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Curtin v. Ogborn

OPINION FILED AUGUST 21, 1979.

JOHN P. CURTIN ET AL., PLAINTIFFS AND COUNTERDEFENDANTS-APPELLANTS,

v.

DORTHA OGBORN, DEFENDANT AND COUNTERPLAINTIFF-APPELLEE.



APPEAL from the Circuit Court of Cook County; the Hon. GEORGE J. SCHALLER, Judge, presiding. MR. JUSTICE PERLIN DELIVERED THE OPINION OF THE COURT:

Plaintiffs and counterdefendants, John P. Curtin and Denise Curtin (hereinafter referred to as plaintiffs), brought an action in equity to obtain a refund of the earnest money they had deposited pursuant to a real estate sales contract. Defendant and counterplaintiff, Dortha Ogborn (hereinafter referred to as defendant), filed a counterclaim for breach of contract. The trial court dismissed the complaint for want of prosecution and entered judgment for defendant on the counterclaim. Plaintiffs appeal, presenting the following issues for review: (1) whether the trial court abused its discretion in denying plaintiffs' motion for continuance; (2) whether there was sufficient evidence of a breach of contract by plaintiffs; and (3) whether the judgment of earnest money plus attorney's fees was proper.

We affirm in part and reverse in part.

On March 27, 1974, plaintiffs executed a real estate sales contract with the First National Bank of LaGrange as trustee under trust number 507, whereby plaintiffs agreed to purchase and the trustee agreed to sell certain real property located in LaGrange, Illinois, for a sum of $87,000. Defendant was the sole beneficial owner of the trust. Plaintiffs deposited as earnest money with the real estate agency, Joseph A. Thorsen, three promissory notes, one for $2000 due March 29, 1974, one for $2000 due June 3, 1974, and one for $4500 due September 3, 1974. The first note was redeemed, and the sum of $2000 plus the other two notes were held by Thorsen pending consummation of the sale.

The contract in question was subject to the purchasers procuring within 20 days a loan commitment in the amount of 75% of the purchase price with an interest rate not to exceed 7.9% for a period of 25 years. The contract privided, inter alia, that the closing date was September 3, 1974, and that "time was of the essence." The contract further provided:

"If this contract is terminated without Purchaser's fault, the earnest money shall be returned to the Purchaser, but if the termination is caused by the Purchaser's fault, then at the option of the Seller and upon notice to the Purchaser, the earnest money shall be forfeited to the Seller and applied first to the payment of Seller's expenses and then to payment of broker's commission, the balance, if any, to be retained by the Seller as liquidated damages. * * *

In the event this transaction is not closed because of the purchaser's default, seller shall not be liable for any real estate commission to any real estate broker herein involved."

The sale to plaintiffs was never consummated.

On January 3, 1975, plaintiffs filed an action against defendant, the First National Bank of LaGrange as trustee and Joseph Thorsen, alleging that plaintiffs performed their duties under the contract but were unable to secure a mortgage and that they notified the trustee within the 20-day period provided in the contract but the trustee, Thorsen and defendant refused to return the earnest money to plaintiffs. Plaintiffs requested the court to order the return of the earnest money to them.

On February 3, 1975, defendant filed a counterclaim against plaintiffs alleging that defendant was and had been ready, willing and able to perform in accordance with the contract; that she was not notified until June 27, 1974, that plaintiffs were unable to perform; that plaintiffs terminated the contract through their own fault and are not entitled to a refund of the earnest money; and that defendant is entitled to receive the money and the notes held by Thorsen. Defendant also filed a third-party complaint against Thorsen requesting that Thorsen be directed to deliver to defendant the sum of $2000 and the two notes.

On February 5, 1975, the First National Bank of LaGrange filed a motion to dismiss the bank as a party defendant alleging that the bank was a misjoined party because the bank signed the contract in question as trustee at the written direction of the beneficial owner and not individually. On April 22, 1975, the court dismissed the bank as a party with leave to plaintiffs to reinstate the bank as a party at a subsequent date.

On December 13, 1975, a by-agreement order was entered dismissing Thorsen from the action with prejudice to plaintiffs and defendant and ordering Thorsen to continue to hold the earnest money pending disposition of the action and then to tender the earnest money as directed by the court.

The trial date was set for April 24, 1978. On the date of trial plaintiffs filed a motion to dismiss the action voluntarily or for a continuance alleging that plaintiffs were out of town and were unable to appear for trial on that date. The trial court denied the motion for continuance and dismissed plaintiffs' complaint for want of prosecution. The court then proceeded on the counterclaim for breach of contract.

Defendant testified that on March 27, 1974, she was the sole beneficial owner of real property at 344 South Sixth Avenue, LaGrange, Illinois. The legal title was held by First National Bank of LaGrange as trustee. Defendant directed the trustee to execute the contract dated March 27, 1974, to sell the property to plaintiffs. The contract was signed by Charles F. Kennedy, president of the bank, as trustee. On May 6, 1974, defendant had a conversation with plaintiff John Curtin and she informed him that there was a tenant in the garage apartment and she wanted to know whether he could remain on the premises. Also, defendant told plaintiff that she found a house she was interested in purchasing and she wanted to know if the closing could be earlier than September as provided for in the contract. Plaintiff told her there would be no problem. Plaintiff apologized for "dragging his feet" in regard to the financing and said he would work on arranging financing the next week. Defendant made an offer on the house and gave a note as the down payment on May 8, 1974. Defendant had to withdraw the offer after the contract with plaintiffs failed; however, defendant sustained no dollar damages as a result of the withdrawal.

Defendant testified further that she had been prepared to close and deliver a deed or direct the trustee to deliver a deed to plaintiffs. Defendant did not receive notice until June 27, 1974, that plaintiffs were not going to consummate the contract. The sale was never closed and defendant requested but never received the earnest money. The property in question was sold to a third party in November 1975 for $91,000. Between September 3, 1974, and November 1975 defendant installed a new heating plant in the house at a cost of $3000, paid the taxes of $1500 for the year and ...


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