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Lannon v. Lamps

OPINION FILED JANUARY 17, 1980.

R.J. LANNON, JR., PLAINTIFF-APPELLANT,

v.

MATILDA LAMPS ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of La Salle County; the Hon. WENDELL THOMPSON, Judge, presiding.

MR. JUSTICE ALLOY DELIVERED THE OPINION OF THE COURT:

Plaintiff R.J. Lannon, Jr., appeals from a judgment of the Circuit Court of La Salle County denying him specific performance of an option to lease real estate from defendants. The option to lease had been executed by August and Edward Toedter in favor of Don Wilmot and R.J. Lannon, Jr. Lannon had exercised the option in 1970, after the death of both Toedter brothers. Later, Wilmot assigned his rights under the option to Lannon. The defendants, as heirs of the brothers and successors in interest in the real estate, refused to lease the land covered by the option to Lannon, on the basis of the terms of the option agreement. Lannon then brought the instant suit for specific performance of the option agreement.

After Lannon had presented his case, the defendants moved to dismiss the action for failure to state a prima facie case. The trial court ruled in defendants' favor and dismissed the suit for lack and want of equity. Plaintiff Lannon appealed and this court reversed, finding that while the evidence was capable of differing interpretations, the court erred in weighing the evidence at the directed verdict. (Lannon v. Lamps (1977), 53 Ill. App.3d 145, 368 N.E.2d 196.) We remanded. Upon remand, further hearings were held at the conclusion of which the court found for defendants and entered judgment in their favor, dismissing the suit. The circuit court found that the plaintiff Lannon had failed to show that the option agreement had been entered into fairly and understandingly. It found that enforcement of the option, via specific performance, would work an unconscionable result. Plaintiff Lannon appeals from that decision, arguing that the option was not unconscionable, that there was no misrepresentation, and that the option was freely and understandably entered into by the Toedter brothers. Lannon also raises issues with respect to various evidentiary rulings by the court and with respect to the propriety of the same judge who entered the earlier dismissal motion continuing to sit as judge upon remandment.

The record discloses that during the pertinent period of time involved in this litigation, being 1964-1965, August and Edward Toedter were elderly men. Edward was born in 1880 and August in 1884. The brothers owned 160 acres of land located south of Interstate 80 and west of Highway 51 in Peru, Illinois. They had been born on the land and had resided there all their lives. The house in which they resided in 1964 and 1965 had no running water, no electricity, no central heat, and no indoor plumbing. They seemed to prefer the simple life into which they had been born and trusted to the old ways, albeit primitive from our more "modern" perspective. Neither of the brothers drove an auto during this time, and relatives and friends would do grocery shopping for them and take care of other necessities such as coal, corn cobs and ash removal. The Toedter brothers had stopped farming their property in 1950 and thereafter leased it to a tenant.

Dr. G.W. Toraason, of Peru, Illinois, began treating the brothers in 1964 when both became acutely ill. Both men needed operations to remove tumors of the colon and one had a bladder tumor as well. With regard to their mental states, Dr. Toraason testified that during the period 1964-1965 both suffered from deteriorating mental conditions, the elder, Edward, more seriously than August. Dr. Toraason testified that during this time both suffered from senile dementia, a deterioration of the mental processes through cerebral arteriosclerosis. It was Toraason's opinion of their mental competence that both were below the norm for men of their age, octogenarians.

In the summer of 1964, Don Wilmot, a pharmacist and drug store owner in La Salle, Illinois, became interested in acquiring some of the Toedter property for a motel he was planning to build. Wilmot, having been introduced to the Toedters through a mutual friend, attempted to persuade them to option to him a portion of their land. They refused. Wilmot then went to a relative of theirs, Albert Tomaszewski, and asked him to persuade the elderly men to sign the option agreement. Tomaszewski refused to help Wilmot. At that time Wilmot went to attorney R.J. Lannon, Jr., plaintiff in this case, to get help. Lannon and Wilmot then became partners in the land venture that Wilmot desired to develop.

Wilmot took Lannon to the Toedters' farm in the summer of 1964 and introduced him to the brothers. Lannon persuaded them to agree to a 1-year option for a 99-year lease of 7 acres in return for $10. Lannon later prepared the document and gave it to Wilmot to get the Toedters' signatures. Wilmot brought it to them and they signed that option agreement on November 24, 1964. This first option between the Toedters and Lannon and Wilmot expired and is not at issue in the instant case.

The option at issue is one executed between those same parties in 1965. Sometime in the early part of that year, Wilmot and Lannon desired to obtain an option for additional acreage belonging to the Toedters. Testimony at trial indicated that the men had no specific plans for the additional property they wanted to obtain an option on, but they felt it would be a good speculative investment. Lannon prepared this 1965 option agreement, which provided Lannon and Wilmot with a 5-year option for a 99-year lease on an additional 24 acres of the Toedters' land. Consideration for the option was to be $10, and the stated rental price of the lease was to be $200 per acre annually. Wilmot discussed the option with the Toedters and explained to them that he and Lannon wanted an additional 17 acres, along with the original 7 optioned for the motel and access. The option prepared by Lannon was for 24 acres, but it did not cover the original 7 acres optioned in 1964. Wilmot then gave the option agreement to his wife and she went to the brothers' farm to obtain their signatures. Lois Wilmot presented the option agreement to August Toedter for him to look over. She told him that the option was for a larger parcel than before and for a longer period of time. According to her testimony, August Toedter looked at the two-page document for about 2 hours, in silence. At the end of that time, he signed the agreement and told his brother to sign as well. They were given a $10 check as consideration for optioning 24 acres of their property for 5 years, with stated 99-year leases for $200 per acre if the option were to be exercised. The signed option agreement was then returned to Don Wilmot by his wife and Wilmot later took it to a notary who notarized it.

In February 1966, some 6 months after executing the option, Edward Toedter was placed in a nursing home and died shortly thereafter. August Toedter died in September 1969.

Plaintiff Lannon mailed his letter exercising the option on August 1, 1970, the last possible day to do so. Two days later, Don Wilmot assigned his interest in the option agreement to Lannon.

Subsequent thereto, the heirs and representatives of the heirs refused to execute a lease as per the terms of the 1965 option. Lannon then brought suit in circuit court seeking specific performance of the option agreement. After presentation of plaintiff's case, the defendant moved to dismiss the complaint for failure to state a prima facie case. The trial court granted the motion and dismissed the case for lack and want of equity. Lannon then appealed to this court, and we reversed the dismissal. (Lannon v. Lamps (1977), 53 Ill. App.3d 145, 368 N.E.2d 196.) We noted that while the evidence was capable of being interpreted so as to cast doubt upon the fairness of the option and the methods by which it was obtained, the trial court, addressing the motion for directed verdict, should not have weighed the evidence. It should have given plaintiff the benefit of any doubt at that stage. (53 Ill. App.3d 145, 149.) We found that the plaintiff Lannon had stated a prima facie case so as to withstand the motion for directed verdict by defendants, and we remanded to the circuit court for further proceedings. Upon remandment, the case was heard by the same judge who had heard the case previously. A further hearing on the merits was held and the court entered judgment for defendants.

From that judgment the plaintiff Lannon again appeals, and he raises five issues. (1) Whether the court erred in considering incompetent evidence on the question of the Toedter brothers' mental capacities. (2) Whether the court erred in finding the agreement unconscionable where it was fair on its face and recited adequate consideration. (3) Whether there was any misrepresentation by Wilmot or Lannon. (4) Whether the trial court's denial of specific performance was against the manifest weight of the evidence. (5) Whether the same judge who had previously heard the case and ruled on the dismissal should have heard the case upon remandment. Before addressing these specific issues, some discussion of rules applicable to specific performance is in order.

• 1 Special rules have developed respecting an action for specific performance of a contract. As stated by the Illinois Supreme Court in Johnson v. Gianacakos (1934), 356 Ill. 410, 413:

"Specific performance of a contract cannot be demanded as a matter of right. Whether or not it shall be awarded rests in the sound discretion of the chancellor and is to be determined from all the facts and circumstances surrounding the case. Unless the record shows that the parties to a contract have ...


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