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100 So. Wacker Dr. v. Szabo Food Ser.

OPINION FILED MARCH 24, 1975.

ONE HUNDRED SOUTH WACKER DRIVE, INC., ET AL., APPELLEES,

v.

SZABO FOOD SERVICE, INC., APPELLANT.



Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County; the Hon. Nicholas J. Bua, Judge, presiding.

MR. JUSTICE DAVIS DELIVERED THE OPINION OF THE COURT:

The plaintiffs, One Hundred South Wacker Drive, Inc. (Wacker), and International Business Machines Corporation (IBM), filed suit in the circuit court of Cook County against Szabo Food Service, Inc. (Szabo).

The plaintiff Wacker is lessor and the defendant Szabo is the lessee under a lease covering part of the premises at 100 South Wacker Drive in Chicago. The plaintiff IBM is another tenant in the premises, whose property was damaged by the fire in question.

On April 3, 1968, while Szabo was engaged in the operation of its food business, a fire occurred upon the leased premises which caused substantial damage to both the premises leased to Szabo and to other parts of the building, for which the plaintiff Wacker sought damages in the sum of $500,000 and the plaintiff IBM sought damages for $2,500.

The complaint was in five counts, wherein Szabo was charged with several specific acts of negligence. Count II was based on the doctrine of res ipsa loquitur, and count III charged several violations of the Chicago Municipal Code contrary to Szabo's express duty under the lease. Count V charged violations of various specific provisions of the lease.

Szabo moved for judgment on the pleadings as to Wacker, which motion was denied. Szabo then moved to vacate that order, which motion was granted, and judgment on the pleadings was thereafter granted to Szabo. The circuit court found no just reason for delaying appeal. Wacker appealed to the appellate court, which reversed the circuit court. (14 Ill. App.3d 438.) We granted leave to appeal.

The question here presented is one of law. The issue presented for resolution is whether the parties to the lease, considering the lease as a whole in the light of our prior decisions in Cerny-Pickas & Co. v. C.R. Jahn Co. (1955), 7 Ill.2d 393, and Stein v. Yarnall-Todd Chevrolet, Inc. (1968), 41 Ill.2d 32, manifested an intent to exculpate the lessee from liability in event of loss by fire through negligence of the lessee.

The appellate court was of the opinion that the case hinged on the interpretation to be given to the yield-back clause of the lease. While that clause is important to the adjudication of the case, it is the law in Illinois that the proper construction to be given to a lease is to be determined by consideration of the instrument as a whole. Cerny-Pickas & Co. v. C.R. Jahn Co. (1955), 7 Ill.2d 393, 396.

The lease contained the following yield-back clause:

"XIV. At the termination of this lease by lapse of time or otherwise:

2. Tenant shall return the Leased Premises and all equipment and fixtures of Landlord in as good condition as and when Tenant originally took possession * * * ordinary wear and loss or damage by fire or other casualty * * * excepted, failing which Landlord may restore the Leased Premises to such condition and Tenant shall pay the cost thereof." (Emphasis ours.)

The defendant contends that this provision exculpates it from any liability for any fire damage to the entire building, caused by its negligence; the plaintiff, on the other hand, insists that it exculpates the defendant for fire damages only to the leased premises. The defendant relies principally on the following cases: Cerny-Pickas & Co. v. C.R. Jahn Co. (1955), 7 Ill.2d 393; Stein v. Yarnall-Todd Chevrolet, Inc. (1968), 41 Ill.2d 32; and Belden Manufacturing Co. v. Chicago Threaded Fastners, Inc. (1967), 84 Ill. App.2d 336.

The plaintiff Wacker sets forth the rationale on which its suit was based in the first paragraph of the argument in its brief in this court:

"It should be understood at the outset that plaintiff did not carry fire insurance in an amount sufficient to cover the entire loss of April 3, 1968. It is plaintiff's position that it had the right, in determining the extent of coverage which it would procure, to rely upon defendant's lease obligations — the requirements that defendant comply with all laws, that defendant refrain from ...


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