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Crum v. Krol

OPINION FILED AUGUST 14, 1981.

THOMAS CRUM ET AL., PLAINTIFFS-APPELLEES,

v.

ANDREW KROL, DEFENDANT-APPELLANT.



APPEAL from the Circuit Court of Cook County; the Hon. E.C. JOHNSON, Judge, presiding.

MR. JUSTICE WILSON DELIVERED THE OPINION OF THE COURT:

In this action for breach of a real estate contract, plaintiff was awarded damages under two counts of his complaint. Defendant appeals from the judgment, contending that: (1) the contract was never completed and is unenforceable under the Statute of Frauds; (2) the court should have directed a verdict in defendant's favor following the close of plaintiffs' case; (3) the court erred in adding Thomas Crum & Associates as a party plaintiff; (4) the damages award was erroneous and duplicative; and (5) defendant should have been awarded judgment on his counterclaim. For the reasons that follow, we affirm the trial court's judgment.

On October 11, 1975, defendant Andrew Krol engaged a real estate salesman, Lawrence Bergnach, to find a purchaser for a certain parcel of land. Krol signed the listing agreement as owner. Plaintiff, Thomas Crum, decided to buy it for use as a trucking terminal. Bergnach prepared two form documents titled "Real Estate Sales Contract," which listed Krol as the seller and Crum as the purchaser. Plaintiff's attorney, Elbert Elmore, used these documents to prepare the final written agreements. One document listed several contingencies to be performed.

The date on which Krol signed the documents was disputed at trial. Crum and Bergnach testified that he signed in March of 1976, but Krol contended that he did not sign them until late June or early July of 1976. Although Krol's brothers also owned part interest in the premises, their names were not included on the documents and they never signed them.

Crum testified that after the documents were signed, he, Krol, and Bergnach fulfilled the contingencies listed on the first document. Specifically, Krol signed a petition, which was ultimately granted, to rezone the property, thus permitting the future operation of Crum's trucking business. Crum obtained a soil test and paid for repairs of a well that furnished water to the property. He also secured financing. Bergnach obtained a permit from the State allowing for the development of sufficient ingress and egress from a main road to the real estate.

In May or June of 1976, Krol agreed to let Crum move onto the property to begin his trucking operations. He did not pay rent while he occupied the land. He testified that he incurred expenses in connection with establishing his business. Bills were introduced into evidence, over defense counsel's objection, which indicated that these expenses were paid by a corporation, Thomas Crum & Associates. *fn1

In May, the final price terms were approved and initialed by the parties. In late June or early July of 1976, Crum and his attorney met with Bergnach and Krol, ostensibly to close the transaction. Title had been ordered down. During this meeting Krol took the contracts to be signed by his brothers and assured the others that there would be no problem in obtaining their signatures. The brothers never signed, however, and Crum did not receive title to the property.

Crum brought an action for damages against Krol, the other titleholders, Bergnach, and Wm. C. Groebe & Co. At the time of trial, however, Krol was the only remaining defendant. The trial court found Krol liable to Crum for breach of contract and awarded $13,435.65 in damages arising from the breach. The court further awarded Crum $3,746.55 pursuant to the unjust enrichment count of the complaint. Subsequently, Krol brought this appeal.

OPINION

I

The first and major issue is whether the parties entered into a valid, enforceable contract for the sale of the realty in issue. In essence, Krol argues that the two documents he signed do not satisfy the Statute of Frauds; further, that the documents must be construed as Crum's offer to purchase rather than a completed contract. The basis for both arguments is the failure of Krol's brothers, as co-owners of the realty, to sign the documents. We reject Krol's contentions.

A.

Section 2 of "An Act to revise the law in relation to frauds and perjuries" (Ill. Rev. Stat. 1977, ch. 59, par. 2) requires a contract for the sale of realty to "be in writing, and signed by the party to be charged therewith." Our courts> have held that the writing must contain on its face or by reference to other writings the names of the buyer and seller, a description of the land, the price, terms, and conditions of sale, and the signature of the party against whom the contract is to be enforced. Thompson v. Wiegand (1956), 9 Ill.2d 63, 136 N.E.2d 781; Mid-Town Petroleum, Inc. v. Dine (1979), 72 Ill. App.3d 296, 390 N.E.2d 428.

• 1, 2 In the pending case the two signed documents contain all of these elements. They are facially complete records of the agreement between Crum and Krol. We find, therefore, that since Krol is the party to be charged in this case, he cannot use his brothers' failure to approve and sign the documents as the basis for his Statute of Frauds defense. *fn2 Nevertheless, a writing that complies with the Statute of Frauds is not necessarily a valid contract, but only evidence of one. (Hall v. Humphrey-Lake Corp. (1975), 29 Ill. App.3d 956, 331 N.E.2d 365.) The real issue before us, therefore, concerns the intent of the parties, Crum and Krol: Did they intend to create a binding contract when they signed the documents, or was the contract conditioned upon the approval and signatures of Krol's brothers?

B.

• 3, 4 Krol's position is that the documents were not to be effective as contracts without the signature of his brothers and thus cannot be enforced against him. It is true that if a written contract by its terms is drafted as a mutual agreement among several parties, it must be signed by all parties in order to bind them, or it will not bind any party because the contract will remain uncompleted. (See Santelli v. Lev (1927), 324 Ill. 454, 155 N.E. 278; see also Hall v. Humphrey-Lake Corp.) Similarly, if a writing indicates that an agreement to sell realty is subject to final approval by a third party, and is otherwise contingent upon the execution of a formal contract, the writing may be deemed insufficient under the Statute of Frauds or incomplete as a final contract. See Brunette v. Vulcan Materials Co. (1970), 119 Ill. App.2d 390, 256 N.E.2d 44; cf. Barton Chemical Corp. v. Pennwalt Corp. (1979), 79 Ill. App.3d 829, 399 N.E.2d 288 (whether the execution of a formal document is essential to the creation of a binding contract is a question of intent).

The documents in the instant case, however, do not expressly require the brothers' approval of the transaction as a condition precedent or a contingency of the contract. Their names are not included on the documents as parties to the transaction. In construing the legal effect of the documents, therefore, the trial court evaluated extrinsic evidence of the parties' intent and resolved the conflicting testimony as a question of fact. Our review is thus limited to determining whether the court's judgment in favor of Crum is contrary to the manifest weight of the evidence. See Sherbrooke Homes, Ltd. v. Krawczyk (1980), 82 Ill. App.3d 990, 403 N.E.2d 622.

Krol maintains that Crum knew of his brothers' ownership interest in the property and understood that their signatures on the documents were necessary to complete the transaction. Accordingly, he believes that the signed contract forms must be construed as Crum's offer to purchase, which was never accepted. To support his argument, Krol focuses on certain parenthetical language in the documents which was inserted after the words, "Name of Seller: Andrew Krol." The language provided as follows: "Permission to enter names of titleholders at time of execution hereof by seller." According to Krol, this language put Crum on notice of the existence of other potential titleholders from the beginning of the negotiations.

• 5, 6 We disagree with Krol's inference that Crum's awareness of other possible owners would necessarily prevent the execution of a valid contract between him and Krol. Under Illinois law, the grantor of real estate need not have title at the time the contract is made (White v. Bates (1908), 234 Ill. 276, 84 N.E. 906; Bissett v. Gooch (1980), 87 Ill. App.3d 1132, 409 N.E.2d 515); it is the promise to convey title that is the basis of the contract. (Breiling v. Hybl (1912), 167 Ill. App. 165; see Sherbrooke Homes, Ltd.) A breach of such a promise may be compensated in damages even though the contract cannot be specifically performed. Thus, although the trial court in the present case could not order Krol to convey the entire property, in derogation of the rights of the other titleholders (White v. Bates; see also Dineff ...


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