Elmore Real Estate Improvement Co. v. Olson

63 N.E.2d 764, 392 Ill. 46, 1945 Ill. LEXIS 408
CourtIllinois Supreme Court
DecidedNovember 21, 1945
DocketNo. 29080. Cause transferred.
StatusPublished
Cited by6 cases

This text of 63 N.E.2d 764 (Elmore Real Estate Improvement Co. v. Olson) is published on Counsel Stack Legal Research, covering Illinois Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Elmore Real Estate Improvement Co. v. Olson, 63 N.E.2d 764, 392 Ill. 46, 1945 Ill. LEXIS 408 (Ill. 1945).

Opinion

Mr. Justice Wilson

delivered the opinion of the court:

Plaintiff, Elmore Real Estate Improvement Company, a corporation, filed its complaint in the circuit court of Cook county against defendants, Norman L. Olson, individually and as successor-trustee, Clifford M. Leonard and Leonard Construction Company, (formerly known as Leonard Company.) The complaint seeks specific performance, or, in the alternative, damages at law for breach, of a real-estate contract dated April 21, 1939, and a supplemental contract dated April 22, 1939, entered into between plaintiff and the trustee. Norman L. Olson, individually, but not as trustee, was subsequently dismissed as a defendant. A motion to require plaintiff to elect, on the ground that specific performance and damages constituted inconsistent remedies, was overruled, with leave granted to renew the motion at any later stage, of the proceedings if it should appear that continuance of the action in the alternative without election resulted in a legal detriment to defendants. The motion was not renewed. The original complaint, as amended, and, in turn, a second amended complaint, were stricken, with leave to plead further. Finally, on motion of defendants, the present, or third, amended complaint was stricken and the cause dismissed for the want of equity. Plaintiff prosecutes a direct appeal to this court on the theory a freehold is necessarily involved.

From the pleadings it appears'that although dated April 21 and 22, 1939, the contracts did not become effective until June 15, 1939. Both were executed by Olson solely in his representative capacity as successor-trustee, and it was expressly understood that nothing contained in the agreements would be construed as creating any liability on him personally to perform any agreement or covenant, either express or implied. By the provisions of the agreement of April 21, 1939, plaintiff was granted exclusive right of sale, at specified minimum prices, of lots and tracts in Biltmore Country Estates and Signal Hill subdivisions, two subdivisions located in Lake county to which title was held by Olson, as trustee. The sole beneficiary of the trust was Leonard Construction Company. All the shares of stock of the latter company were owned by Clifford M. Leonard. The provisions of many of the twenty-six clauses of the agreement are not in controversy. Under the contract Olson, as trustee, was not obligated to pay out any money to plaintiff for service or commission charges, on property sold by plaintiff, but was entitled to receive sixty per cent, net, of the proceeds of each sale of lots and tracts in Biltmore Country Estates and seventy-five per cent, net, of the proceeds of each sale of tracts in Signal Hill subdivision. Conversely, plaintiff’s sole right to service and commission charges, payable solely out of the proceeds of sales, was to retain forty per cent and twenty-five per cent, respectively, of the agreed purchase price of lots in Biltmore Country Estates and Signal Hill subdivisions. The contract further provided that if the trustee should receive in cash within five years from the date of the contract, $156,000, as proceeds of sales of lots and tracts in the Biltmore Country Estates, and $40,000, as proceeds of sales of tracts in the Signal Hill subdivision, then the interest of the trustee in those subdivisions should cease, and the trustee would be required to convey and quitclaim to plaintiff title to all lots and tracts unsold in both subdivisions, and to assign to plaintiff all interest of the trustee in and to outstanding purchase contracts and all moneys due thereunder. Plaintiff, in turn, was then required to assume and fulfill all obligations and duties imposed upon the trustee in all contracts of purchase so assigned. It was further provided by the contract that plaintiff agreed to exert its best efforts to make sales of lots and tracts in the two subdivisions to the extent of $60,000 for each year the contract was in force, and that “in the event that Elmore (plaintiff) does not make sales to the extent of Sixty Thousand Dollars ($60,000.00) within one year after the date hereof and likewise make sales to the extent of Sixty Thousand Dollars ($60,000.00) in each year thereafter, either party hereto may cancel this Agreement, upon giving sixty (60) days’ prior written notice to the other party.” The supplemental contract, dated April 22, 1939, merely included other parcels of vacant real estate to be conveyed to plaintiff as additional compensation upon suecessful completion by it of the terms and provisions of the principal contract, dated April 21, 1939.

It is substantially undisputed that plaintiff made sales of lots and tracts, approved and accepted by the trustee, in aggregate amounts, respectively, of $84,000 for 'the first period ending June 15, 1940, $54,675 for the second period ending June 15, 1941, and $46,920 for the third period ending June 15, 1942; and that the amount of sales for the first period constituted a compliance with the terms and provisions of the contract. With respect to the sales for the second and third years, it is alleged in the complaint that, although less than the $60,000 annual requirement, all of the sales contracts for these two years were accepted by the trustee; that the trustee waived strict performance by failing to cancel the agreement pursuant to its terms; and that, on the contrary, he, the trustee, continued to treat the agreement in full force and effect, by continuing to accept and execute contracts obtained by plaintiffs from purchasers.

The present controversy arises out of the actions of the parties in the fourth period of the contract, namely, the year ending June 15, 1943. The trustee, on May 28, 1943, eighteen days prior to the expiration of this fourth period, served a notice upon plaintiff, in part to the effect that he elected, in accordance with the terms and provisions of the contract, to terminate and cancel the agreement sixty days from the date of the notice, for failure on the part of plaintiff to make sales as provided by the agreement. He concluded the notice by stating that plaintiff “defaulted in sales for the year ending June 15, 1941, and again for the year ending June 15, 1942, and it does not appear that you will be able to make sufficient bona fide sales this year based on sales to date.”

The complaint alleges that the termination notice was served in bad faith and with an unlawful intent and design to discourage plaintiff in its efforts to dispose of real estate in an amount sufficient to comply with the terms of the contract, that the trustee breached the contract by refusing longer to be bound thereby, and that the letter of May 28, 1943, constituted notice to plaintiff to this effect.

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Cite This Page — Counsel Stack

Bluebook (online)
63 N.E.2d 764, 392 Ill. 46, 1945 Ill. LEXIS 408, Counsel Stack Legal Research, https://law.counselstack.com/opinion/elmore-real-estate-improvement-co-v-olson-ill-1945.