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612 N. Michigan Ave. Bldg. Corp. v. Factsystem

OPINION FILED NOVEMBER 15, 1977.

612 NORTH MICHIGAN AVENUE BUILDING CORPORATION, PLAINTIFF-APPELLEE,

v.

FACTSYSTEM, INC., ET AL., DEFENDANTS. — (JEFFERSON STATE BANK ET AL., DEFENDANTS-APPELLANTS.)



APPEAL from the Circuit Court of Cook County; the Hon. SHELDON BROWN, Judge, presiding.

MR. JUSTICE PERLIN DELIVERED THE OPINION OF THE COURT:

Defendants-appellants, Jefferson State Bank and Bernard Feinberg, appeal from a finding of the trial court which assessed damages against them for rents due under a number of leases and for wrongful use and occupancy of plaintiff's premises. This court has previously affirmed appellants' liability in 612 North Michigan Avenue Building Corp. v. Factsystem, Inc. (1st Dist. 1975), 34 Ill. App.3d 922, 340 N.E.2d 678, wherein the cause was remanded to the trial court for a hearing on the issue of damages. On appeal appellants contend that (1) the testimony of plaintiff's managing agent was not competent and did not support the judgment as to rents due under a number of leases; (2) plaintiff failed to prove the extent of its damages and the duration of use and occupancy under its count alleging wrongful use and occupancy; and (3) the trial court erred in awarding plaintiff costs for appellate brief printing expenses. Plaintiff cross-appeals, maintaining that the trial court improperly denied it interest on its judgment for damages for appellants' wrongful use and occupancy.

We affirm in part and reverse in part.

Plaintiff, lessor, and defendant Factsystem, as lessee, entered into a number of leases for office space in plaintiff's building. Among the credit references listed in Factsystem's application was defendant Jefferson State Bank whose president was defendant Feinberg. Factsystem entered into possession of the leased premises and paid rent to and including the month of April 1970. On May 1, 1970, Factsystem had become insolvent, and nearly all of its assets had been sold at public auction to satisfy its obligations to defendant Jefferson State Bank, incurred as the result of many loans by the latter to the former secured by Factsystem assets.

Plaintiff then filed a three-count complaint whereby it sought to recover from defendants Jefferson State Bank and Feinberg the rent incurred on the Factsystem premises from May 1, 1970, through June 25, 1970 (the date on which Factsystem ceased possession), and damages for the use and occupancy of the premises by Jefferson State Bank and Feinberg from June 26, 1970, until the expiration of the lease term on October 21, 1970. The complaint alleged that Jefferson State Bank and Feinberg had committed a fraud because Feinberg, at the time he gave plaintiff assurances that Factsystem was financially responsible, had failed to disclose that he was a director of Factsystem and that he had a substantial financial interest in Factsystem. Fraud was also alleged to exist since nearly all of the assets of Factsystem were pledged as security for loans made by Jefferson State Bank to Factsystem, and since most of the assets were purchased at the public auction by Jefferson State Bank and used to set up a successor corporation to Factsystem. Count II of the complaint which sought the appointment of a receiver was dismissed without prejudice by the trial court and is not involved in this appeal.

After filing its complaint, plaintiff served defendants with a lengthy list of interrogatories. A number of attempts were made to secure answers to these interrogatories. When all such attempts failed, the trial judge imposed sanctions on defendants for their failure to comply with discovery procedures. He struck defendants' answers to the complaint and entered judgment on the complaint in favor of plaintiff.

Defendants-appellants appealed the default judgment to this court. In 612 North Michigan Avenue Building Corp. v. Factsystem, Inc. (1st Dist. 1975), 34 Ill. App.3d 922, 340 N.E.2d 678, this court affirmed the actions of the trial court in granting judgment in favor of plaintiff but reversed and remanded that part of the judgment relating to damages. Appellants' motion for leave to appeal to the supreme court was denied (58 Ill.2d 599 (1975)) and the cause was reinstated in the trial court for trial on the issue of damages.

Following a series of three hearings, the trial court sitting without a jury awarded damages in the amount of $19,833.02 plus interest on the finding of liability under count I of the complaint and $19,804.44 under count III. The interest on the judgment on count I was to run from June 26, 1970, the date on which Factsystem's unpaid rent was due and owing to plaintiff. The interest on the judgment on count III was to run only from October 6, 1975, the date of the judgment order.

Defendants-appellants Jefferson State Bank and Feinberg have appealed from those portions of the October 6, 1975, order awarding plaintiff damages under counts I and III of its complaint and awarding plaintiff costs for appellate brief printing expenses. Plaintiff cross-appeals from that portion of the October 6, 1975, order limiting its recovery of interest under count III to accrual from October 6, 1975, the date of the judgment order.

Appellants contend that the testimony of John W. Carlson, the managing agent of plaintiff's building who testified as to count I of plaintiff's complaint, was incompetent in that plaintiff failed to lay a proper foundation for Carlson's testimony. Specifically, appellants argue that the trial court violated the best evidence rule, that the underlying records from which Carlson made his calculations were not offered into evidence or shown to be admissible evidence under the business records exception to the hearsay rule.

In support of this position appellants quote at length from LeRoy State Bank v. Keenan's Bank (1929), 337 Ill. 173, 169 N.E. 1. The substance of the LeRoy case is that in spite of the best evidence rule, where the original documents consist of numerous documents, books, records or papers which cannot be conveniently examined to extract the fact sought to be introduced, any competent witness may testify to the fact, provided it is capable of being ascertained by calculation. The court has discretion to admit such summaries, provided they are verified by the person by whom the records were prepared and provided the adverse party is given the opportunity to examine the originals. It is necessary that the original record from which the summary was made be of such a character as to be itself admissible in evidence. Where the testimony of the person who made the original record is unavailable, the authenticity of the original record may be established by other evidence.

In the instant case John W. Carlson, manager of the 612 North Michigan Avenue Building, was allowed to testify to the amount of rent due from Factsystem as of June 25, 1970, from a summary of the accounts of his employer, a building management firm. In addition to Carlson's testimony, copies of the ten leases signed by the plaintiff, lessor, and by defendant Factsystem, as lessee, were admitted into evidence. Each of the 10 leases provided for payment of rent in addition to the fixed rent. Additional rent was to come from a percentage of any increase in real estate taxes, any special assessments, and operating costs of the leased premises, which accrued for any calendar year during the term of the leases.

Plaintiff produced its audits, tax bills and ledger sheets concerning the leased premises for appellants to inspect well before trial. Moreover, this court has previously upheld the trial court's entry of a default judgment against appellants for their failure to comply with discovery. Plaintiff maintains that appellants have waived any right to complain about the competency of Carlson's testimony since appellants have been in possession of all documents which served as the basis of Carlson's testimony.

• 1-3 The law requires the best evidence available and will bar the admission of any evidence which by its nature indicates there is other more direct, positive and conclusive evidence. (First Trust & Savings Bank v. Powers (1946), 393 Ill. 97, 65 N.E.2d 377.) Before secondary evidence of the contents of a writing may be introduced, the moving party must lay a proper foundation to meet hearsay, authentication and best evidence objections. (In re Estate of Fidler (1st Dist. 1974), 23 Ill. App.3d 1046, 319 N.E.2d 822.) Thus a proper foundation has been found to authorize the introduction of a record copy of a lease when the moving party testifies that neither he nor his attorney had possession or control of the lease. (Prettyman v. Walston (1864), 34 Ill. 175.) Also inaccessibility of the original may be shown at trial when the very nature of the proceedings places a party on notice that he is in possession of a writing upon which the moving party ...


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