Kane v. McDermott

547 N.E.2d 708, 191 Ill. App. 3d 212, 138 Ill. Dec. 541, 1989 Ill. App. LEXIS 2005
CourtAppellate Court of Illinois
DecidedNovember 30, 1989
Docket4-89-0385
StatusPublished
Cited by13 cases

This text of 547 N.E.2d 708 (Kane v. McDermott) 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
Kane v. McDermott, 547 N.E.2d 708, 191 Ill. App. 3d 212, 138 Ill. Dec. 541, 1989 Ill. App. LEXIS 2005 (Ill. Ct. App. 1989).

Opinion

PRESIDING JUSTICE McCULLOUGH

delivered the opinion of the court:

Plaintiff Paul Kane brought an action seeking specific performance of an option to purchase real estate, contained in a lease between him and his uncle, James McDermott. Defendant, William McDermott, had inherited the property from James McDermott. Defendant opposed specific performance and brought a counterclaim seeking possession of the disputed property and damages. The trial court granted plaintiff specific performance and found for plaintiff on the counterclaim.

Defendant appeals, arguing the trial court abused its discretion in granting specific performance because the description of the real estate was not definite, the option failed to set forth sufficient terms and conditions of the sale, and the sales price of the property was not fixed in the option. Second, defendant argues the trial court erred in admitting testimony concerning custom and usage.

We affirm.

The parties filed a stipulation of facts. On August 18, 1972, James McDermott and plaintiff entered an Illinois crop-share cash farm lease. The lease term started on March 1, 1973, and ended on March 1, 1988. The lease applied to approximately 320 acres of land. The legal description of all of the leased property was contained in the lease.

The part of the leased land at issue here is described as:

“The West Half of the Northwest Quarter of Section 29, in Township 28 North, Range 9 East of the Third Principal Meridian, Mona Township, Ford County, Illinois.”

The lease was validly executed, supported by consideration, and in full force and effect during its entire term. Plaintiff complied with the term of the lease and was not in breach with respect to it.

The parties further stipulated that defendant is the current owner in fee simple of the disputed 80 acres, subject to certain liens and encumbrances. James McDermott devised the property to defendant. Prior to James McDermott’s death and after it, defendant knew of the crop lease and its terms. Plaintiff continued to farm the leased land as defendant’s tenant. The lease provided it was binding upon heirs, executors, administrators, and assigns of the original landlord and tenant.

Section 7 of the lease is entitled “Additional Agreements.” It is handwritten and states:

“It is agreed that the tenant, and/or his heirs, is to have first option to purchase any part or all of the land farmed by the tenant, and/or his heirs and owned by the landlord and/or his heirs at the appraised bid as established by three disinterested parties.”

On July 8, 1987, plaintiff sent a letter by certified mail to defendant. The letter states that plaintiff is exercising the option granted in section 7 of the lease. On July 22, 1987, defendant sent a return letter to plaintiff. The return letter from defendant’s attorneys stated that they had serious questions about the enforceability of the option and defendant did not intend to comply with its terms.

On August 17, 1987, plaintiff recorded the lease and a notice that he intended to exercise the option to purchase the west half of the northwest quarter of section 29, in township 28 north, range 9 east of the third principal meridian, in Mona Township, which was contained within the leased property. Defendant received a copy of the recorded notice.

Defendant had not offered to sell the property to any third party. Defendant had not agreed to sell the property to plaintiff. No price had been determined or agreed upon between plaintiff and defendant. However, plaintiff had been ready and financially able to purchase the property.

Prior to November 1, 1987, defendant served plaintiff with a written notice to terminate the tenancy. Defendant had the opportunity to lease the disputed property for the 1988 crop year at $126 per tillable acre to a third party. Plaintiff did not surrender possession of the property on March 1, 1988, and continued to farm it, pursuant to his claim under the lease. Defendant did not consent to the holdover.

At the hearing, plaintiff called Faraday Strock, a retired attorney who specialized in real estate transactions in Ford County, as a witness. Strock stated he was familiar with custom as it applied to general terms and provisions in real estate contracts absent an agreement by the parties to the contrary. Title would typically be transferred by warranty deed. It would be merchantable title shown by an abstract or title insurance policy. The customary exceptions were for tile drains and utility easements. Absent an agreement to the contrary, the seller would pay the cost of proving merchantable title. Revenue stamps were the obligation of the seller. Unless the contract expressly provided that the property was to be purchased subject to mortgages, they would typically have to be discharged prior to closing.

Strock further testified that in a farm transaction, closing possession is typically given on March 1 of the year following the termination of the tenant’s lease. In a farm real estate transaction, taxes are to be paid by the owner of the land who receives the crop rent for the year. Most parties would ordinarily anticipate taxes would be a part of the contract to sell real estate. Ordinarily, a provision concerning taxes would be included in a real estate sales contract, in addition to a provision concerning the growing crops.

Strock further testified that based on custom and practice, each party would select an appraiser. The two appraisers would select a third appraiser. The parties would pay the expenses of their appraiser and share the cost of the third. If the parties refused to appoint an appraiser to set a purchase price, the court would make the appointment. Strock stated he knew plaintiff and had done legal work for him. He also knew defendant and had represented him in the past. He represented defendant in a guardianship matter related to his father. His prior contacts did not affect his testimony relating to custom and practice in real estate matters.

On cross-examination, Strock admitted discussing the instant lease with defendant. If he had drafted a contract for the sale of property, he would have included provisions related to taxes, title, and the mechanics of the appraisal process. “Appraised bid” did not have legal significance outside the context of the option. The custom and practice he discussed would be commonly understood by lay people in the farming community who had been involved in numerous real estate transactions.

The trial court found section 7 of the lease was a specifically enforceable term.

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Bluebook (online)
547 N.E.2d 708, 191 Ill. App. 3d 212, 138 Ill. Dec. 541, 1989 Ill. App. LEXIS 2005, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kane-v-mcdermott-illappct-1989.