Prodromos v. Poulos

• Court: Appellate Court of Illinois
• Writing for the Court: RAKOWSKI
• Citation: Prodromos v. Poulos, 202 Ill.App.3d 1024, 560 N.E.2d 942, 148 Ill.Dec. 345 (Ill. App. 1974)
• Decision Date: 01 October 1974
• Parties: , 148 Ill.Dec. 345 John PRODROMOS, Plaintiff-Appellant, v. Jerry POULOS and First National Bank of Skokie, as Trustee, u/t/a Dated

Page 942

560 N.E.2d 942

202 Ill.App.3d 1024, 148 Ill.Dec. 345

John PRODROMOS, Plaintiff-Appellant, v. Jerry POULOS and First National Bank of Skokie, as Trustee u/t/a Dated October 1, 1974, a/k/a Trust No 50102T, Defendants (Jerry Poulos Defendant-Appellee).

No. 1-89-0977.

Appellate Court of Illinois First District, Sixth Division.

Aug. 31, 1990.

Rehearing Denied Oct. 9, 1990.

[202 Ill.App.3d 1025] [148 Ill.Dec. 347] Ronald Gertzman, Chicago, for plaintiff-appellant.

William T. Regas and Leslie P. Poole, Park Ridge (William T. Regas and Mark B. Friedman, of counsel), for defendant-appellee.

Justice RAKOWSKI delivered the opinion of the court:

Plaintiff John Prodromos brought an action for specific performance of a real estate sales contract and damages against First National Bank of Skokie, as Trustee, u/t/a dated October 1, 1974, a/k/a Trust No. 50102T (Trustee Bank) and Jerry Poulos, the sole beneficiary of the Trust. The first amended complaint requested relief on three alternate theories: (1) specific performance of the contract by the Trustee Bank; (2) specific performance by defendant Poulos; or (3) damages against Poulos for unjust enrichment. Defendants moved pursuant to section 2-619(a)(7) and 2-619(a)(9) of the Code of Civil Procedure (Ill. Rev.Stat.1987, ch. 110, pars. 2-619(a)(7), (a)(9)) to dismiss counts I and II on the grounds that Poulos did not have written authority to act as an agent of the Trustee Bank, that the Trustee Bank neither executed the contract nor ratified Poulos' action, and that because Poulos signed the contract in a representative capacity he cannot be bound personally. The defendants moved to dismiss the third count on the grounds that the existence of an express contract precluded relief on a theory of unjust enrichment. The trial court granted the motion and dismissed all three counts with prejudice.

The issues presented on appeal are: (1) whether the action of the trustee in issuing three documents necessary to complete a real estate sales contract constitutes ratification of that contract even if the documents do not specifically refer to the contract (2) whether the trust beneficiary who signed a contract as agent of the trustee but who was without authorization to do so can be personally compelled to perform; and (3) whether the complaint stated a cause of action in quasi contract. We affirm.

The parties agree on the following facts. In 1987, John Prodromos and Jerry Poulos owned adjoining parcels of real estate located in unincorporated Cook County, Illinois, outside of the Village of Glenview and the City of Prospect Heights. Legal title to the Poulos land was held by the Trustee Bank as trustee and Poulos was the sole beneficiary of the Trust.

Under the terms of the trust, Poulos had power to direct the Trustee Bank to dispose of the property in various ways. However, Poulos could not act for the Trustee Bank:

"No beneficiary hereunder shall have any authority to contract for or in the name of the trustee or to bind the trustee personally."

In 1987, Glenview sought to annex both properties. Prodromos asked Poulos to join with him in resisting the Glenview annexation in order to negotiate better terms or in annexing with Prospect Heights. Prodromos agreed to bear all expenses of these dealings which would enhance the value of both properties. In August 1987, Prodromos and Poulos agreed that, if Prodromos was successful in negotiating a favorable annexation, Poulos would agree to sell his property to Prodromos. Poulos would sell at a mutually agreed on price, and this agreement would be based in part on the annexation terms which Prodromos secured to enhance the value of the property.

After months of negotiations, Prodromos and Glenview reached a favorable annexation agreement enhancing the value of both properties. On January 5, 1988, Prodromos and Poulos met to complete the annexation agreement and to complete the documentation for the sale of Poulos' property to Prodromos.

In paragraph No. 2, the sales contract states:

"First National Bank of Skokie, as Trustee under Trust 50102T under agreement dated October 1, 1974 by: Jerry Poulos (Seller) agrees to sell the real estate and the property described above, if any, at the price and terms set forth herein, and to convey or cause to be conveyed to Purchaser or nominee title thereto by a recordable trustee's deed, * * *."

Poulos signed the first page of the contract "Jerry Poulos, as agent for First National Bank of Skokie, T/U/T 50102T dated October 1, 1974." The rider introduced both parties at the top, describing Poulos as an "agent" for the Trustee Bank. Poulos signed the rider twice as "Seller: Jerry Poulos."

Subsequently, Poulos caused the Trustee Bank to issue: (1) a trustee's deed conveying the property to the Bank of Ravenswood as trustee for Trust No. 25-9017; (b) an ALTA statement; and (c) a proceeds letter addressed to the Bank of Ravenswood and designating Poulos and the Trustee Bank to be the recipients of monies and proceeds from the real estate transaction. However, these papers were not delivered to Prodromos.

Ill.Rev.Stat.1989, ch. 110, par. 2-619 provides that:

"(a) Defendant may, within the time for pleading, file a motion for dismissal of the action or for other appropriate relief upon any of the following grounds. If the grounds do not appear on the face of the pleading attacked the motion shall be supported by affidavit:

* * * * * *

(7) That the claim asserted is unenforceable under the provisions of the Statute of Frauds.

* * * * * *

(9) That the claim asserted against defendant is barred by other affirmative matter avoiding the legal effect of or defeating the claim."

The non-moving party may then present affidavits or other affirmative matter to counter the affirmative defenses.

When deciding to grant a motion to dismiss based solely on the plaintiff's pleadings, the trial court must: "[t]ake all well pled allegations of fact contained in the complaint, and any attached exhibits incorporated into the complaint, as true and construe all reasonable inferences therefrom in the plaintiff's favor." (Paine/Wetzel Associates, Inc. v. Gitles (1988), 174 Ill.App.3d 389, 391, 123 Ill.Dec. 813, 528 N.E.2d 358.) If the only issue before the court is whether the complaint states a cause of action, then the court must "sustain the complaint unless it clearly appears that no set of facts could be proved under the pleadings which would entitle the plaintiff to some type of relief." Paine/Wetzel, 174 Ill.App.3d at 393, 123 Ill.Dec. 813, 528 N.E.2d 358.

In a motion brought under Ill.Rev.Stat.1989, ch. 110, par. 2-619, the court must also consider whether the defendant has brought forth facts which constitute an affirmative defense that could defeat the plaintiff's cause of action.

I.

Prodromos asserts that the actions of the Trustee Bank in issuing three documents needed to execute a real estate sale contract constitute ratification of that contract even though none of the documents refer to the contract specifically.

The Illinois Statute of Frauds, Ill.Rev.Stat.1989, ch. 59, par. 2, provides that:

"No action shall be brought to charge any person upon any contract or the sale of lands, * * * unless such contract or some memorandum or note thereof shall be in writing, and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorized in writing, signed by such party."

Under the Statute of Frauds, a person cannot enforce a real estate contract unless: (1) there is a written memorandum or note on one or more documents; (2) the documents collectively contain a description of the property and the terms of sale, including price and manner of payment; and (3) the memorandum or note contains the signature of the party to be charged. Shugan v. Colonial View Manor (1982), 107 Ill.App.3d 458, 464-65, 63 Ill.Dec. 82, 437 N.E.2d 731.

In this case, neither party disputes the existence of a written document with the property description and terms of sale and signature of defendant Poulos as "agent" for the Trustee Bank. In his defense, Poulos disputes only whether the contract was subsequently ratified by the party to be charged, that is by the Trustee Bank.

In a contract for the sale of land, an agent may sign the contract only if the authority to do so is in writing. (Cosmopolitan National Bank of Chicago v. Kobialka (1980), 85 Ill.App.3d 1, 3, 40 Ill.Dec. 449, 406 N.E.2d 150, citing Lipkin v. Koren (1946), 392 Ill. 400, 64 N.E.2d 890 and Leach v. Hazel (1947), 398 Ill. 33, 74 N.E.2d 797.) If the agent's signature is unauthorized, however, the principal can ratify the agent's action after the fact by acceding to the action in writing. (Kobialka, 85 Ill.App.3d at 4, 40 Ill.Dec. 449, 406 N.E.2d 150.) When he ratifies, the principal makes the agent's act obligatory upon himself and thus confirms what was originally an unauthorized act. Wings v. Lederer (1966), 77 Ill.App.2d 413, 418, 222 N.E.2d 535.

"The general rule is that the act of ratification must be of the same nature as that which would be required for conferring the authority in the first instance." (Kobialka, 85 Ill.App.3d at 4, 40 Ill.Dec. 449, 406 N.E.2d 150, quoting Bruns v. Huseman (1914), 266 Ill. 212, 215-16, 107 N.E. 462.) At the least, the document ratifying an action, must show that the principal fully understood that ratification included the contract at issue. (Bruns, 266 Ill. at 215-16, 107 N.E. 462.) Furthermore, when several writings are used to satisfy the Statute of Frauds in support of a contract, each writing "must refer expressly to the other writing, or the several writings must be so connected, either physically or otherwise, as to show by internal evidence that they relate to the same contract." Mid-Town Petroleum, Inc. v. Dine (1979), 72 Ill.App.3d 296, 304, 28 Ill.Dec. 261, 390 N.E.2d 428. On appeal, Prodromos concedes that Poulos was not an authorized...