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Pannett v. Schnitz





APPEAL from the Circuit Court of Edwards County; the Hon. CARRIE L. WINTER, Judge, presiding.


This is an appeal from the judgment of the circuit court of Edwards County denying relief to plaintiff-appellant, Clarence L. Pannett, under the Illinois forcible entry and detainer statute (Ill. Rev. Stat., ch. 57, par. 1 et seq.).

In January 1973, plaintiff, Clarence L. Pannett, and his partner, Dennis Gibson, entered into an installment contract with the defendants, Ernest and Lucille Schnitz, for the purchase of the "Stop-N-Shop" grocery and restaurant in West Salem, Illinois. Under the contract, the partners were to make 162 equal payments of $1,000 and a final payment of a slightly lesser amount. Payments were to be made on the fifteenth of each month to the sellers through a bank in Mt. Carmel, Illinois. The installment contract provided, regarding default:

"Default. In the event of failure of Buyer to make any payment of such purchase price or interest thereunder within 90 days after the same are due hereunder, or to pay taxes or all insurance payments, or assessments when due, the Seller may declare this agreement and Contract for sale terminated and shall thereupon be entitled to immediate possession of said premises, and in such event the payments made by Buyer may be retained by Seller as liquidated damages.

Until default by the Buyer of the terms of this Contract, they shall be entitled to the sole possession of said premises."

With the exception of the first payment, plaintiff was never on time with the monthly payments to the Schnitzes. In February 1975 (a year before this action), the plaintiff and his partner received a notice of forfeiture after they missed three monthly payments. However, the plaintiff managed to pay the three monthly payments then due, which were accepted by defendants, and plaintiff and his partner remained in possession.

Business conditions continued to deteriorate and in February 1976, the plaintiff and his partner were again behind in their payments. The payments for December 15, and January 15, 1976, had not been received when plaintiff called a meeting with defendants at the store on February 7, 1976.

At that meeting, plaintiff told the Schnitzes that he was terminating his partnership with Gibson, and was closing the store. He also told the Schnitzes that he would make their monthly payments until he could sell the store to a qualified buyer.

The store was closed, the inventory removed, and plaintiff began showing the premises to interested purchasers. On February 13, plaintiff submitted checks to the bank as payment of one $1,000 installment, and these were sent by the bank for collection. The bank received in return a $1,000 cashier's check from Mr. Pannett's bank on the 19th of February.

On February 17, Ernest Schnitz went to his bank to see if the $1,000 had been credited to his account. It had not been credited although the amount had been submitted for collection. He did not ask whether a payment had been received from Pannett. Mr. Schnitz then went to the county tax collector's office and paid the last half of the 1974 taxes which were overdue. Schnitz then had his attorney prepare two notices to be sent to the partners, Pannett and Gibson, declaring the contract for sale terminated by virtue of plaintiff's failure to make any payment of the purchase price within 90 days after it was due, and also, by virtue of plaintiff's failure to pay all the 1974 real estate taxes due and payable in 1975. Possession was demanded and although Schnitz did not have a building key, he took possession of the building, changed the locks, and denied possession to Pannett.

The bank returned the February payment received February 19, 1976, to Mr. Pannett's bank after being notified by Schnitz that the contract had been terminated. When Pannett tendered another payment on March 13, 1976, the bank refused to accept it or attempt to collect it.

Numerous issues are raised on appeal. The principal question is whether plaintiff Pannett was in default on February 17, 1976, either for failure to make the monthly payment within 90 days after it became due, or for failure to pay real property taxes for 1974 which were then overdue.

It does not appear that the plaintiff was in default on the monthly payments. The last payment had been for November 1975, and the next one which had not been paid, was due December 15, 1975. The contract provided that default would occur 90 days after a payment was due, which in the case of the December payment, was March 15, 1976.

There is no question that the last half of the 1974 taxes were still outstanding, and that was, on its face, a default on the contract. However, the Edwards County treasurer and tax collector, testified at the trial that she had reached an agreement with Dennis Gibson for monthly payments on the delinquent taxes which he had been paying. The treasurer said she did not list the property for sale for delinquent taxes, and gave no notice of delinquency to plaintiff Pannett or defendants Schnitz. Although it may be uncommon as well as without legal authority for the taxing authority to work out a payment ...

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