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Fitzpatrick v. Allied Contracting Co.





APPEAL from the Circuit Court of Sangamon County; the Hon. SAMUEL SMITH, Judge, presiding.


Rehearing denied May 23, 1962.

Plaintiffs, James R. Fitzpatrick, Florence C. Fitzpatrick, Thomas D. Burton and Mary E. Burton have appealed directly to this court from a decree of the chancellor of the circuit court of Sangamon County, confirming the findings of fact of the special master's report and granting defendant and counterclaimant, Allied Contracting Company, specific performance of an alleged agreement to reconvey land. The special master found that defendant and counterclaimant, Allied Contracting Company, was entitled to specific performance and a reconveyance upon payment to plaintiffs of the amount by which the improvements made by them enhanced the value of the land; or alternatively, defendant-counterclaimant might sell the land to plaintiffs at its fair cash market value as of December 1955. While the chancellor held that defendant-counterclaimant was entitled to specific performance and ordered a reconveyance of the property to it, he held that plaintiffs were not entitled to reimbursement for their improvements upon the premises.

The defendant-counterclaimant. Allied Contracting Company, a corporation. (previously having the corporate name Rantoul Development Company and hereinafter referred to as "Allied") had two officers and directors, by name Adolph Lubin and M.D. Barker, who are Springfield businessmen, engaged in the development and sale of real state. James R. Fitzpatrick, the principal plaintiff, is also a Springfield businessman with wide business interests, including real-estate promotion and development. Fitzpatrick and Messrs. Lubin and Barker had had a "feud" of many years' duration. In November 1946, while in a Springfield restaurant, Adolph Lubin encountered Fitzpatrick who stated that he had a piece of land on the south side of the city on which he planned to build a memorial park in memory of his recently deceased son and that there was another piece of land (the tract involved in this litigation) located to the north of his land and owned by Allied which he needed to acquire in order to do with the park what he wanted to do. Lubin replied that the land was not for sale but that he was quite sure that he and Mr. Barker, his business associate, would not stand in the way of such a project and if that was what Fitzpatrick wanted to do, he thought Allied would be willing to make a gift of the land. Lubin testified that Fitzpatrick refused the land as a gift on the grounds that it would not be his memorial to his son unless he bought it, while Fitzpatrick's version was that he did not refuse the gift until after he consulted his wife. Later the parties agreed to have a mutual acquaintance appraise the land for the lowest selling price that could be justified. The appraiser arrived at a figure of $1,800 for the tract and this became the cash consideration for the sale. The balance of the negotiations was handled by M.D. Barker on behalf of Allied.

Barker advised Fitzpatrick that Allied planned to put a restriction on use and a right to repurchase in the proposed deed from Allied to Fitzpatrick. However, at the latter's request, the officers of Allied after consulting with its attorney agreed to place such restriction and right to repurchase not in the deed but in a separate document. This document reads in pertinent part as follows:

"Springfield, Illinois December 1, 1946

Rantoul Development Company 300 North 9th Street Springfield, Illinois Gentlemen:

As an inducement to you to sell and convey to Florence C. Fitzpatrick the property hereinafter described and as part of the consideration for such sale and conveyance, we hereby undertake and agree with you, and your successors and assigns, that if said property, within twenty-five years from the date of your conveyance to said Florence C. Fitzpatrick, is used for any purpose other than a baseball park or grounds we will cause the same to be returned and reconveyed clear of encumbrances to you, or to your successors or assigns, for the sum of $1,800.00 to be paid to me, or my order, upon reconveyance of said property to you. In addition to baseball, athletic and recreational activities are also satisfactory. * * * [Then follows a legal description of the real estate in controversy.]

Very truly yours, /s/ Florence C. Fitzpatrick Florence C. Fitzpatrick

/s/ James R. Fitzpatrick James R. Fitzpatrick"

There is no dispute that James R. Fitzpatrick and his wife, Florence C. Fitzpatrick, executed and delivered the above instrument to the officials of Allied (then Rantoul Development Company). The dispute relates to the time and circumstances of its execution and delivery. Fitzpatrick contends that this document was delivered on or about December 2, 1946, and then cancelled or rescinded within a day or two when, according to Fitzpatrick, the initial deal looking toward a gift of the land for a memorial park did not materialize because of the objections of his wife. Allied contends that this document was received on or about December 17, 1946, with a covering letter from Fitzpatrick, and thereafter Barker delivered a warranty deed to the real estate to one of Fitzpatrick's employees and in turn received the $1,800 consideration.

The parties do not disagree that, on or about the date it bears, a warranty deed in the usual form dated December 17, 1946, properly executed by M.D. Barker, Jr. and M.D. Barker, Sr. on behalf of Allied (then Rantoul Development Company) to Florence C. Fitzpatrick was delivered to one of Fitzpatrick's employees. Fitzpatrick urges that the document relating to use and repurchase, dated December 1, 1946, was then no longer a part of the transaction, that its return to Fitzpatrick had been requested by letter, that Barker had agreed to destroy it, and that the ultimate purchase was not for a memorial park at all. Allied, on the other hand, contends that the document dated December 1, 1946, was very much an integral part of the transaction, that no one had requested its return, that the sale was for a memorial park, and that the conduct of the parties substantiates these contentions. The deed in question, which admittedly contained no restrictions, bears a recorder's stamp of December 19, 1946. The check in payment of the property bears a stamp of the bank, indicating a date of December 19, 1946. Neither party fixes the time nor the circumstances of the introduction of the question of placing a restriction on the use of the land. Both are vague as to the exact times and content of their conversations. It seems evident that Fitzpatrick was mistaken as to the date of execution and attempted recission of the letter. The dates he fixed thereafter of December 2 and 3 were at a time when the proposed transfer was to be a gift. Nevertheless, the letter recited a consideration of $1800, the appraisal figure which was admittedly not disclosed to him until a week later. The finding of the master, in which the chancellor concurred, that the document was not validly rescinded is supported by the record.

Fitzpatrick argues that in any event the document dated December 1, 1946, was superseded or "obliterated" by, or merged in the deed from Allied to Fitzpatrick. Allied's position is that the document dated December 1, 1946, is an enforecable agreement, that it and the deed should be construed together, the latter in no way nullifying the effect of the former. Allied contends that the letter dated December 1, 1946, was by its terms not some preliminary offer or negotiation, stating itself to be "as an inducement * * * and as part of the consideration for such sale and conveyance, we hereby undertake and agree * * *." The document was not a preliminary offer or negotiation, so that the legal proposition that all preliminary negotiations to a conveyance of property are merged in the conveyance itself cannot apply here so as to nullify the effect of the letter, for the letter was found to be a collateral document, supplementing the provisions in the deed. Where the parties intend that two instruments shall be executed as part of the same transaction and taken and construed together as one agreement, they will be given effect as such. Baltimore and Ohio Southwestern Railroad Co. v. Brubaker, 217 Ill. 462, 467; Clodfelter v. Van Fossan, 394 Ill. 29, 34.

In Chicago Title and Trust Co. v. Wabash-Randolph Corp. 384 Ill. 78, 87 the court stated: "The principles in reference to merger are well settled. If the terms of a contract for sale of real estate are fulfilled by delivery of the deed, there is a merger, (Weber v. Aluminum Ore Co. 304 Ill. 273,) but if there are provisions in the contract which delivery of the deed does not fulfill, then the contract is not merged in the deed as to such provision and the contract remains open for the performance of such terms. ...

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