National Tea Co. v. American Nat. Bank and Trust Co. of Chicago

Decision Date05 October 1981
Docket NumberNo. 80-2837,No. 20911,20911,80-2837
Citation100 Ill.App.3d 1046,427 N.E.2d 806
Parties, 56 Ill.Dec. 474 NATIONAL TEA COMPANY, an Illinois Corporation, Plaintiff-Appellee, v. AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, Trustee Under Trust, and Jerome R. Rosenberg, Defendants-Appellants.
CourtUnited States Appellate Court of Illinois

Byron L. Gregory and Bruce H. Weitzman, Chicago, (McDermott, Will & Emery, Chicago, of counsel), for defendants-appellants.

Eugene E. Gozdecki, Chicago (Mayer, Brown & Platt, Bennett I. Berman and Murray J. Lewison, Chicago, of counsel), for plaintiff-appellee.

GOLDBERG, Justice:

The trial court granted National Tea Company (plaintiff) a summary judgment upholding its right of possession to leased premises. American National Bank and Trust Company of Chicago and Jerome R. Rosenberg (defendants) appeal.

On July 15, 1964, Nicholas P. Cholis leased 611 Dundee Road in Elgin, Illinois, to plaintiff. The term was from October 1, 1965 through September 30, 1980. The lease provided for an annual rent of $29,000 in monthly installments of $2416.67. The lease contained an automatic extension clause, after completion of the original term, for four periods of five years each, at the same terms and conditions as the original lease period. The plaintiff as lessee, however, had the privilege of cancelling the lease "at the end of the original term or at the end of any extended period upon Lessee's giving to Lessor at least 180 days notice of such cancellation prior thereto * * *." The lease further provided the plaintiff as lessee could sublet or assign all or any part of the premises but would remain liable for any payments not tendered by the sublessee or assignee.

On April 11, 1974, plaintiff sublet the entire premises to Value Rug Mart Inc. and Piper's Carpeting Inc. These companies are owned and controlled by defendant Jerome R. Rosenberg. The sublease provided for a monthly rent of $2250 and for a stipulated percentage rental. The sublease commenced on May 1, 1974 and ran through September 29, 1980. Subsequently, defendant American National Bank and Trust Company of Chicago, as trustee, became the owner of record of the leased property and lessor in the original lease. Also, defendant Rosenberg became owner of the entire beneficial interest in the trust including power of direction.

This sublease also provided:

"3. The Prime Lease grants to Sublessor upon certain conditions four (4) extensions or options of renewals for periods of five (5) years each after the expiration of the original term on September 30, 1980. The Tenant is not granted the privilege and is hereby denied the privilege or option of renewing or extending this Sublease under and as provided in the Prime Lease."

On December 1, 1977, plaintiff and Value Rug and Piper's Carpeting (former sublessees) terminated their previous sublease and entered into an agreement referred to as an "assignment." Plaintiff assigned to Value Rug and Piper's Carpeting "all of Assignor's (plaintiff's) leasehold estate and right, title and interest for all of the remainder of the current term ending September 30, 1980 * * *." The "assignment" further provided:

"(t)he automatic extension periods granted in the Assigned Lease are expressly excluded from this assignment. Assignor (plaintiff) reserves the right of re-entry in the event of a default by Assignee."

Under this "assignment," assignees Value Rug and Piper's Carpeting agreed to pay the entire monthly rent of $2416.67 plus a stipulated percentage rental.

Subsequently, assignees (Value Rug and Piper's Carpeting) notified defendant trustee, which at this time was the lessor in fact, they wished to terminate the assigned lease at the end of the original lease term, September 30, 1980. The notification complied with the 180-day period of the end of the lease term as prescribed by the original lease. Defendant trustee then leased the premises to a third party. On May 21, 1980, plaintiff brought this action seeking a declaratory judgment establishing its rights to possession of the leased property as of October 1, 1980, at expiration of the original lease term. Both plaintiff and defendants filed motions for summary judgment.

Plaintiff argues the "assignment" contract only incorporates the original term of the prime lease. Furthermore, because the "automatic extension periods * * * are expressly excluded from (the) assignment" plaintiff thereby reserved the right either to continue to lease the property after September 30, or to terminate the lease upon proper notice. Under plaintiff's theory, the rights of Value Rug and Piper's Carpeting, assignees, to possession of the leased property ended on September 30, and they had no legal authority to terminate the prime lease.

Defendants urge the lease "assignment" and related documents did not clearly and unambiguously reserve to the plaintiff the right to regain possession as of October 1, 1980; the lease "assignment" did not state the right to send the termination notice was reserved to plaintiff so that such right passed to the assignees; since plaintiff drafted the "assignment" any ambiguity must be construed against plaintiff; and plaintiff's assertion as to the intent of the parties has been refuted by the language of the "assignment" and by an affidavit filed in the trial court by Jerome R. Rosenberg.

Whether or not a contract is ambiguous is a question of law. (Touhy v. Twentieth Century-Fox Film Corp. (1979), 69 Ill.App.3d 508, 513, 26 Ill.Dec. 32, 387 N.E.2d 862, citing Stevenson v. ITT Harper, Inc. (1977), 51 Ill.App.3d 568, 573, 9 Ill.Dec. 304, 366 N.E.2d 561, leave to appeal denied, 66 Ill.2d 642.) A contract will be considered to be ambiguous if it is " 'capable of being understood in more senses than one.' " Standard Steel & Wire Corp. v. Chicago Capital Corp. (1975), 26 Ill.App.3d 915, 919, 326 N.E.2d 33, quoting from First National Bank of Chicago v. Victor Comptometer Corp. (1970), 123 Ill.App.2d 335, 341, 260 N.E.2d 99.

In our opinion the sublease of April 11, 1974 and also the "assignment" of December 1, 1977, clearly and unambiguously reserved to plaintiff the right to reoccupy the premises on October 1, 1980, and the right either to accept the automatic extensions of the original lease of July 15, 1964, or to terminate it. The clear provisions of the sublease and of the "assignment" make this conclusion inescapable.

The sublease of April 11, 1974, expressly noted the four renewal periods in the original lease and denied to Value Rug and Piper's Carpeting as sublessees "the privilege or option of renewing or extending this Sublease under and as provided in the Prime Lease." The sublease expressly terminated on September 29, 1980.

The "assignment" of December 1, 1977, expressly assigns only the "leasehold estate * * * for all the remainder of the current term ending September 30, 1980 * * *." This provision clearly indicates plaintiff reserved rights under the lease which extended beyond the original term. The "assignment" also provides: "(t)he automatic extension periods are expressly excluded * * *." Taking the "assignment" as a whole (see Dasenbrock v. Interstate Restaurant Corp. (1972), 7 Ill.App.3d 295, 299, 287 N.E.2d 151), we find that there is only one sense in which the contract can be understood. The...

To continue reading

Request your trial
29 cases
  • Lakeland Property Owners Ass'n v. Larson
    • United States
    • United States Appellate Court of Illinois
    • February 1, 1984
    ......[77 Ill.Dec. 70] Foran, Wiss & Schultz, Chicago, for plaintiff-appellant. ...Wisconsin National Life Insurance Co. (1982), 111 Ill.App.3d 745, ...456, 439 N.E.2d 1264; Chicago City Bank & Trust Co. v. Wilson (1980), 86 Ill.App.3d 452, ... National Tea Co. v. American National Bank & Trust Co. of Chicago (1981), 100 ......
  • Newcastle Properties, Inc. v. Shalowitz
    • United States
    • United States Appellate Court of Illinois
    • September 26, 1991
    ......] Torshen, Schoenfield & Spreyer, Ltd., Chicago (Jerome H. Torshen and Steven P. Garmisa, of ... The seller was the LaSalle National Bank and Trust Company, as Trustee under Trust ...v. American Insurance Co. (1981), 102 Ill.App.3d 919, 922, ......
  • Sunstream Jet Exp., Inc. v. International Air Service Co., Ltd., 82-3019
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • May 22, 1984
    ......         Frank C. Stanley, Chicago", Ill., for plaintiff-appellant. .        \xC2"... 634, 637, 427 N.E.2d 1039, 1042 (1981); National Tea Co. v. American National Bank and Trust, 100 ......
  • TDC Development Corp. v. First Federal Sav. and Loan Ass'n of Ottawa
    • United States
    • United States Appellate Court of Illinois
    • September 24, 1990
    ......] Martin, Craig, Chester & Sonnenschein, Chicago (Thomas H. Donohoe and William A. Kummerer, of ... certain real estate that was held in a land trust which listed TDC as the sole owner of the ... must be taken to resolve such issues (Bank & Trust Co. v. Arnold N. May Builders (1980), 90 ...749, 427 N.E.2d 1295; National Tea Co. v. American Nat'l Bank & Trust Co. ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT