APPEAL from the Circuit Court of Du Page County; the Hon.
GORDON MOFFETT, Judge, presiding.
MR. JUSTICE DIXON DELIVERED THE OPINION OF THE COURT:
The plaintiff, Yale Development Company, an Illinois corporation, filed a complaint for specific performance of a real estate exchange contract and for damages against John F. Andermann and Marie J. Andermann, his wife. By amendment, Yale joined the Melrose Park National Bank as trustee under trust no. 547, grantee in a deed executed by the Andermanns shortly before the filing of the original complaint. The three defendants filed an answer and an affirmative defense in which they asked the court to declare that a rescission of the contract had taken place. The Circuit Court of Du Page County, Illinois, found for the plaintiff, entered a decree for specific performance, and reserved the question of damages for a future hearing. The defendants have appealed.
It appears that on March 24, 1964, the Andermanns gave Yale a one-year option to purchase a 70-acre tract of farmland they owned in Du Page County for a price of $175,000. The option agreement provided that if Yale exercised the option, it was to enter into an exchange contract with the Andermanns, if satisfactory farmland could be found for the exchange. The other land was to be appraised, and if valued at less than $175,000, Yale was to pay the Andermanns the difference. An unexecuted form of exchange contract was attached to the option agreement. Yale obtained two extensions of time from the Andermanns, and then on September 23, 1965, exercised its option and paid the $5,000 earnest money which the option agreement required.
At the time of Yale's exercise of its option, no property had been located which was to be the exchange property. The Andermanns found property with which they were satisfied in early Spring of 1966. This was a 110-acre tract of farmland in Will County belonging to Eugene Weisbrook and Audrey Weisbrook, his wife. On May 11, 1966, Yale and the Andermanns executed the exchange contract for which the option agreement called. In the exchange contract the Andermanns agreed to convey their farm property to Yale in exchange for the Weisbrook property and $58,000 in cash. The final payment of $53,000 was due from Yale by July 1, 1968, and 5% interest was to be paid on July 1, 1967, and July 1, 1968.
A contract between Yale and the Weisbrooks was executed on May 13, 1966. The price for the Weisbrook farmland was $117,000. Of this amount, $10,000 was payable by Yale upon the execution of the contract, $10,000 was payable when title was shown to be good, $13,930 plus 5% interest was to be paid on December 1, 1966, $16,070 plus interest was to be paid on January 15, 1967, and the final payment of $67,000 plus interest was due on July 1, 1967. The Weisbrooks were to deliver possession of the premises on December 1, 1966. Notices to Yale were to be sent to the office of the Andermanns' attorney. A grace period of 60 days was allowed for Yale to cure any default.
Yale paid the Weisbrooks their initial $10,000, and also paid them the second $10,000 which was due when title was found to be good. Yale failed, however, to make the payment due December 1, 1966. On December 14, 1966, the Weisbrooks' attorney sent Yale a notice of default, mailing it to the Andermanns' attorney, and he informed Yale. On January 31, 1967, a declaration of forfeiture was sent to the Andermanns' attorney, who notified Yale, and a copy was sent also to Yale's attorney.
Yale then entered into negotiations with the Weisbrooks and their attorney in an attempt to salvage its contract for purchase of the Weisbrook farm, and as a result an amendment of the contract was executed on February 8, 1967. This amendment eliminated the 60-day grace period, and postponed the January 1, 1967, payment date to March 31, 1967. Yale was required to pay the amount which had been due from it on December 1, 1966, with interest, and also to pay the Weisbrooks $500 as reimbursement for additional income taxes they would have to pay for 1967 by reason of late receipt of the 1966 payment.
Yale made timely payment of the amount due the Weisbrooks on March 31, 1967, but failed to make the final payment by July 1, 1967. Thereafter, on July 3, 1967, Yale sent the Weisbrooks' attorney a proposal for a second amendment of the contract, providing for another extension of the time for payments. This proposal for a second amendment was accepted by letter dated July 20, 1967. It called for an immediate payment of $8,500 plus interest, a further payment of $10,000 plus interest on November 1, 1967, and a final payment of $48,500 on January 15, 1968. The payment of $8,500 and interest due immediately was made by Yale on August 4, 1967.
In order to make the payment due the Weisbrooks on November 1, 1967, Yale found it necessary to borrow $10,000 from the Andermanns. As security, the Andermanns required Yale to give them a promissory note for $10,255, payable with 6% interest on January 10, 1968, and in it, an assignment of Yale's rights under the Weisbrook contract. The note provided that the secured parties could sell or otherwise dispose of the collateral on five days' written notice, in the event of default, or could propose to retain the collateral as provided in the Uniform Commercial Code. The note also authorized judgment by confession. Yale did not pay off the note to the Andermanns on January 10, 1968, when it came due, but it was not thereafter reduced to judgment, and, according to the testimony given by Mr. Andermann and by the Andermanns' attorney at the trial, notice was not thereafter given of any intended sale or other disposition of the collateral or of any proposal to retain the collateral.
On January 11, 1968, the Andermanns' attorney sent a letter to the Weisbrooks' attorney, enclosing a check for the final payment which was to be due from Yale on January 15, 1968, under the second amendment of Yale's contract with the Weisbrooks. Instructions contained in the letter were to deliver the check to the Weisbrooks and to obtain and send back a deed running from them to the Andermanns in accordance with Yale's assignment, unless by January 15, 1968, Yale paid the Weisbrooks what it owed them under its contract with them, and also paid the Andermanns the amount due on the promissory note. On January 12, 1968, the Andermanns' attorney sent Yale a letter telling what he had done, explaining that the Andermanns had asked him "to protect their interest in the Weisbrook farm," and stating that if Yale did not pay the two amounts due by January 15, 1968, a deed would be got and all documents recorded "to allow the transaction to proceed to its ultimate conclusion."
Yale did not make the payments which it was to make by January 15, 1968. The Andermanns' attorney then prepared a quitclaim deed and a corporate resolution and requested that they be executed by Yale in order to clear an objection to title. They were executed and sent back on February 14, 1968. Thereafter, on February 28, 1968, the warranty deeds from the Weisbrooks to the Andermanns were recorded. The Andermanns' attorney testified that neither Yale nor its attorney ever made any objection to cooperating with him.
On February 23, 1968, Yale sent the Andermanns a check for $40,000 and a letter apologizing for the delay, acknowledging that this was not the full amount due, and promising an attempt to make further payments in the very near future. On March 5, 1968, the check was returned, with a letter saying that Yale's terms and conditions were unacceptable.
On March 22, 1968, Yale was sent another letter, requiring Yale to pay the Andermanns a total of $108,397.33 within 30 days. This sum was shown as including principal and interest paid on the Weisbrook contract, principal and interest due on the note, expenses incurred in getting a loan to allow completion of the Weisbrook purchase, attorneys' fees for additional services required, and damages resulting from Yale's delays, including loss of time, inconvenience, and additional 1968 income tax liability. On April 11, 1968, Yale's attorney wrote for a breakdown of the damages item, for which the figure $44,633 had been given. On April 13, 1968, the Andermanns' attorney responded that this figure was reached by determining the profit that the Andermanns would have to report if the disposition of their farm were treated as a cash sale instead of an exchange as originally intended.
On May 17, 1968, a declaration of forfeiture was sent to Yale. With it was sent a check for $58,500, represented to be all the money Yale had paid under the Weisbrook contract. On May 22, 1968, this check was sent back by Yale's attorney, with a letter stating that litigation pending in Du Page County involving the Andermann farm had been ...