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Vogel v. Dawdy

OPINION FILED APRIL 4, 1984.

PETER J. VOGEL ET AL., PLAINTIFFS-APPELLEES,

v.

JIM G. DAWDY ET AL., DEFENDANTS (NORMAN SUTTLES ET AL., DEFENDANTS-APPELLANTS).



Appeal from the Circuit Court of Greene County; the Hon. Thomas G. Roady, Jr., Judge, presiding.

JUSTICE TRAPP DELIVERED THE OPINION OF THE COURT:

The plaintiffs, Peter and Gerda Vogel, commenced an action in forcible entry and detainer on June 11, 1980, seeking possession of an 811-acre tract that they had sold to Jim and Caroline Dawdy on contract. Subsequent amendments to the complaint named as defendants Norwood and Barbara Ashley and Norman and Lula Mae Suttles, who were subsequent purchasers of parcels subdivided by the Dawdys. The Dawdys and the Ashleys defaulted, and summary judgment was entered against them on April 25, 1983. They are not parties to the present appeal. The case against the Suttleses proceeded to a bench trial. On June 28, 1983, the circuit court entered judgment in favor of the Vogels and against the Suttleses. The Suttleses appeal.

The basic facts are not disputed. On March 14, 1979, the Dawdys signed a real estate escrow installment contract to purchase 811 acres of farmland in Greene County from the Vogels. Two days later, on March 16, 1979, the Dawdys entered into a contract for deed to sell 426 acres of the same land to the Suttleses. On May 9, 1979, the Dawdys entered into a similar contract with the Ashleys concerning the remaining 385 acres of the parcel. When the Vogels discovered the subsequent transactions, they brought suit for possession of the land against the Dawdys, the Suttleses, and the Ashleys.

The original complaint was filed on June 11, 1980, and was twice amended to correct the names of the defendants. The second amended complaint, filed October 1, 1980, alleged that the Vogels were entitled to immediate possession of the land, because of several breaches of the Vogel-Dawdy contract. A second count, directed against the Ashleys and the Suttleses, realleged the breaches of the Vogel-Dawdy contract and asserted that any rights of the subsequent purchasers were derivative of the rights of the Dawdys. Four distinct breaches of the Vogel-Dawdy contract were alleged: (1) that the Dawdys assigned their interest in the Vogel-Dawdy agreement without consent of the Vogels, in violation of the terms of the agreement; (2) that the Dawdys removed or suffered the removal of valuable timber from the land, in violation of the terms of the agreement; (3) that the Dawdys failed to provide the insurance required by the agreement; and (4) that the Dawdys failed to pay the 1979 taxes or to evidence payment of same as required by the agreement. The complaint asserted that each of the alleged breaches constituted default warranting forfeiture under the terms of the agreement.

At the trial, only Peter Vogel and Norman Suttles testified. Vogel testified that he and his wife owned the 811 acres in issue, and that they entered into an installment contract with the Dawdys for the sale of the entire parcel on March 14, 1979. He stated emphatically that they had entered no contract with the Suttleses. Moreover, the Dawdys have been given no permission to resell or subdivide the 811-acre parcel. Vogel explained that the 811 acres was an "economic unit," in that the crop land constituting the majority of the acreage was necessary to support the feed lot located on the property.

Vogel testified he learned that persons other than the Dawdys were living on the land in November or December 1979, when a rumor to that effect was communicated by one of Mrs. Vogel's cousins. The Vogels were residing in California at the time. Vogel stated that he called Dawdy immediately and Dawdy assured him that there had been no sale. After that, Vogel sent his farm manager to investigate. The report he received indicated that the Dawdys were not in possession of the land and that the mailbox carried the name "Suttles." Vogel called Dawdy again and was told that the land was being leased; the Dawdys referred him to their attorney.

In January 1980, Vogel called the Dawdys and their attorney perhaps as many as 20 times to determine the status of the land. During the first week of February 1980, he returned to Illinois to investigate. After repeated attempts failed to find anyone at home when he visited the land, Vogel visited the Dawdys' lawyer. He advised the lawyer that he knew the land had been sold and demanded to see the contracts. The lawyer allowed Vogel a brief view of the contracts but did not permit him to copy the documents. Vogel testified that this was his first knowledge of the subdivision of the land and sales to the Ashleys and Suttleses.

On February 27, 1980, Vogel sent a letter to the Dawdys and their lawyer informing them of his determination that the contract had been breached. The letter stated that legal action would be initiated if the breaches were not cured within 30 days. In particular, the letter noted the sale of the property and the failure to insure the premises as actionable breaches. Vogel testified that he never received evidence from Dawdy or anyone else that the insurance and taxes were being paid on the property. He stated that he did not know the Suttleses had any claim or interest in the land when he wrote to the Dawdys; however, the Suttleses later contacted Vogel after payments were due on the Vogel-Dawdy contract. Vogel received payments from the Dawdys in 1980 and 1981, but no payments were ever received directly from the Suttleses.

Norman Suttles testified that he entered a contract for deed to buy 426 acres from the Dawdys on March 16, 1979. The contract expressly recognized the Vogel-Dawdy contract and authorized the Suttleses to verify the Dawdys' payments on the Vogel-Dawdy contract through direct communication with Vogel. Suttles testified that his first contact with Vogel occurred when he telephoned Vogel to confirm that the Dawdys had made their first payment under the Vogel-Dawdy contract. He stated that he told Vogel of his arrangement with the Dawdys. Suttles did this after each payment came due under the Vogel-Dawdy contract. Meanwhile, Suttles himself was making regular payments to the Dawdys pursuant to the contract for deed on the 426 acres.

Although he knew that the Dawdys were buying the land on contract from the Vogels, Suttles testified that he did not check with Vogel to determine whether it was permissible to buy the land, because he relied on his real estate agent to do so. Suttles stated that he read his contract with the Dawdys, but he did not read the Vogel-Dawdy contract. Specifically, he denied any knowledge of the nonassignability clause in the Vogel-Dawdy contract.

Suttles testified that he originally attempted to protect his interests by writing the checks jointly to Dawdy and Vogel, but Dawdy rejected this mode of payment, and Suttles never made a payment directly to Vogel. He testified that he paid the taxes on the land throughout his possession and also kept the place insured. Suttles acknowledged that some trees had been cut down on the property, but he said that the logging had been done before he took possession.

On June 27, 1983, the circuit court entered judgment against the Suttleses and in favor of the Vogels. The court found that the Vogel-Dawdy contract had been breached in several particulars. Further, since the Suttleses knew of the Vogels' interest prior to signing the Dawdy-Suttles contract, the court found that the Suttleses were not good-faith purchasers and the rights were merely derivative of any rights held by the Dawdys. Accordingly, the court held that the Vogels were the legal owners of the land and entitled to possession free and clear of any claim or interest of the defendants.

On appeal, the Suttleses argue that the trial court erred in entering judgment for the Vogels, because (1) the Vogels waived their rights under the nonassignment clause of the Vogel-Dawdy contract; (2) the statutory action in forcible entry and detainer cannot be maintained absent proper notice and demand; (3) an order granting possession is not binding upon one ...


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