Appeal from the Circuit Court of St. Clair County; the Hon.
Dennis J. Jacobsen, Judge, presiding.
JUSTICE JONES DELIVERED THE OPINION OF THE COURT:
This appeal considers the validity of two installment contracts for deed to approximately five acres of real estate in St. Clair County. Two lawsuits resulted from the two contracts and they were ultimately consolidated for trial and this appeal. A prior lawsuit involving one of the contracts resulted in an appeal to this court. Rather than consider the case on its merits, we reversed and remanded for the purpose of adding necessary parties and for such additional pleading as the circumstances might require. (Bovinett v. Rollberg (1979), 73 Ill. App.3d 490, 392 N.E.2d 27.) An additional lawsuit was filed and the trial of the consolidated cases resulted in the instant appeal. Complex pleadings and multiple issues require a rather detailed statement of facts.
Prior to June 28, 1974, John and Stella Neuner (Neuners) were the owners in fee of the real estate in question which was improved with a house and outbuildings. On that date they entered into a contract for deed with Edward J. and Patti L. Rollberg (Rollbergs). (The instrument is styled "Bond for Deed," but its form and terminology are that of a contract for deed, not a bond for deed. Accordingly, we will refer to it as a contract for deed.) The contract price was $34,320, payable 10% down and the balance in monthly installments of $225, inclusive of interest at 6%, for 36 months. The amount remaining due and unpaid on July 1, 1977, was payable in a lump sum, referred to by the parties as the balloon payment. The amount due for the balloon payment would be $28,112.47. The contract further provided that the buyers agreed to pay the taxes levied against the premises for 1976 and subsequent years. In the event the purchasers failed to make the payments and perform the agreements specified within 60 days after they became due, the payments made would be forfeited to the sellers as liquidated damages. Time was declared to be of the essence, and the sellers could declare the contract forfeited and retake possession of the premises by serving notice of their intent to do so upon the buyers. The contract also contained the following provisions:
"No assignment of this contract shall be valid unless consent in writing is first had of the party of the first part [the sellers] and endorsed hereon. Party of the second part [the purchasers] shall not do or permit to be done on said property, anything out of which a mechanic's or other lien could arise, without written consent of the party of the first part. Notice is hereby given that party of the first part shall not be responsible to anyone for anything so done."
Pursuant to the contract, the Rollbergs took possession of the property and commenced the monthly payments. Prior to the due date of the balloon payment, the Rollbergs entered into a standard listing contract with a real estate sales agency for sale of the property. The agency located a prospective buyer of the property in the persons of Lawrence E. and Beverly A. Bovinett (Bovinetts). On March 7, 1977, still prior to the due date of the balloon payment and following negotiations between the Rollbergs and the Bovinetts conducted by a representative of the real estate sales agency, an alleged, but highly disputed, contract for sale was made whereby the Rollbergs agreed to sell the property to the Bovinetts for $52,500. The facts surrounding the execution of this Rollberg-Bovinett contract are set forth in our opinion in the prior appeal and need not be repeated here. It should be noted, however, that the alleged agreement between the Rollbergs and the Bovinetts was not an assignment of the Rollbergs' interest in the Neuners' contract, but a separate and subsequent contract for deed.
Two days after the alleged execution of the Rollberg-Bovinett contract, Mr. Rollberg notified the sales agency that he would not sell the property for less than $55,000 and that he had not agreed to sell for $52,500. The disagreement precipitated the earlier suit for specific performance to which we have alluded. That suit was filed on May 25, 1977, approximately five weeks before the balloon payment due date on the Neuners' contract of July 1, 1977.
The complaint by the Bovinetts was in two counts. Count I was based on an oral agreement and count II was based on a written agreement for sale of the real estate by the Rollbergs to the Bovinetts. The complaint was against both the Rollbergs and the Neuners, but the Neuners were nominal parties only. Paragraph 7 of both counts of the complaint recited that in the event the Neuners would "exercise any right they have to alter title to conveyance, forfeiture, suffering an assignment or otherwise, this court could be deprived of its jurisdiction over the subject matter of this proceeding for enforcement of plaintiffs' contract rights, to the irreparable injury of plaintiffs." The prayer of the complaint was (a) that the Rollbergs be directed to specifically perform the contract for sale and (b) that the defendants be enjoined and restrained from conveying or otherwise alienating or altering the rights of the parties in and to the real estate pending final determination of the proceeding. The complaint of the Bovinetts did not allege in any way, nor did it suggest, that the Neuners had violated any agreement with either the Rollbergs or the Bovinetts, or that the Neuners were in any way at fault.
On June 2, 1977, the trial court issued a temporary restraining order which included the following findings and order:
"It is alleged that the installment sales contract between Neuners and Rollbergs may contain the usual provisions for assignment, forfeiture, reversion, and other changes in the title to said real estate. It further appears that, since whatever right plaintiffs have are derived from defendants Rollberg, but that they have no contract with defendants Neuner, it is necessary in order to enforce plaintiffs' rights in this proceeding that the status quo be maintained between defendants Rollberg and defendants Neuner, thereby protecting the jurisdiction of this Court over the subject matter of this proceeding.
NOW, THEREFORE, IT IS ORDERED, ADJUDGED AND DECREED that defendants, and each of them are enjoined and restrained from assigning, forfeiting, transferring or conveying whatever interest they may have, whether legal or equitable, in real estate described in the Complaint filed herein, * * * or from suffering such assignment, forfeiture, transfer or conveyance. It is the intention of this order that the title and existing contractual relationships relating to the title to said real estate remain intact and unchanged, pending the further order of this Court."
By an order of June 9, 1977, the temporary restraining order was continued in effect as a preliminary injunction pending final determination of the litigation. The Rollbergs and the Bovinetts were present at the hearing on June 9, but the Neuners were not. On July 26, 1977, on motion of the Rollbergs, the preliminary injunction was amended so as to permit the Neuners to convey the premises to the Rollbergs in fulfillment of the contract. The Bovinetts filed their consent to the amendment.
On September 27, 1977, following a trial on the merits, the trial court entered an order finding that a valid contract for sale had been entered into by the Rollbergs and the Bovinetts and directed the Rollbergs to comply. The order of September 27, 1977, made no mention of the Neuners. The Neuners had not been represented at the trial but Mrs. Neuner had attended as a spectator. In response to a question directed to her by the court at the conclusion of the hearing, Mrs. Neuner said something to the effect that all they (the Neuners) wanted was their money.
On October 6, 1977, a post-trial motion was filed by the Rollbergs. On November 18, 1977, for the first time, the Neuners entered the case by filing a motion for an order confirming that the preliminary injunction had been dissolved. Their motion alleged that the Rollbergs were in default on their contract for more than 60 days and that they, the Neuners, had elected to terminate the contract for deed with the Rollbergs and declare a forfeiture of the payments made. The Neuners' motion also asserted that the preliminary injunction against them was improperly sought by the Bovinetts who had no contractual rights with them. The motion concluded with an allegation that the order of September 28, 1977, "disposes of the controversy on its merits and renders the temporary injunction functus offcio [sic]."
On December 22, 1977, the court entered an order which denied the Rollbergs' post-trial motion. The order also provided that the "temporary injunction is continued in effect and modified in that it will terminate as to defendants Neuner in 30 days or upon the filing of a notice of appeal by defendants Rollberg, whichever is sooner." On January 12, 1978, the Rollbergs filed a notice of appeal and a motion for stay and continuance of injunction pending appeal. They alleged in their motion for stay that they would be deprived of an effective appeal if judgment were executed upon or if the Neuners were allowed to forfeit their contract.
On January 23, 1978, the Bovinetts filed their own notice of appeal from that portion of the order of December 22, 1977, which terminated the preliminary injunction against the Neuners. There were still no allegations of any wrongdoing or defalcation upon the part of the Neuners. On February 23, 1978, the Bovinetts filed in the trial court a motion for stay of judgment pending appeal. The motion alleged that the Neuners had threatened to forfeit and terminate the interest of the Rollbergs in the subject property and that if they were not stayed from doing so, the judgment of the court would be rendered moot. The motion further alleged that "no harm will be caused to the Neuners by the stay requested, because there are sufficient funds from the proceeds of the sale ordered to pay the balance under their bond for deed in full, with interest at the rate they agreed upon, to the date it is paid."
Also filed on February 23, 1978, was a suggestion of the death of John Neuner. He had left a will and its executor was substituted as a party. The widow of John Neuner, defendant Stella Neuner, succeeded to his interest in the subject property. Subsequently, Stella Neuner conveyed all her interest in the subject property to Mabel Eck and Anne Pennington and they were substituted as parties in the place and stead of the Neuners. For convenience, however, we will hereafter refer to the interests of Eck and Pennington as the Neuners'.
On March 3, 1978, the trial court denied the motions for stay of the Bovinetts and the Rollbergs. On March 22, 1978, this court granted a motion by the Rollbergs for stay of the trial court's orders of September 27, 1977, and December 22, 1977, pending the determination of the appeal. ...