APPELLATE COURT OF ILLINOIS, FOURTH DISTRICT
532 N.E.2d 1128, 178 Ill. App. 3d 118, 127 Ill. Dec. 299 1989.IL.7
Appeal from the Circuit Court of Greene County; the Hon. John W. Russell, Judge, presiding.
PRESIDING JUSTICE McCULLOUGH delivered the opinion of the court. SPITZ and GREEN, JJ., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE MCCULLOUGH
Plaintiffs appeal a trial court order which found a mutual breach of contract, dissolved a joint venture, split assets of the venture, rendered an accounting, and resolved damages issues. Plaintiffs contend the trial court's determination that a mutual breach occurred is contrary to the manifest weight of the evidence, that the trial court erred in dividing the property and ordering incidental relief, that they were entitled to specific performance of their agreement with defendants, that the trial court's award of damages on one sale was erroneous, and the trial court's determination that no breach of contract had occurred in connection with the sale of lot 19 was contrary to the manifest weight of the evidence.
Defendants cross-appeal. They contend plaintiffs' argument exceeds the scope of their notice of appeal, plaintiffs had a duty to mitigate damages, and the trial court's determination of a mutual breach of the escrow agreement was contrary to the manifest weight of the evidence.
We affirm in part, vacate in part, and remand.
Testimony in the instant case principally came from plaintiff, Carl Dawdy (Dawdy), and defendant, Lester Sample (Sample). Two contracts are disputed. The primary dispute concerns an agreement to convey an undivided one-half interest in a 10-acre parcel of ground (Escrow Agreement). A secondary dispute occurred over the sale of an individual lot within the 10-acre parcel (lot 19).
Carl and Connie Dawdy purchased a 10-acre tract of ground in Greenfield in 1979. They divided the property into 25 lots and planned to develop the property for residential use. The property is called Dawdy's North Addition. Dawdy is a building contractor. He builds three to four homes per year and planned to build the homes on Dawdy's North Addition. After Dawdy had begun initial development of the tract, he sold lot 19 to defendants in 1982. The agreement on this sale states that the Samples, defendants, paid $3,000 down and a balance of $5,460 was due on or before May 1, 1983, if the sewer line, water line, and street were completed. Dawdy testified that he had constructed the utility lines and graded the road. He put oversized rock on it and then smaller rock. He finished in September of 1983. Dawdy understood that the balance of the payment for the lot was to be in cash and used to help complete the road. However, the Samples never paid him in cash.
Because he was not paid in cash, Dawdy testified he was unable to pay a subcontractor, Western Asphalt Company, who had provided rock. Carrying charges accrued on his account with Western Asphalt Company. In count III of his second-amended complaint, Dawdy requested the difference
Sample stated that he did not know anything about Dawdy's dealings with Western Asphalt Company. In April 1983, Sample asked Dawdy about the utility lines and roads for lot 19 because nothing had been done.
Sample handled the paperwork for the sale of lot 19. When he received the abstract, he believed there would not be any way for Dawdy to convey clear title to lot 19. He discovered the property was mortgaged, had two years delinquent taxes, and several mechanic liens against it. Dawdy admitted that the bank had contacted him about foreclosing on the 10-acre parcel. Sample stated he told Dawdy the only way to clear title to lot 19 was to pay off all of the liens on the 10-acre property. Sample admitted, however, that he did not seek a release from the bank for lot 19.
The parties then entered negotiations which resulted in the Escrow Agreement, executed April 15, 1983. Dawdy testified Sample was to pay off all of the liens in exchange for one-half interest in the 10-acre parcel. Sample testified that he acquired the entire 10-acre plot, less properties previously sold, by paying off all the indebtedness and releasing a lien on Dawdy's parents' lot.
The documents relating to the property show that the Dawdys sold Dawdy's North Addition and a house on Melissa Street to the Samples for $70,829.16, the amount of the liens against the property on April 15, 1983. A warranty deed was filed on that date. In the real estate Escrow Agreement the Samples agreed to sell the Dawdys an undivided one-half interest in Dawdy's North Addition for $35,914.58. Between April 15, 1983, and April 14, 1984, the principal accrued interest at 11 3/4%. After April 14, 1984, the interest rate was to be changed in line with the rate charged by the Carrollton Bank. The purchase price and any accrued interest were to be paid from the sale of lots to third parties. The Dawdys' ...