{ "id": 2706975, "name": "Robert Neal, Plaintiff and Counterdefendant-Appellee, v. Seymour Lacob, Defendant and Counterplaintiff-Appellant", "name_abbreviation": "Neal v. Lacob", "decision_date": "1975-07-25", "docket_number": "No. 61504", "first_page": "137", "last_page": "145", "citations": [ { "type": "official", "cite": "31 Ill. App. 3d 137" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "31 Ill.App.3d 790", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2712929 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/31/0790-01" ] }, { "cite": "476 P.2d 53", "category": "reporters:state_regional", "reporter": "P.2d", "pin_cites": [ { "page": "54" } ], "opinion_index": 0 }, { "cite": "146 So.2d 474", "category": "reporters:state_regional", "reporter": "So. 2d", "case_ids": [ 9872537 ], "year": 1970, "pin_cites": [ { "page": "479" } ], "opinion_index": 0, "case_paths": [ "/so2d/146/0474-01" ] }, { "cite": "81 F.2d 120", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 938412 ], "opinion_index": 0, "case_paths": [ "/f2d/81/0120-01" ] }, { "cite": "133 F.2d 632", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 3645003 ], "year": 1936, "pin_cites": [ { "page": "635" } ], "opinion_index": 0, "case_paths": [ "/f2d/133/0632-01" ] }, { "cite": "194 P.2d 347", "category": "reporters:state_regional", "reporter": "P.2d", "year": 1943, "opinion_index": 0 }, { "cite": "30 Wash.2d 814", "category": "reporters:state", "reporter": "Wash. 2d", "case_ids": [ 2503979 ], "year": 1943, "opinion_index": 0, "case_paths": [ "/wash-2d/30/0814-01" ] }, { "cite": "29 Ill.App.3d 819", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2499728 ], "weight": 2, "pin_cites": [ { "page": "823" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/29/0819-01" ] }, { "cite": "8 Utah 2d 272", "category": "reporters:state", "reporter": "Utah 2d", "case_ids": [ 8863637 ], "weight": 2, "pin_cites": [ { "page": "274" } ], "opinion_index": 0, "case_paths": [ "/utah-2d/8/0272-01" ] }, { "cite": "349 U.S. 85", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 11333728 ], "pin_cites": [ { "page": "91" } ], "opinion_index": 0, "case_paths": [ "/us/349/0085-01" ] }, { "cite": "350 F.2d 445", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 466729, 3651171 ], "opinion_index": 0, "case_paths": [ "/f2d/350/0445-01" ] }, { "cite": "121 U.S. App. D.C. 315", "category": "reporters:state", "reporter": "U.S. App. D.C.", "case_ids": [ 3651171 ], "opinion_index": 0, "case_paths": [] }, { "cite": "18 A.L.R.3d 1305", "category": "reporters:specialty", "reporter": "A.L.R. 3d", "year": 1968, "pin_cites": [ { "page": "1306" } ], "opinion_index": 0 }, { "cite": "132 U.S. 406", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 5699541 ], "pin_cites": [ { "page": "410" } ], "opinion_index": 0, "case_paths": [ "/us/132/0406-01" ] } ], "analysis": { "cardinality": 908, "char_count": 19161, "ocr_confidence": 0.713, "pagerank": { "raw": 2.7672542008978187e-07, "percentile": 0.8340395521128838 }, "sha256": "4fb9de013245c8923762bb073172103fc94c9005fdf779d3bfc366320f7091d0", "simhash": "1:4b7a8e2f66ac0850", "word_count": 3185 }, "last_updated": "2023-07-14T21:34:56.206419+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "Robert Neal, Plaintiff and Counterdefendant-Appellee, v. Seymour Lacob, Defendant and Counterplaintiff-Appellant." ], "opinions": [ { "text": "Mr. JUSTICE DRUCKER\ndelivered the opinion of the court:\nPlaintiff brought this action seeking rescission of a contract. Defendant counterclaimed; seeking an accounting and money damages.' The trial court found that the contract was unconscionable and consequently held that it \u201cshould be declared null and void\u201d and that the counterclaim should be dismissed for want of equity. It is defendant\u2019s basic contention on appeal that the court\u2019s finding of unconscionability is unsupported by the record.\nIn September 1967 plaintiff, an automobile dealer, entered into the contract which is the subject matter of this dispute. In consideration for lending plaintiff $5000 and guaranteeing a $15,000 line of credit at the Independence Bank of Chicago, it was agreed:\n\u201c1. That ROBERT NEAL so long as he continues to engage either directly or indirectly by his agents or servants in the business of selling automobiles either by way of corporations or individually or partnership agrees to furnish SEYMOUR LACOB a new JAGUAR automobile for his use at no expense to SEYMOUR LACOB; said auto to be returned to ROBERT NEAL each fall.\n2. That in the event that SEYMOUR LACOB is not available to take delivery of said automobile (JAGUAR) then ROBERT NEAL is to furnish said auto to SEYMOUR LACOB\u2019S family.\n3. That ROBERT NEAL is to pay SEYMOUR LACOB his assigns, agents or family the sum of TWENTY FIVE DOLLARS ($25.00) for each new automobile as floor planned & guaranteed sold by said ROBERT NEAL or his agents; in the- event that said ROBERT NEAL ceases selling new automobiles -then the sum of $25.00 to be paid as directed for the sale of used automobiles sold.\n4. That provision number 3 shall remain in effect so long as ROBERT NEAL either directly or indirectly remains in the business of selling autos.\n5. That ROBERT NEAL shall- proceed to pay the FIVE THOUSAND DOLLARS indebtedness commencing OCTOBER 1, 1963 at the rate of $400.00 per month until paid in full.\n6. That the aforementioned loans shall be secured by ROBERT NEAL by liens on all autos presently owned by ROBERT NEAL; said loan further secured by all furniture, tools and assets concurrently situated at COMPETITION MOTORS, LTD., 7729 S. Cottage Grove Ave, Chicago, Illinois.\u201d\nIt is undisputed that from 1967 until the end of 1971, plaintiff, with only minor variations, agreed to by defendant, performed his obligations under the contract. On May 1, 1973, plaintiff filed his complaint seeking rescission of the contract. His action was predicated on the allegation that the contract was \u201cunconscionable, usurious and inequitable.\u201d Defendant filed a counterclaim which alleged that the contract was in actuality a \u201cjoint-venture agreement\u201d and that he was entitled to an accounting and money judgment.\nAt trial plaintiff- testified in his own behalf that he is the president of Bob Neal Pontiac-Toyota, an automobile dealership located in Chicago. At the time of trial he was 41 years old and had been in the automobile business for 13 years. Prior to his entry into the automobile business, he had been a teacher in the Chicago School System for 6 years.\nHe holds a college degree. Plaintiff first met defendant in June 1967 when, pursuant to an \u201coral proposition,\u201d he delivered a Jaguar Roadster sports car to defendant\u2019s home. It was plaintiff\u2019s proposal that if defendant loaned him $7000 at 10% interest, he would give defendant' use of the car. Defendant told him that he would think about it. In September 1967 plaintiff was invited to defendant\u2019s home. Defendant informed him that he had a counterproposal which he thought would be acceptable. Defendant then typed up the instrument which is the-subject matter of the instant case. Although it was not what plaintiff had in mind, \u201cit appeared to be satisfactory.\u201d When he read the contract, plaintiff pointed but to defendant that he wanted defendant to \u201cparticipate in profits of new cars sold [only] insofar as they were.guaranteed and floor planned by him.\u201d Defendant agreed and in longhand added to paragraph 3 of the contract, which required that $25 be paid to him for \u201ceach new car sold by\u201d plaintiff, the words \u201cas floor planned & guaranteed.\nPlaintiff spent 3 to 5 minutes reading the contract and then signed it. He knew that defendant was an attorney. Defendant had not. done any legal work for him prior to the execution of the contract. Subsequent to plaintiff\u2019s signing the contract, defendant on occasion handled some legal matters for him. Defendant did not biH him for these services. Defendant lent him $5000 which he repaid with interest. In October 1967 defendant submitted to Independence National Bank \u201cdocumentation\u201d to guarantee for plaintiff a $15,000 line of credit. This line of credit was terminated 2% years later. Subsequent to October 1967 plaintiff applied for and received, without benefit of defendant\u2019s guarantee, an additional line of credit. In May 1968 plaintiff delivered to defendant a new Jaguar which defendant returned in September of that year. Again in the spring of 1969 he delivered to defendant a Jaguar which was returned in the fall. In 1970 and 1971 he delivered new Triumph TR-6 Convertibles to defendant. In 1972 he delivered a TVR two-seater sports car. Title for aU these cars remained with plaintiff while they were in the possession of defendant.\nPlaintiff did not learn that defendant was contending that he was a \u201cjoint-venturer\u201d until the filing of the counterclaim. Defendant never asked to share in the profits and losses of the business.\nOn cross-examination plaintiff testified that prior to signing the contract he had several telephone conversations with defendant during which the possibility of defendant guaranteeing a $15,000 line of credit was discussed. Defendant had originally contacted him in response to a 1967 newspaper advertisement for the sale of a Jaguar automobile. During the course of their discussions, plaintiff told defendant that without a guarantor the Independence National Bank would not extend him a line of credit. With a line of credit from the bank he could carry a larger inventory of cars. Plaintiff was satisfied with the contract when he signed it. He entered into it \u201cwillingly.\u201d At that time he did not think it was unfair that he would be required to furnish defendant or defendant\u2019s family a Jaguar for as long as he remained in the business of selling automobiles. The cars were delivered in the spring and returned by defendant in the fall. Plaintiff was able to sell the cars used by defendant. It is \u201cpossible\u201d that he made a profit on these sales. In 1968 defendant lent him $3000. He repaid the loan. Plaintiff \u201clived up\u201d to the contract until 1972. He stopped making payments to defendant of $25 for every car sold because he was under the impression that after he stopped dealing with the Independence Bank he was not required to do so. In 1967 plaintiff\u2019s net worth was $22,000; at the time of trial it was $60,000 or $70,000.\nOn redirect examination plaintiff testified that he paid defendant $25 for the sale of each of 163 new cars.\nSarah Lacob, defendant\u2019s wife, testified on his behalf that he first contacted plaintiff in response to a newspaper advertisement regarding the sale of a Jaguar automobile. She was present in September 1967 when defendant typed up the contract. Plaintiff and his wife were also present. Plaintiff suggested the handwritten amendment to paragraph 3. In 1967 she had occasion to visit plaintiff\u2019s place of business. She saw no new cars there nor did she see any sales personnel, mechanics or office help.\nDefendant testified on his own behalf that he first contacted plaintiff in response to a newspaper advertisement. Plaintiff drove the Jaguar to defendant\u2019s home for him to inspect At that time plaintiff proposed that if defendant would lend him some money to go into business, defendant could have use of the car. Defendant, at plaintiffs invitation, went to plaintiffs place of business to continue these negotiations. He did not see any new cars there nor did he see any employees. Plaintiff proposed that defendant go with him to the Independence Bank to guarantee a line of credit so plaintiff \u201ccould get a Toyota line.\u201d Plaintiff agreed to make a new Jaguar available to defendant and his family \u201cevery year [plaintiff] was in business\u201d if defendant would assist him in acquiring a Toyota line. During these negotiations plaintiff offered him \u201ca share of the business\u201d if defendant would assist him in getting a $15,000 line of credit. Defendant responded to this proposal, \u201cI don\u2019t want a share of your business, however, I would be interested in being a sort of silent partner 8 8 8.\u201d The contract that was agreed upon was worded to incorporate defendant\u2019s desire \u201cto be paid for every car that was sold by virtue of [his] guarantee.\u201d As other good and valuable consideration, defendant agreed to provide his legal services to assist in the operation of the business. During \u201cthe latter part of 1972\u201d plaintiff informed defendant that while he no longer intended to pay him $25 for every new car sold, he would comply with \u201cthe Jaguar provision of the contract.\u201d\nOpinion\nDefendant contends that the trial court erred in finding the contract to be \u201cunconscionable.\u201d He argues that the contract was a valid joint venture agreement between himself and plaintiff under which plaintiff was obfigated to supply him or his family with a new Jaguar every year and pay $25 for each new car sold for as long as plaintiff remained in the business of selling automobiles. Plaintiff counters that defendant, taking advantage of their friendship and his position as an attorney, lured him into signing the contract. He argues that defendant\u2019s. consideration was miniscule in relation to the benefits he derived under the contract.\nTraditionaHy an unconscionable bargain has been defined as one \u201cwhich no man in his senses, not under delusion, would make, oh the one hand, and which no fair and honest man would accept, on the other * * (Hume v. United States (1889), 132 U.S. 406, 410.) The term is used to signify a contract that is improvident, totally one-sided or oppressive. (See Annot, 18 A.L.R.3d 1305, 1306 (1968).) Where a contract is found to be unconscionable, courts will refuse to give fuU effect to it as written. (See Williams v. Walker-Thomas Furniture Co. (1965), 121 U.S. App. D.C. 315, 350 F.2d 445.) In the context of dealings between businessmen, the unconscionabffity doctrine has been appfied to protect those in need of goods of services from being overreached by others who have the power to drive hard bargains. (Cf. Bisso v. Inland Waterways Corp., 349 U.S. 85, 91.) However, it is to be noted that in the absence of fraud, mistake or duress, courts are reluctant to strike down contracts for \u201c[pjeople should be entitled to contract on their own terms without the indulgence of patemafism by courts in the aHeviation of one side or another from the effects of a bad bargain.\u201d Carlson v. Hamilton, 8 Utah 2d 272, 274, 332 P.2d 989.\nWe befieve that in determining whether a contract such as the one here at issue is unconscionable, such factors as the age and education of the contracting parties, their commercial experience and their relative bargaining positions should be considered. In the instant case the record reveals that plaintiff was a college graduate. He was almost 40 years of age at the time the contract was signed and had been in. the auto.mobile business for a number of years. The contract was drafted by defendant only after he had several discussions with plaintiff regarding plaintiff\u2019s need of capital, to expand , his business. After negotiating a modification of the typewritten proposal prepared by defendant in September 1967, plaintiff \u201cwillingly\u201d signed it. He testified that the contract \u201cappeared to be satisfactory.\u201d Plaintiff fulfilled his oblig\u00e1tions under the contract, without complaint, for several years. It does not appear that defendant lured plaintiff into signing the contract by taking advantage of an attorney-client relationship; the evidence seems clear that at the time the contract was signed, no such relationship existed between the parties. Although plaintiff was aware that defendant was an attorney, the negotiations leading up to the signing of the contract were conducted at arm\u2019s length. Moreover, we note that while it appears that subsequent to the signing of the contract, plaintiff developed a substantial automobile dealership, in 1967 plaintiff\u2019s business was a veritable \u201cshoestring operation,\u201d Nevertheless, the record demonstrates that defendant risked $20,000, a cash loan of $5000 and a guarantee of a $15,000 line of credit on the hope that plaintiff\u2019s business would be a success. Clearly, then, defendant\u2019s consideration under the contract was substantial. On the basis of this record we must reverse the trial court\u2019s holding that the contract was \u201cunconscionable.\u201d\nAlthough we agree with defendant\u2019s contention that the contract was not unconscionable, we cannot agree with his claim that it created a joint venture relationship between himself and plaintiff. In Electrical Contractors, Inc. v. Goldberg & O\u2019Brien Electric Co., 29 Ill.App.3d 819, our court recently had occasion to examine the nature of the joint venture relationship:\n\u201c[T]o constitute a joint venture, there must be a community of interest and the right to joint control. (Finn v. Drtina (1948), 30 Wash.2d 814, 194 P.2d 347; 46 Am.Jur.2d Joint Ventures \u00a7 12.) Some courts have said that the most important criterion of a joint venture is joint control and management of the property used in accomplishing its aims. (Detachable Bit Co. v. Timken Roller Bearing Co. (6th Cir. 1943), 133 F.2d 632, 635; Chisholm v. Gilmer (4th Cir. 1936), 81 F.2d 120.) In fact, one court went to the extent of saying that \u00b0 * there can be no joint venture or common enterprise of legal important unless there be a community of interest in the objects or purposes of the undertaking, and an equal right to direct and govern the movements and conduct of each other in respect thereto.\u2019 (Crutti v. Frank (La. App. 1962), 146 So.2d 474, 479.) Another has pointed out that \u2018[wjhere the right to control is lacking, a joint enterprise does not exist.\u2019 Bainbrich v. Wells (Colo. App. 1970), 476 P.2d 53, 54.\u201d 29 Ill.App.3d 819, 823.\nIn the case at bar the written contract contains no hint that the parties intended defendant to have any right to exercise control or management over the conduct of plaintiffs automobile dealership. The record is manifest that defendant never attempted to assert such a right. Plainly, then, defendant is not a joint venturer in plaintiffs business.\nAs we have indicated above, it is our view of the instant contract that it is neither an unconscionable bargain unenforceable against plaintiff, nor is it a joint venture agreement giving defendant a perpetual right to a share of the profits of plaintiffs business. Rather, guided by tire recent decision in Keeshin v. Levin, 31 Ill.App.3d 790, which cited 17 Am.Jur.2d Contracts \u00a7 325, we have analyzed the intent of the parties \u201cby a fair construction of the terms and provisions of the contract itself, by the subject matter to which it has reference and by the circumstances of t\u00edre particular transaction giving rise to the question\u201d and hold that the instant contract contains two severable provisions, one of which has terminated, the other remaining in force. Essentially the contract here provided that in return for a $5000 loan and a guarantee of a $15,000 line of credit at the Independence Bank of Chicago, plaintiff agreed to provide defendant or his family with the use of a new Jaguar every year he remained in the automobile business and, in addition, $25 for each new car sold \u201cas floor planned and guaranteed * 9 * by [defendant] .\u201d These provisions are severable. Our view is reinforced by an examination of the record in its entirety. It reveals that plaintiff was anxious to expand the scope of his operation. In order to do so he needed to obtain a line of credit from a bank. Apparently he could not obtain such a fine of credit unless it was guaranteed by a third party. Defendant proposed that he provide such a guarantee if plaintiff agreed to pay him $25 for each new car plaintiff sold. At plaintiffs insistence this provision was limited to cars sold \u201cby virtue of defendant\u2019s guarantee\" of plaintiffs line of credit at the Independence Bank of Chicago. When this line of credit was terminated, it was the intent of the parties that defendant\u2019s right to $25 for each new car sold would end. The parties in addition also agreed that defendant or his family would be given the use of a new Jaguar every year for enabling plaintiff to expand his inventory of new cars. Thus, while the provision calling for $25 to be paid defendant for each new car sold ended when plaintiff terminated his line of credit guaranteed by defendant at the Independence Bank, plaintiffs obligation to provide defendant with the use of a new Jaguar continues to run.\nAccordingly we reverse the judgment entered below and remand the caiise with directions that a judgment be entered finding (1) the provision of the contract that $25 be paid to defendant for each new car sold by plaintiff by virtue of the floor plan financing guaranteed by defendant\u2019s $15,000 (paragraphs 3 and 4 thereof) is of no further force and effect, and (2) the provision of the contract that defendant be provided with the use of a new automobile from spring to fall (paragraphs 1 and 2 thereof) is in full force and effect; and that a hearing be granted on defendant\u2019s counterclaim to determine the fair rental value of a new automobile for that period of time during which defendant was not provided with the use of a car by plaintiff.\nReversed and remanded with directions.\nLORENZ and SULLIVAN, JJ., concur.\nIn Beutel, Bank Officers Handbook of Commercial Banking Law \u00a7 15 \u2014 25, at 199 (4th ed. 1974), the following discussion of \u201cfloor plan financing\u201d appears:\n\"Sometimes, when the debtor is a merchant or manufacturer who intends to sell the goods the bank or other creditor is financing, the creditor allows the goods so securing the loan to be placed in the inventory of the debtor or displayed for sale. The contract of security may provide that, as goods are to be sold and replaced, the replacements are to become part of the security. This so-called floor plan financing offers very precarious security to the lender, because if the goods are sold in the ordinary coruse of business or come into the hands of a person who gives new value for them, the security interest is cut off in his favor. This is true even if the buyer knows of the security interest.\u201d\nWe note that among the exhibits introduced below was plaintiff\u2019s profit and loss statement for April 1967 which indicates he made a net profit of $97.17.", "type": "majority", "author": "Mr. JUSTICE DRUCKER" } ], "attorneys": [ "Seymour Lacob, pro se.", "Cummings & Wyman, of Chicago (Daniel P. Nagle, of counsel), for appellee." ], "corrections": "", "head_matter": "Robert Neal, Plaintiff and Counterdefendant-Appellee, v. Seymour Lacob, Defendant and Counterplaintiff-Appellant.\n(No. 61504;\nFirst District (5th Division)\nJuly 25, 1975.\nSeymour Lacob, pro se.\nCummings & Wyman, of Chicago (Daniel P. Nagle, of counsel), for appellee." }, "file_name": "0137-01", "first_page_order": 161, "last_page_order": 169 }