Frank Rosenberg, Inc. v. Carson Pirie Scott & Co.

• Decision Date: 27 September 1963
• Docket Number: No. 37684,37684
• Citation: 28 Ill.2d 573,192 N.E.2d 823
• Parties: FRANK ROSENBERG, INC. et al., Appellants, v. CARSON PIRIE SCOTT & CO. et al., Appellees.
• Court: Illinois Supreme Court

Page 823

192 N.E.2d 823

28 Ill.2d 573

FRANK ROSENBERG, INC. et al., Appellants, v.CARSON PIRIE SCOTT & CO. et al., Appellees.

No. 37684.

Supreme Court of Illinois.

Sept. 27, 1963.

Sidney D. Davidson and John F. Sloan, Peoria, for appellant.

Harold H. Kuhfuss, Pekin, for appellees Kerasotes.

Richard H. Radley and Davis, Morgan & Witherell, Peoria, and William B. Garrett, Chicago, for appelleesCarson Pirie Scott & Co., John T. Connord and Joseph S. Ehrman.

Edwin V. Champion and Arthur B. Copeland, Peoria, for appelleeMcGrath Sand and Gravel Co.

SCHAEFER, Justice.

In this action the plaintiffs seek specific performance of separate agreements concerning the sale of two tracts of land, or alternatively, damages for breach of the agreements.The circuit court of Tazewell County entered a decree allowing motions for summary judgment for the defendants and the plaintiffs have appealed directly to this court.A freehold is involved.

The two parcels of land are adjacent, and both have been acquired by Carson Pirie Scott & Co. for the construction of a shopping center.While there is much in the arguments of the parties that is common to both tracts, there are significant differences both in the operative facts and in the applicable legal doctrines.We shall therefore discuss each tract separately.

The McGrath Parcel

In the causes of action relating to this parcel the plaintiffs are Bernard J. Rosenberg and two corporations of which he was president, Frank Rosenberg, Inc., and Lakeview Cemetery Association.The defendants are McGrath Sand and Gravel Co. and Carson Pirie Scott & Co., both corporations, and two individuals, John T. Connors, Jr. and Joseph S. Ehrman, Jr.

The following undisputed facts appear from the pleadings and the affidavits in support of and in opposition to the motions for summary judgment.On March 16, 1942, Lakeview Cemetery Association, (Lakeview), and McGrath Sand and Gravel Company, (McGrath), entered into a contract for the exchange of two tracts of land.The contract provided that in excavating sand and gravel McGrath would leave such lateral support that Lakeview's land would not be damaged.It also granted McGrath an option to purchase from Lakeview a third tract, known as lots 12 and 13, and it provided that in the event McGrath should exercise the option it would not sell the property so acquired to any person or persons for cemetery purposes and that if it sold the land, the deed of conveyance would carry a restriction against a sale by the grantee for cemetery purposes.The contract further contained the provision upon which the plaintiffs base their present claims, that Lakeview 'shall have the first refusal in case of sale of any property in this paragraph described.'The contract was recorded on March 17, 1942.On June 29, 1945, McGrath exercised its option to purchase lots 12 and 13 from Lakeview.

McGrath sold certain of the land described in the contract to Veterans Memorial Cemetery Association, and Lakeview, Frank Rosenberg, Inc. and Bernard J. Rosenberg brought an action against McGrath to recover damages for this breach of the contract.The case was settled in November of 1959.McGrath paid $4000 and Frank Rosenberg, Inc., and Lakeview executed a release, the terms of which will be described.

On December 16, 1960, Lakeview assigned all its rights under the McGrath contract to Frank Rosenberg, Inc., and on May 1, 1961, Lakeview was dissolved.On March 24, 1961, McGrath conveyed lots 12 and 13 to John T. Connors, Jr., without first offering to sell the property to Lakeview or Frank Rosenberg, Inc.On April 20, 1961, Connors conveyed the property to Joseph S. Ehrman, Jr., who holds title for Carson Pirie Scott & Co.(Carsons).

The complaint in the present case was filed on November 3, 1961.It asserted that the plaintiffs desired to exercise the right of first refusal granted by the contract, and were ready, willing and able to do so.It prayed 'that a decree of specific performance be entered against defendants or such of them as are found to hold legal and beneficial interests in said property' and, in the alternative, it sought damages for breach of contract in the amount of $200,000 in favor of each of the three plaintiffs.

The arguments based upon the undisputed facts have taken a wide range.The defendants assert that the plaintiffs' rights are barred by the release, that the first refusal provision of the contract violates the rule against perpetuities, and that it is also invalid as an unreasonable restraint upon alienation.The plaintiffs assert the validity of the right of first refusal and its enforceability, and they contend that the release given to McGrath did not extend to subsequent breaches of the contract relating to the right of first refusal.

As we viewthe case it is necessary to consider only one of the issues thus tendered by the parties.We are of the opinion that the release which was executed by both Lakeview and Frank Rosenberg, Inc., had the effect of eliminating the first refusal provision of the contract.The first paragraph of the release acknowledged the receipt of $4,000 and in general terms recited that in consideration therefor Lakeview Cemetery Association and Frank Rosenberg, Inc., released and discharged McGrath from any action, claim or demand, accrued or to accrue.The second paragraph released and discharged McGrath from any claims asserted in the then pending action which was identified by title and number.The release continued:

'Also of and from any and all claims which have, in the past, arisen or may, in the future, arise or, in any way, grow out of any alleged breach or breaches by McGRATH SAND AND GRAVEL COMPANY, a Corporation, of a certain contract entered into between McGRATH SAND AND GRAVEL COMPANY, a Corporation, and LAKEVIEW CEMETERY ASSOCIATION, a Corporation, * * * by the terms of which contract, among other provisions thereof, the last mentioned parties thereto agreed to and later, in pursuance thereto, exchanged certain real-estate therein described and which contract was recorded.

'It is expressly understood, however, that the only two provisions of said contract referred to and described in the last preceding paragraph of this Release excepted from this Release are:

'First The provisions therein, that McGRATH SAND AND GRAVEL COMPANY, a Corporation, * * * would not sell or convey any part of said lands in the contract mentioned, other than to LAKEVIEW CEMETERY ASSOCIATION, a Corporation, for cemetery purposes and that if any sale of said lands by McGRATH SAND AND GRAVEL COMPANY, a Corporation, is made, such Deed of conveyance would carry with it a restriction of the use of said property for cemetery purposes.The Release is intended to and does, by its terms, release McGRATH SAND AND GRAVEL COMPANY, a Corporation, from any and all claims for damages arising from any alleged breach or breaches caused by the conveyance by it of said lands described in said paragraph prior to the date of this Release.However, said restriction, last mentioned above in said contract referred to, shall continue and be in effect, as to any conveyance of land in said contract described by McGRATH SAND AND GRAVEL COMPANY, a Corporation, which occurs subsequent to the date of this Release; and

'Second The provision in said Contract last mentioned, which provides that McGRATH SAND AND GRAVEL COMPANY, a Corporation, in pursuing its graveling operation of the premises acquired by it under said contract, shall mine or take from said ground only as close to the premises of the LAKEVIEW CEMETERY ASSOCIATION, a Corporation, as will leave sufficient lateral support for the land of LAKEVIEW CEMETERY ASSOCIATION, a Corporation, in order that said land of LAKEVIEW CEMETERY ASSOCIATION, a Corporation, shall not be damaged by reason of any such excavation and as to this latter provision in said contract referred to, the undersigned, LAKEVIEW CEMETERY ASSOCIATION, a Corporation, and FRANK ROSENBERG, INC., a Corporation, hearby release any claim for damages for any alleged breach, resulting from any act or thing done by McGRATH SAND AND GRAVEL COMPANY, a Corporation, prior to the date of this Release.However, said provision in said contract referred to as to lateral support shall continue and be in effect as to any excavations referred to in said contract by McGRATH SAND AND GRAVEL COMPANY, a Corporation, which are made subsequent to the date of this Release.'

In our opinion the effect of the quoted language of the release was to discharge McGrath from all obligations under the contract between Lakeview and McGrath except the two provisions of the contract that were specifically excluded from the operation of the release.

The plaintiffs contend that the language of the release does not express an intent to eliminate the right of first refusal.They ask, 'If the release in this case had been intended to release the right of first refusal why did it not simply say: 'The undersigned hereby release their right of first refusal contained in the contract dated March 14, (sic)1942." Certainly the language thus suggested would have eliminated the right of first refusal, but that language is not the exclusive formula by which that result could be accomplished.The language actually used was equally effective.It specifically released and discharged all claims, past or future, arising out of the contract, with the exception of the two provisions expressly excluded from the operation of the release.

The effect of the language used in the release is not diluted by the affidavit of the attorney who represented the plaintiffs in their action against McGrath.Accepted at its full face value, that affidavit submitted by the plaintiffs in opposition to the motion for summary judgment, stated no more than that the matter of Lakeview's right of first refusal was not mentioned in the settlement negotiations.We do not agree with the plaintiffs'...