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Zion Industries, Inc. v. Loy

OPINION FILED FEBRUARY 24, 1977.

ZION INDUSTRIES, INC., PLAINTIFF AND COUNTERDEFENDANT-APPELLANT, CROSS-APPELLEE,

v.

ALFRED J. LOY ET AL., D/B/A ARROW MOVING AND STORAGE CO., DEFENDANTS AND COUNTERPLAINTIFFS-APPELLEES, CROSS-APPELLANTS.



APPEAL from the Circuit Court of Lake County; the Hon. JOHN L. HUGHES, Judge, presiding.

MR. PRESIDING JUSTICE RECHENMACHER DELIVERED THE OPINION OF THE COURT:

Mr. PRESIDING JUSTICE RECHENMACHER delivered the opinion of the court:

Zion Industries brought an action for rent against Phillip J. Haymaker and Alfred J. Loy, doing business as Arrow Moving and Storage Co. Haymaker was dismissed as a defendant and the defendant hereinafter will be referred to as Loy. Loy counterclaimed, alleging damages incurred as a result of Zion's failure to perform a covenant to repair the roof of the leased building. Originally the trial court simply awarded Zion a judgment for the unpaid rent in the amount of $26,606.91, with nothing to Loy on his counterclaim. Loy then filed a motion to reconsider, as a result of which a new trial was ordered. At the second trial the previous judgment for Zion was affirmed but Loy was awarded a judgment in the amount of $27,081 for damages, being $25,000 for loss of business caused by the leaking roof and $2,081 for damage to a customer's property, which the customer deducted from the amount he was charged by Loy for storage fees. Both sides appeal.

Zion contends they are not liable for damages because (1) a provision of the lease — paragraph 6 — states they are not liable for water coming through the roof or walls and will not be liable for failure to keep the premises in repair; (2) while there is a covenant requiring the landlord to make any necessary repairs to the roof if written request is made to do so, no such written request was made; (3) there is no adequate evidence to support the damages awarded to Loy by the court.

Loy, on the other hand, maintains he has no liability for the rent because the failure of Zion to make proper repairs to the roof reduced his capacity to store his customers' goods by from one-third to two-thirds, this amounting to a constructive eviction and relieving him from the obligation to pay rent.

The evidence given at the trial indicated that Loy leased the premises (which had formerly been a candy factory) from Zion for three years from 1966 to 1969, then renewed the lease for two years, from February 1, 1969, through January 31, 1971. Late in 1970 or early in 1971, Loy approached Zion management and said he did not want to make a new lease for a definite term since he was not sure just how good his business would be in the coming year but he would like to remain under a month to month tenancy. Zion agreed and thereafter beginning with the expiration of the written lease on January 31, 1971, Loy occupied the premises at the same rental under a month to month tenancy.

The written lease which had expired on January 31, 1971, contained several provisions which must be considered in arriving at a decision in this case, since it has been considered by the parties and was held by the trial court that the provisions of the written lease applied to the oral month to month tenancy which followed it. Paragraph 6 of the written lease provided that the "[l]essor shall not be liable for any damage occasioned by failure to keep said premises in repair, nor * * * for any damage occasioned by water, snow or ice being upon or coming through the roof * * *." Paragraph 2, among other provisions, contained the following:

"Upon receipt of written request from Lessee, the Lessor shall, during the term of this lease, make any and all necessary repairs to the roof and exterior walls of the premises demised herein * * *."

Loy testified that there had been minor leaks in the roof previous to 1972 but they were not serious. However, in March or April 1972, following thawing conditions, he began to notice numerous leaks in the roof. He was not sure when he reported the leaks to Zion management but believed it was sometime after a rain storm in March or April 1972. No written request was given by him to have the roof repaired but Loy testified he telephoned either the owner, Mr. Wolfslagle, or the Zion maintenance man, Jim Meyers. He testified he also complained by telephone either to Mr. Meyers or to Mr. Wright, the Zion auditor, in May and in July of 1972 and thereafter he complained to Zion about the roof several times from August through October 1972. Loy testified that during July 1972 Zion attempted to make repairs to the roof with plastic roof cement but this repair did not stop the water from coming through the roof. Some further work was done in September 1972 but this too failed to keep the water out. According to Loy's testimony water came into the building every time it rained from March up to and including December 1972. By July 1972 he could use only 50% of the building and by December 1972 his useable space was reduced to one-third of the total floor space. At this time, in December 1972, Loy was some $21,000 in arrears in rent and was given a notice to quit the premises by Zion. He then began moving his merchandise out of the building and completed doing so in February 1973. At the time he quit the premises Loy owed some $23,000 in rent calculated on the original rental of $2700 per month, plus $60 per month for heat.

• 1 As to Zion's contention that the obligation to repair the roof could be invoked only by a written request, whereas only telephone requests were made to Zion, we regard the acknowledgment of the oral request implied by sending men and materials to the building and attempting to repair the roof, as waiving the technicality of written notice. We find no merit to Zion's contention in this regard.

• 2 Conceding then that oral notice of the condition of the roof was given and written request to repair was waived, we consider next the contention that the breach of this covenant dispensed the tenants' obligation to pay rent. The general rule in Illinois, as elsewhere, is that the obligation to pay the rent and the covenant to make repairs are separate and independent covenants and that the failure to make the promised repairs does not discharge the obligation to pay the rent. (Peoria Housing Authority v. Sanders (1973), 54 Ill.2d 478; Rubens v. Hill (1904), 213 Ill. 523; Lipkin v. Burnstine (1958), 18 Ill. App.2d 509; Ing. v. Levy (1975), 26 Ill. App.3d 889.) However, it is equally well established that the obligation to pay rent is dispensed where the landlord evicts the tenant from the premises and even a partial eviction is sufficient to suspend the obligation of paying rent. Goldberg v. Cosmopolitan National Bank (1961), 33 Ill. App.2d 83.

But as stated in that case:

"An eviction in the sense in which it is thus used must of course be something of a serious and substantial character done by the landlord with the intention of depriving the tenant of the enjoyment of the premises." (Emphasis added.) 33 Ill. App.2d 83, 86.

• 3 Since it was admitted by Loy that Zion attempted to carry out its obligation to repair the roof, even though the repairs were ineffectual, it cannot be contended in this case that the landlord did anything with the intention of depriving the tenant of the enjoyment of the premises. Nevertheless, Loy argues, the failure to make adequate repairs amounted to a constructive eviction, since it allowed a condition to continue which eventually deprived Loy of the effective use and enjoyment of 50% or more of the leased space. Constructive eviction is, of course, recognized under some circumstances as tantamount to actual eviction. Automobile Supply Co. v. Scene-In-Action Corp. (1930), 340 Ill. 196. See also 49 Am.Jur.2d Landlord and Tenant § 301 (1970).) However, as held in Automobile Supply Co.:

"There can be no constructive eviction, however, without the vacating of the premises. Where a tenant fails to surrender possession after the landlord's commission of acts justifying the abandonment of the premises the liability for rent will continue so long as possession of the premises is continued." 340 Ill. 196, 201-02.

In this case, Loy remained in possession of the premises at all times.

Loy contends, however, that the modern rule is that where the landlord takes some action whereby the tenant is deprived of a portion of the premises, the tenant may treat such partial eviction as an eviction from the whole premises and be relieved of the obligation to pay any rent at all, even though he continues in possession of the remainder of the premises. Goldberg v. Cosmopolitan National Bank (1961), 33 Ill. App.2d 83, is cited as authority sustaining this proposition. But an examination of that case discloses it has no relevance to the case at hand. Goldberg involved an actual eviction for a portion of the leased premises and in a separate case, an action of forcible detainer for the balance. It was not a case of constructive eviction for failure to perform agreed repairs as we are dealing with in the case before us. We have found no cases and none have been cited to us wherein the alleged eviction was not only partial and not only constructive rather than actual, but in addition, where the tenant remained in possession of the premises. In Lipkin v. Burnstine, cited by Loy, the claimed eviction was based on failure to furnish heat and the tenant moved out of the premises. In Goldberg, also cited by Loy, the eviction was actual, but even there the appellate court remanded the case to determine "whether the eviction was of a serious character and was done by lessor with the intention of depriving lessee of the enjoyment of the premises demised." In view of Zion's attempt to make repairs to the roof it is obvious that there was no intent to deprive Loy of the enjoyment of the premises. In the Goldberg case there appears a quotation from Justice Cardozo's opinion in the case of Fifth Avenue Building Co. v. Kernochan (1917), 221 N.Y. 370, 372-73, 117 N.E. 579, 580, where he said:

"`Eviction as a defense to a claim for rent * * * suspends the obligation of payment either in whole or in part, because it involves a failure of the consideration for which rent is paid (citing cases). We are dealing now with an eviction which is actual and not constructive.'" (Emphasis supplied.) (33 Ill. App.2d 83, 86-87.)

Since there was no actual eviction from the premises in the case before us the doctrine that rent is suspended in case of an actual ...


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