Appeal from the Superior Court of Cook county; the Hon. JAMES
R. BRYANT, Judge, presiding. Reversed and remanded with
MR. JUSTICE KILEY DELIVERED THE OPINION OF THE COURT.
Rehearing denied November 23, 1955.
This is an action for damages based upon fraud and breach of warranty in a real estate transaction. The finding and judgment were for plaintiff in the sum of $1,986. Defendants have appealed.
The real estate involved was in Chicago and was improved with a three-flat building and cottage. Negotiations were begun in the fall of 1950 and on November 11th the parties made a contract for a warranty deed. The purchase price was $23,500. The contract subjected the sale to "existing leases expiring as shown on reverse side." These leases were described in a rider as follows:
"1st floor lease expires in 1952 and provides for $63.25 as monthly rental.
"2nd floor occupied by Sellers.
"3rd floor, from month to month, rental 63.25.
"Cottage lease expiring in 1952, rental 25.00.
"Sellers agree to deliver possession of the apartment occupied by them . . . within 15 days from date of closing. . . ."
On December 12, 1950 defendants made an affidavit of title "to induce" the plaintiffs to purchase the property, and in the affidavit the leases were described as in the rider. The warranty deed was signed and was notarized on December 12, 1950. It made no reference to the leases.
April 30, 1952 plaintiff accepted written notice of the first floor lessee's election to exercise an option for a renewal for three years at the same rental. Plaintiff brought this action April 10, 1953.
The question is whether the evidence justified a finding of either fraudulent concealment or breach of warranty because of defendant's failure to notify plaintiff of first floor lessee's option right.
The trial court could properly infer from the testimony that plaintiff had demanded the first floor lease during the negotiation for, and making of, the contract and at the closing of the deal; that defendants deliberately withheld the lease from plaintiff until after the deal was closed; and that plaintiff had no actual notice of the lessee's option until April 30, 1952. Presumably these were the inferences drawn by the court and the basis of the decision.
Plaintiff knew that a tenant was in possession of the first floor apartment and was bound to inquire and determine the terms of the tenancy. Joiner v. Duncan, 174 Ill. 252; Coari v. Olsen, 91 Ill. 273, 280; Fisher v. Michigan Square Bldg. Corp., 328 Ill. App. 143, 161. The court in the Duncan case said that since Pfeiffer, as mortgagee, failed to make inquiry of the rights of those in possession, his position was no better than it would be had he made inquiry and learned the truth. The court stated at 174 Ill. 257: "Actual possession of land is notice equal to the record of a deed under which the party in possession claims, and a purchaser is bound to inquire by what ...