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Yoder v. Rock Island Bank





APPEAL from the Circuit Court of Rock Island County; the Hon. ROBERT J. HORBERG, Judge, presiding. MR. JUSTICE BARRY DELIVERED THE OPINION OF THE COURT:

This appeal was instituted by the plaintiffs, John T. and Joyce F. Yoder, after the Circuit Court of Rock Island County entered judgment in favor of the defendant, The Rock Island Bank, in a specific performance action. In addition, in a foreclosure case consolidated with the specific performance action, the trial court awarded a judgment to The Rock Island Bank against the Yoders, entering a decree of foreclosure.

In July of 1973, Yoder executed three separate construction mortgages to the bank on Lots 1, 2 and 5 in Timothy Sirkl Second Addition to Coal Valley, Illinois. These three mortgages were placed of record. The bank did advance money on the house being constructed on Lot 1, but no money was ever advanced on the mortgages on Lots 2 and 5.

In early November of 1974, Mr. Yoder discussed these particular mortgages and his financial obligations that were then due and owing to the bank with Mr. Arvid Johnson, who was the vice president of the bank and in charge of the bank's real estate loan department. At that time, Mr. Johnson advised Yoder to have his attorney send him something in writing with respect to this problem. This was done, and in response to this letter, the Yoders' attorney, Sidney S. Deutsch, was referred to the bank's attorney, Mr. H. Reed Doughty. He spoke to Mr. Doughty about this, but he wanted something in writing.

Thereafter, Mr. Deutsch received a letter from Mr. Doughty dated November 29, 1974. In this letter Mr. Doughty stated that he discussed Deutsch's letter with Mr. Arvid Johnson. The letter continued:

"* * * It would appear to me that we can make a resolution of Mr. Yoder's problems with the bank as follows:

Previously, your client has offered to convey good title to the bank of Lot 1 in Timothy Sirkl, 2nd Addition, to the bank in exchange for a release on the mortgage thereon, together with a release by the bank of the judgment obtained against your client in cause 74 LM 7.

In addition to this the bank will agree to release the mortgages on Lots 2 and 5 of the same addition. I must emphasize, however, that clear title must be provided to the bank for Lot 1 if this is to be accomplished. If your client is willing would you please advise at your earliest convenience and furnish me with abstract of title or commitment for title insurance `owners policy.' If he is not willing we will proceed to foreclose the mortgage on Lot 1."

Since both Deutsch and Doughty were possible witnesses, the case was tried by other counsel. Deutsch, testified that after he received the letter of November 29, 1974, he called his client into the office and then called Doughty, explaining that the Yoders were going to go ahead and do what was necessary. Doughty testified that he has no recollection of Deutsch contacting him after his letter of November 29, 1974. He does, however, admit that he did receive a commitment for a title insurance policy, but he can't remember the date of receipt. The effect date on the schedule of commitment appears to be December 9, 1974.

Doughty further testified that, after writing the letter, he had a conversation with Mr. John Miller, who was then the president of The Rock Island Bank. Miller had discussed this matter with Johnson and learned of the terms of the letter which had been written to Yoder's attorney on November 29. Miller advised Doughty that he was unhappy with those terms and that he wanted to cancel or revoke the terms set forth in the letter of November 29. As a result of this conversation Doughty wrote a letter on December 20, which stated that Miller did not wish to proceed in accordance with the suggestions made in the letter of November 29, 1974.

Deutsch testified that after obtaining the commitment for title insurance and after the recording of the deed, which was done by the title company, he called Doughty and informed him that they had a commitment for title insurance, that there was a judgment to the bank that could be taken care of since it was their property. He also testified that in this telephone conversation he commented that the taxes would be taken care of when they got together, that the judgment of the bank could be withdrawn and that, although there may be another mortgage or lien for security for fees due him, that mortgage would also be taken care of, so the defendant would receive clear title. Deutsch further testified, in the same telephone conversation, that Doughty told him that the president had countermanded Johnson and that the offer would be withdrawn. Deutsch replied that Doughty should go back and talk to the president and that they should not run out on a commitment. Doughty stated he would go back and talk to them again. Subsequently Deutsch received the letter dated December 20. That was the last communication Deutsch had with Doughty.

A deed dated December 6, 1974, conveying Lot 1 of Timothy Sirkl Second Subdivision to the Village of Coal Valley, situated in Rock Island County and State of Illinois, from the Yoders to the Bank was recorded at 12:09 p.m. on December 9, 1974, in the Rock Island County recorder's office. This deed was delivered to the abstract company at the time the plaintiffs requested a title policy. A commitment for title insurance was issued, effective December 9, 1974, in the amount of $22,000, an owner's policy to be issued to the proposed insured, The Rock Island Bank, an Illinois corporation, with fee simple title vested in The Rock Island Bank, an Illinois corporation, to the land referred to as Lot No. 1 in Timothy Sirkl Second Subdivision, located in Rock Island County, Illinois, as of the effective date. Certain exceptions were listed. The taxes for the year 1974 were a lien but were not due and payable. Another exception was the taxes for 1973 in the amount of $58.59, which are unpaid. Likewise, a release of the mortgage recorded July 11, 1973, by The Rock Island Bank was required, as well as a release of the judgment of The Rock Island Bank versus John Yoder, Case No. 74 LM 7. The commitment is signed by The Rock Island County Abstract Title & Guaranty Company representatives for Chicago Title Insurance Company. This commitment was received by the bank's attorney, Mr. Doughty, who had a copy of the commitment in his file. However, the title company apparently missed a mortgage from the Yoders to Deutsch. Doughty discovered Deutsch's mortgage after the lawsuit was filed. That mortgage, in the amount of $5,270 covering Lots 1, 2, 3, 4, and 5 of Timothy Sirkl Second Subdivision to the Village of Coal Valley, situated in the County of Rock Island and State of Illinois, except that portion of Lot 5 which has been deeded to Dwaine C. Halverson, dated October 26, 1973, filed October 30, 1973, in the recorder's office of Rock Island County, Illinois, in Record Book 580, page 220, Document No. 746721, has not yet been released, but Deutsch has acknowledged in open court that he would release it without receiving consideration from the bank.

The evidence presented by the bank indicated that the amount of the principal balance left on the Lot 1 mortgage was $17,973.90, the total amount of money paid out by the bank. Adding interest, there is a total due on the mortgage of $21,003.45.

It was stipulated by the bank that the only issue was the outcome of the specific performance action. If relief was denied in that case, then it is stipulated that the bank was entitled to a decree of foreclosure. Therefore the only issue raised on review is whether the trial court erred in refusing to grant specific performance to the plaintiffs. The underlying, and controlling, question is whether there was a contract which could be specifically enforced.

• 1 It is the most elemental principle of law that, for a contract to come into existence, there must have been an offer and an acceptance. If the offer does not specify a particular mode of acceptance, the offer may be accepted by a performance of the desired acts. (Central National Bank & Trust Co. v. Consumers Construction Co. (2d Dist. 1972), 5 Ill. App.3d 274, 282 N.E.2d 158.) Nevertheless, the acceptance must conform ...

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