APPEAL from the Circuit Court of Champaign County; the Hon.
ARTHUR D. NICOL, Judge, presiding.
MR. JUSTICE LONDRIGAN DELIVERED THE OPINION OF THE COURT:
Rehearing denied September 30, 1981.
Using a warranty deed recorded November 16, 1973, the defendants, Paul Tangora and John R. Kelly (sellers), conveyed a rooming house located at 206 East Green in Champaign to the plaintiff, Robert L. Monti (buyer). Subsequently, during August 1974, the city of Champaign (city) closed the rooming house for building code violations which the sellers had been aware of prior to the conveyance of the property to the buyer. The buyer brought a multicount suit for damages and, after a bench trial, the trial court entered a judgment in favor of the sellers and against the buyer. On appeal, the buyer contends that the trial court's judgment should be reversed because (contrary to the trial court's findings) (1) the sellers' attorney bound the sellers to a warranty of no notice of building code violations, (2) the sellers ratified the terms of the contract prepared by their attorney, and (3) the sellers breached the covenants contained in their warranty deed.
We affirm the trial court's judgment.
A more detailed recitation of the facts is necessary in order to understand our resolution of the buyer's first two issues. At trial, the evidence revealed that the sellers received repeated notices of the building code violations from the city during 1972. Also during 1972, buyer inquired about purchasing the property. He visited the premises two or three times that year, but brief negotiations did not produce an agreement.
During the summer of 1973, buyer bought the two lots immediately east of the rooming house. That September, buyer telephoned seller Tangora to renew his inquiry about purchasing the sellers' property. This telephone conversation, which did not include seller Kelly, produced an oral agreement between buyer and Tangora whereby buyer agreed to purchase the property by assuming its existing mortgage. Buyer testified that building code violations were not mentioned in this conversation or any other conversation. Tangora testified that code violations were discussed in this conversation and that the owners' intent was to walk away from the property. It appears that only a bare "agreement" was arrived at between buyer and Tangora, as they did not discuss the matter of easements or restrictions on the property, or title insurance. Nor did they discuss the type of deed to be used or the need to have spouses sign a deed.
Tangora contacted Attorney J. Michael O'Byrne of Champaign and directed him to prepare a contract for the sale of the property to buyer. Tangora did not give O'Byrne any direction concerning the type of deed to be used, the type of exceptions, restrictions or easements. Tangora testified at one point that he mentioned code violations to O'Byrne. He also testified that he was pretty sure that he did not discuss them with O'Byrne. O'Byrne testified that Tangora made no mention of the violations. Thereafter, O'Byrne prepared a contract and sent it to Attorney Carl Sinder in Champaign. The contract was prepared from a standard form. O'Byrne's testimony indicated that some paragraphs, including one warranting that sellers had no notice of code violations, were included automatically.
The parties also disputed whether the property had been posted with notice of code violations prior to the conveyance. Tangora testified that there were "stickers" on the property, indicating code violations, while plaintiff testified that there were none until 1974.
O'Byrne attached a note addressed to Tangora with the contract, requesting that when the contract was signed, to notify O'Byrne so that title insurance could be ordered. O'Byrne did not tell Sinder that he did not have his clients' approval of the provisions of the contract before sending the contract to Sinder. Sinder stated that the general custom of practice of attorneys in Champaign County was to prepare contracts with only those provisions that had been authorized by the attorney's client. O'Byrne testified that this was not a matter of custom.
On November 16, 1973, plaintiff signed the contract prepared by O'Byrne in the office of Sinder. Later that morning, Sinder and O'Byrne met in the offices of O'Byrne to close the transaction. O'Byrne delivered a deed signed by the Tangoras and by himself as attorney-in-fact for the Kellys. O'Byrne promised a deed from the Kellys to confirm this deed when they returned to town. Sinder delivered a check for mortgage arrearages and for a share of unpaid bills and damage deposits to O'Byrne.
Sinder testified that he was reasonably certain that Tangora was present at the closing, and that Tangora signed the contract which had been prepared by O'Byrne. According to Sinder, the contract was then delivered to O'Byrne to have the other defendants sign the contract and return it to Sinder. According to O'Byrne, Tangora was not present at the closing, nor was the contract. He also testified that he did not transmit the contract to his clients and did not see it after initially preparing it until it was later returned to his office by Kelly. According to O'Byrne, Kelly told O'Byrne that he could not sign it because of the code violations paragraph.
Tangora acknowledged that after closing he received the contract from O'Byrne or picked it up from his office. Tangora further admitted that the purpose for the contract being delivered to him was for him to sign it. He testified that he signed the contract, then scratched his name out, because of the provision relative to code violations. He further stated O'Byrne called and asked for the contract back and that he said he did not want to go through with the deal because it was not right. He further related that O'Byrne picked up the contract from him and that he never saw it again.
Kelly first saw the contract when he returned to Champaign around December 1973. He admitted that the contract was brought to his house by Tangora. He testified that it was at his house for him to sign. He believed the scratched-out signatures of the Tangoras were on the contract when he first saw it. He refused to sign the contract because of the code violations provision. He and his wife did, however, sign a confirming deed and returned it to O'Byrne.
Buyer took possession of the premises on November 1, 1973, and continued to operate the premises as a rooming house until August 1, 1974. In August 1974, the plaintiff and his rooming house tenants received written notice from the city of the existence of building code violations. They also received notice from the city of the condemnation and closure of the premises because of the violations. Buyer secured, for the first time, a copy of the list of code violations sent to sellers in 1972. On August 16, 1974, the building was closed by the city because of the building code violations. Shortly thereafter, Sinder visited the office of O'Byrne and ...