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Yale Development Co. v. Texaco

OPINION FILED JUNE 8, 1977.

YALE DEVELOPMENT COMPANY, INC., PLAINTIFF-APPELLEE AND CROSS-APPELLANT,

v.

TEXACO, INC., DEFENDANT-APPELLANT AND CROSS-APPELLEE.



APPEAL from the Circuit Court of Du Page County; the Hon. EDWIN L. DOUGLAS, Judge, presiding.

MR. JUSTICE BOYLE DELIVERED THE OPINION OF THE COURT:

Rehearing denied September 16, 1977.

In the spring of 1971, Yale Development Company, Inc., plaintiff-appellee, hereinafter referred to as "Yale," entered into negotiations with Texaco, Inc., defendant-appellant, hereinafter referred to as "Texaco," for the sale of certain real estate owned by Yale. Texaco was interested in obtaining the property as a site for a new gas station. The property in question is located in the vicinity of Glen Ellyn on Roosevelt Road near Valley Road in an unincorporated portion of Du Page County.

On June 14, 1971, Yale, by its president, Mr. Arthur Sheridan, completed a purchase option form. The form was provided by Texaco. Mr. Sheridan merely inserted a legal description of the property, a $400 option consideration, and the total purchase price of $125,000. He also deleted paragraphs 5 and 6 of the form.

The form, with the additions and deletions made by Mr. Sheridan of Yale, was forwarded to Texaco's real estate agent, Mr. William Rife. Mr. Rife forwarded the form to his superior, Mr. Robert Carr, who objected to the deletion of paragraph 6. He informed Mr. Rife that Texaco required paragraph 6 to be included in the contract. Thereupon, Mr. Rife prepared an overleaf paragraph 6, attached it to the contract, and returned this revised contract to Mr. Sheridan of Yale.

Mr. Sheridan was not willing to accept Texaco's version of paragraph 6 and inserted his own version in its place.

Texaco's version of paragraph 6 reads as follows:

"6. In the event it becomes necessary to deed or dedicate part of the property for highway purposes in order to obtain service station permits, Optionee may cancel and terminate the Purchase Contract created by its exercise of this Option in the event that the portion of the premises which would remain after such a proposed conveyance would, in its opinion, be unsatisfactory for a gasoline service station use, and thereupon Optionor shall refund all monies received hereunder and neither party shall have any other or further rights against the other."

Yale's version as drafted by Mr. Sheridan merely added the following to Texaco's version:

"* * * excepting herefrom a strip of land across the frontage of the premises having a depth of approximately 25 feet, which land may be required by the State of Illinois for widening in conjunction with the construction of an interchange."

Yale's version of paragraph 6 was initialed by Mr. Rife and submitted to his superiors in the Texaco organization. Mr. Carr testified that he rejected Yale's version of paragraph 6; however, the record reveals that Texaco authorized and sent to Yale a check for $400 as consideration for the option contract.

At trial, Texaco attempted to show that Yale's version of paragraph 6 was rejected by Texaco and that its (Texaco's) version was resubmitted to Yale and approved by Yale. In any event, Texaco argues that only its home office in New York had authority to bind Texaco to a contract and only its version of paragraph 6 was transmitted to New York for approval.

On November 24, 1971, Texaco exercised the option to buy the property. The parties set about to acquire the necessary permits for the service station. In this process, Texaco submitted a general arrangement plan to the State of Illinois in order to secure a highway access permit. This plan came back from the State with a request that it be modified to accommodate a proposed widening of Roosevelt Road. Texaco never submitted a modified plan. Sometime thereafter, the dispute between Yale and Texaco came to light.

When Texaco refused to go through with the deal, Yale sued for breach of contract. After a lengthy bench trial, judgment was rendered in Yale's ...


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