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Reid v. Wells

November 19, 1999

DAVID REID, PLAINTIFF-APPELLEE, CROSS-APPELLANT,
v.
RAYMOND WELLS, JR. AND SUZANNE JENNINGS WELLS, DEFENDANTS-APPELLANTS. CROSS-APPELLEES.



Appeal from the Circuit Court of the 12th Judicial Circuit Will County, Illinois No. 92 MR 13802 Honorable John F. Cirricione Judge, Presiding

The opinion of the court was delivered by: Justice Breslin

Plaintiff David Reid filed suit against defendants Raymond and Suzanne Wells claiming that the defendants breached a loan agreement. The defendants filed a counterclaim against Reid alleging that he breached a separate oral partnership agreement. The trial court dismissed the defendants' counterclaim, finding that it was barred by the statute of limitations. Subsequently, the jury found in favor of Reid, awarding him $192,500. On appeal the defendants argue, among other things, that Reid's cause of action is barred by the five-year statute of limitations for unwritten contracts because Reid's name did not appear on the contract. Reid cross-appeals for interest on his judgment. Based on the following discussion, we affirm and hold that an undisclosed principal steps into the shoes of his agent for the purposes of the statute of limitations.

FACTS

The defendants entered into a loan agreement (loan or loan agreement) with Bob White in which the defendants acknowledged the receipt of $175,000 and agreed to pay back this amount in 6 months plus 10% interest for a total of $192,500. As security for the loan, the defendants agreed to make White a joint tenant of six parcels of real estate that they owned.

After Reid filed suit, the defendants moved for summary judgment, arguing that because Reid was not a named party to the agreement the 5-year and not the 10-year statute of limitations should apply. 735 ILCS 5/13-205, 13-206 (West 1998). The parties agreed that if the five-year statute applied then the suit would have been time-barred. The court denied the defendants' motion.

The defendants then filed a counterclaim against Reid alleging that they had entered into an oral partnership agreement with Reid for the purchase and subsequent sale of various parcels of real estate (Mound Road Property). The trial court found that their counterclaim was barred by the five-year statute of limitations and granted Reid's motion to dismiss for that reason. Subsequently, the case proceeded to trial on Reid's breach of contract claim.

The defendants testified that the debt created by the loan agreement had been satisfied by an oral agreement in which they agreed to transfer stock in Advanced Water Technology, Inc. (water company), a company owned by them, to Reid and/or White. The defendants claimed that this oral agreement was entered into prior to the due date on the loan. They also claimed that as a result of the oral agreement the deeds being used as security for the loan were returned to them.

Following the close of evidence, the jury returned a verdict in favor of Reid in the amount of $192,500 ($175,000 plus 6 months' interest at 10%). The defendants appeal, claiming that (1) Reid's attempt to enforce the loan agreement was barred by the five-year statute of limitations; (2) any oral agreement in effect between Reid and the defendants was likewise barred by the five-year statute of limitations; (3) the trial court committed several errors in evidentiary rulings the cumulative effect of which was to deny the defendants a fair trial; and (4) the trial court erred in dismissing the defendants' counterclaim concerning the oral partnership agreement for the Mound Road Property based on the five-year statute of limitations. Reid cross-appeals for interest on the judgment.

Other facts relevant to this appeal will be related as they become necessary to the discussion.

ANALYSIS

1. Statute of Limitations

The defendants assert that because Reid is not named in the loan agreement his cause of action is barred under the five-year statute of limitations. We disagree.

When an agent fails to disclose that he is acting for a principal, the latter may, on a showing of the agency, claim the benefit of any transaction into which the agent entered as if the principal had entered into it himself. O'Connor v. Village of Palos Park, 31 Ill. App. 3d 528, 333 N.E.2d 276 (1975) See also Brunswick Leasing Corp. v. Wisconsin Central, Ltd., 136 F.3d 521 (7th Cir. 1998)(generally, an undisclosed principal may step into the shoes of his agent and assume all the rights and obligations of a contract that the agent had entered into on the undisclosed principal's behalf).

It is clear from the record that the jury was presented with evidence of an agency relationship between Reid and White in the form of extensive testimony by both gentlemen. Given the jury's province to determine the credibility of witnesses (see Moss v. Miller, 254 Ill. App. 3d 174, 625 N.E.2d 1044 (1993)), we cannot say that a finding of agency was against the manifest weight of the evidence. The sole question then is whether, through ...


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