Appeal from the Appellate Court for the Fourth District; heard
in that court on appeal from the Circuit Court of Greene County,
the Hon. Thomas G. Roady, Jr., Judge, presiding.
JUSTICE WARD DELIVERED THE OPINION OF THE COURT:
On June 11, 1980, Peter and Gerta Vogel (Vogels) brought a forcible entry and detainer action in the circuit court of Greene County against Jim and Carolyn Dawdy (Dawdys), Norwood and Barbara Ashley (Ashleys) and Norman and Lula Mae Suttles (Suttles), to obtain possession of two tracts of farmland in Greene County. The tracts were noncontiguous. One tract consisted of 426 acres and the other 385 acres. The Vogels, on March 14, 1979, had entered into a contract of sale with the Dawdys for the sale of the tracts. Shortly after the contract was executed, the Dawdys entered into a contract of sale with the Ashleys in regard to the 385-acre parcel and with the Suttles for the sale of the 426-acre parcel. On April 25, 1983, the circuit court, following defaults by the Dawdys and Ashleys, entered summary judgments against them. Neither the Ashleys nor the Dawdys are a party to this appeal. On June 28, 1983, the circuit court, following a bench trial, entered judgment, granting the Vogels possession of the parcel held by the Suttles. The appellate court affirmed (Vogel v. Dawdy (1984), 123 Ill. App.3d 356), and we granted the Suttles' petition for leave to appeal under Rule 315 (87 Ill.2d R. 315).
The contract between the Dawdys and the Vogels was a real estate installment contract. The price of the two farms was to be $1,850,000. There was to be a $200,000 down payment, $300,000 was to come due in April 1979, and the balance was to be paid in yearly installments of $150,000 on each February 15, commencing in 1980. The purchasers agreed:
"Not to sell, assign, grant, set over or convey the premises herein conveyed nor to assign their interest, or any part thereof, in this contract without the prior written consent of the Sellers, which will not be unreasonably withheld."
The contract also required the buyers to secure specified insurance coverages, subject to approval by the sellers, and further provided that the buyers were to pay all taxes on the properties. The contract provided that a breach of any provision of it would be considered a default of the contract warranting forfeiture.
On March 16, 1979, two days after the Vogel-Dawdy contract was signed, the Dawdys entered into a contract to sell the 426-acre parcel to the Suttles, and on May 9, 1979, the Dawdys contracted with the Ashleys for the sale of the 385-acre parcel. These contracts for sale were made without the consent or knowledge of the Vogels. The contract price of the 385-acre tract to the Ashleys was $962,500; the contract for the sale of the 426-acre tract to the Suttles had a sales price of $1,065,000. The Ashleys were to make a $356,500 down payment in six payments over the following 18 months and annual installment payments commencing February 1, 1980, until the balance was paid. The Dawdys had received $280,000 under their contract with the Ashleys, as of July 16, 1981, when a petition in bankruptcy as to the Ashleys was filed. Under the contract with the Suttles, a $350,000 down payment was received by the Dawdys when the contract was entered into and annual installment payments to the Dawdys of approximately $84,000 beginning February 15, 1980, were called for. The down payment and three installment payments were paid to the Dawdys by the Suttles. In early 1983, a bankruptcy petition in regard to the Suttles was also filed. It does not appear in the record whether the petitions in bankruptcy were voluntary.
The Vogels' complaint in forcible entry and detainer against the Dawdys, Ashleys and Suttles for possession alleged several breaches of the Vogel-Dawdy contract and alleged they constituted defaults under the contract. In a second count directed at the Ashleys and the Suttles, the complaint realleged the Vogel-Dawdy contract breaches and claimed that their rights as subsequent contractors with the Dawdys were subordinate to the Vogels' right to possession under the contract.
The breaches of contract the complaint alleged were that (1) the Dawdys assigned their interest in the contract to third parties, i.e., the Ashleys and the Suttles, without the consent of the Vogels; (2) the Dawdys failed to provide the insurance coverage the contract required; (3) the Dawdys failed to pay real estate taxes on the properties; and (4) the Dawdys removed timber from the land without the Vogels' consent.
As stated, both the Dawdys and Ashleys defaulted and summary judgments were entered against them. (The Vogels took possession of the 385-acre Ashley tract in June 1983.) Peter Vogel and Norman Suttles testified in the remaining case against the Suttles.
Vogel testified that after the contract with the Dawdys in March 1979 was entered into he lived in California. In November 1979, Vogel learned from his wife's cousin that someone other than the Dawdys was occupying his land. He then telephoned Dawdy about it numerous times, but Dawdy denied contracting to sell the land. Vogel testified that he traveled to Illinois in early February 1980 and visited the office of the Dawdys' attorney. There Vogel ascertained that the Dawdys entered into separate contracts to sell the parcels.
Vogel testified that he was particularly disturbed that what he regarded as a 811-acre farm was divided and resold. He considered the tract a single economic unit, as the crops on one parcel were needed to support the feed lot on the other parcel. Preserving the property as a single unit was the reason, he stated, for the nonassignment clause in the contract with the Dawdys.
On February 27, 1980, Vogel mailed letters to the Dawdys and their attorney, advising that he considered that the Dawdys had breached the contract by contracting to sell the property to third parties without his consent and by failing to secure the insurance coverage provided for. The letter stated that unless the breaches were rectified within 30 days, legal action would be taken. Vogel testified that when he wrote the letter he did not know specifically that the Ashleys or Suttles claimed any interest in the land, and that he had no contact with the Suttles until after he had filed the suit. He testified that he received an annual installment payment from the Dawdys in February 1980 and one in February 1981. Vogel stated that he never received any payment from the Suttles.
The testimony of Mr. Suttles was that he contracted to purchase the 426-acre tract from the Dawdys on March 16, 1979. Suttles said that he knew the Dawdys had contracted to acquire the land from the Vogels, because the Vogel-Dawdy contract was specifically referred to in Suttles' contract with the Dawdys. Suttles testified, however, that he never read the Vogel-Dawdy contract and stated that he was unaware of the clause in that contract which prohibited the Dawdys from selling ...