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03/30/88 M. H. Stein, v. Garel Spainhour Et Al.

March 30, 1988

M. H. STEIN, PLAINTIFF-APPELLEE

v.

GAREL SPAINHOUR ET AL., DEFENDANTS-APPELLANTS



APPELLATE COURT OF ILLINOIS, FOURTH DISTRICT

521 N.E.2d 641, 167 Ill. App. 3d 555, 118 Ill. Dec. 359 1988.IL.454

Appeal from the Circuit Court of De Witt County; the Hon. Donald R. Parkinson, Judge, presiding.

APPELLATE Judges:

JUSTICE McCULLOUGH delivered the opinion of the court. GREEN, P.J., and KNECHT, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE MCCULLOUGH

The defendants, Garel Spainhour, T. A. Spainhour, and Verneal Spainhour, appeal the judgment of the circuit court of De Witt County finding in favor of the plaintiff, M. H. Stein, on a claim of breach of lease. The defendants maintain: (1) the court erroneously found an implied covenant to operate a business on the leased premises; (2) the court failed to properly consider the sale of the building and equipment; and (3) the court improperly assessed damages.

We affirm.

On January 31, 1974, the plaintiff entered into a 15-year lease with the defendants. Under the terms of the lease, the defendants agreed to pay rent of "One Hundred Fifty Dollars ($150.00) per month or 6% of net sales after sales tax from the business conducted on the premises, whichever sum is greater." It was further stipulated that:

"The business to be conducted on said premises shall be a sale of Dairy Queen confections. At the present time a Dairy Queen franchise has not yet been approved for the Lessees, and if such Dairy Queen franchise has not been awarded to the Lessees within a reasonable time hereafter, then this lease shall be null and void."

The defendant-lessees also covenanted to purchase public liability and fire insurance; to pay all utilities; to repair and maintain the leased premises at their own expense; and to pay all property taxes assessed against the building. The lessees also agreed to pay any reasonable attorney fees incurred by the lessor as a result of a default of the terms of the lease.

At the time of the execution of the lease, the parties were negotiating the sale of the building and equipment. In this respect, the lease provided:

"At the present time this lease includes the lot legally described above and the business building located thereon. However, the parties are now negotiating with each other whereby the Lessees may purchase the building only from the Lessors. In the event such a sale takes place, then the terms of this lease, and the rental due thereon will remain the same even though the building has been sold to the Lessees and the rental is for the lot only."

The defendants were granted a Dairy Queen franchise and commenced business on the leased premises in February 1974. Rent was always paid based on the percentage of sales, as the sales exceeded the minimum amount.

In May 1974, the defendant T. A. Spainhour and his spouse, Jamie J. Spainhour, entered into an installment contract with the plaintiff for the purchase of the building and equipment. Although the contract provided for final payment to be made in May 1989, the defendants tendered final payment in October 1983. On ...


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