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Northern Trust Co. v. Haning

OPINION FILED JUNE 10, 1982.

NORTHERN TRUST COMPANY, PLAINTIFF-APPELLANT AND CROSS-APPELLEE,

v.

W.E. HANING, DEFENDANT-APPELLEE AND CROSS-APPELLANT.



APPEAL from the Circuit Court of Tazewell County; the Hon. JOHN A. GORMAN, Judge, presiding.

PRESIDING JUSTICE BARRY DELIVERED THE OPINION OF THE COURT:

Northern Trust Company appeals from an award of zero dollars damages returned on a verdict in Northern Trust's favor in an action brought by Northern Trust to recover damages for the wrongful holdover of possession by W.E. Haning, tenant of a farm owned by the estate of John J. O'Neil.

Most of the facts of this case are not in dispute. Northern Trust was engaged by the owners of 320 acres in Tazewell County to manage the farm, and since 1970 or 1971, Northern Trust had leased the farm to W.E. Haning under a crop-share lease. The terms of the last lease provided for the owners and Haning, as the operator, to divide the crop expenses and to share the crop on a 50-50 basis for the year beginning March 1, 1979, and ending February 29, 1980. The lease also provided that it would continue from year-to-year unless either party served a written notice on the other party prior to the first day of September preceding the termination date.

During the summer of 1980, the owners of the O'Neil farm decided to put the farm up for sale, and accordingly Northern Trust gave Haning written notice in August of 1979 that the lease would terminate as of February 29, 1980. Both parties agree that the lease was thereby extinguished.

Northern Trust then negotiated with Haning for an interim operating agreement to insure that the necessary tillage and fertilizing would be performed by Haning in the fall and winter to prepare the ground for the next planting season, and also to insure that Haning would operate the farm during the coming year in the event it was not sold. This agreement contained the following provisions:

"1) Operator will perform fall 1979 tillage and will bear one-half of the cost of fertilizer applied in the fall of 1979;

2) Owner must notify Operator by March 1, 1980 of any pending sale of the farm; if Owner does not notify the Operator by March 1, 1980, Operator will be allowed to operate the property on a crop-share agreement for the 1980 crop year under the same terms as the 1979 lease (dated November 14, 1978 and now terminated);

3) If Owner advises Operator by March 1, 1980 that a farm sale is completed or pending, Operator must cease all operations and yield possession of the farm.

4) In the event the Operator must yield possession, Owner shall reimburse Operator for Operator's share of fall 1979 fertilizer expenses; Owner shall also be obligated to pay Operator for all tilling operations performed following the fall 1979 harvest at custom rates as established by the Tazewell County Extension Office."

In February of 1980 the O'Neils notified Northern Trust that a buyer had been obtained, and Max Evans, who was then manager in charge of the O'Neil farm, called Haning on February 11, 1980, to tell him about the pending sale. According to Evans, he told Haning that the farm had been sold to a neighbor, that he should send his bills for tillage work and fertilizer to Northern Trust for payment before closing, and that Evans would find out about when Haning's son would have to give up possession of a house which he occupied on the premises. According to Haning, Evans told him that a buyer might have been found and he would let him know for sure later. Haning also stated that he talked to Ward Freitag sometime after April 1, by which time he knew Freitag had purchased the farm. At that time Freitag asked Haning if he could put tile around the perimeter of the farm in order to improve drainage, and Haning gave his consent.

In the meantime, on March 10, 1980, Northern Trust sent defendant Haning a letter which began "This will confirm our conversation of some 3-4 weeks ago about the final settlement on the O'Neil Farm." The letter requested bills from Haning for the cost of fertilizer applied in the previous fall and a statement listing the acres tilled and the custom rates for tillage practices from the Tazewell County Extension Office. The letter also informed Haning the house could continue to be leased from the purchasers.

Haning refused to surrender possession, claiming that he had leasehold rights to the farm for the coming crop year, and as a consequence, Freitag indicated that he would not complete the sale unless he was given possession. Northern Trust then agreed to lease the farm from Freitag and to bring legal action to eject Haning from the farm. In the event Haning was not ejected by April 26, 1980, Northern Trust agreed to pay $60,000 in cash rent to Freitag for the period from April 26, 1980, to February 28, 1981. Freitag completed the purchase transaction, and Northern Trust brought a forcible entry and detainer action against Haning on April 8, 1980. The trial date was delayed by Haning's jury demand, so Northern Trust paid the $60,000 cash rent to Freitag, and Haning remained in possession. After the crops were harvested, Haning tendered one-half of the crop to Northern Trust pursuant to the terms of the previous lease. Northern Trust did not refuse, and also paid the owner's share of the expenses, thus realizing $36,526 in partial mitigation of damages.

Haning asserted as an affirmative defense that he was not notified of a sale during the term of the interim agreement because he did not receive a notice in writing before March 1, 1980.

Trial was set for May 18, 1981. On May 6, 1981, Northern Trust requested leave to file an amendment to its complaint consisting of two counts, one of which would assert that Haning's holdover of possession was wilful and the other would assert that Northern Trust was damaged in the amount of $60,000 when it had to pay that amount as cash rent to prevent the sale from failing. Defendant Haning asked for 30 days to respond to the amended complaint, but Northern Trust would not agree to a continuance. The trial court refused leave to amend without a continuance, and the cause proceeded to trial before a jury. At the conclusion of trial the jury returned a verdict finding that Haning had wrongfully withheld possession and ...


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