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Oxequip Health Indus. v. Canalmar

OPINION FILED APRIL 3, 1981.

OXEQUIP HEALTH INDUSTRIES, INC., PLAINTIFF-APPELLEE,

v.

CANALMAR, INC., ET AL., DEFENDANTS-APPELLANTS.



APPEAL from the Circuit Court of Cook County; the Hon. HAROLD A. SIEGAN, Judge, presiding.

MR. JUSTICE LORENZ DELIVERED THE OPINION OF THE COURT:

The defendants appeal from the entry of an order granting a preliminary injunction in an action for specific performance. The order enjoins transferring title of the disputed property. On appeal, the defendants contend (1) plaintiff's complaint does not provide sufficient basis for a preliminary injunction, and (2) the order fails to meet the requirements of section 3-1 of the Injunction Act. Ill. Rev. Stat. 1979, ch. 69, par. 3-1.

The amended complaint alleges that plaintiff, as lessee, and Canalmar, as lessor, entered into a lease for the premises at 12601 S. Springfield, in Alsip, for a period of 10 years with an option to purchase.

According to the lease,

"Lessor represents that it is presently the owner of the property and presently retains all rights of possession thereto, and has full authority to grant lessee an option to purchase the premises * * *."

Despite this representation, legal title was held by Marquette National Bank (MNB) as trustee under an agreement dated January 14, 1974 — almost a year before the lease agreement was executed. The complaint alleges that Canalmar was the beneficial owner of the property.

On September 21, 1979, plaintiff attempted to exercise the option to purchase by delivering, to Canalmar, a notice and $20,000 earnest money deposit. Canalmar refused the tender because of disagreements over the terms of the sale and the timeliness of the notice.

When Canalmar refused to close, plaintiff filed an action for specific performance. Plaintiff also requested an interlocutory order enjoining defendants from conveying the property before resolution of the case, but, by agreed order, the parties maintained the status quo.

At a hearing on defendants' motion to dismiss the specific performance action, defense counsel represented to the court that Canalmar's beneficial interest had been assigned to MNB, in its individual capacity, when the trust was created. The trial court then issued the following preliminary injunction:

"Defendants and Marquette National Bank are enjoined from transfering [sic] Title to the property without bond."

Defendants contend that the complaint does not provide a sufficient basis for the preliminary injunction because:

(1) the complaint does not show that there would be irreparable harm if the preliminary injunction were not issued;

(2) the complaint fails to state a cause of action because Canalmar, as beneficial owner of the property, did not have authority to grant the option, and because it had assigned the beneficial interest to the trustee as collateral;

(3) plaintiff judicially admitted that the option was invalid because, in alternative counts for deceit, it states that the representations Canalmar made (about being the owner and ...


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