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Hakala v. Illinois Dodge City Corp.





APPEAL from the Circuit Court of Boone County; the Hon. DAVID R. BABB, Judge, presiding.


The plaintiffs appeal from the judgment of the trial court of Boone County in favor of the defendant in an action brought to rescind a transaction whereby the plaintiffs paid to the defendant the sum of $75,360 in return for the conveyance of some 8.54 acres of land. The land in question was part of a larger tract owned by the defendant, Illinois Dodge City Corporation, and was located in Boone County, north of the Northwest Tollway, near Belvidere.

The tract which is the subject of this litigation had no access and it was provided in the original purchase agreement between the defendant and the original purchaser, Bette Lee Pyfer, that in addition to furnishing certain sanitary facilities to the property, the seller would provide access, as indicated by paragraph 8 of the contract to purchase, which reads as follows:

"8. Seller shall furnish, at its expense, a sixty (60) foot improved roadway from the North West corner of the above described premises and running thence Westerly along the North line of KaNer, to the road commonly known as the `Service Road'. * * *"

In 1966, the present plaintiffs bought Betty Lee Pyfer's rights under the contract and took an assignment of all of her rights thereunder, including the obligation of the defendant, stated in paragraph 8, to build the access road. In May 1968, in the course of completing the purchase of the property, the plaintiffs were furnished a title report from the McHenry County Title Company which indicated the land in question had no access. Therefore, an escrow was set up in the amount of $41,300 out of the purchase price of $75,360, to be released to the seller upon the seller furnishing city water and sanitary facilities to the property and completing "construction of East Chrysler Drive and Dodge Terrace, in accordance with the requirements of the City of Belvidere * * *," the city engineer being appointed agent for all parties "to determine the nature and extent of the performance by SELLER" in accordance with paragraph 8 of the agreement of October 15, 1965, between seller and Betty Lee Pyfer.

There is no indication as to whether the city engineer ever gave the escrowee a written certificate of acceptance. However, the road was built and on October 24, 1968, John Strom, the seller's attorney, wrote the plaintiff, John G. Boyle, as follows:

"I was successful in completing the Dedication of East Chrysler Drive and Dodge Terrace and have just received the acceptance back from the City. As soon as sufficient prints are made of it, I will have it recorded.

To my mind this is the last remaining item to be done as far as our Escrow Agreement is concerned. You probably know that the City does not wish us to proceed with black topping until next Spring."

This was followed by another letter from Strom to Boyle, dated November 14, 1968, reading as follows:

"I am enclosing now the recorded Plat of the Dedication of East Chrysler Drive and Dodge Terrace, which was accepted by the City of Belvidere on October 7, 1968.

Such being the case, I believe this now completes all of the conditions of the Escrow. Consequently, I would like your permission to release the balance of the funds as the contractor is growing impatient for the balance of the monies involved."

To which Boyle replied:

"Enclosed find a direction from Hugo Hakala to turn over the street escrow fund, which was deposited pursuant to the agreement of May 9, 1968. [The escrow agreement.]

It is my recollection that you assured me that all requirements relating to the construction of the roads in question have been fully carried out."

(The plat of dedication referred to is an exhibit in this case showing its acceptance by the City of Belvidere as of October 4, 1968.)

Upon receipt of the direction referred to, it was used by defendant, in late 1968, to obtain release of the escrow funds. John G. Boyle testified at the trial that at that time he went out and drove over the new road but did not know until 1972 that the eastern terminus of the road did not reach his property.

In October of 1969, at the direction of the defendant, a surveyor prepared a plat of survey which showed that the access road in question ended at a point some 38 feet short of the plaintiffs' property. However, this document was not certified for record until September 1972, which is the time the plaintiffs say they first became aware of the discrepancy. It is apparent that neither the plaintiffs nor the defendant were aware of the gap in the road at the time it was completed and the escrow funds released. However, about September 15, 1972, when the 1969 survey was certified by the surveyor, the remaining property of the defendant was sold to a third party, including the land representing the gap between the access road ...

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