Court Opinion

ID: 9738697
Source: CourtListenerOpinion
Date Created: 2023-08-26 20:01:05.822306+00
Date Added: 2024-06-11T07:24:07.964328
License: Public Domain

SCHWARTZ, P. J., specially concurring: I cannot agree with that portion of the court’s opinion which deals with the liability of the defendant-guarantor for taxes. No genuine issue of fact is raised in that respect. The court upheld defendant’s contention on what appears to me to be a highly technical construction of the instrument; that is, that the guaranty was against default on the part of the lessees and that there was no default in respect to taxes on May 31, 1961 because the bill for taxes for the prior year was not issued until the following day, June 1, 1961. The guarantee is that the defendant will pay the rent and perform all the other covenants, conditions, provisions and terms contained in the lease. His obligation is thus coextensive with that of the lessees for the first year of the term and to the limit of $30,000. In addition to taxes, the lease provides that lessees will be liable for all water rents, driveway fees, gas, electric light, power and other utility charges. Indeed, lessees were obligated to pay all charges accruing against the premises (other than repairs to roof and exterior walls). It was designed to be a net lease and it explicitly provided as follows: “it being the intention of the parties that this shall be a net lease, entitling Lessor to full rentals without any expenses or deductions therefrom arising either out of Lessor’s ownership, or of Lessee’s use, of the demised premises.” If, in the payment of the various charges aforementioned, let us say, for water, gas or light, the lessees were given credit on a thirty or sixty day basis and that extended the time for payment beyond May 31, 1961, it would certainly be an unreasonable and unacceptable argument to contend that the cost of such commodities and services did not become tbe obligation of the lessees within the year they were received or rendered. Taxes are, in substance, the charge which the state and its political subdivisions — county, city and others, make for the costs of government, including police and fire protection, care of streets and alleys, sewage disposal, and a host of other facilities, all available to and, of course, in greater or lesser degree used by lessees during the period of guaranty. Real estate taxes are distinguishable to some extent from the cost of water, gas, light or other facilities furnished and necessary to the operation of a building, in that taxes for one year are not determined until some time the following year. Bills for these taxes are therefore not issued until after expiration of the year. The taxes in question, while for the prior year, were billed on June 1, 1961, that is, on the day following the expiration of the one year to which the guaranty was limited. The parties obviously understood the procedure with respect to taxes and provided in the lease that the general real estate taxes for the first fractional calendar year of the term were to be prorated between the parties as of the date of the commencement of the lease “on the basis of the actual taxes,” and that general taxes for the last full calendar year of the term were to be paid when the taxes were ascertainable, and that “general taxes for the last fractional year of the term shall be prorated on the basis of the amount ascertainable for the last full calendar year.” They thus recognized that not the date of billing, but the period in which the taxes accrued, determined the extent of liability. If the interpretation of the lease as now made by the court should ultimately become a final judgment, the lessors could not collect taxes for the last year of the term because such taxes would not be due and payable until after expiration of the entire term. The language used in the lease is that the lessees will pay the taxes which are levied or assessed against the demised premises. “Levied” is defined as the formal and official action of a legislative body determining that a tax of a certain amount shall be imposed. People v. Pittsburgh, C. C. & St. L. R. Co., 316 Ill 410, 147 NE 492; 31 ILP, Revenue, Par 102. It is apparent that taxes are levied or assessed some time before the issuance of the tax bill. Statutory provisions governing the many local governmental bodies and municipal corporations which levy taxes against property in Cook County provide for the levying of each tax before a specific date in each year. That date is prior to March 31st. Ill Rev Stats, c 24, § 8-3-1, and c 120, § 637 (1963). Thus, even giving the instrument of guaranty a technical construction, the guarantor was liable as of that date.