could not enforce the ordinance by way of injunction against him since the city had acquiesced in like violation by other businesses in the City of Sterling.

While the plaintiffs brief raises several issues it was conceded by both the plaintiff and defendant during oral argument before this court that the sole issue is whether or not the failure of the city to enforce an ordinance against everyone affected by it prevented the defendant city from enforcing it by way of injunction against the plaintiff 'since the city was not coming into court with clean hands.

After examining the record we find that we cannot make a determination of the issue raised since there was no evidence introduced at the trial as to the number, nature or character of other violations of the zoning ordinance and which the city had failed to prosecute. It is true that the plaintiff did attempt to introduce evidence as to other violations of the ordinance but the trial court sustained a defendant’s objection and such evidence was excluded. The plaintiff does not question this ruling of the trial court in his appeal but argues that there are many violations of the ordinance and that the defendant city has ignored them. We have no evidence of such violations before us and a reviewing court must determine the rights of parties solely on the evidence offered or produced at the trial. (See 2 Ill. L. & Pr. Appeal and Error § 644.) It is true that the plaintiff attempted to place such evidence in the record but when he was prevented from doing so by the trial court’s ruling, he failed to take the further, necessary and requisite step, to-wit, “to make an offer of proof” as to what was expected to be proven. If such a procedure had been followed we would then be in a position to address ourself as to whether or not the defendant city has violated the “clean hands” doctrine. The procedure to be followed when evidence is excluded by the trial court in order to preserve it for purposes of appeal clearly requires that an offer of proof be made. (See 2 Ill. L. & Pr. Appeal and Error § 259.) Since such a procedure was not followed by the plaintiff we have nothing before us but his allegations of discrimination against him, all of which are totally unsupported by any evidence or an offer as to what he intended to prove if permitted to do so.

The plaintiff in oral argument requested that we examine his testimony before the trial court when he sought and obtained without notice the issuance of a temporary injunction. We do not deem such testimony as k part of the record in this case since subsequently the plaintiff on his own motion asked that his petition for an injunction be dismissed with prejudice. This motion was granted and the hearing proceeded on the defendant city’s cross-complaint for an injunction. It is only the record made in this hearing with which we can concern ourselves.

In view of the record in this case we have no alternative but to affirm the judgment of the Circuit Court of Whiteside County which directed that an injunction be issued against the plaintiff.

Affirmed.

DIXON and STOUDER, JJ., concur.