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Butz v. Butz

JULY 26, 1973.




APPEAL from the Circuit Court of St. Clair County; the Hon. CARL H. BECKER, Judge, presiding.


Rehearing denied August 17, 1973.

This is an appeal from a decree for specific performance of an agreement for the conveyance of farm land entered by the Circuit Court of St. Clair County in favor of the appellees.

On July 22, 1954, Eva Butz, a widow, owner of the land in question, entered into a ten-year written lease with plaintiffs-appellees Norbert Butz, her son, and Lucille, his wife. The term of the lease was from March 1, 1955 to March 1, 1965. It was entitled "Farm Lease With Option to Purchase," and provided that the lessees should have an "option to renew said lease for an additional ten-year term upon the conditions, covenants, and restrictions hereinafter set forth." The lease contained no provisions of any kind with regard either to the time or manner in which the option to renew should be exercised.

Paragraph 18 of the lease granted to the lessees "the exclusive right at their option for and during the period of the original term herein provided for or renewal thereof to purchase the demised premises for the sum of $25,595." The option to purchase further provided that it should not be exercisable by the lessees during the lifetime of the lessor and "shall be exercised by the lessees during a period of two years from date of lessor's death." The lessees were required in case they exercised the option to serve written notice of such election upon the personal representative of the lessor. By terms of the lease the lessor bound her heirs, executors, administrators and assigns to effect the conveyance of the property to the lessees if the option were exercised.

On July 30, 1962, Eva Butz executed her last will and testament. Paragraph FIFTH of her will provided,

"Since I have entered into an agreement with my son NORBERT BUTZ for the sale of my farm located in Shiloh Valley Township, St. Clair County, Illinois to be performed within two years from my death, I direct that my Executors shall carry into effect the terms of said agreement should my son, NORBERT, desire to complete and comply with its terms * * *."

Paragraph SIXTH of her will required that in case of election to exercise his option to purchase,

"* * * then my son NORBERT, his heirs or assigns, shall pay the additional taxes imposed upon my estate by reason of the increased valuations and the refusal of the Internal Revenue Service and/or the State of Illinois to accept the valuation of said farmlands as determined in the option agreement."

Eva Butz died on December 13, 1967, at the age of 96 leaving as her heirs nine living children and children of one of the six of her children who had predeceased her. The will was duly admitted to probate on January 17, 1968, and sons Joseph and Henry Butz were named as executors. On September 30, 1968, notice that the appellees, Norbert Butz and Lucille Butz, had elected to exercise the option to purchase was served upon the executors. The executors refused to convey the property and the optionees commenced a suit for specific performance which resulted in the decree here on appeal. Following denial of a posttrial motion for rehearing, to vacate the decree or for judgment and decree in favor of the defendants, notice of appeal to this court was filed on September 5, 1972.

No question was raised at the trial court level about the validity of the lease or of the will. The issues presented to the trial court were: (1) Was the original lease renewed for another ten years effective March 1, 1965, and (2) were the provisions in the will regarding the option sufficient in law to sustain the right to an option even if the lease had expired. The trial court decided that the holding over by the lessees was sufficient to renew the lease for another ten years and hence keep the option alive. Having so decided the court granted specific performance, finding it unnecessary to discuss the second issue. The issues presented on appeal are the same as those presented to the trial court.

We disagree with the decision of the trial court that the holding over by the lessees under the circumstances present in this case was sufficient to renew the lease for an additional term but nevertheless affirm the judgment of the trial court upon different grounds.

• 1 When a lease contains an option to renew and expresses the conditions under which the option can be exercised there is little doubt that when a tenant fails to meet these conditions his right to possession terminates with the lease, and if he holds over and is accepted by the landlord he becomes a tenant from year to year. But when the lease creates an option to renew without stating how or when it is to be exercised, what is the position of the holdover tenant?

It is the appellants' view that some overt act is required so the landlord will know whether or not the lease is being renewed, and that in the absence of such overt act the tenant who holds over becomes a tenant from year to year with only those provisions of the former lease pertaining to the rent and other matters essential to the farming of the land applicable to the tenancy from year to year. An option to purchase, ...

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