Appeal from the Circuit Court of Cook County; the Hon. Albert
S. Porter, Judge, presiding.
PRESIDING JUSTICE LINN DELIVERED THE OPINION OF THE COURT:
Plaintiff, Jacquelyn Wilbur, and defendants, Thomas Potpora and Roger Vlaming, entered into an installment sale agreement whereby plaintiff agreed to sell and defendants agreed to buy four franchises. As consideration for the agreement, defendants gave plaintiff a down payment and signed a promissory note for the balance of the purchase price, to be paid in monthly installments.
After paying one installment, defendants halted further payment, having concluded that plaintiff had fraudulently misrepresented certain facts concerning the franchises.
Plaintiff filed suit for the balance due on the note. Defendants in turn filed a countercomplaint charging fraudulent misrepresentation. Defendants moved for a directed verdict at the close of plaintiff's case, and their motion was granted. Plaintiff's appeal followed.
We affirm in part, reverse in part and remand for a trial on the merits.
On December 28, 1977, plaintiff agreed to sell and defendants agreed to buy four franchises to publish T.V. Facts, a weekly booklet that lists scheduled television programs and is distributed free to the public. Revenue from a franchise is derived from the sale of advertising space in the booklets.
After a series of meetings in which plaintiff presented to defendants certain financial statements, customer lists and memoranda indicating the revenue generated by the franchises over the past several years, the parties entered into an installment contract in which defendants agreed to pay $90,000 for the rights, title and interest to the franchises. As evidence of past business income, and to aid in securing financing of the purchase, defendants took one of the customer lists supplied by plaintiff to defendants' bank. Defendants were able to secure a $35,000 bank loan, $30,000 of which defendants gave to plaintiff as a down payment on the purchase. A payment schedule for the balance of the purchase price was evidenced by a promissory note, executed simultaneously with the agreement, in which defendants agreed to pay $1088.08 each month for five years at an annual interest rate of seven percent. The note, signed by defendants, was attached to the last page of the installment agreement.
In January 1978, defendants timely paid the first installment. Thereafter, having concluded that plaintiff had misrepresented her ownership of the franchises, the number of paying customers purchasing advertising space from the franchises, and, correspondingly, the true incoming revenues, defendants refused to pay further installments. On November 17, 1978, after defendants failed to respond to two written demands for payment, plaintiff filed suit in the law division of the circuit court of Cook County. The original complaint was later amended to include a request for injunctive relief and was thereupon transferred to the chancery division.
Defendants filed an answer to plaintiff's complaint, generally denying all allegations and raising the affirmative defense of fraud in the inducement of the agreement. Defendants also filed a countercomplaint, seeking damages from plaintiff for fraudulent misrepresentation and breach of contract.
On December 16, 1982, counts I and II were tried before the trial judge sitting without a jury. Following opening statements, the court heard plaintiff's case which consisted of the testimony given by plaintiff, by Walter Eisin, the attorney who represented plaintiff following the sale of T.V. Facts to the defendants, and by defendant, Thomas Potpora, called as an adverse witness. Plaintiff then rested her case. Defendants thereupon moved for a directed finding based on the ground that plaintiff had failed to prove she had performed her part of the T.V. Facts contract and had thus failed to establish a prima facie case of breach of contract. Plaintiff argued that the action was on the promissory note and not on the agreement, and that because she had established a prima facie case on the note, it was not proper to direct a verdict for the defendants at the close of her case. The trial court granted defendants' motion for a directed verdict in their favor. Defendants thereupon took a voluntary non-suit on the counterclaim.
• 1 Where defendants move, as they did in the trial court, for a directed verdict under section 2-1110 of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, par. 2-1110), the trial judge must first determine, as a matter of law, whether plaintiff made out a prima facie case. (Kokinis v. Kotrich (1980), 81 Ill.2d 151, 154-55, 407 N.E.2d 43, 45.) Before the trial court ...