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Farnsworth v. Lamb

AUGUST 2, 1972.




APPEAL from the Circuit Court of DeWitt County; the Hon. RODNEY A. SCOTT, Judge, presiding.


This case comes to us from the Circuit Court of DeWitt County on a judgment entered on a jury verdict in favor of the Plaintiff, Kent R. Farnsworth, Sr., and against the Defendants, Carl A. Lamb and Norma Lee Lamb, and the Defendants Evelyn I. Henry and Jack Henry d/b/a Henry Realty, in the amount of $2,700.00. Only the Defendants Evelyn I. Henry and Jack Henry have appealed.

The record reveals that in January, 1969, the Lambs were the owners of certain property located near Farmer City, Illinois. On January 9th they entered into a real estate listing contract with Evelyn I. Henry wherein they granted Mrs. Henry the exclusive right to sell the property in question for a specified period of time and agreed to pay her a commission in the amount of five per cent of the sale price. The listing contract further provided that the commission was due and payable when a contract of purchase was signed. At the time this listing contract was consummated, Mrs. Henry was a licensed real estate broker and the owner of a real estate agency operating under the name of "Henry Realty." Her husband, Jack Henry, was a real estate salesman who worked with his wife in the operation of the agency.

Pursuant to their listing agreement the Henrys began to solicit prospective buyers for the Lambs' property. In response to an advertisement placed in a Decatur newspaper, the Plaintiff, Kent F. Farnsworth, Sr., and his wife became interested in the property. The Farnsworths were shown the property by either Mr. or Mrs. Henry and a series of negotiations then ensued between the parties that culminated in a written Contract for Sale of Real Estate executed on March 15, 1969, by Mr. Farnsworth and the Lambs. This contract was a printed "form" contract with various blank spaces for the insertion of the pertinent details. It was prepared on the date of its execution by Mrs. Henry who typed it in the kitchen of the property owned by the Lambs while Mr. Henry, Mr. Farnsworth and Mr. and Mrs. Lamb remained in the living room. The contract, minus the legal description of the property and a listing of certain items of personal property that were included in the purchase price, provided as follows (the italicized language was typewritten; the remainder was part of the printed form):


RECEIVED of KENT R. FARNSWORTH Two Thousand seven hundred and no/100 _________ Dollars, as part payment toward the purchase of the following described Real Estate:

[Here there was inserted a legal description of property together with list of personal property.]

which is hereby bargained and sold to the said Kent R. Farnsworth for the sum of Twenty seven thousand and no/100 _____________ Dollars, Twenty four thousand three hundred and no/100 ___________ Dollars, more to be paid on the delivery of a good and sufficient Warranty Deed of Conveyance for the same within 90 _____ days from this date, or as much sooner thereafter as the Deed is ready for delivery, after the title has been examined and found good, and the balance to be paid as follows: cash in hand upon delivery of a good and sufficient Warranty Deed of Conveyance, the amount of $24,300.00.

To be secured by Trust Deed or Mortgage on the property above described. Should the title to the property not prove good, then this $2,700.00 to be refunded. But should the said Kent R. Farnsworth fail to perform this Contract on his part promptly at the time and in the manner above specified (time being of the essence of this Contract), then the above Two thousand seven hundred and no/100 _______ Dollars shall be forfeited by him as liquidated damages, and the above contract shall be and become null and void.

On the date the contract was executed Mr. Farnsworth tendered a cashier's check in the amount of $2700.00 to either Mr. Lamb or to Mr. Henry. This check was then given to Mrs. Henry who endorsed it payable to the escrow account of Henry Realty. The testimony disclosed that the Henry's later paid one-half of this down payment, $1350.00, to Mr. and Mrs. Lamb and retained the other one-half in payment of their real estate commission.

After the contract was signed Mr. and Mrs. Farnsworth attempted to secure financing to pay the balance of the purchase price. In this record they enlisted the services of Mr. Henry who assisted them in submitting written applications to savings and loan associations in Leroy and Gibson City. Mrs. Farnsworth also contacted a number of area lending institutions by telephone in the hope of obtaining a mortgage loan. Unfortunately, the Farnsworths' efforts proved fruitless due to the fact that during this period of time home mortgage money was scarce and the lending institutions they contacted were not making 90% loans, the type needed by the Farnsworths to finance their purchase.

Consequently, on May 21, 1969, counsel for Mr. Farnsworth wrote to the Lambs and informed them that the Farnsworths could not obtain a mortgage on the property. Unless the Lambs were willing to finance the remainder of the purchase price themselves, Mr. Farnsworth stated that he wished his "earnest money" of $2700.00 returned at once. When both the Lambs and the Henrys adamantly refused to return the $2700.00 to him, Mr. Farnsworth filed suit.

The complaint filed by Mr. Farnsworth was directed against both the Lambs and the Henrys and alleged, in essence, the facts set forth above. In addition, the complaint asserted that in the event Mr. Farnsworth could not obtain a loan for the balance of the purchase price, then the defendants had agreed to refund the $2700.00 earnest money. The complaint went on to declare that a mortgage could not be obtained and that the defendants failed to honor Mr. Farnsworth's request for the return of his earnest money. At the outset the Henrys filed a motion to dismiss on the ground that the contract in question was not ambiguous and, therefore, parol evidence would be inadmissible to explain or add to its tenor. This motion was denied by the trial court and the case proceeded to a trial by jury.

At the trial virtually all of the parties admitted that there had been some discussion between Mr. Farnsworth and the Henrys and between Mr. Farnsworth and the Lambs to the effect that Mr. Farnsworth was going to have to obtain financing in the form of a mortgage to purchase the Lamb property. Both Mr. and Mrs. Lamb testified that prior to the signing of the real estate contract they knew that Mr. Farnsworth had to secure a mortgage in order to complete the purchase. Mrs. Henry testified that one week prior to the contract's execution she was present at the property with Mr. and Mrs. Farnsworth and the subject of financing was discussed although she did not remember the exact ...

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