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New York Cent. Development Corp. v. Byczynski

MAY 20, 1968.




Appeal from the Circuit Court of Putnam County, Tenth Judicial Circuit; the Hon. ALBERT PUCCI, Judge, presiding. Reversed and remanded.


Rehearing and petition for certification of importance denied July 16, 1968.

The plaintiffs obtained an option to buy 370 acres of land from defendants at a fixed price of $330,000. The contract contained this provision:

"The conveyance of the above premises is conditioned upon conveyance of suitable exchange property to seller. Seller will sell only if such exchange property cannot be acquired by purchaser."

When the buyers exercised their option as provided in the contract, the sellers declined to close the deal. Plaintiffs then filed this suit in equity praying for specific performance. It was defended on the ground that plaintiffs had not performed their obligation to produce suitable exchange property. The chancellor denied the relief deciding for defendants on the ground principally that the words "acquired by purchaser" mean that the plaintiffs were obligated to acquire and tender suitable exchange property.

When an exchange is contemplated it is surely essential that the party tendering the exchange be able to convey, or cause to be conveyed, the title thereto. To this extent that party must acquire a right to convey. But, there arose a number of questions which cannot be answered by merely reading this paragraph. Who has the right to select the property to be exchanged? To whom must it be suitable? May the plaintiffs tender acreage which the defendants say is too far away or otherwise undesirable to them? May the plaintiffs claim credit on their contract for their costs even if defendants assert the price is too high?

Surely the parties must have had some understanding on these subjects when they contracted. Yet, the contract does not spell out what they intended, thus leaving both sides room to claim what they think was meant. With two possible answers to these and other questions, the written contract left matters open to dispute unless both sides dealt at all times in good faith.

The rest of the contract throws no light on these questions. The fact is the parties did not write a complete statement of their intentions. The option agreement is incomplete on its face as to various matters which have to be agreed upon. In this situation, evidence of prior negotiations is admissible.

"Whether the written contract was intended to be a complete and final agreement, must be determined from the language of the contract and the circumstances of the case. If it is silent in essential particulars, parole evidence is admissible to establish the missing parts." Stevens v. Fanning, 59 Ill. App.2d 285, 207 N.E.2d 136; Olson v. Rossetter, 399 Ill. 232, 77 N.E.2d 652; Meyer v. Sharp, 341 Ill. App. 431, 435, 94 N.E.2d 510; Fuchs & Lang Mfg. Co. v. R.J. Kittredge & Co., 242 Ill. 88, 94, 89 N.E. 723.

"Parole evidence which does not vary or contradict the document under consideration is admissible to establish a fact as to which the instrument is silent." 18 ILP, Evidence, § 271.

"The intention of the parties, it is true, must govern; but the experience of human affairs teaches the courts that this intention is not to be sought merely on the apparent meaning of the language used, but this language may be enlarged or limited by reference to the circumstances surrounding the parties and the object they evidently had in view." Pocius v. Halvorsen, 30 Ill.2d 73, 78, 195 N.E.2d 137.

In addition to the line of cases above referred to which permit evidence to be admitted as to prior and contemporaneous negotiations, where it is found that the written agreement is silent in some essential matters, there is another line of cases which refer to the acts of the parties as showing what they believe was intended. Some of these cases are as follows:

"In the construction of a contract it is always allowable to look to the interpretation the parties place upon it, contemporaneously or in its performance for aid in ascertaining its meaning." Consolidated Coal Co. v. Schneider, 163 Ill. 393, 396, 45 N.E. 126.

"Where the parties to a contract have approved a particular construction of doubtful terms or conditions of the contract, the court will follow the construction which the parties have placed upon it." Abingdon Bank ...

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