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Djomlija v. Urban





APPEAL from the Circuit Court of Cook County; the Hon. NATHAN M. COHEN and the Hon. HAROLD SIEGAN, Judges, presiding.


Plaintiffs, Mile and Mira Djomlija, brought suit for specific performance of a real estate contract against defendants, Kenneth and Margaret Urban. The trial court entered judgment in favor of plaintiffs. We affirm.

On June 28, 1977, the parties entered into a contract whereby defendants were to convey to plaintiffs a six-unit apartment building in Des Plaines, Illinois, at a price of $134,900. The contract contained a mortgage contingency clause which provided that plaintiffs had 30 days within which to secure a written mortgage commitment. Plaintiffs were to notify defendants in writing within the 30-day period if they were unable to obtain the commitment. If defendants were not so notified, it would be conclusively presumed that plaintiffs had secured a commitment or that they would purchase the property without mortgage financing. No closing date was specified in the contract. Plaintiffs did not secure a mortgage commitment within the 30-day period, and they did not notify the sellers that a commitment had not been obtained.

Plaintiffs testified that they were informed by the sellers' broker that the sellers were not in a hurry to close and wanted to postpone the closing until after January 1, 1978, for income tax purposes. Plaintiffs therefore did not believe that it was urgent that they obtain the mortgage commitment. Plaintiffs also were not in a hurry to close because they planned to close on the sale of a building they owned in Rosemont, Illinois, in early September, and they wanted to apply some of the proceeds towards the purchase of the Des Plaines property. Plaintiffs stated that they would have had sufficient funds for the closing without these proceeds.

Plaintiffs' attorney testified that he first tried to set a closing date for the first or second week in September which was when he first learned the name of defendants' attorney. It appears that no closing date was arranged at that time. According to plaintiffs' attorney, sometime prior to mid-October, defendants' attorney informed him that defendants wanted to delay the closing for personal reasons. In Mid-October, defendants' attorney suggested that the closing could go ahead "if the broker was eliminated" because defendants were unhappy with the broker's actions. Plaintiffs refused to alter the contract in regard to the broker's commission. Plaintiffs' attorney further testified that he again contacted defendants' attorney regarding the closing in November. He was unaware that defendants did not intend to close until he received a letter to that effect from defendants' attorney in December.

Defendants testified that they were not sure that they wanted to sell the property and that they had put the property up for sale "[just to see] what the market would bring." It was their understanding that they had the option of choosing whether or not to close on the property. Defendants learned in early August that plaintiffs did not have a mortgage commitment. Defendants told the broker and their attorney that they did not wish to sell and that the earnest money should be returned to plaintiffs. According to defendants, neither plaintiffs nor their attorney demanded that a closing date be set, and plaintiffs never tendered the funds needed to close.

The trial court ruled that plaintiffs were entitled to specific performance. It ordered that the closing take place within 30 days. The closing was aborted several times and finally occurred in late December. The closing took place after defendants filed their notice of appeal. The trial court also dismissed defendants' suit for declaratory judgment which defendants had filed in the third municipal district shortly before plaintiffs brought this action. The declaratory judgment action had been transferred to the chancery division of the first district and consolidated with this specific performance action.

Defendants first contend that plaintiffs were not entitled to specific performance because plaintiffs breached the contract. Defendants' argument relates in part to the mortgage contingency clause, which reads:

"This offer is contingent upon me securing within 30 days of acceptance hereof by owner of said property a mortgage loan commitment in writing for $107,900 with interest at not more than 9% per annum * * *. If I do not obtain such commitment, I shall notify Seller in writing within said number of days. If Seller is not so notified it shall be conclusively presumed that I have secured such commitment or will purchase said property without mortgage financing. If seller is so notified, Seller and broker may, within an equal number of additional days secure a mortgage commitment for me upon the same terms. * * * If I notify Seller as above provided, and neither I, Seller, nor broker, secure * * * such commitment * * *, this agreement shall be null and void and all earnest money shall be returned to me * * *."

According to defendants, plaintiffs did not comply with the clause because they "failed to obtain a written mortgage commitment and further failed to notify [defendants] in writing of such failure within the required 30 day period."

• 1 We believe that the language of the mortgage contingency clause itself disposes of defendants' argument. Under the terms of the clause, if plaintiffs did not notify defendants in writing within the 30-day period that they were unable to obtain the commitment, then a conclusive presumption would arise that plaintiffs had either secured a mortgage commitment or would purchase the property without mortgage financing. Since plaintiffs did not notify defendants in writing that they had not obtained a commitment, this presumption arose. The effect of plaintiffs' failure to notify defendants in writing that they did not have a written commitment was to make the contract binding and not, as defendants suggest, to terminate it. The contract could not have become null and void unless plaintiffs notified defendants in writing that they did not obtain a commitment and thereafter defendants and their broker failed to secure financing for plaintiffs. This did not occur. Defendants' claim that they orally learned of plaintiffs' failure to get a commitment is of no significance since the contract became binding in the absence of written notification. We therefore reject defendants' argument that plaintiffs breached the contract by failing to comply with the mortgage contingency clause.

• 2 Defendants also argue that plaintiffs breached the contract because they did not deposit with the broker the total amount of earnest money required by the contract. The contract reads: "$ One Thousand * * * earnest money * * * (equal to at least 10% of the purchase price) * * *." While $1000 is less than 10% of the purchase price of $134,900, this inconsistency is insufficient to defeat plaintiffs' right to specific performance. First, the words "One Thousand" are written by hand while the rest of the provision is printed. Generally, where there is conflict in a contract between handwritten and typed or printed terms, the handwritten terms will be deemed controlling. (Berman Leasing Co. v. Chicago Terminal Clearance, Inc. (1967), 88 Ill. App.2d 43, 46, 232 N.E.2d 180, 182; see Illinois Valley Asphalt, Inc. v. La Salle National Bank (1977), 54 Ill. App.3d 317, 322, 369 N.E.2d 525, 529.) In addition, the balance to be paid is shown in the contract as $133,900, a figure which is consistent with the $1000 earnest money figure. Finally, it appears that defendants did not object to the payment of only $1000 until after the trial. Under the circumstances, we cannot say that plaintiffs breached the earnest money provision.

Defendants next contend that plaintiffs should not have been granted specific performance because they were not ready, willing and able to close. Defendants argue that plaintiffs were not able to close until after they sold their Rosemont property in September. Plaintiffs, however, testified that while they would have liked to have applied the Rosemont sale proceeds to the purchase of the property involved here, those funds were not essential, and the money could have been obtained in other ways. Moreover, defendants never demanded that the closing be set before the completion of the Rosemont sale. Mere speculation by defendants that plaintiffs were not ready, willing and able to perform within the 2 1/2, months following the signing of the contract is an insufficient basis upon which to deprive plaintiffs of their right to specific performance.

• 3 Defendants further argue that plaintiffs were not ready, willing and able to close on July 23, 1979, a date set by the court for closing. It is undisputed that plaintiffs did not tender the purchase money on this date. However, to be entitled to specific performance, a party need not have performed according to the terms of the contract if he can establish that he was ready, willing and able to perform but was prevented, and thus excused, from doing so by the acts of the other party. (See Tantillo v. Janus (1980), 87 Ill. App.3d 231, 234, 408 N.E.2d 1000, ...

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