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Lauer v. Blustein

SEPTEMBER 14, 1971.

ALFRED J. LAUER, SR., PLAINTIFF-APPELLEE,

v.

DONALD BLUSTEIN, DEFENDANT-APPELLANT.



APPEAL from the Circuit Court of Cook County; the Hon. Ben SCHWARTZ, Judge, presiding. MR. JUSTICE STAMOS DELIVERED THE OPINION OF THE COURT.

This is an appeal by defendant Donald Blustein from a summary judgment granted in favor of plaintiff Alfred J. Lauer, Sr.

Defendant contends:

1. The contract sued upon is unenforceable because of lack of consideration;

2. The indemnification clause of the contract was intended to apply only to a guaranty executed by plaintiff on November 4, 1964, and not to any subsequent guaranties;

3. Plaintiff did not allege satisfaction of the conditions precedent to defendant's liability under the contract and thereby failed to show that he was entitled to recover under the contract;

4. Plaintiff should not be allowed a summary judgment since defendant has a counterclaim against plaintiff in excess of plaintiff's claim;

5. The renewal of the loan without notice to defendant relieved defendant from liability; and

6. The summary judgment in plaintiff's favor was improper because material issues of fact are in dispute.

The parties had been associated with each other in various business transactions over a number of years. As a result of these transactions defendant and another acquired all of plaintiff's interest in Lauer Finance Corporation.

On November 4, 1964, the parties entered into an agreement whereby defendant agreed to hold plaintiff harmless from liability on any guaranty executed by plaintiff as required by National City Bank of Chicago in connection with a loan from that bank to Lauer Finance Corporation. In exchange for defendant's promise plaintiff agreed to provide collateral for said loan and execute a guaranty thereof if required to do so.

Plaintiff provided the necessary collateral for the loan and National City Bank of Chicago completed the transaction with Lauer Finance Corporation making the loan for a six (6) month period to become due on May 4, 1965. No guaranty of the loan was executed by plaintiff and apparently none was required until that date. On that date plaintiff executed a guaranty to National City Bank of Chicago of the loan to Lauer Finance Company.

On May 12, 1965, no part of the loan had been repaid and plaintiff caused the loan to be repaid thereby discharging his obligation under the guaranty. Plaintiff instituted this action on June 15, 1965, to recover from defendant under the indemnity clause of the November 4, 1964, agreement and was granted a summary judgment by the trial court. Defendant appeals.

OPINION

• 1, 2 Defendant initially contends that the contract is unenforceable because of lack of consideration. We disagree. Defendant promised to indemnify plaintiff from liability under a required guaranty if plaintiff would provide collateral and guaranty the loan from National City Bank of Chicago to Lauer Finance Corporation. Even though defendant received no direct benefit in exchange for his promise there was consideration therefor, since a promise based upon consideration to a benefit to a third person constitutes sufficient consideration for a promise or agreement. (Sherow v. Hirsch, 62 Ill. App.2d 479; Riddle v. LaSalle National Bank, 34 Ill. App.2d 116; Cwik v. Condre, 4 Ill. App.2d 380.) Plaintiff provided collateral for the loan from National City Bank of Chicago to Lauer Finance Corporation thereby benefiting a third ...


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