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12/29/87 John R. Gardner, v. Hector Padro Et Al.

December 29, 1987





517 N.E.2d 1131, 164 Ill. App. 3d 449, 115 Ill. Dec. 445 1987.IL.1929

Appeal from the Circuit Court of Lake County; the Hon. Henry C. Tonigan III, Judge, presiding.


JUSTICE HOPF delivered the opinion of the court. NASH and DUNN, JJ., concur.


Plaintiff, John R. Gardner, sued to secure the return of earnest money paid to defendants pursuant to a contract to purchase real estate. After a bench trial in small claims court, judgment was entered for defendants. On appeal plaintiff asserts that the trial court erred in finding that defendants, Hector and Genevieve Padro, qualified as a "lending institution" as that term is used in the real estate sales contract. Defendant raises issues of waiver and insufficiency of plaintiff's case. We reverse the lower court.

On or about either June 25, 1985, or July 8, 1985, Gardner entered into a contract with the Padros for the purchase of the Padros' home. The contract set forth the purchase price of the property and indicated that $1,500 was to be paid as earnest money. Although paragraph 4A provided that the contract was contingent upon the buyer's securing financing within 90 days, it did not set forth the type, amount, interest rate, or term of the loan to be secured. The spaces for this information were lined through. Paragraph 4A also stipulated that if the buyer could not secure financing within the specified time, the seller had to be notified in writing in order for buyer to avoid a waiver of the contingency. If notice was properly given the seller had the option of securing a financing commitment for the buyer, within another 90 days, from a lending institution upon the terms set forth within the contract. If the seller failed to obtain such a commitment, the contract was to be "null and void and earnest money returned."

Gardner notified the Padros by letter of September 25, 1985, that he had not received a financing commitment. On October 18, 1985, plaintiff filed a small claims complaint alleging that the Padros refused to return his earnest money even though the contract had expired. In a letter dated November 12, 1985, the Padros offered to take back a purchase money mortgage on the same terms plaintiff would have received from the mortgage house to which he had applied for a loan. The record reflects subsequent offers by Gardner to purchase the defendants' property on the basis of at least partial financing by the Padros. In January 1986, the defendants sold the house to their daughter.

Following a bench trial the court found both that Gardner had complied with the contract by giving defendants notice that he could not get financing and that the Padros had complied with the contract by offering financing to plaintiff "in terms of the intent of the . . . parties." Finally, the court found that Gardner's failure to respond to defendants' offer constituted a breach of the real estate sales contract. Judgment was entered in favor of the Padros. At the hearing on plaintiff's motion for reconsideration, the court indicated that it believed it had correctly construed the intent of the parties as expressed by the contract. Gardner's motion was denied, and he now appeals.

The only issue raised by plaintiff on appeal is whether the term "lending institution" in the contract applies to defendants. The section of the contract which grants to seller the option of seeking financing for buyer is found in paragraph 11, which states in pertinent part:

"[Upon] notice of Buyer's inability to obtain mortgage financing being given, Seller may, at Seller's option, within an equal number of additional days of said notice, secure a written commitment from a lending institution for a loan to Buyer upon the same terms. In such event, Buyer agrees to promptly furnish all requested credit information and sign customary papers relating to the application and securing of mortgage commitments."

Defendants take the position that they qualify as a "lending institution" and that by offering to take a purchase money mortgage from plaintiff, they exercised the option available to them. Plaintiff responds that the Padros are not a lending institution as intended by the contract and that he was under no obligation to accept the private financing they offered. We agree with plaintiff.

At the outset we note that neither party has provided us with the original contract which was admitted into evidence at trial. However, plaintiff attached what purports to be a copy of the contract as an exhibit to his motion for summary judgment which was filed on March 31, 1986. In their appellate brief defendants appear to rely on this exhibit, or at least they do not object that it is not a valid copy of the contract. We note also that at the hearing on plaintiff's motion for reconsideration, the trial Judge indicated that the copy of the contract he was relying on at that time was the copy attached to the motion for summary judgment which was in the file. Defendants did not object to use of the copy. Accordingly, we regard the copy of the contract which is attached to plaintiff's motion for summary judgment, and included in the record, as a true copy of the original.

In construing a contract the primary objective is to give effect to the intent of the parties at the time they entered into the contract. (Braeside Realty Trust v. Cimino (1985), 133 Ill. App. 3d 1009, 1011, 479 N.E.2d 1031.) When the contract terms are clear and unambiguous, the intent of the parties must be discerned only from the language used in the contract itself. (Village of Grandview v. City of Springfield (1984), 122 Ill. App. 3d 794, 797, 461 N.E.2d 1031.) A contract is ambiguous only if the language used is reasonably or fairly susceptible to having more than one meaning, but it is not ambiguous if a court can discover its meaning simply through knowledge of those facts which give it meaning as gleaned from the general language of the contract. (Berutti v. Dierks Foods, Inc. (1986), 145 Ill. App. 3d 931, 934, 496 N.E.2d 350.) Nor is a contract rendered ambiguous simply because the parties do not agree on the meaning of its terms. (Berutti, 145 Ill. App. 3d at 934.) When contract terms are unambiguous they must be given their ordinary and ...

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