Smith v. Goldstick

Decision Date05 November 1982
Docket NumberNo. 82-587,82-587
Citation442 N.E.2d 551,110 Ill.App.3d 431,66 Ill.Dec. 125
CourtUnited States Appellate Court of Illinois
Parties, 66 Ill.Dec. 125 Joseph W. SMITH, Plaintiff-Appellee, and Robert E. Gordon & Associates, P.C., Robert E. Gordon, Gilbert W. Gordon, Robert Hirsch and Spencer Schwartz, Intervening Plaintiffs-Appellees, v. Phillip G. GOLDSTICK, Defendant-Appellant.

Friedman & Koven, Stewart M. Weltman, Chicago, for defendant-appellant.

Gordon & Gordon, Ltd., Chicago, for intervening plaintiffs-appellees; Gilbert W. Gordon, Chicago, of counsel.

Butler, Rubin, Newcomer & Saltarelli, Chicago, for plaintiff-appellee; Ronald Butler and Barbara J. Putta, Chicago, of counsel.

SULLIVAN, Presiding Justice:

In an action for an accounting and injunctive relief upon dissolution of a law partnership, defendant appeals from a series of orders approving the sublease of the partnership leasehold to intervening plaintiffs and directing defendant to execute the agreement and vacate the premises. He contends that (1) the trial court improperly ordered a sublease to a third party which was (a) unnecessary to conserve the partnership assets when defendant, as a continuing partner, offered to sublease and (b) less profitable to the partnership than his offer; and (2) the orders were procedurally improper and constituted an abuse of discretion.

Plaintiff's verified complaint, seeking an accounting, alleged that the parties' oral partnership agreement was dissolved on November 1, 1979, and that defendant had not properly wound up the partnership affairs. Defendant's verified answer, which admitted the dissolution of the partnership but denied any wrongdoing, included an affirmative defense asking dismissal for want of equity because plaintiff was without clean hands in that he had frustrated defendant's attempt to wind up partnership affairs. Thereafter, plaintiff filed a verified amended complaint containing more detailed allegations and adding a count seeking damages for breach of contract. No answer to the amended complaint appears in the record.

Among the partnership assets was a lease of office space at 180 North LaSalle Street, Chicago, from August 1, 1976 to November 30, 1986, with an option for an additional five years. Upon dissolution of the partnership, defendant continued to occupy the leasehold premises, subleasing portions thereof to other attorneys and to a corporation partially owned by him. Pursuant to plaintiff's motion, a realtor was appointed to offer the leasehold for sale when the parties failed to reach a mutually satisfactory agreement on its disposition. The only offer received was for $16.50 per square foot from Robert E. Gordon & Associates, and on February 11, 1982, after the trial court found defendant's oral offer (made that day) to sublease for $15.00 per square foot was not acceptable to plaintiff, it ordered acceptance of Gordon's offer subject to negotiation, drafting, and court approval of appropriate documents and terms, and further directed the court-appointed realtor to negotiate with the owners of the building for approval of the sublease. The order also contained an express finding that there was no just reason to delay enforcement or appeal.

On March 4, 1982, intervening plaintiffs were granted leave to enter the action, and the realtor was directed to notify all current tenants to vacate the premises by April 30. Thereafter, defendant's motion for a stay without bond was denied, and an appeal bond of $415,361.91 was set. Finally, on March 24, pursuant to intervening-plaintiff's motion, the trial court approved the sublease agreement and ordered plaintiff and defendant to execute it and vacate the premises. This appeal from the February 11, March 4, and March 24 orders followed.


Because defendant failed to post the bond required by the trial court 1 or seek a stay in this court, a question is raised as to whether this appeal is moot. The failure to obtain a stay pending appeal, of itself, does not make an issue moot (Schaumburg State Bank v. Seyffert (1979), 71 Ill.App.3d 630, 28 Ill.Dec. 221, 390 N.E.2d 388), but when supervening events make it impossible for a reviewing court to grant relief to any party (Panduit Corp. v. All States Plastic Manufacturing Co. (1980), 84 Ill.App.3d 1144, 40 Ill.Dec. 224, 405 N.E.2d 1316), the case is moot because "an appellate finding * * * on the issue * * * cannot * * * have any practical legal effect on the controversy * * * " (Betts v. Ray (1982), 104 Ill.App.3d 168, 171, 60 Ill.Dec. 323, 326, 432 N.E.2d 1222, 1225).

In the instant case, defendant's request that the orders be vacated would divest intervening plaintiffs of their interest in the leasehold, and whether such relief may be granted depends on the status of intervening plaintiffs in this action on February 11 and on the finality of the trial court's order of that date. If they were parties when the order became final, the relief requested may be granted, since " 'a party to a suit * * * cannot acquire any rights or interests based on [an] erroneous decree that will not be abrogated by a subsequent reversal thereof.' " (Schaumburg State Bank v. Seyffert (1979), 71 Ill.App.3d 630, 636, 28 Ill.Dec. 221, 225, 390 N.E.2d 388, 392, quoting First Nat'l Bank of Jonesboro v. Road Dist. No. 8 (1945), 389 Ill. 156, 161-62, 58 N.E.2d 884, 887.) However, if intervening plaintiffs were not parties when the order became final, then the relief requested may not be granted, since Supreme Court Rule 305(i) (Ill.Rev.Stat.1979, ch. 110A, par. 305(i)) provides that in the absence of a stay within 30 days of entry of judgment, persons who are not a party to the action and acquire a right, title or interest in property after the judgment becomes final are not affected by subsequent reversal or modification thereof.

In their initial brief, intervening plaintiffs conceded that they had waived the protection of Rule 305(i) by their intervention. However, they suggested at argument and in their supplemental brief that, should we find that the February 11 order was final, they are protected by Rule 305(i) since their petition to intervene was not granted until March 4. Defendant contends that the February 11 order did not become final until 30 days after entry thereof, and since intervening plaintiffs were parties at that time, Rule 305(i) is inapplicable. In the light of our decision set forth below, that the February 11 order was not final, we find that intervening plaintiffs were parties to this action at the time they acquired their interest in the leasehold premises and therefore, as the relief requested by defendant could be granted, the issue is not moot.

However, intervening plaintiffs' motion to dismiss on the ground that the orders are not appealable was taken with the case, and we will address the question of our jurisdiction before reaching the merits of the action.

Defendant advances several statutory bases for jurisdiction, initially contending that the orders are appealable under paragraph 405 of chapter 110 of Ill.Rev.Stat. (Ill.Rev.Stat.1979, ch. 110, par. 405), which provides in part that "[a]ppeal shall lie from any order which either authorizes or denies the making of a deed, mortgage, lease or other conveyance of real estate."

Supreme Court Rule 1 provides that "rules on appeals supersede statutory provisions inconsistent with the rules and govern all appeals." (Ill.Rev.Stat.1979, ch. 110A, par. 1.) Thus, an appeal must comply with the Supreme Court Rules (People ex rel. Stamos v. Jones (1968), 40 Ill.2d 62, 237 N.E.2d 495; People v. Kepi (1978), 65 Ill.App.3d 327, 22 Ill.Dec. 322, 382 N.E.2d 642), for the constitution gives the supreme court, not the legislature, rule making responsibility for appeals (Ill. Const.1970, art. VI, §§ 1, 16; Metcalf v. Altenritter (1977), 53 Ill.App.3d 904, 12 Ill.Dec. 1, 369 N.E.2d 498), and any statutory provision which "may in any sense be interpreted as an attempt to govern appeals from the circuit court * * * must yield to the Supreme Court Rules" (Illinois Consol. Tel. Co. v. Aircall Communications, Inc. (1981), 101 Ill.App.3d 767, 769, 57 Ill.Dec. 197, 200, 428 N.E.2d 747, 750).

This court has never decided the effect of paragraph 405 on appealability, although we noted in Horvath v. Loesch (1980), 87 Ill.App.3d 615, 43 Ill.Dec. 154, 410 N.E.2d 154, that there were doubts as to "the constitutionality of the legislature's prescribing * * * the appealability of trial court orders * * *." (87 Ill.App.3d 615, 620 n. 3, 43 Ill.Dec. 154, 158 n. 3, 410 N.E.2d 154, 158 n. 3.) The question was not reached in Horvath because the court found that plaintiff's failure to obtain a stay of judgment had made the appeal moot since the property was transferred to a person who was not a party to the action. (See Ill.Rev.Stat.1979, ch. 110A, par. 305(i).) Such is not the case here, and we thus reach the question as to whether paragraph 405 is inconsistent with the Supreme Court Rules governing appeals.

Paragraph 405 purports to make any order granting or denying the conveyance of real estate appealable, regardless of the stage of the proceedings when the order is entered; whereas, under the Supreme Court Rules, only final judgments are appealable as of right. (Ill.Rev.Stat.1979, ch. 110A, par. 301.) In all other cases, the rules governing appeals mandate compliance with certain prerequisites to jurisdiction. (E.g., Ill.Rev.Stat.1979, ch. 110A, par. 304 (orders final in character which do not dispose of the entire proceeding) and par. 307 (exceptions for certain interlocutory orders).) Paragraph 405 could be interpreted as including orders which do not comply with the applicable Supreme Court Rules, and to that extent it is inconsistent with the Rules and cannot confer appellate jurisdiction. (See Browning v. Heritage Ins. Co. (1974), 20 Ill.App.3d 622, 314 N.E.2d 1 (jurisdiction of appellate court is limited to judgments and orders...

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