APPEAL from the Circuit Court of Sangamon County; the Hon.
DEWITT S. CROW, Judge, presiding.
MR. JUSTICE FULTON DELIVERED THE OPINION OF THE COURT:
Rehearing denied January 21, 1952.
This appeal seeks to reverse a judgment of the circuit court of Sangamon County in favor of the plaintiffs. The case arose under a complaint for declaratory judgment to determine whether or not a power of sale, vested in a life tenant under a will, had been effectively exercised, and, if exercised, to determine the persons entitled to the proceeds of sale.
There is no dispute as to any fact. The plaintiffs, Harry, John H., and Ralph Wilson, are the heirs-at-law of the testatrix, Celia Lambert. Plaintiff Eva Irene Suggs is the executrix of the last will and testament of John Slaughter, now deceased, the life tenant who was vested with the power of sale. Harry Wilson is also the personal representative of the testatrix who owned the equitable interest in the real estate and in whose will the power of sale was created.
Defendants Effie Singleton and Ella Rochester are both residuary and specific legatees under the will of Celia Lambert and are her two remaining heirs-at-law. Defendant Irvin Dunas is the tenant of the property in question, with conditional option to purchase the property under the terms of a lease. Defendant David Olsen was the high bidder on the property when it was sold at auction, and the defendant Security Federal Savings and Loan Association holds the legal title subject to a contract of sale to decedent, Celia Lambert. The last two named defendants have no further interest in the outcome of this suit.
Celia Lambert entered into a contract to purchase the property in question on February 1, 1941, from the defendant Savings and Loan Association. She was adjudged incompetent and letters were issued September 7, 1948, to John H. Wilson as conservator of her estate. By a written lease of the same date, the conservator leased the premises to defendant Irvin Dunas, for ten years. This lease provided that the lessee was granted an option to purchase the premises in case a sale of them should become desirable. The lease provided for notice to Dunas of any bona fide offer and he then had thirty days in which to meet that offer if he so desired. The lease stated specifically that the intent and purpose of the lease was to give to Dunas the first opportunity to purchase whenever any sale was contemplated. The lease was recorded.
Celia Lambert had executed her last will and testament during her competency. By its terms she gave the property involved in this proceeding to John Slaughter for life with "full power to sell this real estate and give a good deed for the same, as though I would if I were living myself." The will further provided that in case Slaughter exercised his power of sale he need not account to anyone for the sale price, but that if he did not exercise the power, then, upon his death, the property was to be sold and the proceeds were to be divided, $500 to each of the plaintiffs Wilson, and the balance to be divided equally between the defendants Singleton and Rochester. Celia Lambert died December 9, 1948.
A complaint to set aside this will was filed in the circuit court and was dismissed nine months after the will was admitted to probate. In this proceeding a stipulation was entered into between Slaughter and counsel for all the real parties in interest here, except Effie Singleton. In that stipulation it was noted that she disclaimed herself as a party complainant and asked to be dismissed from the suit. This stipulation provided that the will contest be dismissed and that Slaughter sell the property and divide the proceeds, one third to himself and two thirds to the parties represented by counsel. This includes the plaintiffs Wilson, and the defendant Rochester.
March 30, 1950, Slaughter held a public sale wherein the property was auctioned off to defendant David Olsen, for $28,550. Prospective purchasers had been notified of the rights which Dunas held under the lease, and had also been told that Dunas would not require the full 30 days to which he was entitled to make his decision. On the date of sale, Slaughter executed a warranty deed to Olsen, and Olsen, in return, gave a check in down payment of $4282.50. The deed recited, "Subject to a certain lease in favor of Dr. Irvin Dunas, and subject to a vendor's lien in the amount of $24,267.50 which amount is to be without interest until grantee shall have opportunity to have title examined and its merchantability determined by Grantee, whereupon vendor's lien shall be paid by vendee."
Notice, under the terms of the lease, was given to Dunas on March 30, 1950. Slaughter died on April 3, 1950, and on April 17, 1950, Dunas gave notice of his intention to exercise the option in his lease.
The lower court found that Slaughter validly exercised the power of sale to Olsen, but that Dunas, as lessee, served the requisite notice under the lease which entitled him to a deed of conveyance. The court then ordered that Dunas receive the requisite conveyances from Slaughter's executor, from Olsen, and from the Savings and Loan Association, and that the proceeds of the sale be divided in accordance with the stipulation.
The defendants-appellants contend that the court erred in finding that Slaughter validly exercised the power of sale under Celia Lambert's will, arguing that the power of sale was subject to the terms of the lease granting Dunas the option to purchase and that the power terminated on Slaughter's death without the option having been exercised.
First, appellants argue that the power of sale was not effectively or completely exercised, as the lease containing the option to Dunas is binding on the premises and prevented the sale to the bidder at auction. Secondly, appellants urge that no sale was made to the bidder at auction as the purchase price was not paid, title was not merchantable, lessee gave notice of his intention to purchase, and the down payment of Olsen was returned to the bidder and that deed surrendered. Lastly, it is said that there was no acceptance by Dunas prior to the expiration of the offer to sell by the death of Slaughter.
Countering these arguments plaintiffs-appellees say that by the terms of the will Slaughter was given a power to dispose of the property at such time and on such terms and conditions as he saw fit; that the lease by the conservator to Dunas was not the act of Celia Lambert, but was the act of the probate court; that the leasehold is only incidental in this proceeding to a decision on the exercise of the power; that whether or not Slaughter exercised the power must be determined from his intention; that Slaughter, by binding himself in the stipulation in ...