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Mid-continent Const. Co. v. Goldberg

FEBRUARY 25, 1963.

MID-CONTINENT CONSTRUCTION COMPANY, INC., A CORPORATION, PLAINTIFF-APPELLANT,

v.

BERTRAND GOLDBERG, DOING BUSINESS AS BERTRAND GOLDBERG ASSOCIATES, GOETHE BUILDING CORPORATION, A CORPORATION, CONTINENTAL ILLINOIS NATIONAL BANK AND TRUST COMPANY, NOT INDIVIDUALLY BUT AS TRUSTEE UNDER TRUST NO. 46835, DEFENDANTS-APPELLEES.



Appeal from the Superior Court of Cook County; the Hon. WALKER BUTLER, Judge, presiding. Affirmed.

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

This appeal concerns Count II of the amended complaint in which plaintiff, Mid-Continent Construction Company, sought to foreclose a mechanic's lien. (Count I of the complaint, which seeks an accounting, is not involved in this appeal.) Defendants filed a motion to dismiss, raising as a defense a waiver of the mechanic's lien executed by Ursa C. Stringer, president and sole stockholder of plaintiff corporation. After reference to a master in chancery for findings of fact, Count II of the complaint was dismissed without leave to amend the order stating that "[t]here is no just reason for delaying enforcement of or appeal from this order . . ." Plaintiff appeals.

This matter arises out of a written contract, dated October 31, 1960, whereby plaintiff was employed by defendant Goethe Building Corporation to erect the concrete portions of a multi-story building at 1300 Astor Street. Defendant Bertrand Goldberg, doing business as Bertrand Goldberg Associates, was the architect for the project and defendant Continental Illinois National Bank and Trust Company, as trustee of a land trust, held title to the premises. Stringer conducted the negotiations prior to entering into the contract and signed the contract, as president for Mid-Continent.

Concurrent with negotiating the construction contract, which was contingent upon plaintiff's ability to secure financing and a performance bond, Stringer negotiated with Harold J. Green to secure financial aid in order to perform the construction contract. The financial status of plaintiff was such that the bonding company required the guaranty of a person of substantial means before it would execute the performance bond. In return for his promise to sign the performance bond and to provide a revolving fund of $50,000, Green was to be assigned all sums due under the construction contract and Stringer was to assign his 100% interest in the stock of Mid-Continent as security.

On October 28, 1960, Green sent letters to Goethe and Goldberg informing them that he had agreed to make the financial advancements to Mid-Continent and that, in return, all sums due under the contract had been assigned to him. These letters did not mention the stock assignment. Goldberg answered the letter by enclosing photostatic copies of the letter, requesting Green to acknowledge that it was his letter. In addition, Goldberg stated that arrangements were being made with the bank for credit and as soon as the papers were completed, Green would be forwarded a set for his records.

On February 13, 1961, Stringer went to Goldberg's office where he executed a waiver of mechanic's lien on behalf of plaintiff. The waiver recited that it was executed, "in consideration of the sum of One Dollar ($1) and other good and valuable consideration." It further recited that the owner of the building would not permit construction to be initiated without the waiver. The waiver was notarized but was not recorded until August 10, 1961. Neither Goldberg nor Stringer notified Green about the waiver nor did Stringer have prior authorization from the plaintiff's board of directors. (The directors at that time were, in addition to Stringer himself, his wife and Robert Calhoun.) On February 15, 1961, two days after the waiver was executed, Stringer presided over a meeting of the board of directors at which time the directors approved the financial arrangements made with Green and the construction contract itself. The waiver was not mentioned. The written agreement with Green was signed March 7, 1961.

Construction was started on the building, but some months later, work was suspended. On October 20, 1961, Mid-Continent served notice of mechanic's lien and instituted this proceeding.

After defendants filed the motion to dismiss, raising as a defense the waiver signed by Stringer, plaintiff answered contending that:

(1) The release was not executed by an officer of the corporation;

(2) If it were executed by an officer, he had no authority to so do on behalf of plaintiff;

(3) The release was executed without consideration; and,

(4) Defendants were on notice as to the lack of authority of Stringer to execute the waiver.

An order was then entered stating that it appeared to the court, after argument, that the motion to dismiss was well taken and should be granted, but that plaintiff requested an opportunity to submit evidence on the following limited issues:

(1) Whether or not as stated by the attorney for the plaintiff in the course of the above argument, the waiver and release of the lien rights set forth in defendants' motion to dismiss was in fact executed by Ursa C. Stringer in behalf of the plaintiff at some time subsequent to February 13, 1961, the date of execution appearing thereon, at a time when said Ursa C. Stringer did not have ...


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