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Kingsley v. Roeder

OPINION FILED JANUARY 20, 1954.

HERBERT KINGSLEY ET AL., APPELLEES,

v.

OTTOMAR D. ROEDER ET AL., APPELLANTS.



APPEAL from the Superior Court of Cook County; the Hon. JOHN F. HAAS, Judge, presiding.

MR. JUSTICE BRISTOW DELIVERED THE OPINION OF THE COURT:

This is a direct appeal by defendants, Ottomar D. Roeder and Dorothy Roeder, from a decree of the superior court of Cook County, adopting the findings and recommendations of the master in favor of plaintiffs, Herbert Kingsley and Evelyn Kingsley, and ordering specific performance of a real-estate contract between defendants as vendors and plaintiffs as vendees.

The sole inquiry in this proceeding for specific performance is whether there was an effective forfeiture of the contract by reason of plaintiffs' failure to comply with the terms and conditions of the contract.

From the record it appears that plaintiffs, Herbert Kingsley and his wife, Evelyn Kingsley, entered into an agreement with defendants, Ottomar D. Roeder and Dorothy Roeder, for the purchase of a 1 1/2-acre tract of realty located at 4601 Lake Street, Melrose Park, Illinois. Under the terms of the contract, the purchase price of $12,000 was payable, $500 down and $100 or more per month, including 4 1/2 per cent interest, until the principal was reduced to $7500 or under, whereupon title was to be conveyed to the plaintiffs, who in turn were to execute and deliver to defendants a mortgage for the balance, payable on the same terms. The contract also contained certain provisions requiring the purchasers to pay taxes and insurance on the premises.

At the time the contract for purchase was entered into, the property was vacant and had not been occupied for over a year. The frame building thereon was first used by the purchasers for light manufacturing, but since a fire in December, 1950, the plaintiffs operated a trailer camp on the premises, with the knowledge and consent of the defendants.

Although the contract did not state the day of the month on which the payments were to be made, from the testimony it was apparently understood that since the contract was made on the 20th, the payments should be paid on that date each month. Nevertheless, plaintiffs made payments irregularly, sometimes not even within the current month, to defendant Ottomar Roeder's mother-in-law, Mrs. Thierbach, who was designated as defendants' agent for payment. All of these delayed installments on the contract were accepted by defendants through March, 1952. Plaintiffs also paid Mrs. Thierbach the sum due on the first installment of the 1950 taxes, but not the second installment, which was payable in September, 1951. Defendants, however, made no request of plaintiffs for this tax payment. Plaintiffs did insure the premises, and the money from the fire loss in December, 1950, was paid by the insurance company to both plaintiffs and defendants. That policy of insurance expired on April 5, 1952, and although plaintiffs claim to have placed a binder on the premises, the evidence is not clear whether the property was immediately thereafter insured by plaintiffs. Defendants, however, took out insurance on the premises in April, 1952, but did not ask plaintiffs to pay the premiums.

On April 30, 1952, Christian Thierbach, defendants' attorney, who is also the son of defendants' agent for payment, after a title search in which he discovered the unpaid tax installment, prepared for defendants a document titled Notice of Intention, in which plaintiffs were notified that unless their alleged defaults of failure to pay the installments due on March 20 and April 20, 1952, failure to pay the second installment of 1950, and failure to keep the insurance in force, were cured within 30 days from date, the contract would be forfeited. The document was sent by registered mail addressed to plaintiffs at the property in controversy, although at the time Christian Thierbach knew that the plaintiffs did not live there. He did not know where plaintiffs lived, and admittedly did not ask his mother where plaintiffs lived. He did, however, have a conversation with plaintiffs' daughter between April 15, 1952, and April 30, 1952, on the premises, with reference to whether the property was insured, but there was no reference made to defendants' notice of intention to declare a forfeiture if the alleged defaults were not cured.

The registered document was not received by anyone, and was returned sealed to defendants, who thereby knew that plaintiffs had not received it, and had no actual knowledge of defendants' intention to declare a forfeiture in 30 days unless the alleged defaults were cured. Notwithstanding their lack of knowledge of defendants' notice of intention, plaintiffs nevertheless sent currency-exchange money orders to Mrs. Thierbach for defendants for $100 each as monthly payments on the contract on May 5 and May 22, 1952. These money orders were retained by Mrs. Thierbach, but not cashed. It appears, however, that the May 5 money order was delayed in the dead letter office for several weeks, but was ultimately received by defendants and Mrs. Thierbach either at the end of May or the first part of June.

Although Christian Thierbach knew of the arrival of at least one of the payments during May, he proceeded nevertheless, without any further communication, or attempt to communicate, with plaintiffs, to prepare a declaration of forfeiture, which was filed on June 1, 1952, in the recorder's office. No copy of this document was sent to plaintiffs. On June 13 defendants made a demand for immediate possession of the premises upon the operator of the trailer camp, with a formal demand dated June 2; and on June 19 a forcible detainer suit was started by defendants in the justice of the peace court. When plaintiffs learned of defendants' intention to enforce strict compliance with the terms of the contract, they immediately cured the alleged defects by paying all taxes due, had additional insurance policies issued, and offered defendants the full amount of the purchase price, which defendants refused. Defendant Ottomar D. Roeder stated that he did not think plaintiffs could get a mortgage for $7500 on the premises, because it was run down. However, he later admitted that the property was now worth between $16,000 and $20,000.

Plaintiffs thereafter instituted this proceeding for specific performance, in which defendants filed a cross complaint claiming irreparable injury. Plaintiffs made a formal tender in court of $2000 in currency to reduce the amount due on the contract to $7500, as provided under its terms, and offered to execute a purchase-money mortgage for the remaining $7500, but defendants refused the tender.

The master made certain findings, and concluded that the contract between plaintiffs and defendants was not forfeited, but in full force and effect, and that tender of performance had been properly made and should be accepted by defendants. He further recommended that a decree be entered enjoining defendants from proceeding with the forcible detainer suit and ordering them to accept the tender of sufficient amounts to reduce the balance due under the contract to $7500, and then to convey title to plaintiffs and take back a purchase-money mortgage of the $7500 due, as provided in the contract.

Defendants filed certain objections to the report, which were overruled, and the superior court of Cook County entered a decree adopting the recommendations of the master. From this decree defendants have appealed directly to this court, inasmuch as a freehold is involved.

In support of their argument on this appeal that the master's findings were contrary to the manifest weight of the evidence and the law, defendants contend that courts give effect to forfeiture clauses in contracts, and that in the instant case such forfeiture was properly exercised, inasmuch as plaintiffs were in default on the contract, and were committing waste on the premises. They urge further that since the contract was forfeited, plaintiffs could not be entitled to specific performance, and that the equities in this case favored defendants.

Plaintiffs, however, maintain that the evidence fully supports the trial court's findings and decree, which should not be disturbed unless manifestly against the weight of the evidence, and that the right of forfeiture for any possible defaults was waived by the conduct of the parties, and could ...


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