APPEAL from the Circuit Court of Cook County; the Hon.
REGINALD J. HOLZER, Judge, presiding.
MR. JUSTICE STAMOS DELIVERED THE OPINION OF THE COURT:
Prior to June 1979, defendants, Nolin Brown and Floyd Jennings, were purchasing by means of articles of agreement for a deed, a property located at 73d Street and Wentworth Avenue (the Wentworth property) in Chicago, Illinois. When the defendants became delinquent in their payments to the contract seller, they sought assistance from plaintiff, Dorothy Agnew. Defendants executed assignments of their interest in the Wentworth property, and plaintiff paid the outstanding balance on the existing real estate contract. Plaintiff then owned the Wentworth property. When defendants refused to permit plaintiff to collect rents from the tenants of the building or to allow plaintiff to enter the property, plaintiff sued for injunctive relief in the circuit court of Cook County. Defendants counterclaimed, alleging that they had executed the documents to provide security for a loan, and not to convey the property to plaintiff. Defendants contended that the trial court should void the assignments and the quit-claim deed which they had purportedly executed. Defendants also maintained that plaintiff's actions amounted to fraud, defeating her claim of rightful ownership. The trial court found that the transaction lacked consideration and that defendants continued as contract purchasers of the Wentworth property.
The Wentworth property consists of three stores and 10 apartments. Under the articles of agreement executed in August 1969, defendants agreed to purchase the property for $22,950. As of May 1979, there remained a balance due of approximately $6000. Defendant Brown testified at trial that in his estimation the property was currently worth $33,000.
Plaintiff's first witness was Ralph Goren, the attorney who serviced the articles of agreement between defendants and the original contract seller. Goren testified that defendants' payments began in September 1969. By 1973, defendants were one payment in arrears. The arrearage comprised two payments in 1974, five payments in 1975, nine payments in 1976, 13 payments in 1977, and 18 payments in 1978. Goren testified that, at the same time, the escrow account for the Wentworth property showed mounting deficiencies. Toward the end of 1978, Goren corresponded with one of the defendants to warn that if the payments on the contract were not made current, the sellers would terminate the agreement. Brown informed him that Mrs. Agnew was willing to advance money to bring the contract current. On June 25, 1979, Goren received $5108.50 (the outstanding contract balance of $6195.76, less the escrow balance of $1087.26) from plaintiff. When Goren received the assignments of defendants' interests in the articles of agreement, signed by defendants, Goren made out a trustee's deed to plaintiff. On cross-examination Goren acknowledged that although the defendants were perpetually delinquent on the contract payments, legal action had not been undertaken to foreclose on the agreement.
Ora Manning, employed by plaintiff as a barmaid at Dorothy's Blue Fox Lounge, testified to a series of meetings between defendant Brown and her employer, Dorothy Agnew, at the lounge. Dorothy Agnew testified that Brown came to her with the complaint that he was losing his building. He asked her to buy the building and suggested that he would then buy it back at a later date. She had her attorney prepare papers of transfer and gave the papers, assignments of interest, and quit-claim deeds to defendants to sign. These papers were returned to her by defendants with their signatures attached.
During direct examination, plaintiff was asked whether she told defendant Brown that she was going to loan him money on the property in return for his assignment of interest. Plaintiff responded, "Mr. Brown never asked me for any money." In later testimony, plaintiff asserted that she never intended to loan defendants any money or to allow defendants to use the property as security for a loan. On cross-examination, plaintiff explained that Brown had no special relationship with her. Rather, Brown was just another businessman whom she would occasionally see in the neighborhood. She testified that she warned Brown that if she bought the building she would not sell it back to him. She also acknowledged that she was aware that she was buying the building for $5100, but that she was unaware of its actual worth when she completed the transaction. Defendants' attorney then asked:
"What did Mr. Brown tell you that he wanted you to have the building instead of Mr. Goren? [Sic.]
Plaintiff: He said he would rather me to have the building than anybody. He didn't say who.
Q: And you don't know any reason why he would rather see you have the building rather than anybody, do you?
Q: And you say that Mr. Brown didn't ask you for anything in addition to the money to pay the contract, is that right?
Defendant Brown testified on his own behalf. He stated that Goren had not threatened him with legal action for nonpayment. Accordingly, he did not feel threatened with imminent foreclosure at the time of his dealings with plaintiff. When he solicited the loan from plaintiff, he believed that the arrangements would be for $6000 to pay off the contract, $6000 to pay his immediate debts, and $8000 at a later time. The loan, therefore, would amount to $20,000 and would be secured by plaintiff's holding title to the Wentworth property. Jennings testified that he was the silent partner. Although he did not speak directly to plaintiff, he understood that the transaction was to be structured as Brown described.
James Haddon testified that he had been Brown's attorney for at least 15 years. Brown first called him about the Wentworth property transaction in May 1979. On June 5, 1979, Brown came to Haddon's office. Brown explained that he had signed certain documents to receive a loan of approximately $20,000. Brown informed Haddon that other documents detailing the terms of the loan would need to be prepared. Haddon testified that he called plaintiff's attorney and asked him to hold any actions on the transaction in abeyance until the parties' intentions were clarified. Instead, after a number of conversations, plaintiff's attorney informed Haddon that he had ...