Marquette National Bank v. Walgreen Co.

467 N.E.2d 954, 126 Ill. App. 3d 680, 81 Ill. Dec. 832, 1984 Ill. App. LEXIS 2188
CourtAppellate Court of Illinois
DecidedJuly 25, 1984
Docket83-2534
StatusPublished
Cited by7 cases

This text of 467 N.E.2d 954 (Marquette National Bank v. Walgreen Co.) 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
Marquette National Bank v. Walgreen Co., 467 N.E.2d 954, 126 Ill. App. 3d 680, 81 Ill. Dec. 832, 1984 Ill. App. LEXIS 2188 (Ill. Ct. App. 1984).

Opinion

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 i/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 court erred in granting summary judgment because the terms of the lease clearly require that the percentage rents are to be based only on defendant’s sales.

Summary judgment is appropriate where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. (Ill. Rev. Stat. 1983, ch. 110, par. 2 — 1005; Carruthers v. B.C. Christopher & Co. (1974), 57 Ill. 2d 376, 313 N.E.2d 457.) Construction of the terms of a contract presents an issue of law for the court. (Advertising Checking Bureau, Inc. v. Canal-Randolph Associates (1981), 101 Ill. App. 3d 140, 427 N.E.2d 1039.) Here, the parties are in agreement that there is no genuine issue as to any material fact. At issue is whether plaintiff is entitled to percentage rents from defendant, based on defendant’s cash receipts of sales in the past on the leased premises or current sales at its new location, when defendant has exercised its right under the lease to sublet the premises.

In construing a lease, the instrument is considered in its entirety. (One Hundred South Wacker Drive, Inc. v. Szabo Food Service, Inc. (1975), 60 Ill. 2d 312, 326 N.E.2d 400.) The primary objective is to determine and give effect to the intentions of the parties. (Kurek v. State Oil Co. (1981), 98 Ill. App. 3d 6, 424 N.E.2d 56.) Where the terms are clear and unambiguous, they will be given their natural and ordinary meaning. (Susmano v. Associated Internists of Chicago, Ltd. (1981), 97 Ill. App. 3d 215, 422 N.E.2d 879.) The contract must be enforced as written, and a reviewing court will not rewrite the contract under the guise of construction. Stull v. Hicks (1978), 59 Ill. App. 3d 665, 375 N.E.2d 981.

Plaintiff initially contends that under the lease, rent, by clear definition, includes defendant’s sales of drugs and other merchandise in defendant’s drug store. However, plaintiff’s reliance on the definition of “cash receipts of sales” and the rent provision ignores the express language contained in those paragraphs. Both provisions describe sales occurring “on said leased premises.” There is no dispute that defendant no longer has sales “on said leased premises.” Consequently, plaintiff’s first argument fails.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Gerardi v. Vaal
523 N.E.2d 1327 (Appellate Court of Illinois, 1988)
Stein v. Spainhour
521 N.E.2d 641 (Appellate Court of Illinois, 1988)
Chicago Food Management, Inc. v. City of Chicago
516 N.E.2d 880 (Appellate Court of Illinois, 1987)
Robert S. Pinzur, Ltd. v. the Hartford
511 N.E.2d 1281 (Appellate Court of Illinois, 1987)
West Bend Mutual Insurance v. Salemi
511 N.E.2d 785 (Appellate Court of Illinois, 1987)

Cite This Page — Counsel Stack

Bluebook (online)
467 N.E.2d 954, 126 Ill. App. 3d 680, 81 Ill. Dec. 832, 1984 Ill. App. LEXIS 2188, Counsel Stack Legal Research, https://law.counselstack.com/opinion/marquette-national-bank-v-walgreen-co-illappct-1984.