APPEAL from the Circuit Court of Champaign County; the Hon.
ARTHUR D. NICOL, Judge, presiding.
MR. PRESIDING JUSTICE TRAPP DELIVERED THE OPINION OF THE COURT:
Rehearing denied September 8, 1981.
This case primarily involves the interpretation of the parties' contract to purchase real estate. Essentially, both parties contend that based upon their interpretation the other breached the contract.
The evidence at the bench trial showed that Somers (hereinafter seller) desired to sell rental property located on South First Street in Champaign. Seller enlisted the aid of Steven Vance of the Weiner Companies, Ltd., to help him sell the property, which, at that time, had a tenant. Vance, acting as the seller's agent, showed the property to Mayol (hereinafter buyer), who subsequently informed Vance that he wanted to purchase the property. Consequently, the buyer and seller signed a contract to purchase real estate, which in relevant part, stated:
1. Possession to be delivered on or before November 1, 1979 subject to tenant's rights
4. Seller shall furnish merchantable abstract of title or owner's title insurance policy, in the amount of the purchase price, showing merchantable title of record in seller's name, subject only to encumbrances assumed herein.
5. Seller shall convey title by warranty deed, subject only to encumbrances assumed herein.
11. Subject to existing restrictive covenants, easements and zoning regulations, if any." (The underlined words indicate that they were typed onto the form contract.)
Pursuant to other terms of the contract to purchase, the buyer tendered $1,000, which was held in escrow by the Weiner Companies, Ltd.
After signing the contract, the buyer received a copy of the tenant's lease, and, for the first time, learned that the tenant had an option to purchase the property. As a result of this knowledge, the buyer refused to abide by the contract to purchase and sued the Weiner Companies, Ltd., for the $1,000 in escrow. The record shows that, in turn, the Weiner Companies, Ltd., sued the seller. Prior to trial, however, the Weiner Companies, Ltd., tendered $1,000 to the clerk of the circuit court and the case proceeded as if the Weiner Companies, Ltd., had interpleaded the buyer and the seller.
After the evidence was presented, the trial court concluded that the crucial phrase in the parties' contract — "possession to be delivered on or before November 1, 1979, subject to tenant's rights" — was ambiguous. Thus, to ascertain what the parties meant by this phrase the trial court determined that it would consider extrinsic evidence. Based on the evidence presented, the trial court found that the parties intended the phrase to mean that the buyer was taking the property subject to all the tenant's rights contained in the lease, including the tenant's option to purchase. Accordingly, the trial court entered judgment in favor of the seller, awarding the seller the $1,000 as liquidated damages for buyer's breach of contract.
On appeal, the buyer argues: (1) The trial court's interpretation of the contract is against the manifest weight of the evidence, and (2) the seller is not entitled to judgment because he has not furnished the buyer a "merchantable abstract of title or owner's title insurance policy, * * *, showing merchantable title of record in seller's name * * *" as required by the contract.
In Martindell v. Lake Shore National Bank (1958), 15 Ill.2d 272, 283-84, 154 N.E.2d 683, 689, the ...