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Williams v. Rock River Sav. & Loan Ass'n

JULY 2, 1964.

LOREN W. WILLIAMS AND ALBERTA

v.

WILLIAMS, APPELLANTS,

v.

ROCK RIVER SAVINGS AND LOAN ASSOCIATION, AND ROBERT F. PAGEL, D/B/A PAGEL CONSTRUCTION COMPANY, APPELLEES.



Appeal from the Circuit Court of Winnebago County; the Hon. ALBERT S. O'SULLIVAN, Judge, presiding. Affirmed.

CARROLL, J.

The defendant, Robert F. Pagel, constructed a home for the plaintiff. The other defendant, Rock River Savings and Loan Association, made a construction loan to the plaintiff to finance the construction. This appeal involves only the litigation between the plaintiff and Rock River Savings and Loan Association. The record does not show the status of the proceedings between the plaintiff and the defendant, Robert F. Pagel. The plaintiffs seek to recover from Rock River for damages on account of failure of the contractor to perform his contract and failure to receive proper lien waivers. Plaintiffs claim that these matters were breaches of Rock River's agreement with the plaintiffs.

Plaintiffs appeal from an order sustaining defendants' motion for summary judgment.

The pleading to which the defendant filed its motion for summary judgment was plaintiff's third amended complaint as to Count II. This complaint alleged that on or about August 3, 1960, plaintiffs entered into a contract with Pagel for the construction of a home for the sum of $21,500; that part of the said sum was to be paid to Pagel directly by Rock River Savings and Loan Association by virtue of a mortgage which plaintiffs had executed prior to the completion of said home; that the defendant has made payment to the contractor without direct authorization of plaintiffs; that the contractor breached his contract with the plaintiffs in certain respects (the complaint alleging the specific defects). The complaint further alleged:

"5. That on or about the 22nd day of September, 1960, plaintiffs at the instance of the defendant, ROBERT F. PAGEL, and the assurance of ROCK RIVER SAVINGS AND LOAN ASSOCIATION, entered into an agreement with the defendant, ROCK RIVER SAVINGS AND LOAN ASSOCIATION, said Agreement being partly written and partly oral. The written portion of the agreement has been previously filed herein and is made a part of the amended Count Two. In said agreement, the defendant, ROCK RIVER SAVINGS AND LOAN ASSOCIATION, agreed that they would be responsible for making payouts and in connection therewith would first obtain proper waivers of lien or partial waivers of lien and that they would satisfy themselves that the work had been actually completed in a satisfactory manner and that they would make a charge for such service.

"6. That the defendant, ROCK RIVER SAVINGS AND LOAN ASSOCIATION, was paid a fee for the supervision of the construction of the premises herein and for taking the responsibility of making the payouts for work done and completed upon said premises from the proceeds of the construction mortgage, which plaintiffs were required to and did sign prior to the construction of said home and which they were obligated to repay to said defendant, ROCK RIVER SAVINGS AND LOAN ASSOCIATION.

"7. That the defendant, ROCK RIVER SAVINGS AND LOAN ASSOCIATION, wilfully, negligently and carelessly paid out the entire proceeds from the construction mortgage of the plaintiffs, being the amount of Sixteen Thousand Eight Hundred ($16,800) Dollars, contrary to their agreement with the plaintiffs, and were negligent in the following respects:

"a. That from their knowledge of the contractor in question, ROBERT F. PAGEL, they knew or should have known that he was unreliable and that his statement of work completed could not be depended upon, and notwithstanding this fact, they made payouts upon his statement without checking the work completed.

"b. That they did not receive proper waivers of lien for work completed.

"c. That contrary to their agreement, they negligently failed to determine that the work in question was being completed in conformance with the construction contracted and negligently failed to determine that it, in fact, had been completed and negligently failed to determine that it had been, in fact, paid for.

"d. That they negligently failed to obtain evidence satisfactory that the construction of the improvements, after all deductions, would allow sufficient amount in the proceeds of the loan to pay for the completion of the building, equipment and improvements in question.

"e. That they negligently failed to require satisfactory evidence that the equipment, materials and supplies were being provided in accordance with all the provisions of the construction agreement.

"8. That the defendant, ROCK RIVER SAVINGS AND LOAN ASSOCIATION, and the defendant, ROBERT F. PAGEL, had a working agreement whereby ROBERT F. PAGEL would obtain the prospective buyer and that he would then bring said prospective buyer to the defendant, ROCK RIVER SAVINGS AND LOAN ASSOCIATION, who would furnish the financing and that the defendants, ROBERT F. PAGEL and ROCK RIVER SAVINGS AND LOAN ASSOCIATION, worked together to furnish a packaged deal, in this instance, to the plaintiffs and that the defendants, ROCK RIVER SAVINGS AND LOAN ASSOCIATION and ROBERT F. PAGEL, aforesaid were joint ventures in this sale of the premises and the construction of the improvements of the aforesaid to the plaintiffs.

"9. That the written agreement aforesaid was not the entire agreement of the parties and on its face does not purport to be the ...


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