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Marquette Nat'l Bank v. Walgreen Co.

OPINION FILED JULY 25, 1984.

MARQUETTE NATIONAL BANK, TRUSTEE, PLAINTIFF-APPELLANT,

v.

WALGREEN COMPANY, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County; the Hon. James C. Murray, Judge, presiding.

JUSTICE MCNAMARA DELIVERED THE OPINION OF THE COURT:

Plaintiff Marquette National Bank, as land trustee, brought this action seeking a declaration of its rights to rental income under a lease between its predecessor in title and defendant Walgreen Company. The trial court granted defendant's motion for summary judgment and denied a similar motion by plaintiff. Plaintiff appeals.

In 1949, plaintiff's predecessor in title and defendant entered into an agreement to lease the premises at 6300 South Western Avenue in Chicago. The lease was extended and modified in 1965.

Under the terms of the lease, the rent is based on a fixed monthly sum and specified percentages of cash receipts of sales. Paragraph 2 of the amended lease provides in pertinent part:

"2. For and during the further extended period provided herein, Tenant shall pay rent as follows:

(a) A fixed minimum rent in the amount of $1,250.00 per month, payable on the first day of each and every month in advance;

(b) If a sum equal to - 3 1/4% of the cash receipts of sales, as defined in said lease (and also excluding receipts from sale of cigarettes), up to and including $700,000.00,

plus 3% of such cash receipts of sales in excess of $700,000.00 up to and including $1,000,000.00,

plus 2% of such cash receipts of sales in excess of $1,000,000.00,

made by Tenant in the operation of Tenant's store on said leased premises in the twelve months ending February 28, 1967 and in each twelve months period thereafter, shall exceed the total fixed rents under subparagraph (a) above for each such period, then and in such event and on or before each March 25 next succeeding, Tenant shall pay to Landlord the amount of such excess as additional rent." (Emphasis added.)

The term "cash receipts of sales" was defined as "the total amount of all receipts from sales of drugs, food, drinks, goods, wares and merchandise of every sort whatsoever made by Tenant in the operation of Tenant's drug store on said leased premises * * *." (Emphasis added.) Under the lease, defendant was required to provide to the landlord an annual statement detailing its monthly cash receipts of sales. The lease also allows defendant to use the premises for "any lawful purpose." Paragraph 10 allows defendant to assign the lease and sublet the leased premises, although defendant would remain liable for the payment of rent and the performance of the obligations under the lease.

Defendant operated a drug store on the leased premises until October 1981. After closing that store, it opened another drug store at 6200 South Western Avenue, one block north of its first location. In the five years prior to vacating the leased premises, defendant had made rent payments ranging from $32,000 to over $43,000 per year. Over 50% of the total rent paid by defendant was based on cash receipts of sales. Defendant continued paying the minimum monthly rent of $1,250 while the premises were vacant.

In July 1982, defendant sublet the subject premises to Volume Shoe Corporation for the operation of a retail shoe store. Volume pays $2,000 per month rent to defendant. Plaintiff demanded, in addition to the minimum rent, percentage rent based on defendant's cash receipts of sales at its new location. Defendant paid only the minimum rent, maintaining that Volume Shoe's sales were not sufficient to trigger the percentage rent on cash receipts of sales, and that defendant's sales figures could not be used since it had sublet the premises.

Plaintiff filed this action alleging a breach of the terms of the lease. It sought a judgment for $60,000, the minimum monthly rent due until the end of the leasing period, and a declaration that it was entitled to percentage rents based on defendant's past sales on the leased premises or its current sales at the new location. Relying on the decision in Chicago Title & Trust Co. v. Southland Corp. (1982), 111 Ill. App.3d 67, 443 N.E.2d 294, the trial court found that plaintiff had no claim for percentage rent based on defendant's sales after defendant sublet the premises. On appeal, plaintiff contends that the trial ...


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