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Consoer, Townsend & Associates v. Addis

JULY 9, 1962.




Appeal from the County Court of Cook County; the Hon. WALTER R. O'MALLEY, Judge, presiding. Reversed and remanded with directions.


The plaintiff, Consoer, Townsend and Associates, is an engineering firm and the defendants, Irving M. Addis and Ira Salzman, were partners in an architectural firm operating under the name of Addis and Associates. The plaintiff performed engineering services for which it was not fully paid and this action was brought for the balance due. The case was tried without a jury and the court found for the defendants.

The controversy centers around a purported contract between the parties which was attached as an exhibit to the complaint. Ira Salzman did not answer the complaint. The answer of Irving Addis acknowledged that he signed the contract but stated that he did not do so on his own behalf or on behalf of his partnership. He defended on the ground that he signed as agent for a William Ruth, a disclosed principal, and that all the work under the contract was done for Ruth and all payments were made by him.

William Ruth visited the Consoer offices, indicated that he was a representative of Addis and Associates and solicited the firm's services for a proposed twenty-acre subdivision in Mount Prospect. Consoer later prepared a proposal which was addressed to: "Mr. William Ruth, c/o Addis & Associates, . . . Chicago, Illinois." The salutation was "Dear Sir:" and the proposal stated that if it was accepted it would "constitute a contract between us." The letter concluded by requesting a $1,000.00 retainer fee. Below the signature of the Consoer firm an acceptance form was provided.

The contract was returned to Consoer with the form filled out as follows:


By: Addis and Associates

Title: Partner

Attest: Irving M. Addis

Date: 31 Aug. 1956."

Consoer received a check for $1,000 from Addis and Associates, opened an account on its books in that name and proceeded to perform its part of the contract. Upon completion of the first phase, the preparation of plans and specifications for the installation of sewers, streets and sidewalks, it rendered a bill for $5,012.06. A check was received from Addis and Associates, accompanied by a note asking that the bill be receipted and returned to Addis. The receipt was not returned because the check was dishonored by the bank upon which it was drawn. The bill was subsequently paid but whether it was paid by Addis and Associates or Ruth is not clear. All Consoer bills were made out in the name of Addis and Associates. In the beginning they were directed to Ruth at the Addis office; later they were sent to Ruth at his home.

Throughout the execution of the contract, which took two to three years, the members of the Consoer firm dealt with Ruth. They neither saw Irving Addis nor knew that Ira Salzman was his partner until after this suit was started. Ruth was the director of the project and, although ownership appeared to be in a land trust, there was evidence that he was the real owner, and the project was named "Joan Ruth's Wa-Pella Gardens."

Three theories of defense have developed in this case: (1) Addis and Associates signed the contract as agents for Ruth, (2) the contract was with Addis and Associates but Ruth took it over with the consent of Addis and Consoer and (3) there was no contract at all because it was not accepted by the party to whom it was offered. The first of these mutually contradictory theories was the only one raised in the pleadings and it was the only one upon which the case was tried. The second was injected into the defendants' final argument and was adopted by the trial judge as the basis for his decision. The third was also initially introduced in the final argument; it is relied upon heavily in this appeal and is termed "the heart and gist of the whole case."

Neither the second nor the third theories will be considered at length. The second, although in direct opposition to the theory upon which the case was tried, has some evidence to support it and has the added weight of the court's judgment. However, the Addis' answer did not set up this defense and no motion to amend was made either before or after judgment. Ill Rev Stats (1959) c 110, § 46(1)(3). Novation of a contract is a good defense but it must be pleaded by the party claiming to be the beneficiary of the novation. 6 Corbin on Contracts, sec 1299. Likewise, the third theory was never included in the answer as an alternative defense. It is in conflict with the novation theory, ...

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