Feldman v. Oman Associates, Inc.

• Decision Date: 07 June 1974
• Docket Number: No. 56919,56919
• Citation: 314 N.E.2d 338,20 Ill.App.3d 436
• Parties: Jacob FELDMAN and Doris Feldman, Plaintiffs-Appellants, v. OMAN ASSOCIATES, INC., et al., Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 338

314 N.E.2d 338

20 Ill.App.3d 436

Jacob FELDMAN and Doris Feldman, Plaintiffs-Appellants, v. OMAN ASSOCIATES, INC., et al., Defendants-Appellees.

No. 56919.

Appellate Court of Illinois, First District, Fifth Division.

June 7, 1974.

Jerome Feldman, Chicago, for plaintiffs-appellants.

Gaines, Boyer & Shepp, Chicago, for defendants-appellees; Eugene L. Shepp, Chicago, of counsel.

LORENZ, Justice:

Plaintiffs appeal from a judgment entered in favor of defendants. In their complaint plaintiffs sought to recover $3,750 deposited as earnest money under an agreement to purchase real estate. They contend that the trial court erred: (1) by failing to declare the contract a nullity; (2) by considering the contract a binding agreement; (3) by permitting letters from plaintiffs' and defendants' counsel to modify the real estate agreement; and (4) by failing to construe the agreement most strongly against its authors, the defendants.

The following evidence pertinent to this appeal was adduced. On August 11, 1970, plaintiffs signed an 'Offer to Purchase Real Estate' for a home located at 9326 N. Kildare Ave., Skokie, Illinois, and deposited $3,750 as earnest money with defendant Oman Associates, Inc., a broker for the transaction. This money was then deposited in an escrow account with defendant Eugene Matanky and Associates. Defendant sellers Morris and Evelyn Levin, accepted the offer on August 12, 1970.

Paragraph (4) of the offer provided:

'4. This offer is contingent upon Purchaser securing within 20 days of acceptance hereof by owner of said property a mortgage loan commitment for $27,500.00 with interest at not more than 7.9% Per annum to be amortized over 25 years and loan costs not to exceed 2 1/2% Plus appraisal and credit report fee, if any. If Purchaser does not obtain such commitment, Purchaser shall notify Seller in writing within said number of days. If Seller is not notified it shall be conclusively presumed that purchaser has secured such commitment or will purchase said property without mortgage financing. If Seller is so notified, Seller and broker may, within an equal number of additional days, secure a mortgage commitment for Purchaser upon the same terms. In such event Purchaser shall furnish to broker all requested credit information and sign customary papers relating to the application and securing of such commitment. If Purchaser notifies Seller as above provided, and neither Purchaser, Seller, nor broker secure such commitment as above provided, this agreement shall be null and void and all earnest money shall be returned to the Purchaser and Seller shall not be liable for any sales commission.'

Paragraph (3) required sellers to show purchasers marketable title at least five days prior to closing. No closing date was set out in the agreement.

On September 5, 1970, following an application for mortgage financing previously made with Cook County Federal Savings and Loan Association, plaintiffs executed a promissory note and mortgage to the Association. Five days later, the Chicago Title and Trust Company issued its commitment for title insurance. On September 20, 1970, plaintiffs notified Oman Associates, Inc. that their application had been 'refused' two days earlier and that, therefore, they were giving defendants this notice pursuant to the August 12, 1970 agreement. The Levins replied that plaintiffs' notification had not been timely, that they now presumed the contract was going forward and that the proper documents would be tendered within the next few days. After receiving this reply, plaintiffs notified defendants that plaintiffs viewed the contract as null and void due to their inability to obtain financing and therefore demanded the return of the earnest money. Plaintiffs filed suit when defendants failed to return the earnest money. The trial court entered an order denying recovery from which order plaintiffs appeal.

OPINION

Plaintiffs contend that the contract is unfair in that it was never the parties intent that the sale be completed other than by financing. The contract provides, in pertinent part, that the purchasers' offer is contingent upon their ability to secure a loan within 20 days of sellers' acceptance and that the purchasers' failure to give sellers timely notice raises a conclusive presumption that a loan had been secured or that the purchase would be for cash.

Here, the purchasers did not give notice of their inability to obtain financing until September 20, 1970, thirty-nine days after the contract had been accepted and, under the precise language of the contract, nineteen days after the...