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Diedrich v. N. Illinois Publishing Co.

OPINION FILED JUNE 3, 1976.

EDWARD F. DIEDRICH ET AL., PLAINTIFFS-APPELLANTS,

v.

NORTHERN ILLINOIS PUBLISHING COMPANY ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Kane County; the Hon. ALFRED Y. KIRKLAND, Judge, presiding.

MR. JUSTICE HALLETT DELIVERED THE OPINION OF THE COURT:

Rehearing denied August 5, 1976.

The plaintiffs in this case filed an action seeking to rescind a contract for the sale of a house, over 2 1/2 years after they had taken possession of it, on the ground that the seller falsely stated that the structure was capable of housing 20 student roomers whereas in fact part of the house was serviced by a septic tank designed to service a single family and that the defendant seller either knew or should have known that his representation was false or, in the alternative, that the contract should be rescinded because of the mutual mistake of the parties. The plaintiffs also sued both the defendant seller and the defendant newspaper for their alleged libel in publishing an ad stating the plaintiffs were in default. After hearing the evidence, the court directed a verdict for the seller on his counterclaim for specific performance. The jury found for the defendants and against the plaintiffs on the libel claim. The plaintiffs have appealed, contending (1) that the evidence as to mutual mistake was sufficient to go to the jury; (2) that the direction of a verdict on the contract claim confused the jury and in effect directed them to find that the statement was truthful; and (3) that the verdict form was confusing. We find no error and affirm.

The relevant facts, for the most part, were uncontradicted. The defendant seller inherited the house in question when his father died in 1967. It is a single-family house built in 1900 or earlier and is located in the city of De Kalb, Illinois. Because the seller lived in Elgin, and had done so for 15 years, he put it up for sale at the appraised price of $65,000. The property was listed with the Royce Thompson Agency, for whom plaintiff Skoglund works. Ms. Skoglund has been a licensed real estate salesperson for the past 11 years. She showed the house on several occasions. When she showed the house to other interested purchasers, she never mentioned the condition of the plumbing. Ms. Skoglund made no attempt to find out if the property was connected to the city sewer. She assumed it was since anything in the city limits is usually on the sewer.

There were no offers to purchase the house until August, 1969, when plaintiff Skoglund and plaintiff Diedrich decided to form a partnership and purchase the house to convert it to a student rooming house. It had been licensed for such use as the seller's mother had had six roomers living there. Mr. Diedrich is an experienced attorney who has practiced for over 13 years. He has also engaged in some other real estate transactions for investment purposes. They offered to purchase the property for $45,000.

At no time before purchasing the property did plaintiff Diedrich have any conversations with the seller or inspect the house. Ms. Skoglund had of course seen the premises but not in the defendant seller's company. The plaintiffs were aware that the house was over 70 years old and would need extensive repairs and modification. They could see that it still had the original plumbing including a bathtub on legs. Despite the allegations in the complaint, the seller's testimony that he was never told that the property was to be used as a student rooming house was in no way contradicted by the plaintiffs. Likewise they agreed that he made no representations as to the plumbing.

Mr. Diedrich, by mail, offered in August, to purchase the house "as the property is this day, ordinary wear and tear accepted." The contract of purchase likewise was drawn up by Mr. Diedrich. The plaintiffs were to purchase the house and pay for it over a 5-year period. Upon final payment by the plaintiffs, the seller was to convey the title to the property. The parties all agreed that the property was purchased "as is."

The plaintiffs thereupon took possession of the house and made extensive changes in it. The seller became aware of these changes when he drove by and was shown through it. He made no objection to the changes. The plaintiffs operated the house as a rooming house and collected rents from 1969-1973.

The testimony seems to indicate that there had been no trouble with the plumbing in the 8 years before the house was sold. Nor was there any trouble for 2 years after it was sold. But in October of 1971, plumbing problems developed, in the form of backup of sewage in the basement area and a plumber was called. At that time 17 students were living in the house. They had more problems in February of 1972 and a plumber was called again. The number of roomers decreased to six and there have been no subsequent plumbing problems.

It has now been determined that part of the house is served by a septic system for the disposal of sewage. That septic system is not connected to the De Kalb municipal sewer system. It is not known if there is a private sewer line. This septic tank serviced the floor drains in the basement, showers, and two sinks. The defendant seller always believed (and still does) that while there the plumbing system was split, both ran into city sewers. While the septic tank was not actually discovered until during the course of the trial, the defendants were informed by the plumber in December, 1971, or January, 1972, that there was a septic tank. The plaintiffs offered no evidence as to the cost of repairing or correcting the sewer line.

The plaintiffs were consistently late in making the payments on the house and several checks bounced. However, the seller did not protest until November, 1971. Ms. Skoglund asked him to be patient. She did not mention any plumbing difficulties. The October and November payments were finally made at the end of November. In January, 1972, the plaintiffs were again behind on their payments. When the seller complained, Mr. Diedrich told him they were looking for fresh monies and were having problems and had a plumbing problem. Mr. Diedrich did not say he wished to rescind the contract nor did Ms. Skoglund. Likewise, in Mr. Diedrich's letter to the seller's attorney, written January 24, 1972, he states that they were having trouble filling the house because of Ms. Skoglund's illness and the plumbing problems arising from the septic tank and that they would be meeting their responsibilities in the very near future and asked the seller's cooperation. At no time did either plaintiff inform the seller or his attorney they wished to rescind the contract.

The plaintiffs did not pay any installments after November, 1971 nor did they pay the real estate taxes as they were obligated to do. The seller, overwhelmed at the litigation he might have to suffer through, published the following ad in the Daily Chronicle:

"NOTICE

TO THE STUDENT ROOMERS AT 235 NORTH FIRST STREET

DUE TO THE DEFAULT OF PAYMENTS BY ATTORNEY EDWARD DIEDRICH AND SUE SKOGLUND FOR THE PAST FOUR MONTHS, I MUST ASK YOU TO FIND OTHER ...


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