Thread and Gage Co., Inc. v. Kucinski

Decision Date27 June 1983
Docket NumberNo. 82-1040,82-1040
Citation451 N.E.2d 1292,71 Ill.Dec. 925,116 Ill.App.3d 178
Parties, 71 Ill.Dec. 925 THREAD AND GAGE COMPANY, INC., Plaintiff-Appellee, Cross-Appellant, v. Bruno KUCINSKI, Defendant-Appellant, Cross-Appellee. Bruno KUCINSKI, Plaintiff-Appellant, Cross-Appellee, v. CHAIN O'LAKES GAME CORP., etc., Defendant-Appellee, Cross-Appellant.
CourtUnited States Appellate Court of Illinois

Thomas I. Matyas, Rhonda L. Stern, Rosenthal & Schanfield, Chicago, for defendant-appellant, cross-appellee.

Max E. Sherman, Chicago, for plaintiff-appellee, cross-appellant.

BUCKLEY, Presiding Justice:

This appeal arises out of an action brought by Bruno Kucinski against Chain O'Lakes Game Corp. (now doing business as Thread and Gage Company, Inc.) 1 alleging breach of contract and seeking damages and interest allegedly due him. Chain O'Lakes denied liability and, under the new corporate name of Thread and Gage Company, Inc. (Thread and Gage), countersued Kucinski in equity for specific performance. The trial court entered judgment in favor of Thread and Gage for specific performance and granted judgment to Kucinski in the sum of $20,000 plus 5% interest from September 1, 1962. Kucinski appeals the amount of damages and the granting of specific performance, and Thread and Gage cross-appeals.

The record reveals that prior to December 21, 1961, Deno Buralli was the owner of an Illinois corporation known as Chain O'Lakes Game Field Corp. For many years prior thereto, Bruno Kucinski and his family owned and operated a business known as Thread and Gage Company, Inc., which specialized in thread grinding for aircraft parts and high precision machines. The business consisted of a parcel of improved real estate in Schiller Park, Illinois owned by Kucinski in his own name and various items of machinery owned by two corporations which Kucinski controlled, namely, Thread and Gage Company, Inc. and B.K. Machine Leasing Company. Buralli worked for Kucinski for several years as a manufacturer's representative.

On December 21, 1961, the parties executed a series of agreements to effectuate the sale of Kucinski's business to Buralli's corporation, Chain O'Lakes. The first agreement provided for the sale of the assets of B.K. Machine Leasing Company for $25,000; $5,000 down and the $20,000 balance payable in monthly installments of $250 or more a month commencing on September 1, 1962, with no interest being charged on the principal unless there was a delinquency in any of the installments and, if so, then a charge of 5% interest per annum on the principal, payable each month. The agreement included a list of certain items of machinery that were covered under this particular transaction.

The second agreement between Kucinski and Buralli, as agent for Chain O'Lakes, covered the sale of the assets of Thread and Gage Company, Inc. The agreement stipulated that the $100,000 purchase price was to be satisfied by Chain O'Lakes' payment of $10,000 down and installment payments totalling $90,000 under an installment plan with terms identical to the first agreement. A separate list of machinery was also included under this agreement.

A third agreement was on a form entitled "Articles of Agreement for Warranty Deed" (warranty deed agreement), whereby Kucinski undertook to sell certain real estate located in Schiller Park, Illinois to Chain O'Lakes. The agreement provided that the purchase price for the real estate was $75,000; $5,000 down and the $70,000 balance to be paid in monthly installments of $500 or more commencing on September 1, 1962, with no interest charged on the principal unless there was a delinquency in payment and, if so, then 5% was to be charged on the principal balance until the delinquent installment was paid.

The parties further agreed that Kucinski's corporation was to release the corporate name of Thread and Gage Company, Inc. to permit Chain O'Lakes to assume the name. After the documents were signed and the various downpayments were made, a dispute arose between the parties over the fact that certain items of machinery sold to Chain O'Lakes under the B.K. Machine Leasing Company agreement (BKML agreement) were also included under the agreement covering machinery belonging to Kucinski's former Thread and Gage corporation (Thread and Gage agreement). On September 1, 1962, when the first installment payments were due under the three agreements (a total of $1,000; $250 under the BKML agreement, $500 under the warranty deed agreement, and $250 under the Thread and Gage agreement), Buralli, on behalf of Chain O'Lakes, refused to make the $250 payment due under the BKML agreement. Additionally, Buralli testified that he informed Kucinski no future payments would be made under that agreement.

Each month thereafter, Thread and Gage (formerly Chain O'Lakes) made installment payments to Kucinski in the sum of $750, rather than the $1,000 due under all three agreements. The monthly checks were either cashed or deposited by Kucinski.

On May 20, 1969, an attorney, acting on behalf of Kucinski, sent a letter to Thread and Gage requesting payment of $20,000 plus 5% interest, which was claimed due for the machinery covered under the BKML agreement. Thread and Gage, however, continued in its repudiation of the agreement, sending monthly checks in the sum of $750 instead of $1,000.

On March 27, 1973, Kucinski filed a complaint at law, seeking $250 per month, plus interest from September 1, 1962, to February 1, 1973, or a total of $31,250. In its answer, Chain O'Lakes denied liability and on January 10, 1975, countersued Kucinski in equity for specific performance of the Articles of Agreement for Warranty Deed. The suit for specific performance alleged that the $75,000 purchase price set forth in the warranty deed agreement had been paid and that Thread and Gage was, therefore, entitled to the deed.

On December 21, 1976, Kucinski amended his complaint at law and alleged, for the first time, that the failure of Thread and Gage to make payments under the BKML agreement constituted a breach of the other two agreements, thereby triggering interest from September 1, 1962, for the combined balance of all the agreements. The amended complaint sought damages in the sum of $196,000 plus 5% interest.

The trial court found that "all of the documents were in fact executed at one time" and "did in fact constitute one transaction." The trial court further determined that the transaction was to be completed by Chain O'Lakes (the present Thread and Gage) in three separate phases: (1) purchase of the realty under the warranty deed agreement; (2) purchase and payment of the agreement wherein the former Thread and Gage sold all of its assets to Buralli or his nominee; and (3) payments to be made under the BKML agreement.

The trial court further found that the present Thread and Gage was in compliance with the terms and conditions of the first two phases, but that it breached phase three of the transaction in failing to pay the first installment due September 1, 1962, under the BKML agreement. Accordingly, the court awarded judgment to Kucinski in the sum of $20,000 plus 5% interest from September 1, 1962. Upon payment of this judgment, the court ordered Kucinski to specifically perform under the warranty deed agreement and convey a deed to Thread and Gage. The court further ordered Thread and Gage to continue complying with the terms of the second phase.

In accordance with the above order, Thread and Gage tendered payments of $39,981.72 ($20,000 plus 5% interest) and requested the warranty deed. Kucinski refused to accept payment or deliver the deed.

On appeal, Kucinski first argues that the three agreements are to be construed as one contract and that a failure to pay installments under the BKML agreement is a breach of the other two agreements. We reject this argument.

Where different instruments are executed at the same time between the same parties and in the course of the same transaction, all the instruments must be read and construed together. (Sudeikis v. Chicago Transit Authority (1980), 81 Ill.App.3d 838, 37 Ill.Dec. 21, 401 N.E.2d 1114.) It is a fundamental principle that in construing contracts the primary objective is to determine and give effect to the intentions of the parties. (AZL Resources, Inc. v. Bromagen (1979), 79 Ill.App.3d 76, 34 Ill.Dec. 617, 398 N.E.2d 292.) The most reliable indicator of the parties' intent can be found in the language used in their contract. (In re Estate of Savage (1979), 73 Ill.App.3d 656, 29 Ill.Dec. 706, 392 N.E.2d 263.) Where a contract is ambiguous, courts may determine the parties' intent by looking to the interpretation which the parties themselves have placed on the agreement as shown by their contemporaneous or subsequent acts or conduct. See Winn v. Turner (1977), 55 Ill.App.3d 291, 13 Ill.Dec. 475, 371 N.E.2d 170; Bulley & Andrews, Inc. v. Symons Corp. (1975), 25 Ill.App.3d 696, 323 N.E.2d 806.

Here, although the three agreements were executed at the same time and constituted one transaction, we believe that it was the parties' intention to treat payments and defaults under each of the agreements as separately payable and enforceable. First, we note that the language of each agreement is unambiguous; none of the agreements refer to each other. If the parties had intended the failure to pay one of the agreements to...

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