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01/14/87 Kenneth R. Eppers Et Al., v. First National Bank of

January 14, 1987





503 N.E.2d 589, 151 Ill. App. 3d 902, 104 Ill. Dec. 874 1987.IL.26

Appeal from the Circuit Court of Lake County; the Hon. Terrence J. Brady, Judge, presiding.


JUSTICE HOPF delivered the opinion of the court. LINDBERG, P.J., and UNVERZAGT, J., concur.


Defendant, First National Bank of Lake Forest, as trustee, appeals from an order of the trial court of Lake County which permanently enjoined it from seeking forfeiture of an installment contract between itself and plaintiffs for the purchase of real property and from filing any action for possession of the subject real property.

Defendant contends on appeal that the trial court erred in determining that plaintiffs had a right to cure a breach of contract after receiving notice of defendant's intent to declare a forfeiture and that the complaint fails to adequately state a basis for injunctive relief.

First National Bank of Lake Forest (Seller) entered into an installment contract with Kenneth and Diane Eppers and Arthur Johns (Buyers) for the sale of commercial realty. The contract provided, among other things, that Buyers would (1) pay all taxes due on the realty before accrual of any penalty; (2) keep all buildings on the property insured in the Seller's name; and (3) keep improvements on the premises in good repair and not commit waste. The contract also contained a forfeiture clause whereby, upon Buyers' breach of any contractual conditions, Seller could, at its option, declare the contract forfeited, retain all payments previously made by Buyers, and have the right to reenter and take possession of the property.

Subsequently, Buyers failed to pay the 1982 and 1983 real estate taxes on the property before penalties accrued and also failed to keep the buildings on the property insured as agreed. As of February 12, 1985, taxes were in arrears in the amount of approximately $3,500, and insurance premiums were owed in the amount of $639. By that time Buyers had made 66 monthly payments against principal and interest on the property, thus reducing the purchase price of $252,000 to a balance of $181,016.

On February 12, 1985, Seller directed to Buyers notice of intent to declare forfeiture and notice of intent to file a forcible entry and detainer suit with demand for possession. Buyers tendered the following amounts by check to Seller's agent in order to cure the default: $2,500 on February 12, 1985, $639 on February 15, 1985, and $1,000 on February 19, 1985. Seller's agent retained the checks but did not cash them.

On March 18, 1985, Seller served Buyers with a declaration of forfeiture and a demand for possession of the property. The declaration was recorded on March 27, 1985, the same day Buyers filed their complaint for injunctive and other relief. After a bench hearing on the merits of the complaint, the court found that the evidence would support findings that from time to time the Buyers made late payments toward the mortgage, taxes, and insurance and that Buyers had in fact defaulted under the contract with regard to taxes and insurance premiums. The court also found, however, that Buyers had cured the default, within 30 days of receipt of the notice of intent to declare forfeiture, by paying the amounts of the arrearages to the Seller.

The court then determined that the Buyers had met all of the requisites for injunctive relief and enjoined the Seller from further pursuing any forfeiture of the installment contract, any forcible entry and detainer action, and any action which would cloud title to the subject property. The court also ordered the Seller to accept the payments which had been tendered by Buyers as a cure of default. The Seller then filed this appeal.

Seller first contends that the trial court erred when it determined that Buyers had 30 days after receipt of his notice of intent in which to cure defaults under the contract. Seller correctly notes that the contract did not, by its terms, provide for a cure period. The notice, according to Seller, was given merely to comply with (1) a rule of equity that a purchaser must be given a reasonable warning of a seller's intention to declare a forfeiture, and (2) the Forcible Entry and Detainer Act (the Act) (Ill. Rev. Stat. 1983, ch. 110, par. 9-101 et seq.) requirement that a defaulting buyer be given 30 days' demand for possession (Ill. Rev. Stat. 1983, ch. 110, par. 9-104.1(a)). The purpose of the notice requirements, as asserted by Seller, is not to give the buyer a time in which to cure, but merely to allow the buyer a reasonable time to vacate or request additional time. Seller insists that when a defaulting buyer wishes to redeem, he may do so only pursuant to section 9-110 of the Act which authorizes the trial court to stay enforcement of judgments in forcible entry and detainer cases, thus giving a purchaser a grace period in which to cure any default. This relief is available with respect to the same contract only once in a five-year period.

Buyers rely on several provisions of the Act to support their contention that they were entitled to a 30-day cure period, rather than merely 30 days' notice of intent, as claimed by Seller. They first note section 9-102 which states in pertinent part that a forcible entry and detainer action may be maintained "[w]hen a vendee having obtained possession under a written or verbal agreement to purchase lands or tenements, and having failed to comply with the agreement, withholds possession thereof, after demand in writing by the person entitled to such possession." (Ill. Rev. Stat. 1983, ch. 110, par. 9-102.) Buyers then look to section 9-104.1(a) of the Act to help determine what is necessary for a proper "demand" by one entitled to possession. According to section 9-104.1(a): "In case there is a contract for the purchase ...

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