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Besinger v. National Tea Co.

SEPTEMBER 13, 1971.




APPEAL from the Circuit Court of Cook County; the Hon. F. EMMETT MORRISSEY, Judge, presiding.


Rehearing denied October 19, 1971.

Leonard Besinger (plaintiff) is the sole beneficiary of a land trust which holds legal title to a large parcel of vacant land in Carpentersville, Illinois. During June of 1961, a real estate broker and attorneys commenced negotiations in his behalf with National Tea Company (defendant) in contemplation of a long-term lease of the real estate. At the termination of these negotiations, later to be examined in some detail, plaintiff filed an amended complaint in two counts. Count I sought specific performance of the alleged lease contract by defendant. Count II sought damages for breach thereof. The trial court sustained a motion to dismiss Count I. The ruling was affirmed by this court upon considerations other than the issues presently to be determined. Besinger v. National Tea Company, 75 Ill. App.2d 395.

In due course, Count II proceeded to trial without a jury. The court found the issues in favor of plaintiff and awarded damages of $154,999.94. Defendant appeals; raising primarily the issue of validity of the alleged contract. A statement of pertinent facts follows.

During the spring of 1961, an employee of defendant named Chester W. Cooke contacted plaintiff's real estate broker. This led to various conversations and discussions. As a result, on June 12, 1961, plaintiff wrote a letter to defendant which described itself as a "commitment to lease." The letter contained ten numbered paragraphs with general provisions of a proposed lease of the vacant property to defendant for 15 years with three five-year options and a provision that defendant was to construct a commercial building upon the vacant property. The tenth paragraph provided for inclusion in the lease of "Other provisions usually and customarily included * * *" in such documents in the Chicago area.

This commitment was followed by a telegram sent to plaintiff by defendant on July 17, 1961, which stated, "We accept your offer of June 12th with all items and conditions." Various additional letters passed between defendant, plaintiff's broker and plaintiff's legal counsel. As a result, and on August 15, 1961, one of plaintiff's attorney sent Cooke an original and two copies of a proposed lease.

Plaintiff's counsel and Cooke continued their discussions and correspondence. It was agreed that the duplicating machine owned by defendant should be used to prepare the lease for execution. Accordingly, on September 13, 1961, plaintiff's counsel sent Cooke an original of the proposed lease reflecting all changes agreed upon to that date with the request that it be duplicated and returned to counsel, "for execution" by the client.

On October 2, 1961, Cooke sent the attorney five copies of the proposed lease for execution by plaintiff. This letter also stated, "When returning the leases to me for execution by our management I request that the survey referred to in the Demise Clause be attached to all copies." Cooke signed this letter: "C.W. Cooke, Manager Real Estate Department." This lease document contained blank spaces for signature by an undesignated person in behalf of defendant and also by its secretary and for acknowledgement of the signatures of defendant's president and secretary before a notary public.

The finalized copies of the lease were dated October 9, 1961. Plaintiff obtained execution and acknowledgement of three copies of the lease by the officials of the corporate trustee holding legal title to the property. On October 23, 1961, plaintiff's counsel sent three copies of the executed lease to Cooke. The letter of transmittal stated, "Please return two fully executed copies to me."

Thereafter, conversations between the parties continued. On October 31, 1961, at the request of Cooke, plaintiff's legal counsel sent him a letter signed by plaintiff which provided that rent would not be due under the lease until six months from October 25, 1961. This was because of, "* * * considerable delay involved in execution of the lease * * *." In addition, at the same time, at the request of Cooke, plaintiff's counsel sent him a memorandum or summary of the lease completely executed by the corporate trustee.

A week or ten days later, one of plaintiff's attorneys called Cooke and inquired about the executed leases. The lawyer testified that Cooke told him that he would receive them "in the next few days." The testimony also is that upon subsequent conversations Cooke said that the delay was caused by internal office procedures and that the leases would be forthcoming very shortly or within a few days. On the contrary, Cooke testified that he never told either of the attorneys for plaintiff that they had nothing to worry about or that the lease would be signed in due course and returned. There is also testimony that Cooke at one time advised plaintiff himself that it would be necessary to obtain approval of the lease by the directors of defendant. In any event, regardless of the merits of these various contentions, neither the lease nor the memorandum was ever executed by defendant.

On November 20, 1961, counsel for plaintiff wrote Cooke and remonstrated against the delay in returning the executed leases. This communication reviewed a portion of the negotiations between the parties. It referred to the fact that executed copies of the lease had been promised to plaintiff's counsel by Cooke and never received. The letter demanded delivery of the executed lease on or before November 23, 1961. No written reply to this letter was ever made and the executed leases were not returned. On December 21, 1961, counsel for plaintiff again wrote to defendant and summarized the negotiations between the parties. This letter pointed out that plaintiff had been obliged to refused another lease offer and "final demand" was made upon defendant to execute and deliver the leases.

There is also evidence that, in a telephone conversation on or about December 1, 1961, counsel for plaintiff advised Cooke that unless the signed leases were returned within five days the transaction would be terminated. On December 28, 1961, Cooke sent counsel for plaintiff a letter with which he returned the unsigned leases. This letter made reference to the telephone conversation. Plaintiff then proceeded with other arrangements for a lease of the vacant real estate.

On appeal, defendant contends that the written commitment for lease sent to defendant by plaintiff on June 12, 1961, together with defendant's telegram of acceptance sent plaintiff on July 17, 1961, are legally insufficient to create an enforceable contract. Defendant further contends that the final draft of the leases completely executed by the lessor together with the letter dated October 2, 1961, signed by Cooke wherein the documents were sent to plaintiff's counsel for execution by the lessor and to be returned "for execution by our management" similarly did not create an enforceable contract because Cooke was not authorized in writing by defendant to execute the leases in questions as specified in Section 2 of the Statute of Frauds. Ill. Rev. Stat. 1969, ch. 59, par. 2. Defendant also contends that the parties never agreed to plans and specifications of the contemplated building so that the purported lease was unenforceable. The final contention of defendant is that the trial court applied ...

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