Smith v. Roberts

370 N.E.2d 271, 54 Ill. App. 3d 910, 12 Ill. Dec. 648, 1977 Ill. App. LEXIS 3732
CourtAppellate Court of Illinois
DecidedNovember 30, 1977
Docket14307
StatusPublished
Cited by19 cases

This text of 370 N.E.2d 271 (Smith v. Roberts) 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
Smith v. Roberts, 370 N.E.2d 271, 54 Ill. App. 3d 910, 12 Ill. Dec. 648, 1977 Ill. App. LEXIS 3732 (Ill. Ct. App. 1977).

Opinion

Mr. JUSTICE MILLS

delivered the opinion of the court:

We have here a lease.

And with it we have the doctrine of commercial frustration.

The trial judge held that the doctrine applied and that the lease was terminated thereby.

He was right. We affirm.

The Smiths and Roberts Brothers entered into a lease agreement for the rental of the first floor and basement of property located in Springfield at 111-113 North Sixth Street. Roberts Brothers was already operating a men’s clothing store next to the leased premises and intended to make an opening through their east wall and Smith’s west wall in order to establish a department which would be called the Gas Light Room. Thereafter, the main store building of Roberts Brothers was completely destroyed by fire. Questions concerning the rights and liabilities of the parties under the lease were raised as a result of that conflagration and those questions then ripened into litigation.

After Roberts Brothers failed to reoccupy the leased premises — which suffered only smoke damage — the Smiths filed suit for breach of the lease. Roberts Brothers then counterclaimed for damages against the Smiths alleging that the Smiths had caused delay in the reconstruction of Roberts Brothers’ premises and asked for a determination that the lease was terminated. The trial court found that the lease had been terminated because the destruction of Roberts Brothers’ main store excused performance on its part. The court also held that the tenant (Roberts Brothers) was not damaged by the landlords (Smiths) during the construction of the tenant’s new building since Roberts Brothers had not complied with statutory notice requirements and, furthermore, that Roberts Brothers had not adequately proved the costs incurred in shoring up and reinforcing the Smith wall.

We concur with the trial judge and affirm.

In their complaint, the Smiths alleged that the clothing store had violated its obligations under the lease and that the leased premises had been restored and repaired according to provisions of the lease. Roberts Brothers’ defense to the complaint was two-fold: (1) the lease had been terminated because of the “doctrine of commercial frustration”; and (2) the lease had been terminated because of the “doctrine of constructive eviction.” We need only consider the first defense since it is dispositive of the question.

At issue is the doctrine of commercial frustration:

“The doctrine of frustration is an extension of this exception to cases where the cessation or nonexistence of some particular condition or state of things has rendered performance impossible and the object of the contract frustrated. It rests on the view that where from the nature of the contract and the surrounding circumstances the parties when entering into the contract must have known that it could not be performed unless some particular condition or state of things would continue to exist, the parties must be deemed, when entering into the contract, to have made their bargain on the footing that such particular condition or state of things would continue to exist, and the contract therefore must be construed as subject to an implied condition that the parties shall be excused in case performance becomes impossible from such condition or state of things ceasing to exist.” Leonard v. Autocar Sales & Service Co. (1945), 392 Ill. 182, 187-88, 64 N.E.2d 477, 479-80, cert. denied (1946), 327 U.S. 804, 90 L. Ed. 1029, 66 S. Ct. 968.

The doctrine of commercial frustration is not to be applied liberally. (Greenlee Foundries, Inc. v. Kussel (1973), 13 Ill. App. 3d 611, 301 N.E.2d 106.) However, the defense of commercial frustration is a viable doctrine in Illinois and will be applied when the defendant has satisfied two rigorous tests: (1) the frustrating event was not reasonably foreseeable; and (2) the value of counterperformance by the lessee had been totally or near totally destroyed by the frustrating cause. Greenlee, citing Lloyd v. Murphy (1944), 25 Cal. 2d 48, 153 P.2d 47.

The factual circumstances here satisfy these stringent tests. First, although it might be foreseeable that the main Roberts Brothers’ store would be destroyed and the leased premises would remain intact, it is a remote contingency to provide for in a lease. The parties were, in fact, diligent enough to put a catastrophe clause in the lease concerning destruction of the leased premises. We find that their failure to include such a clause as to Roberts Brothers’ main store was not due to a lack of diligence since such a contingency was not reasonably foreseeable.

The second horn of the two-prong test is also satisfied — the value of the Smith counterperformance was totally — or nearly totally— destroyed. Although it would be physically possible to operate the leased premises as a separate entity, testimony revealed that operations would have to be changed drastically in order to make the premises self-sufficient. Furthermore, the record clearly demonstrates that the leased premises were never intended to be autonomous. Therefore, the trial court’s finding that the existence of the main store was an implied condition of the contract between the parties and that its destruction frustrated the lease is an accurate interpretation of the lease. The court’s finding results in the fairest disposition of the parties’ respective interests.

In addition to its defenses to the Smith complaint, Roberts Brothers counterclaimed against the Smiths for costs incurred while underpinning the Smith building in order that Roberts Brothers could reconstruct their demolished building. The trial court found that all three of the notices that were sent by Roberts Brothers requesting permission to inspect Smith’s property were defective under the protection-of-adjacent-landowner’s act (Ill. Rev. Stat. 1975, ch. 17½, par. 51). We agree that the first two notices were clearly defective and their effectiveness was vitiated. The failure of the notices to specify the depth of the excavation renders it impossible for an adjoining landowner to determine whether he or the excavating landowner has the duty to shore up the property as it is the depth of the excavation which is determinative of whether subsection 1 or subsection 5 of the act will apply. (Ill. Rev. Stat. 1975, ch. 17½, par. 51(1), (5).) If the excavation is of a depth of not more than the standard depth of foundations (8 feet), subsection 1 of the act will apply and the adjoining landowner, if given proper notice, will have no less than 30 days to shore up his own property. If, on the other hand, the excavation is intended to be deeper than the standard depth, subsection 5 will apply and the excavating landowner, if given necessary license, shall enter the adjoining landowner’s property and take the necessary precautions in order to protect the adjacent landowner’s premises. Therefore, it is imperative that the notice provisions of the act be complied with, indicating the depth of the excavation and when it is intended to be made. Ill. Rev. Stat. 1975, ch. 17½, par. 51(1).

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Cite This Page — Counsel Stack

Bluebook (online)
370 N.E.2d 271, 54 Ill. App. 3d 910, 12 Ill. Dec. 648, 1977 Ill. App. LEXIS 3732, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smith-v-roberts-illappct-1977.