La Salle National Bank v. Khan

547 N.E.2d 472, 191 Ill. App. 3d 41, 138 Ill. Dec. 305, 1989 Ill. App. LEXIS 1610
CourtAppellate Court of Illinois
DecidedOctober 16, 1989
Docket1-88-2246
StatusPublished
Cited by6 cases

This text of 547 N.E.2d 472 (La Salle National Bank v. Khan) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
La Salle National Bank v. Khan, 547 N.E.2d 472, 191 Ill. App. 3d 41, 138 Ill. Dec. 305, 1989 Ill. App. LEXIS 1610 (Ill. Ct. App. 1989).

Opinion

JUSTICE O’CONNOR

delivered the opinion of the court:

This is an appeal from a judgment awarding possession to plaintiffs La Salle National Bank and Ahmo Hamzagic in an action brought for forcible entry and detainer.

Defendants, Hadi and Sartaj Khan, entered into a 15-year commercial lease, beginning May 1, 1987, for the property at 1313 Wilson Avenue in Chicago, for the purpose of operating a coin-operated laundry. The lease was signed by the Khans as tenants and La Salle National Bank as landlord, as trustee of a trust dated May 2, 1961. Pursuant to paragraph G of the trust agreement, the trust was to expire May 2, 1981. The lease provided that rent was due on the first day of each month and that rent was to be paid to the landlord at 135 South La Salle Street.

Plaintiff Ahmo Hamzagic was the beneficiary of the trust, and from May 1987 until January 1988 collected the rent for the property from the Khans. The Khans wrote their checks payable to Hamzagic and, despite the provisions of the lease, paid the rent after the first of the month, typically around the tenth of each month. Through January 1988, Hamzagic accepted the late payments. In addition to the rent, the Khans paid Hamzagic for a scavenger service for the property. The parties disagree as to whether payments for the scavenger service constituted partial payment of rent.

In February 1988, attorney Bahtiar Hoxha sent a letter to the Khans on behalf of Hamzagic. The letter stated:

“Please be advised that [Hoxha] represents Mr. Ahmo Hamzagic, the sole beneficiary of La Salle National Bank Trust No: 27819, Lessor.
My client advises me that you have been paying your rent on the tenth day of the month. However, the rent is due on the first of each and every month.
This letter will serve notice to you that as of March 1, 1988 my client will not accept rent payments from you that are not timely.
NOTE, any payment of rent made after the first day of the month in which it is due will be treated as a breach of the Store Lease.” (Emphasis in original.)

The rent for March 1988 was paid on March 1. The rent for April 1988 was not paid until April 6. On April 7, plaintiffs filed an action for forcible entry and detainer. On April 13, 1988, the rent check was returned to the Khans with a letter notifying the Khans that the lease had been breached. Checks for payment of the scavenger service for April and May of 1988 were not returned and were entered at trial as plaintiffs’ exhibits.

The trial court denied defendants’ motion for a directed verdict at the close of plaintiffs’ case. Defendants then sought to introduce a parol modification of the lease allowing rent payments later in the month. The trial court refused to admit the testimony as violative of the parol evidence rule and granted judgment for plaintiffs. Defendants now bring this appeal.

Defendants’ first contention on appeal is that there was no basis for maintaining an action for forcible entry and detainer as plaintiff Hamzagic had the rent check in his possession when he filed suit on April 7, which constituted acceptance of the rent and a waiver of his right to sue under the holdings of Plasti-Drum Corp. v. Ferrell (1979), 70 Ill. App. 3d 441, 388 N.E.2d 438, and Westerman v. Gilmore (1958), 17 Ill. App. 2d 455, 150 N.E. 2d 660. Plaintiff Hamzagic points out that after defendants were notified that any future late payment would be considered a breach of the lease, the rent payment for April 1987 was tendered six days late. Hamzagic further contends that as the lease contained a waiver of notice clause, he was not required to declare a forfeiture before bringing an action for possession.

Defendants correctly state that failure to enforce conditions of a lease, such as the covenant for prompt payment of rent, can give rise to a waiver of that condition. (See Okey, Inc. v. American National Bank & Trust Co. (1981), 96 Ill. App. 3d 987, 992, 422 N.E.2d 221.) Moreover, a lessor’s acceptance of later accruing rent, where the lessor has knowledge of the lessee’s breach of the lease, constitutes a waiver of the forfeiture. (See, e.g., Weiss v. Johnson (1963), 28 Ill. 2d 259, 261, 190 N.E.2d 834.) Where the lessor waives lessee’s forfeiture by an act inconsistent with the declaration of a forfeiture, such as the acceptance of late rent payments, the lease continues in force. Okey, Inc. v. American National Bank & Trust Co. (1981), 96 Ill. App. 3d 987, 992, 422 N.E.2d 221.

Defendants here, however, were notified in writing by plaintiff’s agent that future late payments would be considered a breach of the lease. In light of this notification and the existence of the waiver of notice provision in paragraph 13 of the lease, there is no merit to defendants’ argument that plaintiff was required to give additional notice that he intended to declare a forfeiture. Further, although plaintiff received the late payment one day before filing suit and the check was not returned to defendants until April 14, 1987, there is no basis for concluding that plaintiff “accepted” the check in that the check was not endorsed or deposited and the filing of the suit for forcible entry and detainer immediately after the late receipt of the check clearly manifested plaintiff’s intent to not accept the rent.

Westerman v. Gilmore (1958), 17 Ill. App. 2d 455, 150 N.E.2d 660, relied upon by defendants, is not to the contrary. The landlords in Westerman sought to terminate a lease based on defendants’ nonpayment of rent. The lease in question contained no forfeiture clause and no waiver of notice. Citing numerous cases in which retention of rent had been held to constitute a waiver of forfeiture, the court held that the plaintiffs had waived the default specified in their notice by accepting and retaining rent due up to a date which was beyond the date fixed for the termination of the lease. The distinction between Westerman and the instant case is that here, the lease contained a waiver of notice clause, and more important, plaintiff Hamzagic did not “accept” rent for a period “beyond the date of the attempted termination of the lease” (Westerman, 17 Ill. App. 2d at 459) and therefore did not waive the breach of the covenant to pay rent.

Defendants also argue that plaintiff had accepted partial payment of rent at the time of trial in that he had retained checks for scavenger services for the months of April and May 1988, which they assert constituted additional rent under paragraph 2 of the lease. Defendants rely on Bernstein v. Weinstein (1920), 220 Ill. App. 292, 296-97, in which the court stated that acceptance of any part of rent subsequent to a breach constitutes consent to the tenancy.

This argument does not accurately state the terms of the lease.

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Cite This Page — Counsel Stack

Bluebook (online)
547 N.E.2d 472, 191 Ill. App. 3d 41, 138 Ill. Dec. 305, 1989 Ill. App. LEXIS 1610, Counsel Stack Legal Research, https://law.counselstack.com/opinion/la-salle-national-bank-v-khan-illappct-1989.