APPEAL from the Circuit Court of Lake County; the Hon. JOHN L.
HUGHES, Judge, presiding.
MR. JUSTICE NASH DELIVERED THE OPINION OF THE COURT:
Plaintiffs, Paul and Gila Mallin, brought this action in the Circuit Court of Lake County against defendant Arline Good seeking to enforce certain covenants in a contract for the sale of real estate. They appeal from an order which granted summary judgment to defendant on the grounds that all of the terms of the contract merged into the deed and that, in any event, there no longer was any privity between plaintiffs and defendant as a result of the initial conveyance of title to the premises to a nominee who then conveyed to plaintiffs.
On February 5, 1977, the parties entered into a contract for the purchase by plaintiffs of defendant's single family dwelling in River Woods, Illinois. It provided that the purchase price was $165,000 and closing was to occur on July 1, 1977, or sooner by mutual agreement. The following typewritten language was inserted into the printed form contract:
"All heating, plumbing, electrical and air conditioning to be in working order at the time of closing * * *."
The word "reasonable" was handwritten above "working" and the words "or adjustment at closing" were also appended by hand. Also inserted in the contract was another typewritten provision which read:
"Roof to be inspected when weather permits (no later than May 1) any damage to roof to be repaired by seller * * *."
The original contract language "to buyer's satisfaction at that time" was deleted and replaced with "in a good and workmanlike manner."
Examination of the discovery deposition of Paul Mallin, offered in support of defendant's motion for summary judgment, reveals plaintiffs had inspected the house three or four times prior to executing the contract and observed water marks on the ceiling. Mr. Mallin had the roof inspected on April 30, 1977, and was informed that there were "a lot of problems with this roof." On advice of his attorney, Mr. Mallin then obtained three written estimates of the cost of the needed repairs, but had no work done prior to closing. He stated that at the closing on June 23, 1977, defendant's attorney told plaintiff "they had a roofer that was willing to fix it for $200," but defendant's attorney would not guarantee the work.
According to the affidavit of plaintiff's attorney offered in response to defendant's motion, a list of other repairs which defendant was purportedly required to make under the contract was given orally to defendant's attorney at the closing which he then wrote down. Plaintiffs had complained that a faucet was not working, the dryer would not start, water was leaking into a closet, there was an odor permeating throughout the house, and there were problems with the septic tank. No "adjustment" was made for these items at the closing, however. Although plaintiffs considered defendant to be in breach of the contract, their attorney informed defendant's attorney that they would pay the agreed upon purchase price and accept the title, but would enforce their rights under the covenants of repair in the contract. When defendant's attorney raised the question of merger of these provisions into the deed, plaintiffs' attorney provided him with a copy of the decision in Brownell v. Quinn (1964), 47 Ill. App.2d 206, 197 N.E.2d 721. While an escrow account was set up to withhold funds pending clearance of title, no agreement was made to set aside funds for any repairs to the house.
Plaintiffs originally intended to place title to the premises in a land trust and at their request defendant executed a deed to Maryann Renaud, who was to serve as a conduit for that purpose. Renaud later executed a deed to Mr. Mallin when plaintiffs decided not to place the property in trust. Neither of these deeds made any mention of an obligation on the part of defendant to make repairs.
We consider first plaintiffs' contention that their action is not barred by the doctrine of merger by deed. While plaintiffs agree that the provisions of the contract governing the conveyance of title were merged into the deed, they argue that the covenant to repair the roof and the purported warranty of condition of the designated house equipment survived since they are collateral undertakings which were not fulfilled by delivery of the deed.
• 1, 2 The doctrine of merger by deed evolved solely to protect the security of land titles. (Petersen v. Hubschman Construction Co. (1979), 76 Ill.2d 31, 389 N.E.2d 1154.) In general, if the terms of a contract for the sale of real estate are fulfilled by delivery of the deed there is a merger of the two instruments and, unless a reservation is made in the deed (Petersen v. Hubschman Construction Co.), it supersedes all contract provisions. (Harris Trust & Savings Bank v. Chicago Title & Trust Co. (1980), 84 Ill. App.3d 280, 405 N.E.2d 411.) Where there are provisions in a contract which are not fulfilled by delivery of the deed, the contract is not merged, but remains open for performance of such terms. (Petersen v. Hubschman Construction Co.; Chicago Title & Trust Co. v. Wabash-Randolph Corp. (1943), 384 Ill. 78, 51 N.E.2d 132; Brownell v. Quinn (1964), 47 Ill. App.2d 206, 197 N.E.2d 721.) Whether and to what extent the contract merges into the deed is also a matter of the intention of the parties as evidenced by the language of their agreement and the surrounding circumstances. See Weck v. A:M Sunrise Construction Co. (1962), 36 Ill. App.2d 383, 184 N.E.2d 728; Harris Trust & Savings Bank v. Chicago Title & Trust Co.; 77 Am.Jur.2d Vendor & Purchaser § 291 (1975).
• 3 While no Illinois reviewing court has considered the specific question of whether a vendor's covenant to make repairs will be merged into the subsequent deed, the weight of authority in other jurisdictions is that such agreements are collateral to the deed and are not merged into it. (Annot., 38 A.L.R.2d 1310, 1325 (1954); 77 Am.Jur.2d Vendor & Purchaser § 341 (1975).) In our view, an examination of the analogous authority in this State leads to a similar conclusion. In Brownell v. Quinn (1964), 47 Ill. App.2d 206, 197 N.E.2d 721, the covenant of a builder/vendor to convey a lot and construct a house thereon "in a neat and workmanlike" manner was held to not have merged into the deed. The court reasoned that the ...