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Bellows v. Ziv

NOVEMBER 28, 1962.




Appeal from the Municipal Court of Chicago; the Hon. THOMAS H. FITZGERALD, Judge, presiding. Reversed and remanded with directions.



This appeal is taken from an order entered in the Municipal Court of Chicago dismissing the fourth amended statement of claim of the plaintiffs on motion of the defendant. The plaintiffs elected to stand on the statement of claim, and judgment order was entered in the trial court that the cause be dismissed. By his motion to strike, the defendant admitted all matters well pleaded in the statement of claim.

In this case the suit was brought by certain beneficiaries under an Illinois land trust. These beneficiaries, as partners, were operating and managing the Shoreland Hotel.

The defendant, Gus F. Ziv, on November 2, 1948, had entered into a lease with the Shoreland Hotel Company, a corporation then engaged in managing and operating the hotel, for an apartment in the hotel. The term of the lease was for one year, commencing January 1, 1949 and expiring December 31, 1949. At the end of the term the lessee continued to pay rent.

On or about June 8, 1954 the American National Bank and Trust Company of Chicago, as trustee under the terms of a trust agreement dated June 8, 1954, known as Trust No. 10380, became vested by mesne conveyances with the fee simple title to the Shoreland Hotel premises. The trust agreement, a copy of which was attached to the statement of claim, contained the ordinary provisions usually found in this type of trust. Among other things it provided that the trustee would take title to the premises in question and hold it for the "uses and purposes and upon the trusts herein set forth." The agreement further provides that the interest of the beneficiaries should consist solely of the power of direction to "deal with the title to said real estate and to manage and control said real estate as hereinafter provided, and the right to receive the proceeds from rentals and from mortgages, sales or other disposition of said real estate"; that such rights "shall be deemed to be personal property, and may be assigned and transferred as such"; and that no beneficiary at any time shall have "any right, title or interest in or to any portion of said real estate as such, either legal or equitable, but only an interest in the earnings, avails and proceeds as aforesaid." It further made provision that the trustee should not incur any personal liability for anything that it might do in or about the real estate or for injury to any person or property happening thereon. It further provided that the designated trustee is the sole owner of record of the real estate referred to, and that the trustee shall "convey title to said real estate, execute and deliver deeds for or otherwise deal with said trust estate only when authorized to do so in writing" by beneficiaries owning ninety percent or more of the beneficial interest. There is also a provision that the beneficiary or beneficiaries shall in their own right "have the full management of said real estate and control of the selling, renting and handling thereof, and any beneficiary or his or her agent shall handle the rents thereof and the proceeds of any sales of said property, and said Trustee shall not be required to do anything in the management or control of said real estate or in respect to the payment of taxes or assessments or in respect to insurance, litigation or otherwise, except on written direction," and a twenty year limitation was placed upon the trust. The agreement also contained the usual provision that the agreement should not be placed on record.

The defendant continued to occupy the same premises and to pay the same rent. He paid his rent to the beneficiaries operating as the Shoreland Hotel, and, according to the complaint, has since June 8, 1954 "attorned to and acknowledged plaintiffs as landlord of the said demised premises." He continued to pay rent up to and including the instalment of rent due October 1, 1958. On September 5, 1958 the defendant sent a letter addressed to the Shoreland Hotel giving notice that he would on October 31, 1958 permanently vacate the apartment occupied by him. On the latter date the defendant vacated the premises. The plaintiffs in their fourth amended statement of claim sought a judgment for eight months' rent allegedly owing to them commencing with the November 1, 1958 rent.

The plaintiffs filed three statements of claim, each of which was stricken on motion of defendant. This appeal is taken from the judgment order entered striking the fourth amended statement of claim and dismissing the suit.

The only question before us is whether or not the plaintiffs, beneficiaries under the trust, have the right to maintain an action for rent, in their own names, against the defendant. No other question is involved nor will be considered. Many other matters have been discussed in the briefs before us which are not pertinent to this issue. The question as to whether the beneficiaries in the first instance would have the right to make a lease with the tenants is not before us, nor will we consider or pass upon it. Nor will we consider the question of whether the plaintiffs, as beneficiaries, have a right to a distraint or to proceed in forcible detainer against the defendant.

At this point it is appropriate to discuss the general rules of law governing the relationship between the parties.

[2-6] Where a tenant holds over after the expiration of a lease for a year or years, the landlord may elect to accept and treat him as a tenant from year to year. 24 ILP Landlord and Tenant, sec 65; Eppstein v. Kuhn, 225 Ill. 115, 80 N.E. 80. The election to treat the tenant as a holdover tenant is exclusively that of the landlord, and the presumption of law, in the absence of a preponderance of evidence establishing a contrary agreement, is that there is a holding over upon the terms of the original lease. The terms of the new tenancy from year to year are subject to all the terms and conditions contained in the original lease so far as they are applicable. Cottrell v. Gerson, 296 Ill. App. 412, 16 N.E.2d 529, affirmed 371 Ill. 174, 20 N.E.2d 74; 24 ILP Landlord and Tenant, sec 67. The holding over does not renew or extend the lease but it creates a new tenancy from year to year. Such tenancies are the creation of judicial decisions based upon principles of policy and justice and are indefinite as to duration. Such a tenancy has many of the qualities of a tenancy for a definite term of years, but substantially it is a tenancy at will except that it cannot be terminated without notice to quit. In Bell v. Groom, 224 Ill. App. 58, the court states:

"In some jurisdictions it has been held that a tenant who occupies demised premises for several years after the termination of his lease creates each year a new term expiring at the close of the current year and requiring no notice for its termination, but such rule is not in force in Illinois, where it has been repeatedly held that if a tenant under a demise for a year or more holds over at the end of his term without any new agreement with the landlord, he will be treated as a tenant from year to year. (Hunt v. Morton, 18 Ill. 75; Goldsborough v. Gable, 140 Ill. 269.) And it seems to us that the Illinois rule is according to the great weight of authority on the subject. The Appellate Court of the First District in a well-considered case, Hately v. Myers, 96 Ill. App. 217 (following the language of Goldsborough v. Gable, supra), said that where the tenant remained in possession after the expiration of his term without any new contract in respect thereto, it was optional with appellant to treat him as a trespasser waiving the wrong of holding over or to treat him as a tenant; and by accepting the payment of rent thereafter the landlord made his election and the tenant became a tenant of the premises from year to year upon the same terms and subject to the same rent as provided in the original contract. And it was held by the court that where a tenant remains in possession after the expiration of a term of years, with the consent of the landlord, the law will imply a new tenancy from year to year, i.e., without a definite period for its termination, and if either party desires to terminate it, good faith requires that reasonable notice should be given. And it was further held that under the statute in force in this State such notice must be a 60-day notice."

In the instant case, at the end of defendant's term under his sublease, the fact that he continued to pay rent resulted in the creation of a year to year tenancy.

The fourth amended statement of claim stated that the plaintiffs are co-partners in the ownership and operation of the premises in question under the style and description of Shoreland Hotel. It further alleged that the "fee simple title to the real estate and property above described" became vested by mesne conveyances in the trustee. It is our duty to determine if the fourth amended statement of claim sets out a cause of action. The statement of claim was ineptly drawn and only indicates that mesne conveyances were made of the fee simple title to the real estate. It does not state whether the real estate was owned by the Shoreland Hotel Company and conveyance made directly to the trustee or whether the Shoreland Hotel Company operated the property under a lease made to it by a third party owner. If the conveyance of the real estate was made either to the beneficiaries or to the American National Bank and Trust Company of Chicago, as trustee, by a third party owning the property, who ...

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