APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FOURTH DIVISION
et al., Counterdefendants-Appellees)
513 N.E.2d 92, 159 Ill. App. 3d 1097, 111 Ill. Dec. 846 1987.IL.1207
Appeal from the Circuit Court of Cook County; the Hon. Thomas Cawley, Judge, presiding.
JUSTICE JOHNSON delivered the opinion of the court. McMORROW, P.J., and LINN, J., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE JOHNSON
This proceeding arises from the jury trial of three breach of contract actions which were consolidated in the circuit court of Cook County. The underlying theme of these actions is five notes which evidenced the capitalization of a business venture for the purchase and resale of discount airline coupons. The first action was brought by plaintiff-counterdefendant John N. Daniggelis (hereinafter Daniggelis) against defendants-counterplaintiffs David Pivan and Lawrence Wilson (hereinafter Pivan and Wilson) alleging breach of an oral agreement to establish a formal escrow account to hold the coupons pledged as collateral for the loans. Thereafter, Pivan and counterplaintiffs Rita Pivan and Pivan Management Co. (hereinafter Rita Pivan and PMC) filed a complaint against Daniggelis and his company, Airline Coupon Services, Inc. (hereinafter ACS), seeking damages for amounts remaining due and owing under a collateral note and a promissory note. Lastly, Wilson and counterplaintiffs Earl Abramson and Irving Finder (hereinafter Abramson and Finder) brought another action against Daniggelis and his company seeking damages for amounts owing on the three remaining collateral notes. The court consolidated all of the actions for trial. The jury found in favor of Daniggelis and against all other parties on each of the claims and awarded him damages of $21,400. The court entered judgment on the verdict plus costs. This appeal followed.
We affirm in part and reverse in part and remand.
The stipulated statement of facts reveals that Daniggelis originally contacted Pivan in late June or early July 1979, to obtain financing for a new business venture. For the previous several weeks, he had purchased half-fare airline discount coupons issued by American and United Airlines from passengers as they left their flights, and sold them at a profit. He informed Pivan of his plan to purchase large quantities of coupons to sell to mass users in bulk at a substantial markup. Pivan agreed to lend him money to finance the venture and contacted his friend and occasional business associate, Wilson, to tell him of the proposition.
On July 5, 1979, Daniggelis secured a loan from Pivan evidenced by a collateral note to Rita Pivan in the principal amount of $15,000, with an 18%-per-annum rate of interest, due on September 4, 1979 (hereinafter referred to as the first Pivan note), and pledged 500 coupons as collateral for the loan. In connection with this note Daniggelis also signed a promissory note for management fees to PMC (hereinafter referred to as the first PMC note) in the amount of $1,860, with no interest, which was due on the same date.
On July 6, 1979, Daniggelis secured from Pivan a second loan for the same amount and with the same conditions. Again the loan was evidenced by a collateral note (hereinafter the second Pivan note) to Rita Pivan and another 500 coupons were pledged as collateral. The due date on this note was September 25, 1979. Similarly, Daniggelis executed a second promissory note for management fees to PMC in the amount of $2,490, dated July 6, 1979, and due September 25, 1979, with no interest (hereinafter the second PMC note).
Daniggelis met with Pivan and Wilson on July 11, 1979, and executed a third collateral note to Wilson (hereinafter the Wilson note) in the principal amount of $12,000, with interest at the stated rate of 100% per annum, due in 90 days, and pledged 300 coupons as collateral. With Wilson acting as agent, Daniggelis executed two more collateral notes bearing the same terms and conditions as the Wilson note. The first of these was payable to Finder (hereinafter the Finder note) and executed on July 13, 1979. The other was payable to Abramson (hereinafter the Abramson note) and executed on July 23, 1979. Daniggelis pledged 300 coupons as collateral on each of these notes as well.
On August 21, 1979, Daniggelis delivered a check for $18,000, which represented his sale of the 500 coupons collateralizing the first Pivan note at $36 per coupon. At that time, Wilson signed a receipt to Daniggelis indicating that the first Pivan note and the first PMC note were retired and returned $675 to Daniggelis as his profit.
On September 25, 1979, the second Pivan note and second PMC note became due. Daniggelis claimed that his efforts to sell the coupons were inhibited by Pivan's and Wilson's failure to set up the escrow account. Thereafter, on October 6, 1979, Daniggelis asked for and received the release of 100 of the 500 coupons collateralizing the second Pivan note. It was agreed that he would bring in payment for the released coupons on or before October 13, 1979, and that the due date for payment on the remaining 400 coupons would be extended ...