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Rosewood Corp. v. Fisher





APPEAL from the Circuit Court of Cook County; the Honorable Judges, JOHN J. GREALIS, IRVING KIPNIS, and RAYMOND E. TRAFELET, presiding.


Rehearing denied October 6, 1970.

We here consider consolidated appeals, prosecuted from judgments for possession entered by the circuit court of Cook County in favor of plaintiffs, which present issues relating to the construction and constitutional validity of the Forcible Entry and Detainer Act, (Ill. Rev. Stat. 1967, ch. 57,) the distinctive and limited purpose of which is to supply a speedy remedy to permit persons entitled to the possession of lands to be restored thereto. Wall v. Goodenough (1855), 16 Ill. 415.

General factual background reveals that all the defendants are members of the Negro race who, at various times during the 1960's, entered into installment contracts for the purchase of residential properties. Some were of new construction; others were older properties. The plaintiffs-sellers, for the most part, were developers and builders of residential areas, and others dealing in the sale of real estate. Generally speaking, it appears that the contract prices for new residences were in the vicinity of $25,000. Monthly installments on such contracts ranged from $140 to $160. Defendants, for the most part, complied with their contracts and accumulated equities in their respective properties until 1968 when a general feeling of dissatisfaction arose among the contract buyers stemming from beliefs that they had been overcharged for their properties, and that unfair advantage and discrimination, made possible by the social and economic problems encountered by members of their race in the purchase of suitable residence properties, had been practiced against them. We do not find, however, nor have we been so advised, that any of the contract purchasers then took any affirmative steps to pursue State remedies for obtaining judicial relief from the allegedly unconscionable contracts. Instead, they appear to have embarked upon a concerted course of self-determination and self-help, for an apparent purpose of securing a modification and renegotiation of their contracts, and stopped making their installment payments. In so doing, they defaulted on their contract obligations and, by the terms of the contracts, exposed themselves to forfeiture of their contract rights and equities and to suits for possession.

Early in 1969 two class actions, predicated on section 3 of the Civil Rights Act of 1866 (42 U.S.C. § 1982; and see: Jones v. Alfred H. Mayer Co. (1968), 392 U.S. 409, 20 L.Ed.2d 1189, 88 S.Ct. 2186), were filed in a Federal district court on behalf of contract purchasers of both new and old properties. In those actions it was alleged that the contracts were unlawful and in violation of various constitutional and statutory rights of the purchasers, and the relief requested was that the payment and forfeiture provisions be declared presently unenforcible and that the contracts be rescinded or reformed. We digress to state that these actions are still pending, a panel of three judges having decided on February 11, 1970, at the instance of the contract sellers, to follow a course of abstention until the issues of the present case have been decided.

In May, 1969, the Federal actions withstood motions by the contract sellers to have them dismissed and, commencing at about that point of time, the sellers proceeded with forcible entry and detainer actions, now numbering in the hundreds, in the circuit court of Cook County. And it is from this background that the principal issues in the present appeal have arisen. As noted, all of such actions have concluded with judgments for possession being entered for the plaintiffs. Some of the defendants perfected appeals; some sought to appeal by filing notice but suffered dismissal for failure to file an appeal bond as required by sections 18 and 19 of our Act, (Ill. Rev. Stat. 1967, ch. 57, pars. 19, 20,) while still others took no steps toward an appeal. Where appeals were not perfected, evictions reaching mass proportions have followed.

During September, 1969, some 370 contract buyers filed a declaratory judgment action in the circuit court of Cook County for a declaration that certain defenses which were being denied to defendants in the actions for possession could be advanced and litigated, or an alternative declaration that the Forcible Entry and Detainer Act was unconstitutional if it was to be construed as meaning that such defenses could not be advanced and litigated. This action, the caption of which was Alexander et al. v. Hamilton Corporation et al., was dismissed on motion of the defendants thereto and the plaintiffs perfected an appeal to the appellate court. We have since allowed the appeal to be transferred to this court and have caused it to be consolidated with appeals taken from the forcible entry and detainer actions.

The first of the appeals from the judgments for possession to reach this court was in the case of Rosewood Corporation, plaintiff-appellee versus Chester J. Fisher and Julia M. Fisher, defendants-appellants. And although notice of appeal was filed May 23, 1969, it was not until January 21, 1970, that the record on appeal was filed in this court. In addition to constitutional questions, this appeal, as shall subsequently be discussed in greater detail, also raised an issue, involving a construction of the Forcible Entry and Detainer Act, as to whether the trial court erred in refusing to permit certain defenses relied upon by defendants to be pleaded and heard. Thereafter, on January 22, 1970, we permitted the appeal in Lawson Corporation v. Jackson to be transferred to this court from the appellate court and to be consolidated with Fisher, inasmuch as a similar issue relating to defensive pleadings was involved. By subsequent orders continuing up to the time this court convened for its March, 1970, Term, we caused some 156 additional appeals to be consolidated with Fisher either by permitting their transfer from the appellate court, or by granting defendants who had suffered adverse judgments in the trial court to file notices of appeal to this court. In all of these additional cases, as in Fisher and Jackson, there is involved a construction of our Act insofar as it relates to the pleadings of defendants.

Section 2 of the Forcible Entry and Detainer Act provides in pertinent part that a person entitled to possession of lands may maintain an action and be restored to possession: "Fifth, When a vendee having obtained possession under a written or verbal agreement to purchase lands or tenements, and having failed to comply with his agreement, withholds possession thereof, after demand in writing by the person entitled to such possession." (Ill. Rev. Stat. 1967, ch. 57, par. 2.) Section 5 thereafter provides that a person entitled to possession may initiate an action by filing a complaint in the circuit court of the county where the premises are situated and then continues: "The defendant may under a general denial of the allegations of the complaint give in evidence any matter in defense of the action. No matters not germane to the distinctive purpose of the proceeding shall be introduced by joinder, counterclaim or otherwise: * * *." (Emphasis added.) But it is clear that matters germane to the distinctive purpose of the action may be introduced by a defendant by way of counterclaim or otherwise, inasmuch as section 11 of the Act directs that: "The provisions of the Civil Practice Act, and all existing and future amendments of said Act and modifications thereof, and the rules now or hereafter adopted pursuant to said Act, shall apply to all proceedings hereunder in courts, except as otherwise provided in this Act." Indeed, it was not until the Civil Practice Act was adopted that the words emphasized in the quotation from section 5, appearing above, were added to the section. (Cf. Ill. Rev. Stat. 1933, ch. 57, par. 5, with Ill. Rev. Stat. 1935, ch. 57, par. 5.) And so far as the distinctive purpose of the Forcible Entry and Detainer Act is concerned it has been accurately and succinctly stated in Bleck v. Cosgrove, 32 Ill. App.2d 267, 272 that: "Forcible entry and detainer is a summary statutory proceeding to adjudicate rights to possession and is unhampered and unimpeded by questions of title and other collateral matters not directly connected with the question of possession."

In the Fisher and Jackson cases, whose pleadings are treated upon severally and taken as being representative of those in all the possession cases to which this appeal has been extended, the defendant sought to introduce by way of answer, counterclaim or affirmative defense, various matters going to the validity and enforceability of the contracts upon which plaintiffs based their claim of a right to possession. Included were allegations that the contracts were unconscionable and unenforcible; that they were usurious; that they were extracted and induced by fraud; and that they were in violation of the civil and various constitutional rights of the defendants. And while a contention is made by plaintiffs that such matters were improperly and insufficiently pleaded, that issue is not open to our consideration. It is well settled that the sufficiency of a pleading may not be attacked for the first time in a court of review. (McFail v. Braden, 19 Ill.2d 108, 120.) On motion of plaintiffs, the trial court struck the defensive pleadings challenging the validity and enforceability of the contracts on the ground that they were not germane to the issue of right to possession and therefore prohibited by section 5 of the Act. Defendants now contend that such a construction of the section causes the Act to violate constitutional guarantees of equal protection and due process of law, and various other provisions of our State and Federal constitutions. It is broadly asserted, too, that such a construction of the Act in its application to contract purchasers of land causes it to be an arbitrary and discriminatory measure against poor persons and members of minority groups who are unable to obtain mortgage financing when they purchase residences. In the view we take, however, these constitutional claims are not reached and need not be decided. See: Bismarck Hotel Co. v. Petriko, 21 Ill.2d 481; City of Detroit v. Gould, 12 Ill.2d 297.

Limiting ourselves to a consideration of the act only so far as it applies to contract purchasers of land, this case is, so far as we can ascertain, one of first impression in this court. It is our opinion that the defenses going to the validity and enforceability of the contracts relied upon by the plaintiffs were germane to the distinctive purpose of the forcible entry and detainer actions and were improperly stricken. That purpose, to repeat, is to restore possession to one who is entitled to the right of possession. "Germane" has been judicially defined as meaning "closely allied," and is further defined in Webster's New Twentieth Century Dictionary, p. 767, as meaning: "closely related; closely connected; relevant; pertinent; appropriate." Where as here, the right to possession a plaintiff seeks to assert has its source in an installment contract for the purchase of real estate by the defendant, we believe it must necessarily follow that matters which go to the validity and enforceability of that contract are germane, or relevant, to a determination of the right to possession. This is particularly true for two reasons. First, because a contract buyer becomes the equitable owner of the property upon execution of an installment contract, (Shay v. Penrose, 25 Ill.2d 447, 449,) and thus by such an action may be stripped of his equitable ownership as well as possession; second, the contract purchaser is faced not only with the loss of possession, but, unlike a tenant, trespasser or squatter, is likewise faced with the loss of the equity accumulated by payments made on the contract. Here, for example, the Fishers had paid approximately $10,000 toward satisfaction of their total contract obligations. On the other side of the coin, a contract seller claiming and seeking to enforce a claimed right of possession should not be permitted to prevail on the basis of such contract so long as its validity and enforceability is questionable under the law. Should a contract purchaser not be permitted to defend upon the very contract upon which the seller relies, in our judgment the result could be, as argued, a direct denial of constitutional rights and an indirect denial of civil rights. We believe that contract buyers may plead equitable defenses and be given equitable relief if it is established that the contracts are unconscionable or in violation of civil rights as here contended. Cf. Horner v. Jamieson, 394 Ill. 222; Stein v. Green, 6 Ill.2d 234.

Section 11 of the Forcible Entry and Detainer Act provides that the rules of practice and pleading in other civil cases shall apply to detainer actions, and, as previously noted, contemporaneously with the enactment of the Civil Practice Act section 5 of the detainer act was amended in terms which permits matters germane, (i.e., closely allied; closely related, closely connected; appropriate,) to be introduced by a defendant. The fusion of the practice and procedure in suits at law and in equity accomplished by the Civil Practice Act is, in our opinion, sufficient to permit necessary equitable relief in these proceedings, rather than to force upon defendants a separate proceeding where the same relief will be forthcoming. Cf. Ellman v. De Ruiter, 412 Ill. 285; Nikola v. Campus Towers Apartment Bldg. Corp. 303 Ill. App. 516.

A necessary concomitant of the seeking of relief through equity is a willingness to do equity. This is fundamental in equity jurisprudence. The invocation by defendants of equitable defenses necessarily requires that the trial court exercise its discretion by ordering such payments as the court deems proper and any other equitable arrangements ...

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