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Keller v. Hyland Builders Corp.

DECEMBER 10, 1962.

ARTHUR C. KELLER, PLAINTIFF-APPELLEE,

v.

HYLAND BUILDERS CORPORATION, ET AL., DEFENDANTS-APPELLANTS.



Appeal from the Superior Court of Cook County; the Hon. DANIEL A. COVELLI, Judge, presiding. Affirmed.

MR. PRESIDING JUSTICE BURMAN DELIVERED THE OPINION OF THE COURT.

Rehearing denied January 10, 1963.

This is an appeal from an order of the Superior Court refusing to vacate a confessed judgment.

The action concerns promissory notes given to plaintiff by defendants in partial payment for a certain motel property. Plaintiff was the owner of and held title to the real estate in question in the name of Green Bay Washington Motel Corporation. The land had been purchased from Jerome Morrison and Harry Porett and plaintiff owed them money on the purchase price. When construction of the motel was commenced, plaintiff paid $25,000 to Porett and Morrison for the construction of off-site improvements.

Prior to the completion of the motel, in December, 1960, defendants negotiated with Morrison, Porett and plaintiff for the purchase of their respective interests in the motel. On December 17, 1960, a purchase price of $106,000 was agreed upon. $10,000 was to be paid in cash with promissory notes for the balance. Nine days later, defendants agreed to execute separate judgment notes of $50,000 payable to Porett and Morrison and $44,000 payable to plaintiff. The notes were executed and delivered to the respective parties. The $50,000 due Morrison and Porett was payable as follows:

$20,000 due May 10, 1961, 5,000 due July 1, 1961, 5,000 due February 1, 1962, 5,000 due April 1, 1962, 5,000 due June 1, 1962, 10,000 due July 1, 1962.

The $44,000 due plaintiff was payable as follows:

$ 5,000 due July 1, 1961, 10,000 due September 1, 1961, 10,000 due November 1, 1961, 5,000 due February 1, 1962, 5,000 due April 1, 1962, 5,000 due June 1, 1962, 4,000 due July 1, 1962.

Among other things, the purchase agreement provided that Porett was to deliver to defendants a letter guaranteeing installation of off-site improvements on or before May 1, 1961, while plaintiff was to deliver a letter certifying that he had not caused any liens to be placed on the premises other than for architectural or engineering services rendered.

The first two installments of the notes payable to Morrison and Porett, due May 10, 1961, and July 1, 1961, were paid. The first payment on the notes payable to plaintiff, due July 1, 1961, was not paid. On August 24, 1961, after the forty-day grace period had lapsed, plaintiff confessed judgment for the entire amount due, pursuant to the acceleration clause.

On September 7, 1961, defendants filed a petition seeking to open up the confessed judgment, alleging that neither Porett nor plaintiff had provided the letters outlined, and "that the guarantee of the installation of off-site improvements and the certification that no liens had been placed on the premises other than for architectural and engineering services constituted a substantial portion of the consideration for defendants' execution of the promissory notes on which judgment has been taken, and that said consideration has therefore failed." On September 18, 1961, defendants filed a supplemental affidavit setting forth offsetting claims against plaintiff in the following amounts:

$ 2,166, the amount of a mechanic's lien filed by Soil Testing Service for services requested by plaintiff,

30,000, cost of off-site improvements not completed ...


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