APPEAL from the Circuit Court of St. Clair County; the Hon.
STEPHEN KERNAN, Judge, presiding.
MR. JUSTICE JONES DELIVERED THE OPINION OF THE COURT:
Rehearing denied July 25, 1979.
Lawrence and Beverly Bovinett brought an action for specific performance against Edward and Patti Rollberg to compel conveyance of certain real property pursuant to a land sales contract. The Bovinetts also sought injunctive relief against the Rollbergs and John, Stella and Mildred Neuner to restrain them from conveying or otherwise altering any rights they may have had with respect to the property in question pending a final determination of the dispute by the court. During the course of this action the trial court granted the request for a preliminary injunction. At the conclusion of a bench trial, the court entered an order for specific performance which required the Rollbergs to convey their interest in the property to the Bovinetts, and the court dissolved the preliminary injunction against the Neuners.
The Rollbergs appeal the order of specific performance as well as the dissolution of the injunction against the Neuners; the Bovinetts separately appeal the dissolution of the preliminary injunction against the Neuners. The following issues are raised on appeal: whether a valid contract existed between the Bovinetts and the Rollbergs so as to justify the remedy of specific performance; whether the trial court erred in dissolving the preliminary injunction against the Neuners.
John and Stella Neuner executed a bond for deed with the Rollbergs to convey to them certain real property consisting of five acres of land improved with a house and four outbuildings. The purchase price was roughly $34,000. Although the bond for deed was not offered in evidence at trial, it apparently provided for the Rollbergs to make a down payment to be followed by monthly payments of a specified amount with the balance of the purchase price to be paid on July 1, 1977. The balance due was approximately $28,000. If the Rollbergs met all of their obligations under the contract, the Neuners would convey legal title to them. This agreement contained a forfeiture provision which gave the Neuners the right to declare a forfeiture and reclaim the property in the event the Rollbergs failed to satisfy their obligations under the agreement.
The Rollbergs signed a listing contract in January 1977 with the State Realty Company. The contract authorized the company to show the premises they were purchasing from the Neuners, but it did not give the company any authority to enter into a contract for the sale of the property as agent for the Rollbergs.
A representative of the real estate company informed the Rollbergs on March 2 of an offer made by the Bovinetts to purchase the property for $50,000. This offer was rejected. On March 7 the Rollbergs received through the realtor a proposed contract for the sale of the premises which contained a new offer by the Bovinetts, increasing the purchase price to $51,000. This offer was rejected as well. However, despite the rejection a discussion pertaining to the sale of the property ensued between the Rollbergs and the realtor until 10:30 p.m. At this point, the Rollbergs placed the figure $52,500 on the earlier rejected contract, drew a circle around the figure, and initialed it. Edward Rollberg stated at trial that the purpose of writing a new figure and initialing it was not to present a counteroffer, but, rather, to get the realtor out of his home.
The realtor went to the Bovinett home that same night and secured their approval of the $52,500 purchase price. The realtor made one change in the contract after the Rollbergs initialed it without their prior knowledge or approval. At the time the alleged agreement left the Rollberg home it contained a provision that if the Bovinetts, as purchasers, were unable to obtain an insured loan for $44,500 within 30 days the agreement would be rescinded and the earnest money refunded. The realtor changed the amount of the insured loan to be obtained from $44,500 to $46,000. This change was initialed by the Bovinetts.
The realtor from the State Realty Company testified that he notified Patti Rollberg the next morning about the Bovinetts' acceptance of the $52,500 offer. On March 9 Edward Rollberg notified the realtor that he would not accept any offer below $55,000. The rejection precipitated this action for specific performance and temporary injunctive relief which was commenced on May 25.
This alleged contract for sale occurred at a time when the Neuners were holders of the legal title to the land and the Rollbergs merely had equitable title pursuant to the bond for deed with the Neuners.
A temporary restraining order was issued on June 2 enjoining the Neuners and the Rollbergs from either "assigning, forfeiting, transferring or conveying whatever interest they may have" in the property or "from suffering such assignment, forfeiture, transfer or conveyance." The temporary restraining order was continued as a preliminary injunction by the trial court on June 9. Upon motion by the Rollbergs the trial court modified the preliminary injunction on July 26 to allow the Neuners to deed the property to the Rollbergs. The Rollbergs apparently sought legal title to the property to enable them to obtain a mortgage for the balance due on their bond for deed with the Neuners. A consequence of this lawsuit was that the Rollbergs had been unable to secure a mortgage on their interest in the bond for deed and were in default after failing to pay the balance due on July 1. On September 27 the trial court, after a hearing on the merits, ordered the Rollbergs to perform in compliance with their land sales contract with the Bovinetts.
The Neuners filed a motion on November 18 in which they sought to be dismissed as party defendants, or in the alternative, to have the preliminary injunction against them dissolved. Among the various grounds raised in the motion the Neuners argued that the injunction was invalid because they were strangers to the contract between the Rollbergs and the Bovinetts, and, in the alternative, they argued that even if the injunction were valid it should have been dissolved because the hearing and decision on the merits rendered it functus officio. On December 22, the trial court ordered that the preliminary injunction against the Neuners would dissolve within 30 days or upon the filing of a notice of appeal by the Rollbergs. The Rollbergs filed a notice of appeal on January 12, 1978. Shortly thereafter the trial court dissolved the preliminary injunction against the Neuners which enabled them to declare a forfeiture against the Rollbergs and begin an eviction proceeding. Finally, this court issued a stay of the trial court's order dissolving the preliminary injunction against the Neuners pending the outcome of this appeal.
1 The first issue on appeal is whether the trial court erred in holding that a valid contract existed between the Rollbergs and the Bovinetts with respect to the sale of real property. We decline to decide this issue on the merits; rather, our disposition of this case turns upon a matter which has not been raised by any of the parties on appeal. John and Stella Neuner, legal titleholders to the real property, were not named parties in this, or any, action for specific performance on a contract of sale or bond for deed purportedly conveying or agreeing to convey that realty. Upon consideration of the facts and issues presented in this case we are persuaded that John and Stella Neuner were indispensable parties for a determination of the action for specific performance, and that it was improper for the trial court to have arrived at a final decision in their absence.
2 A necessary party is an individual or entity having a present, substantial interest in the matter being litigated, and in whose absence a complete resolution of the matter in controversy cannot be achieved without affecting that interest. (Oglesby v. Springfield Marine Bank (1944), 385 Ill. 414, 52 N.E.2d 1000; Stavros v. Karkomi (1st Dist. 1976), 39 Ill. App.3d 113, 349 N.E.2d 599; McDonald's Corp. v. Smargon (1st Dist. 1975), 31 Ill. App.3d 493, 334 N.E.2d 385.) The requirement that the interest in the subject matter in litigation be present and substantial implies that it be more than a mere expectancy or future contingency. (Stavros v. Karkomi; McDonald's Corp. v. Smargon.) The determination of whether a party is necessary to a cause of action is controlled by the issues ...