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Bank of Marion v. Fritz

OPINION FILED MARCH 29, 1974.

THE BANK OF MARION, APPELLANT,

v.

ROBERT "CHICK" FRITZ, INC., APPELLEE.



Appeal from the Appellate Court for the Fifth District; heard in that court on appeal from the Circuit Court of Williamson County; the Hon. Stewart Cluster, Judge, presiding.

MR. JUSTICE RYAN DELIVERED THE OPINION OF THE COURT:

Rehearing denied May 31, 1974.

This case involves an action by the Bank of Marion for damages for breach of an alleged contract. A jury verdict was returned in favor of the defendant in the circuit court of Williamson County. The trial court then entered a judgment notwithstanding the verdict for $25,567.92 in favor of the plaintiff. The trial court also conditionally ruled that in case of the reversal of its order a new trial be granted to the plaintiff. The appellate court reversed the judgment notwithstanding the verdict and the conditional order granting a new trial and reinstated the jury verdict. (9 Ill. App.3d 102.) We granted leave to appeal.

The defendant is a beer distributor. In 1969 it contracted with Diversified Contractors, Inc., for the construction of a warehouse. Diversified had difficulty in securing financing for the construction project. To overcome this financing difficulty, the plaintiff Bank and Diversified agreed that the Bank would advance construction funds if Diversified secured a promise from the defendant to make the periodic payments due under the construction contract jointly to Diversified and the Bank. Diversified then succeeded in having defendant's president, Fritz, sign the following instrument:

"CERTIFICATION OF CONTRACT

TO: Bank of Marion Public Square Marion, Illinois

Att: Mr. Oscar Schafale

RE: Construction Contract on Beer Warehouse & Offices Highway 177 West Mascoutah, Illinois

This certification of contract is to confirm the contract between our company and Diversified Contractors, Inc., for the contract amount of $111,664.00 — plus extras to date of $3,745.00 — for a total of $115,409.00. The total amount plus any other extras and/or deletions will be made Jointly to the Bank of Marion and Diversified Contractors, Inc.

Signed:

ROBERT "CHICK" FRITZ, INC. Mascoutah, Illinois

BY: /S/ Robert Fritz"

Diversified delivered this instrument to the Bank, which then made the construction loans. However, none of the warehouse payments were ever paid jointly to Diversified and the Bank; all payments were made directly to Diversified. Diversified eventually defaulted in its loan repayments and the Bank sued the defendant, claiming that because of the defendant's failure to make its payments jointly to Diversified and the Bank, it had suffered $34,697.28 in damages.

Fritz testified that he signed the instrument without reading it and did not know that it would be used to induce the Bank to make a loan to Diversified. According to his testimony the instrument was presented to him by Robert Morgan, vice president of Diversified, while he was busy at the plant. Morgan allegedly said that the Bank wanted assurances that Diversified was completing its contract with the defendant. It wanted to know where the defendant was working and what it was doing. Fritz accepted this explanation and signed the paper without reading it. The defendant did not receive a copy of the instrument and prior to Diversified's default ...


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