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Harper v. Kennedy





APPEALS from the Circuit Court of Douglas County; the Hon. RODNEY A. SCOTT, Judge, presiding.


Rehearing denied November 24, 1958.

This cause comes before us on the consolidation of three separate appeals from orders of the circuit court of Douglas County. In order to clarify its present posture, it is necessary to trace the development of the litigation which had its genesis in an action where Charles L. Sharp, now deceased, took judgment by confession on certain notes signed by Martin B. Kennedy, now deceased, and the defendant, Grace Kennedy, his wife. Defendant moved to open the judgment and for leave to plead, and upon denial of the motion appealed to the Appellate Court which reversed the trial court, opened the judgment, and granted such leave. (Sharp v. Kennedy, 12 Ill. App.2d 353.) In the interim, Sharp died and his executor was substituted in his stead. The executor, together with Sharp's heirs and devisees, filed a complaint for partition of certain real estate owned by Sharp and Martin B. Kennedy as tenants in common. Grace Kennedy, as Martin's sole legatee, devisee and executor, filed answer and counterclaim in the partition action wherein she alleged that Sharp and Martin B. Kennedy had entered into a contract whereby Sharp agreed to cancel the judgment notes by will, and Martin agreed to purchase Sharp's interest in the real estate for $3,500 shortly after Sharp's death. The answer prayed dismissal of the suit for partition, and the counterclaim prayed specific performance of the alleged agreement. The actions were consolidated in the trial court.

After hearing on October 11, 1957, the trial court entered two separate decrees. One ordered that the judgments of $9,881.49 originally entered on the notes remain in full force and effect; the other found that defendant had an option to purchase the property for $3,500 and ordered that she be given 30 days to exercise such option, and that upon her failure to do so, a decree of partition be entered in accordance with the prayer of the complaint.

The defendant took separate appeals to the Appellate Court, which were transferred to this court on the ground that a freehold was involved. The defendant failed to exercise the option within 30 days from the entry of the decree, and the trial court thereupon entered a decree for partition from which defendant appealed directly to this court. Since it appears that all three appeals revolve around the construction of the alleged agreement between Charles L. Sharp and Martin B. Kennedy, we consolidated them for argument and opinion.

For approximately 20 years prior to 1949, Sharp and Kennedy were partners in a hatchery business, although Sharp did not take an active part in the management of the hatcheries after 1942. On January 31, 1949, they dissolved the partnership pursuant to written agreement, whereby Kennedy purchased Sharp's interest therein for $15,000. This was to be paid by $1,000 in cash; two notes of one Heacock, payable to Kennedy and endorsed by him, amounting to $2,741.54; and five promissory notes for $2,000 and one for $1,258.46, executed by Kennedy, dated January 24, 1949. Each note was to bear interest at the rate of 4 1/2 per cent from January 1, 1951. The first note was to be due on August 1, 1952, and one note was to be due on August 1 of each subsequent year. No evidence was introduced concerning the execution of the notes described in this agreement, but it appears from exhibits in the record that the Kennedys executed four judgment notes payable to Sharp, on January 24, 1949; three in the amount of $1,000 and one in the amount of $1,258.46, maturing on August 1, of 1954, 1955, 1956, and 1957 respectively. Thereafter, on January 1, 1952, they executed four more $1,000 notes payable to Sharp maturing on August 1, of 1958, 1959, 1960 and 1961, respectively, and on August 1, 1953, they executed a further note to Sharp for $646.95, due one year after date. While it does not appear from the record, it is undisputed that the January 1, 1952, notes were given in substitution of past due notes, and that the August 1, 1952, note was for past due interest. There is nothing in the record to indicate that any of the notes mentioned in the dissolution agreement were ever paid.

On January 21, 1952, Kennedy and Sharp executed a certain instrument prepared by Sharp's lawyer. Since its interpretation is the crux of the entire controversy, we set it forth in full.

"THIS AGREEMENT made and entered into this 21st day of January, 1952, by and between Martin B. Kennedy, Party of the First Part, and Charles L. Sharp, Party of the Second Part, witnesseth:

WHEREAS, under the terms of a contract dated the 31st day of January, A.D. 1949, between the parties hereto which dissolved a partnership heretofore carried on between the parties hereto, certain notes were executed by the Party of the First Part in favor of the Party of the Second Part as a part of the consideration of said contract dissolving said partnership.

AND WHEREAS, the Party of the Second Part has this day executed a Last Will and Testament providing for the cancellation of said indebtedness which may be owing by First Party to Second Party upon the death of Second Party.

NOW THEREFORE, in consideration of the mutual promises and agreements herein contained, the Party of the First Part agrees that upon the death of the Party of the Second Part, the said First Party will purchase the undivided one-half interest in the following described real estate:

Beginning at the Southwest corner of Lot 9, Block 17 of the original Town, now City of Tuscola, Illinois, thence East 41 feet 3 inches, thence North to the North line of said Lot 9, thence West to the West line of said Lot 9, thence Southwesterly with East line of Park Street, in the City of Tuscola, Illinois, to the place of beginning.

from the Executor of the Last Will and Testament of the Second Party for the sum of $3,500.00, which said sum will be paid within 6 months after the ...

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