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Mueller & Sons, Inc. v. No. Ill. Gas Co.

MARCH 23, 1973.

GEORGE F. MUELLER & SONS, INC., PLAINTIFF-APPELLANT,

v.

NORTHERN ILLINOIS GAS COMPANY, DEFENDANT-APPELLEE.



APPEAL from the Circuit Court of Cook County; the Hon. RONALD J. CRANE, Judge, presiding.

MR. JUSTICE LORENZ DELIVERED THE OPINION OF THE COURT AS MODIFIED UPON DENIAL OF PETITION FOR REHEARING:

Plaintiff appeals from a judgment of the circuit court in favor of defendant.

The facts are summarized. On November 17, 1969, plaintiff's authorized agent, L.H. Smith, signed a contract on behalf of plaintiff to install, service and maintain vending machines on the premises of defendant. An employee of defendant, Kenneth Schmitz, signed the contract in his own name under the heading "(Individual) Proprietor." The space for signing as "(Corporation) Proprietor" was left blank. L.H. Smith wrote "Northern Illinois Gas Co." on the blank entitled "Trade Name." Plaintiff installed the machines and served the defendant at three of its locations from December, 1969 to March, 1970.

On April 8, 1970, A.J. Morphey, division personnel director of defendant, sent a letter to plaintiff, complaining of plaintiff's failure to properly service the machines, to provide certain new machines, and to maintain the machines in sanitary condition. Morphey then requested plaintiff to remove the machines from defendant's premises. On April 9, 1970, a letter sent by plaintiff's attorney to Morphey maintained that either each situation complained of did not occur or was not the fault of plaintiff. The letter expressed plaintiff's intent to continue to perform the contract. Also on April 9, in a separate envelope, pursuant to the contract, a check for $260.42 payable to defendant for commissions and a statement of the account were sent to defendant.

Plaintiff alleged in its complaint that defendant breached the contract by refusing to permit the installation, servicing and maintenance of machines tendered for installation or already installed. In lieu of an answer, on June 18, 1970, defendant filed a motion to dismiss the complaint on grounds of legal insufficiency. The motion alleged that the contract is not binding on defendant since signed by an individual proprietor, Kenneth Schmitz; that the alleged contract limits the relief which may be sought; that plaintiff's sole remedy is in chancery; that since plaintiff drafted the contract, it should be construed against it; that the parties to the contract lacked written authorization; and that Leland Smith lacks power to bring the suit in the name of plaintiff. On July 8, 1970, the court dismissed the complaint on the grounds that the alleged contract was not signed or executed by the corporate defendant. On August 6, 1970, pursuant to plaintiff's motion, the court vacated its order to dismiss.

On September 29, 1970, defendant filed its answer to the complaint denying plaintiff's allegations in Count I and alleging as to Count II that defendant did not make or deliver the instrument, that the instrument lacks mutuality, and that the instrument limits the remedy to an action in chancery. Following a hearing on the merits, defendant filed an amended answer on January 25, 1971, in which it further alleged that the contract is not enforceable, failing to comply with the Statute of Frauds; that in the event of a finding of ratification, plaintiff substantially breached the contract; and, that, in any event, ratification was only partial.

On February 11, 1971, the court ruled in favor of defendant, finding that:

(1) Kenneth Schmitz did not have express or implied authority to enter into a contract on behalf of defendant.

(2) The Statute of Frauds applies.

(3) The amount in controversy exceeds $500, and the term sued upon exceeds one year.

(4) The instrument is not signed by defendant.

(5) The contract is invalid in respect to defendant.

Plaintiff appeals from this ruling, the following issues arising: if no authority existed, whether defendant ratified the contract so as to become bound by its terms, and even if defendant would otherwise be bound to the contract, ...


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