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10/05/89 John T. Heitz Et Al., v. Circle Four Realty Co.

October 5, 1989





548 N.E.2d 11, 191 Ill. App. 3d 727, 138 Ill. Dec. 781 1989.IL.1599

Appeal from the Circuit Court of Tazewell County; the Hon. William J. Reardon, Judge, presiding.


JUSTICE STOUDER delivered the opinion of the court. WOMBACHER, P.J., and SCOTT, J., concur.


William and Helen Moynan, executors for the estate of John W. Willhardt, filed this action in the circuit court of Tazewell County, seeking inter alia a declaratory judgment that a land contract between Willhardt and Circle Four Realty Co., Inc., had terminated. Willhardt's grandchildren, John T. Heitz and Cathy Heitz Schanes, subsequently replaced the Moynans as parties in interest when the Moynans, pursuant to the provisions of Willhardt's will, deeded to Heitz and Schanes the real property at issue. After the circuit court entered judgment for Circle Four, Heitz and Schanes brought this appeal.

The record indicates that on December 9, 1966, Donald Smelz, president of Circle Four, entered into a contract with Willhardt for the development of two tracts of Willhardt's farmland. Under the contract Willhardt was to convey to Circle Four, either directly or through an escrow, deeds to any lots that Circle Four had subdivided. Circle Four was to pay for the lots at the rate of $1,600 per acre. By its terms the contract was to terminate at the first to occur of either the full payment of purchase price for the tracts of land, the failure of Circle Four to pay for the lots as agreed, or on January 1, 1969, unless at least 10 lots had been "sold and settled for" since January 1, 1968, in which case the contract would be automatically extended annually so long as an average of at least 10 lots per year had been "sold and settled for."

Circle Four proceeded to develop the land, and it sold a sufficient number of lots to keep the contract in force through 1971. Between 1971 and 1975 Circle Four did not subdivide the land, but during each of those years and every year thereafter until 1981, it tendered and Willhardt accepted the sum of $5,000.

In 1975, the Commercial National Bank in Peoria deeded to Circle Four approximately 11 acres of the land which had been placed in its trust by Willhardt in 1969. Circle Four did not pay any money for the deed at the time of or after the transaction.

In March and April of 1976, Helen Moynan, Commercial National Bank's trust officer Robert Cochran and the attorneys for Willhardt and Circle Four corresponded with one another regarding the drafting of an addendum to the 1966 contract to reflect what was actually being done by the parties. The addendum, which was drafted by Willhardt's attorney, provides that if Circle Four fails to sell and settle an average of 10 lots per year as was required for annual extension of the 1966 contract, Willhardt would have the right but not the obligation each year to accept $4,800 in exchange for a deed for three acres, which exchange would annually extend the 1966 contract. Neither Willhardt nor Smelz signed the addendum. Smelz's attorney testified that Smelz refused to sign the addendum because the clause giving Willhardt the right to refuse tender constituted a new term.

Sometime thereafter, Willhardt became aware of the fact that Commercial had transferred the 11 acres to Circle Four. In response, Willhardt revoked the trust and in October 1976 made his neighbor friends, the Moynans, trustees for the land. Neither Willhardt nor the Moynans took any action against Commercial for the transfer of the deed to Circle Four.

On December 30, 1976, Helen Moynan, Willhardt and his attorney, and Smelz and his attorney, Melvin O. Moehle, met to discuss the agreement between Willhardt and Smelz. Moehle's notes of the meeting were admitted into evidence. The notes purport to identify terms of an agreement between Willhardt and Smelz, generally suggesting the annual exchange of $5,000 for 3.07 acres of Willhardt's land. However, no written agreement resulted from the meeting, and neither party signed Moehle's notes.

In October of 1980 Smelz deeded back to the Moynans in trust for Willhardt the 11 acres which he received from Commercial in 1975 in exchange for a trust deed from the Moynans for 13.6 acres of Willhardt's land. The trustee's deed was signed by both William and Helen Moynan, and their signatures were notarized by Willhardt's attorney, Rudolph J. Westphal. Smelz gave no additional consideration for the receipt of the additional 2.6 acres. The parties agree that the exchange was made because the 13.6 acres were more suitable for development. Circle Four subsequently developed the property received as a result of the 1980 deed.

On February 20, 1981, Willhardt and the Moynans returned a $5,000 check to Smelz, with a letter indicating that they agreed to waive the payment of $5,000 for the years 1980, 1981, and 1982. On November 11, 1983, Willhardt and the Moynans sent a letter to Smelz indicating ...

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