Handelman v. Arquilla

• Decision Date: 27 November 1950
• Docket Number: No. 31744,31744
• Citation: 407 Ill. 552,95 N.E.2d 910
• Parties: HANDELMAN et al. v. ARQUILLA.
• Court: Illinois Supreme Court

Page 910

95 N.E.2d 910

407 Ill. 552

HANDELMAN et al. v.ARQUILLA.

No. 31744.

Supreme Court of Illinois.

Nov. 27, 1950.

Rehearing Denied Jan. 15, 1951.

Mayer Goldberg, and Leonard L. Levin, both of Chicago, for appellants.

Herbert C. Paschen, and Francis J. Mahon, both of Chicago, for appellee.

CRAMPTON, Justice.

The plaintiffs, Charles and Ida Handelman, brought this suit against defendantGeorge Arquilla in the superior court of Cook County for specific performance of a contract whereby defendant undertook to purchase from plaintiffs an unimproved tract of real estate.Defendant filed an answer setting forth two defenses, namely, (1) that plaintiffs made default in performance of the contract, whereupon defendant elected to declare it void; and (2) that plaintiffs' agent made certain misrepresentations as to the nature of the land, upon which defendant relied in signing the contract.The cause was referred to a master who, after hearing the evidence, recommended the complaint be dismissed.The chancellor entered a decree approving the report of the master and dismissing the suit for want of equity.Plaintiffs appeal directly to this court, a freehold being involved.

The property in question consists of a 120-acre tract of vacant land lying party within the village of Olympia Fields and wholly within Cook County.No sewage disposal facilities existed in the territory.In the spring of 1948 a real-estate broker, whom plaintiffs had engaged to find a buyer for the property, had several conversations with defendant with reference to a purchase by the latter.Defendant was engaged in the business of constructing houses, and informed the agent that he was interested in buying the property for the purpose of building residences upon it.After considerable negotiation the broker informed defendanthe thought the property could be purchased for $600 per acre.Defendant replied he would be interested in buying it provided he could use septic tanks in erecting the homes.The broker assured him septic tanks could be used.At a further conversation defendant said he had heard there had been trouble in that vicinity about the use of septic tanks, and the broker promised to investigate the matter.After consulting some person connected with the county zoning board, the broker again told defendant septic tanks could be used, whereupon defendant signed a contract and paid $5000 earnest money on the purchase price.

Thereafter tests were conducted on the land to ascertain the seepage rate.Ten test holes were dug on various parts of the property, three of which indicated the soil would be unsuitable for a seepage system, three others showed doubtful results, and four indicated the area would be suitable.It was further found that the soil in the territory was extremely variable, making it necessary to run tests on each individual lot to determine whether the installation could be made.Defendant thereupon notified plaintiffs that he could not proceed with the contract because there was some question as to whether the land could be used for septic tanks.It is not disputed that all negotiations concerning the contract were conducted by defendant with the broker; that plaintiffs had not met or talked with defendant about the matter and had no knowledge of their agent's representation that septic tanks could be used on the property.

Plaintiffs' contentions that defendant failed to prove the defense of fraud by clear and convincing evidence, and that the land was not shown to be unsuitable for use with septic tanks cannot be sustained.Defendant made it clear to the broker that he would enter the contract only if he could build houses with septic tanks.The broker undertook to assure him the land was suitable for such use, and defendant unquestionably relied upon this representation in signing the contract.Where material representations are made to induce another to purchase property, and he does so in reliance upon them, it is immaterial whether the statements are made without knowledge of the truth or with an actual intent to deceive.If they are in fact untrue specific performance will be denied.Wisherd v. Bollinger, 293 Ill. 357, 127 N.E. 657.Further, the evidence concerning the condition of the land amply warranted the finding that it was unsuitable for using a subsurface seepage system of sewage disposal.Of the ten test holes made, less than half showed the particular area to be sufficient in seepage rate.The tests were made by qualified engineers, and the conclusions were based upon one inch per hour as the minimum seepage requirement.We cannot say that the findings of fact are against the weight of the evidence, and they will not, therefore be disturbed.

Plaintiffs next argue that the representations were not statements of fact but were merely expressions of opinion 'to the effect' that county authorities would approve the use of septic tank systems upon the land in question; that as such opinions relate only to future action by administrative officials they do not constitute representations of existing facts upon which defendant was entitled to rely.In further support of this position plaintiffs assert that the record contains no proof of the requirements of the State Department of Public Health, or of any application by defendant for a building permit including the use of a septic tank system.In answer to this argument it is sufficient to point out that the representations contained no mention of any administrative body or its requirements.The statements were that defendant'could use septic tanks.'They obviously related to the nature of the soil and the use to which the land was adaptable, and constituted representations of fact, not mere opinions as to future events or matters of administrative action.

Plaintiffs further claim they are not bound by the misrepresentations of their agent.We think this position is likewise without merit.Defendant requested assurance that septic tanks could be used.The agent's statement that they could be used related to a matter inherently connected with the condition of the property and was made in the course of the general business expressly or impliedly entrusted to him by the plaintiffs.The representations were made within the general scope of his authority to obtain a buyer, and if they were not in accord with the truth it is only just that any loss occasioned thereby should be borne by those who selected and commissioned him rather than by the purchaser who was misled by the false statements.

In Keating v. Frint, 291 Ill. 423, 126 N.E. 136, 138, the defendant, who owned certain land in Boone County, entered into a contract with plaintiff to exchange it for plaintiff's tract of land situated in Canada.Neither had seen the Canadian property, but prior to execution of the contract plaintiff referred defendant to a third party for information concerning it.The third party misrepresented the character of the Canadian land, as a result of which defendant was induced to sign the contract.A bill brought by the plaintiff for specific performance was dismissed in the trial court.Upon review this court affirmed the decree, pointing out that the question is not whether the seller is liable in damages for the false statements of the third party, but rather whether the buyer is to be bound by them.The opinion further observes: 'The principles which govern in a suit for specific performance are different from those in an action on the case for deceit.'Specific performance cannot be demanded as a matter of right, but rests in the sound discretion of the court, to be determined from all the facts and circumstances of the particular case.If the...