Spangler v. Holthusen

• Decision Date: 19 June 1978
• Docket Number: No. 76-446,76-446
• Citation: 18 Ill.Dec. 840,61 Ill.App.3d 74,378 N.E.2d 304
• Parties: , 18 Ill.Dec. 840 John J. SPANGLER and Helen C. Spangler, Plaintiffs-Counterdefendants-Appellees- Cross-Appellants, v. George W. HOLTHUSEN, Defendant-Counterplaintiff-Appellant-Cross-Appellee.
• Court: United States Appellate Court of Illinois

Page 304

378 N.E.2d 304

61 Ill.App.3d 74, 18 Ill.Dec. 840

John J. SPANGLER and Helen C. Spangler Plaintiffs-Counterdefendants-Appellees- Cross-Appellants, v. George W. HOLTHUSEN Defendant-Counterplaintiff-Appellant-Cross-Appellee.

No. 76-446.

Appellate Court of Illinois, Second District.

June 19, 1978.

Allan L. Blair, Chicago, James M. Allen, Dixon, for George W. holthusen.

Edward F. Diedrich, James R. Buck, DeKalb, for John and Helen Spangler.

NASH, Justice.

Plaintiffs, John J. Spangler and Helen C. Spangler, appeal from an order of the Circuit Court of Lee County finding they had breached an agreement to sell real estate to defendant, George W. Holthusen. Defendant appeals from that portion of the order which assessed no damages in favor of defendant as a result of plaintiffs' breach of the contract. Defendant has also filed a motion in this court, pursuant to Supreme Court Rule 366 (Ill.Rev.Stat.1973, ch. 110A, par. 366), for leave to amend his complaint to seek a decree of specific performance of the contract in issue should we determine he is not entitled to money damages for plaintiff's breach. We have taken that motion with the case.

Plaintiffs' cross-appeal arises from a complaint filed by them in which the Spanglers, owners of the farm which is the subject of this case, sought specific performance of and a declaratory judgment on an installment land sale contract entered into between them and Holthusen on December 10, 1973. They also sought damages alleged to have arisen from Holthusen's claimed breach of the contract. Defendant Holthusen, thereafter, filed a separate action against the Spanglers in which he sought damages for an alleged loss of profits arising from their claimed breach of the same contract. The cases were consolidated for trial and the parties now each appeal from portions of the order and judgment entered by the trial court.

The contract provided for the sale by the Spanglers of their 247 acre farm in Lee County to Holthusen for $140,000. It included some take-out privileges by Holthusen but limited payments toward the purchase price to $15,000 each year. It provided for a closing of the transaction on March 1, 1974, and for a written notice by sellers if they chose to cancel the contract in the event of a default by the purchaser. On December 24, 1973, two weeks after executing this contract and without informing the Spanglers, Holthusen entered into a written agreement to sell or assign his interest in the Spanglers' farm to Leslie Richardson for the sum of $293,250 with possession of the farm to be delivered to Richardson by April 30, 1974. It is the $153,250 loss of profit on that sale which Holthusen seeks to recover from the Spanglers as a result of their claimed breach of the land sale contract.

In their cross-appeal, the Spanglers contend the trial court erred in its finding they breached the contract with Holthusen. This was an installment land sale contract entered into by the parties on December 10, 1973, at which time Holthusen made a $5,000 down payment to be held by the real estate broker until the transaction was closed on March 1, 1974. On the March 1st date, Holthusen was to make a further payment of $20,000 and receive possession of the farm and the Spanglers were to deliver a warranty deed for the farm to an escrow agent to be ultimately delivered to Holthusen when he had completed the payments provided for in the contract, but not before March 1984. The closing of the transaction on March 1st, however, was extended by agreement of the parties to March 15th but, while the Spanglers did then appear at their attorney's for that purpose, Holthusen failed to do so or to make the $20,000 payment due at that time. Through their attorneys, the Spanglers agreed to extend the closing date to March 23, 1974, and, there still being certain disagreements to resolve then, it was again postponed. On April 17th Holthusen caused his check for $20,000 to be delivered to the Spanglers' attorney, together with other documents pertinent to the completion of the transaction, and the parties all met on April 24th for that purpose. At that time the Spanglers declined to accept Holthusen's uncertified check and the parties met again on April 26th whereupon Holthusen tendered $20,000 in cash which was also refused by the Spanglers.

The Spanglers contend Holthusen breached the contract by his failure to make the $20,000 payment on March 15th when it was due and that such breach became substantial when he continued to fail to tender payment of that sum until April 17th thus justifying the Spanglers to consider the contract terminated. (6 Corbin on Contracts § 1253 (1962).) They suggest title objections which had been raised by Holthusen's attorney and prevented the March 15th closing (certain pipe-line easements and the regulations of a soil conservation district affecting the subject property) were not unusual objections and could have been readily checked, but, although Holthusen could easily have done so, he failed to do so before the closing. The Spanglers assert that by reason of the unwarranted delay occasioned by Holthusen they were entitled to be compensated for damages sustained by them and they sought to renegotiate certain terms of the contract with Holthusen to that end. The Spanglers believed the contract should be adjusted to provide for lost interest they had sustained on the $20,000 payment to have been made by Holthusen on March 15th, to recover of the further interest paid by them on a loan for the purchase of another farm which they had intended to finance with Holthusen's $20,000 payment and for costs incurred by them in commencing spring plowing when it appeared that this transaction might not be carried out.

Holthusen contends, however, it was the Spanglers who breached the contract as the closing delays had either been agreed to by the parties or not caused by him. He notes, too, that the contract provided for a remedy should the purchaser fail to comply with its terms whereby the seller could then declare the contract cancelled or forfeited by giving written notice thereof to the purchaser. In that event, at the expiration of 30 days after such notice the agreement would be at an end if, in the intervening period, its terms had not been complied with by the purchaser. The Spanglers concede they did not exercise that provision for termination of the contract. Holthusen also points out that his title objections were recognized by the Spanglers' attorney as matter which must necessarily be cleared up and that in a letter to Holthusen's attorney on April 1st, Spanglers' attorney informed him that some of the objections had been waived and the balance would follow. This letter also asked that a new closing date be determined and that Holthusen remit the $20,000 payment required by the contract. Thereafter, on April 17th, Holthusen did cause his $20,000 check and other documents requested by Spanglers' attorney to be sent to him. While Holthusen also argues that the Spanglers actually wished to avoid the sale to him under the contract as they believed they could sell the farm to another party for a price $40,000 to $50,000 more than he had agreed to pay, that contention has no support in the evidence. We note, too, that the Spanglers commenced this action against defendant on December 12, 1974, for specific performance of their agreement with Holthusen or damages; it is not realistic to expect them to have taken that action if the more profitable opportunity to sell their farm had been possible.

While we are persuaded from the evidence in this case that the Spanglers declined to complete the sale of the property to Holthusen because they sought to recover losses sustained by them as a result of the delayed closing which they believed were attributable to him, it is apparent the Spanglers had no basis on which to do so. The first delay in closing occurred on March 1, 1974, and was occasioned by the Spanglers who were taking a trip abroad; on March 15, the date to which all parties had agreed to extend the closing, apparently valid title objections were still to be settled; on April 17, when requested, Holthusen did tender his check for the closing payment of $20,000 and it was accepted without objection by Spanglers' attorney; on April 24, for the first time, the Spanglers objected to the personal check. On April 26, however, the Spanglers also refused to accept the $20,000 payment in cash then tendered by Holthusen and declined to complete the sale of the farm to him in accordance with the contract.

As the Spanglers correctly argue, a material or total breach of the contract by Holthusen would entitle them to seek compensation for damages sustained and, in addition, would be a proper cause excusing the Spanglers from further performance of their contractual duties. (Anderson v. Long Grove Country Club Estates, Inc. (1969), 111 Ill.App.2d 127, 139, 249 N.E.2d 343, 349; see also Ill.L. & Prac. Vendor & Purchaser § 161 (1958). Nor was the termination or forfeiture remedy provided for in the contract exclusive; it left the Spanglers with the right to seek any other legal remedy available to them. (Anderson at 140, 249 N.E.2d 343, 350.) The availability of the notice provision as a means to terminate the contract, however, and the failure of the Spanglers to exercise it upon the claimed default of Holthusen on March 15, 1974, or at any other time thereafter, is pertinent to a determination of whether there was a contract between the parties subject to being breached by the Spanglers on April 26, 1974, as found by the trial court. If the Spanglers had not earlier terminated the contract, their refusal to complete the transaction with Holthusen on April 26th must be considered in that light. John Spangler testified he considered the contract had been forfeited by Holthusen by his failure to make the $20,000 payment on March 15th and that a new...