JUSTICE BILANDIC
delivered the opinion of the court:
Dix Mutual Insurance Company (insurance company) paid its insured (landlord) $40,579 for a fire loss on certain real property. The insurance company, by way of subrogation, seeks to recover the $40,579 from Terrence LaFramboise (tenant) because he allegedly caused the fire loss due to his negligence. The trial court dismissed the insurance company’s first-amended complaint for failure to state a cause of action. The trial court found that the parties did not intend for the tenant to be liable for fire damage to the real property and that the tenant was a co-insured under the insurance company’s insurance policy. The appellate court reversed, reinstated the first-amended complaint and remanded the cause for further proceedings. We allowed the tenant’s petition for leave to appeal. (134 Ill. 2d R. 315.) We reverse.
The unique facts of this case compel us to include the entire lease, which, in words and figures, is as follows:
“LEASE AGREEMENT
This Lease is made between Terry LaFramboise, tenant and acting landlord, J.S. Ludwig.
The house is leased beginning September 15, 1986 through September 15, 1987 for $325.00 per month. This amount is payable on the 15 [sic] of the month.
TERMS:
(A) $325.00 deposit has been made and will be considered the last month’s rent of the year.
(B) The Tenant is to furnish their [sic] own utilities.
(C) The Tenant is to mow and keep the yard and area around the house neat at all times and the farm buildings.
(D) The Tenant will not xxxxxxxxxxxx [sic] in walls, paint, or make any additions to the home that are permanent without approval of the Landlord.
(E) The Tenant will assume their [sic] own risk for their [sic] personal property and Landlord, J.S. Ludwig, will not be responsible for fire, wind, or water damage. DESCRIPTION:
The house is located on the Mitchell Farm in Vermilion County, Pilot township.
TENANT: LANDLORD:
s/ Terry LaFramboise s/ J.S. Ludwig
Date: 9-16-86 Date: 9-15-86”
During the term of the lease, the landlord maintained fire insurance coverage on the real property from the insurance company.
During the one-year term, the tenant, with the landlord’s approval, attempted to strip the paint from the exterior of the property with a power stripper, which removes paint by heat application. During this process, the house was damaged by fire. The landlord filed a claim with the insurance company and was paid $40,579 for the loss. The insurance company then brought this subrogation action against the tenant to recover the amount it paid to the landlord for the fire loss. In its complaint, the insurance company alleged that the tenant was negligent in his use of the power stripper. The issue before this court is whether the insurance company’s first-amended complaint states a cause of action in subrogation.
When the legal sufficiency of a complaint is challenged by a motion to dismiss, all well-pleaded facts in the complaint are to be taken as true. (Burdinie v. Village of Glendale Heights (1990), 139 Ill. 2d 501, 505.) On review, we must determine whether the well-pleaded allegations of the complaint, when interpreted in the light most favorable to the plaintiff, are sufficient to set forth a cause of action upon which relief may be granted. Burdinie, 139 Ill. 2d 501.
The doctrine of subrogation is a creature of chancery. It is a method whereby one who has involuntarily paid a debt or claim of another succeeds to the rights of the other with respect to the claim or debt so paid. (34 Ill. L. & Prac. Subrogation §2 (1958).) The right of subrogation is an equitable right and remedy which rests on the principle that substantial justice should be attained by placing ultimate responsibility for the loss upon the one against whom in good conscience it ought to fall. (34 Ill. L. & Prac. Subrogation §2 (1958).) Subrogation is allowed to prevent injustice and unjust enrichment but will not be allowed where it would be inequitable to do so. (34 Ill. L. & Prac. Subrogation §6 (1958).) There is no general rule which can be laid down to determine whether a right of subrogation exists since this right depends upon the equities of each particular case. See 34 Ill. L. & Prac. Subrogation §6 (1958).
One who asserts a right of subrogation must step into the shoes of, or be substituted for, the one whose claim or debt he has paid and can only enforce those rights which the latter could enforce. (Continental Casualty Co. v. Polk Brothers, Inc. (1983), 120 Ill. App. 3d 395, 397.) Consequently, in the case at bar, the insurance company may assert a right of subrogation against the tenant for the fire damage if: (1) the landlord could maintain a cause of action against the tenant and (2) it would be equitable to allow the insurance company to enforce a right of subrogation against the tenant.
With these principles in mind, we turn to the case at bar. Although a tenant is generally liable for fire damage caused to the leased premises by his negligence, if the parties intended to exculpate the tenant from negligently caused fire damage, their intent will be enforced. (One Hundred South Wacker Drive, Inc. v. Szabo Food Service, Inc. (1975), 60 Ill. 2d 312; Stein v. Yarnall-Todd Chevrolet, Inc. (1968), 41 Ill. 2d 32; Cerny-Pickas & Co. v. C.R. Jahn Co. (1955), 7 Ill. 2d 393.) The lease between the landlord and the tenant must be interpreted as a whole so as to give effect to the intent of the parties. Stein, 41 Ill. 2d at 35.
In the instant case, the insurance company contends that the tenant is liable for negligently caused fire damage because the lease does not contain a provision expressly relieving the tenant of this liability. This argument, however, is without merit. In Cerny-Pickas, 7 Ill. 2d at 396, this court stated:
“[B]ecause the contingency was not covered by express language, it does not follow that the instrument may not, when all of its provisions are considered, show that the parties themselves intended that the lessee should not be liable. That determination is to be made upon a consideration of the instrument as a whole.” (Emphasis added.)
Accordingly, to ascertain the intent of the parties, we must consider the lease “as a whole.”
Although the appellate court properly determined that Cerny-Pickas controls the instant case, it nevertheless failed to actually construe the lease “as a whole.” Instead, the appellate court concluded that the absence of a “yield-back” provision revealed the parties’ intent to place responsibility for negligently caused fire damage on the tenant. The appellate court determined that the tenant could only be relieved of this responsibility by an express provision in the lease. This, however, is not the law in Illinois.
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JUSTICE BILANDIC
delivered the opinion of the court:
Dix Mutual Insurance Company (insurance company) paid its insured (landlord) $40,579 for a fire loss on certain real property. The insurance company, by way of subrogation, seeks to recover the $40,579 from Terrence LaFramboise (tenant) because he allegedly caused the fire loss due to his negligence. The trial court dismissed the insurance company’s first-amended complaint for failure to state a cause of action. The trial court found that the parties did not intend for the tenant to be liable for fire damage to the real property and that the tenant was a co-insured under the insurance company’s insurance policy. The appellate court reversed, reinstated the first-amended complaint and remanded the cause for further proceedings. We allowed the tenant’s petition for leave to appeal. (134 Ill. 2d R. 315.) We reverse.
The unique facts of this case compel us to include the entire lease, which, in words and figures, is as follows:
“LEASE AGREEMENT
This Lease is made between Terry LaFramboise, tenant and acting landlord, J.S. Ludwig.
The house is leased beginning September 15, 1986 through September 15, 1987 for $325.00 per month. This amount is payable on the 15 [sic] of the month.
TERMS:
(A) $325.00 deposit has been made and will be considered the last month’s rent of the year.
(B) The Tenant is to furnish their [sic] own utilities.
(C) The Tenant is to mow and keep the yard and area around the house neat at all times and the farm buildings.
(D) The Tenant will not xxxxxxxxxxxx [sic] in walls, paint, or make any additions to the home that are permanent without approval of the Landlord.
(E) The Tenant will assume their [sic] own risk for their [sic] personal property and Landlord, J.S. Ludwig, will not be responsible for fire, wind, or water damage. DESCRIPTION:
The house is located on the Mitchell Farm in Vermilion County, Pilot township.
TENANT: LANDLORD:
s/ Terry LaFramboise s/ J.S. Ludwig
Date: 9-16-86 Date: 9-15-86”
During the term of the lease, the landlord maintained fire insurance coverage on the real property from the insurance company.
During the one-year term, the tenant, with the landlord’s approval, attempted to strip the paint from the exterior of the property with a power stripper, which removes paint by heat application. During this process, the house was damaged by fire. The landlord filed a claim with the insurance company and was paid $40,579 for the loss. The insurance company then brought this subrogation action against the tenant to recover the amount it paid to the landlord for the fire loss. In its complaint, the insurance company alleged that the tenant was negligent in his use of the power stripper. The issue before this court is whether the insurance company’s first-amended complaint states a cause of action in subrogation.
When the legal sufficiency of a complaint is challenged by a motion to dismiss, all well-pleaded facts in the complaint are to be taken as true. (Burdinie v. Village of Glendale Heights (1990), 139 Ill. 2d 501, 505.) On review, we must determine whether the well-pleaded allegations of the complaint, when interpreted in the light most favorable to the plaintiff, are sufficient to set forth a cause of action upon which relief may be granted. Burdinie, 139 Ill. 2d 501.
The doctrine of subrogation is a creature of chancery. It is a method whereby one who has involuntarily paid a debt or claim of another succeeds to the rights of the other with respect to the claim or debt so paid. (34 Ill. L. & Prac. Subrogation §2 (1958).) The right of subrogation is an equitable right and remedy which rests on the principle that substantial justice should be attained by placing ultimate responsibility for the loss upon the one against whom in good conscience it ought to fall. (34 Ill. L. & Prac. Subrogation §2 (1958).) Subrogation is allowed to prevent injustice and unjust enrichment but will not be allowed where it would be inequitable to do so. (34 Ill. L. & Prac. Subrogation §6 (1958).) There is no general rule which can be laid down to determine whether a right of subrogation exists since this right depends upon the equities of each particular case. See 34 Ill. L. & Prac. Subrogation §6 (1958).
One who asserts a right of subrogation must step into the shoes of, or be substituted for, the one whose claim or debt he has paid and can only enforce those rights which the latter could enforce. (Continental Casualty Co. v. Polk Brothers, Inc. (1983), 120 Ill. App. 3d 395, 397.) Consequently, in the case at bar, the insurance company may assert a right of subrogation against the tenant for the fire damage if: (1) the landlord could maintain a cause of action against the tenant and (2) it would be equitable to allow the insurance company to enforce a right of subrogation against the tenant.
With these principles in mind, we turn to the case at bar. Although a tenant is generally liable for fire damage caused to the leased premises by his negligence, if the parties intended to exculpate the tenant from negligently caused fire damage, their intent will be enforced. (One Hundred South Wacker Drive, Inc. v. Szabo Food Service, Inc. (1975), 60 Ill. 2d 312; Stein v. Yarnall-Todd Chevrolet, Inc. (1968), 41 Ill. 2d 32; Cerny-Pickas & Co. v. C.R. Jahn Co. (1955), 7 Ill. 2d 393.) The lease between the landlord and the tenant must be interpreted as a whole so as to give effect to the intent of the parties. Stein, 41 Ill. 2d at 35.
In the instant case, the insurance company contends that the tenant is liable for negligently caused fire damage because the lease does not contain a provision expressly relieving the tenant of this liability. This argument, however, is without merit. In Cerny-Pickas, 7 Ill. 2d at 396, this court stated:
“[B]ecause the contingency was not covered by express language, it does not follow that the instrument may not, when all of its provisions are considered, show that the parties themselves intended that the lessee should not be liable. That determination is to be made upon a consideration of the instrument as a whole.” (Emphasis added.)
Accordingly, to ascertain the intent of the parties, we must consider the lease “as a whole.”
Although the appellate court properly determined that Cerny-Pickas controls the instant case, it nevertheless failed to actually construe the lease “as a whole.” Instead, the appellate court concluded that the absence of a “yield-back” provision revealed the parties’ intent to place responsibility for negligently caused fire damage on the tenant. The appellate court determined that the tenant could only be relieved of this responsibility by an express provision in the lease. This, however, is not the law in Illinois. In Illinois, courts must look to the lease “as a whole” and the spirit of the agreement between the parties rather than search for an express provision in the lease. (See One Hundred South Wacker Drive, Inc. v. Szabo Food Service, Inc. (1975), 60 Ill. 2d 312, 314; Cerny-Pickas, 7 Ill. 2d at 396.) In the instant case, even the most cursory examination of the lease “as a whole” leads us to the obvious conclusion that neither the landlord nor the tenant was a sophisticated real estate mogul. It is hardly surprising to us that this particular lease does not contain a “yield-back” clause, as it is quite likely that the parties involved did not even know what a “yield-back” clause is.
The lease “as a whole” indicated that the tenant wanted shelter for one year for which he promised to pay a modest rent, furnish his own utilities, perform certain services on the farm, and assume the risk for his own personal property. The landlord agreed. Although one may be critical of the grammar, punctuation or even the style of the lease, it is difficult to find fault with the spirit of the document. In drafting this document, the landlord expressly placed minor duties on the tenant. “As a whole,” the lease does not reflect any intent that, during the course of the one-year term, the tenant would be responsible for any fire damage to the realty and be required to pay an additional $40,579 to the landlord. Such a proposition would probably be beyond the wildest dreams of the parties.
The only paragraph which purportedly addresses the risks borne by either party is paragraph (E) which reads:
“(E) The Tenant will assume their [sic] own risk for their [sic] personal property and Landlord, J.S. Ludwig, will not be responsible for fire, wind or water damage.”
The insurance company contends that the last clause in this paragraph reveals the parties' intent to place responsibility for fire damage to the real property on the tenant. This argument persuaded the appellate court. However, the appellate court improperly read the last clause in isolation from the beginning part of the sentence. When read as one complete sentence, it is obvious to us that the parties intended to expressly place responsibility for his own personal property on the tenant and to exempt the landlord from liability for damage to the tenant’s personal property. See, e.g., Tondre v. Pontiac School District No. 105 (1975), 33 Ill. App. 3d 838, 843 (qualifying phrase is confined to the last antecedent).
We find it significant that the parties, who obviously considered the possibility of fire, expressly provided for the tenant’s personal property but failed to do so with respect to the leased premises. This fact indicates to us that the parties intended for each to be responsible for his own property. This conclusion is supported by the landlord’s conduct in taking out a fire insurance policy to cover the leased premises. As this court has noted before:
“ ‘Fire insurers expect to pay fire losses for negligent fires and their rates are calculated upon that basis; indeed, we may well assume that a great majority of fires are caused by someone’s negligence in a greater or lesser degree.’ [Citations.]” Stein, 41 Ill. 2d at 38.
Under the insurance company’s argument:
“it would be necessary for both parties to the lease to carry fire insurance if they are to be protected. The lessee would have to insure against fires due to his negligence, and the lessor against fires due to other causes. *** The parties contemplated that the risk of loss by fire should be insured against and we see no reason to suppose that they did not contemplate the customary insurance policy which covers both accidental and negligent fires.” (Cerny-Pickas, 7 Ill. 2d at 398.)
Therefore, we conclude that the parties intended that the tenant was not to be liable for any fire damage to the premises and that the landlord would look solely to the insurance as compensation for any fire damage to the premises.
In Cerny-Pickas, this court also noted:
“ ‘The ancient law has been acquiesced in, and consciously or unconsciously, the cost of insurance to the landlord, or the value of the risk enters into the amount of rent.’ *** ‘They necessarily consciously figured on the rentals to be paid by the tenant as the source of the fire insurance premiums and intended that the cost of insurance was to come from the tenants. In practical effect the tenant paid the cost of the fire insurance.’ ” Cerny-Pickas, 7 Ill. 2d at 398.
It is well settled that an insurer may not subrogate against its own insured or any person or entity who has the status of a co-insured under the insurance policy. (Reich v. Tharp (1987), 167 Ill. App. 3d 496, 501; 16 Couch on Insurance §61:137, at 197 (rev. 1983).) Under the particular facts of this case, the tenant, by payment of rent, has contributed to the payment of the insurance premium, thereby gaining the status of co-insured under the insurance policy. Both the landlord and tenant intended that the policy would cover any fire damage to the premises no matter who caused it, and to conclude otherwise would defeat the reasonable expectations of the parties.
We therefore conclude that, under the provisions of the lease as a whole, the reasonable expectations of the parties, and the principles of equity and good conscience, the insurance company cannot maintain a subrogation action against the tenant under the facts of this case.
For the foregoing reasons, we reverse the appellate court and affirm the trial court’s dismissal of the insurance company’s first-amended complaint.
Appellate court reversed; circuit court affirmed.