Jovan v. Starr

231 N.E.2d 637, 87 Ill. App. 2d 350, 1967 Ill. App. LEXIS 1288
CourtAppellate Court of Illinois
DecidedOctober 9, 1967
DocketGen. M-51,525
StatusPublished
Cited by11 cases

This text of 231 N.E.2d 637 (Jovan v. Starr) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jovan v. Starr, 231 N.E.2d 637, 87 Ill. App. 2d 350, 1967 Ill. App. LEXIS 1288 (Ill. Ct. App. 1967).

Opinion

MR. JUSTICE ADESKO

delivered the opinion of the court.

The administrators of the estate of James N. Jovan brought this action against John Starr (Starr) and John J. Yowell (Yowell) for the return of $2,000 which Starr, acting as agent for plaintiff, had deposited with Yow-ell acting as escrowee. (We shall refer to James N. Jovan as plaintiff.)

The court found the issues against both defendants and entered judgment for the administrators in the sum of $2,000. Defendant Yowell’s motion for a new trial was denied and he now prosecutes this appeal.

On December 30,1957, plaintiff, one Alexander G. Chiagouris (Chiagouris) and Starr entered into an agreement whereby plaintiff and Chiagouris each advanced $2,000 to Starr, and Starr agreed to use the funds as earnest money to attempt to purchase all the outstanding stock of Terrace Restaurant, Inc., (Terrace Inc.,). Plaintiff and Chiagouris were to remain as undisclosed principals of Starr. The agreement provided inter alia that if Terrace Inc., already in financial difficulty, went into bankruptcy prior to Starr’s acquiring the corporation’s stock, the earnest money was to be returned to plaintiff and Chiagouris.

The stock of Terrace Inc., was being held by defendant Yowell, the corporation’s attorney. Starr met with Yow-ell and negotiated for the purchase of the stock. An agreement, in the form of a letter, addressed to the then stockholders of Terrace Inc., and dated December 31, 1957, was then executed. One of those stockholders was James N. Jovan, one of Starr’s undisclosed principals and plaintiff herein.

The letter agreement first stated the price to be paid for the stock and then provided:

“I have deposited with John J. Yowell the sum of $4,000 as earnest money and to apply on the purchase price.
“In the event that the creditors of the corporation are unwilling to make a settlement of their claims and the corporation is placed in bankruptcy, said earnest money is to be returned to me.
Yours very truly,
/s/ John Starr
“Received check on Pullman Trust & Savings Bank in the sum of $4000.00 signed by John Starr, to be held by me in accordance with the above letter.
/s/ John J. Yowell by L. J. Vance”

(L. J. Vance was an employee of Yowell’s and there is no question that she was authorized to sign his name.)

Subsequently, in March 1958, Terrace Inc., was involuntarily placed in bankrupty. Although at the trial there was some testimony as to whether Starr had defaulted prior to the bankruptcy, this issue has been abandoned on appeal. Defendant Yowell contends that: (1) plaintiff’s claim is barred by the Statute of Limitations and; (2) that he has a retaining lien on the earnest money for his legal services to Terrace Inc., plaintiff being a stockholder of the corporation.

With respect to the suit being barred by the Statute of Limitations, Yowell argues that absent a writing signed by defendant Yowell, plaintiff’s claim, if any, must be controlled by the five year statute of limitations. (Ill Rev Stats 1965, c 83, § 16.) Since the money was deposited with Yowell on December 31, 1957, and the instant action was not commenced until March 20, 1963, it is barred. The only writing signed by Yowell is the letter agreement executed by Starr. Since this does not mention plaintiff, it cannot be relied upon by him to bring this action within the ten year statute of limitations. (Ill Rev Stats 1965, c 83, § 17.)

We do not agree with Yowell’s analysis. The letter agreement signed by Yowell is a sufficient writing to place a claim for a return of the earnest money under the ten year statute of limitations. The fact that plaintiff is not mentioned in the letter agreement is immaterial. In Saladin v. Mitchell, 45 Ill 79 (1867), our Supreme Court stated:

“It is insisted by the plaintiff in error, that the only contract of sale is the one . . . made by another person, to wit, T. D. Hall. He contends it was a contract with Hall, and he alone can maintain an action for its breach. The authority referred to on this point in 2 Smith’s Leading Cases, 358, applies to cases where a purchase is made by an agent, his principal not being disclosed. In such cases it is the established rule, where the contract is not under seal, and made by an agent in Ms own name for an undisclosed principal, either the agent or the principal may sue on it.” (P 82.)

See also Mechem, Law of Agency, Fourth Edition, § 150 (1952):

“The rights of the undisclosed principal, and the method of their enforcement, differ very little from those of the disclosed principal. He sues in his own name and right; when his existence is disclosed it is in general the obligation of the third party to treat him as in all regards the principal. He may sue for breach of the contract and ordinarily, as will be seen later, T may not successfully set up as a defense that he knew neither of P’s existence nor his connection with the contract.”

The other point raised by defendant Yowell is that plaintiff, as a stockholder in Terrace Inc., was obligated to pay Yowell his fees for legal services to the Corporation and had in fact agreed to pay such fees. Consequently, Yowell had a retaining lien on the funds which came into his possession through plaintiff’s agent.

We recognize that attorneys’ liens are classified as general (or retaining) liens and charging (or special) liens. The latter is a lien upon that which is recovered by an attorney for his client through his professional services and is generally covered by the Attorney’s Lien Act. (Ill Rev Stats 1965, c 13, § 14.) This type of lien is not involved in the instant cause.

The retaining lien was first recognized in Illinois in Sanders v. Seelye, 128 Ill 631, 21 NE 601 (1889):

“(T)his retaining lien exists on all papers or documents of the client placed in the attorney’s hands in his professional character or in the course of his employment.” (Pp 637-638.)

In the case of Needham v. Voliva, 191 Ill App 256 (1915), this court stated:

“(A) possessory or retaining lien ... is defined as the attorney’s right to retain possession of property belonging to his client which comes into his hands within the scope of his employment until his charges are paid. Weed Sewing Mach. Co. v. Boutelle, 56 Vt 570. If the relationship of attorney and client exists, the possessory lien will cover in general any property of any kind belonging to the client and held by the attorney. It includes ordinary legal documents of the client in the possession of the attorney, or money collected by the attorney. 4 Cyc 1015. The possessory lien is a right merely to retain and cannot be actively enforced.” (Citations omitted.) (P 258.)

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Bluebook (online)
231 N.E.2d 637, 87 Ill. App. 2d 350, 1967 Ill. App. LEXIS 1288, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jovan-v-starr-illappct-1967.