Farson v. Fogg

68 N.E. 755, 205 Ill. 326

• Court: Illinois Supreme Court
• Decided: October 26, 1903
• Status: Published

Opinion

Mr. Justice Magruder

delivered the opinion of the court:

The appellees claim that the contract of September 17, 1895, here in controversy, was executed for the purpose of compensating them for the damages, which they expected that their land, fronting on Cheltenham Place, would suffer from the laying down of the tracks of the Calumet Electric Street Railway Company upon said place. The testimony, introduced by appellees, tends to sustain this contention; and the contract itself recites that the Calumet company agreed to pave the street in payment of the damages, which appellees would incur by reason of the construction of the railway upon the street in front of their property, in case the company should secure an ordinance permitting them to lay down their tracks there. On the contrary, the appellants claim that the real consideration of the contract was the signingby appellees of the petition of the Calumet company to the common council for permission to lay down the tracks. In other words, the appellants contend that they were to pay $1000.00 to appellees for signing their consent to have the tracks laid in the street, and that the written contract, specifying that the consideration was the damage expected to arise, was so expressed for the purpose of covering up the fact that appellees were selling their consent. The testimony of the appellants strongly tends to sustain this contention. There is much upon the face of the contract itself to suggest the theory contended for by the appellants. The contract states that application had been made by the Calumet company to the city for a license to build a track on Cheltenham Place. Both parties must have known, and did know, that, under the law, the city council had no power to grant the right to the Calumet company to lay the tracks down in Cheltenham Place, except upon the petition of the owners of the land, representing more than one-half of the frontage of the street, or so much thereof as was sought to be used for railroad purposes. The appellees owned all the frontage amounting to four hundred atid eighty feet on the south side of the street. As we understand the evidence, the part of the street, where the tracks were to be laid, was only the length of one block, so that half of the frontage was owned by the appellees. The contract provides that, “if said corporation shall not secure the said franchise or license, and shall have withdrawn its application therefor and returned to said Fogg and Kinney their petition to the city council to grant said franchise or license to said corporation, then said check shall be returned to said Farson, Leach & Co.” It thus appears that Fogg and Kinney did give to the Calumet company, or to Farson and Leach for it, their consent to the laying of the tracks.

But while there are many circumstances disclosed by the evidence, and much that appears upon the face of the contract itself, tending" to create the suspicion that the parties were trying to avoid the effect of the decision of this court in the case of Doane v. Chicago City Railway Co. 160 Ill. 22, yet we are not prepared to say that the evidence is clear and convincing as to the contention of either party upon this question.. We, therefore, pass no opinion upon it.

There is another ground, however, pleaded in the answers and pressed upon our attention in the argument filed in behalf of appellants, upon which, in our opinion, the relief, prayed for in the bill in this case, ought to have been denied.

The Calumet Electric Street Railway Company agreed with the appellees to pave Cheltenham Place, a public street in the city of Chicago, for some consideration, which was supposed to operate for the benefit of appellees. The Calumet company is shown by the proofs to be in the hands of a receiver, and that receiver is not a party to the suit. Waiving, however, the question, whether it was necessary to make the receiver a party or not, we are of the opinion that the Calumet Electric Street Railway Company had no power to make any such agreement. Nor has a court of chancery the power to decree the specific performance of any such agreement. It is a well settled doctrine in this State, that a city holds the title to its streets in trust for the public, and cannot turn over such streets to private parties to be improved. The power to control and improve the streets in the city of Chicago is vested in the city itself, or in its common council.

The seventh paragraph of section 63 of article 5 of the City and Village act, which was in force in 1895 when the contract here under consideration was made, provides that “the city council in cities, and the president and board of trustees in villages, shall have the following powers: * * * Seventh—To lay out, to establish, open, alter, widen, extend, grade, pave or otherwise improve streets, alleys, avenues, sidewalks, wharves, parks, and public grounds, and vacate the same.” By the ninth paragraph of the same section, the city council has power to regulate the use of the streets, by the sixteenth paragraph of the same section to provide for and regulate cross-walks, curbs and gutters, and, by the twenty-fifth paragraph of the same section, to provide for and change the location, grade and crossings of any railroad. (1 Starr & Curt. Ann. Stat.—2d ed.—pp. 689, 692, 694, 696, 697). The power, thus conferred upon the city council, to pave, grade, curb, improve, and regulate the streets' and cross walks is vested exclusively in the city council, and can not be shared by it with any other body or person. It is obvious from the various provisions above referred to of the City and Village act, that the control of the streets and the power to improve them, which are placed in the hands of the city council, are left to a large extent to the discretion of that body. The exercise of these powers is so far discretionary, that the mode of their exercise depends upon the will of the city council. (Town of Ottawa v. Walker, 21 Ill. 605; Murphy v.City of Peoria, 119 id. 509; Gridley v. City of Bloomington, 88 id. 554; City of Chicago v. O'Brien, 111 id. 532).

“In a bill for specific performance the contract must be of such a character that the court is able to make an efficient decree and enforce it when made.” (3 Pomeroy’s Eq. Jur. sec. 1405; Sellers v. Greer, 172 Ill. 549). It is difficult to see how a court of equity could enforce the contract involved in the case at bar. If it should require the Calumet Electric Street Railway Company to pave Cheltenham Place, it would require it to take possession of a public street, which belongs to the city and is held in trust by the city for the use of the people. To order the Calumet company to take possession of this street would be to order it to create an obstruction in a public street, and clothe an outside corporation with the power which the law vests in the municipality. It is well settled, that the specific performance of a contract will not be decreed as a matter of course, even though a legal contract is shown to exist. But such specific performance rests entirely in the discretion of the court upon a view of all the circumstances. (Chicago and Alton Railroad Co. v. Schoeneman, 90 Ill. 258). In Gray v. Chicago, Milwaukee and St. Paul Railway Co. 189 Ill. 400, it was said: “The specific enforcement of a contract is not a matter of absolute right, but of sound discretion in the court.”

It is true, that the common council, in granting leave to a street railway company to lay its tracks in the street, sometimes imposes, as a condition, that the street railway company shall keep the street between its tracks paved; and, perhaps, the common council might make it a condition that the street railway company should keep more of the street than lies between its tracks paved and in repair. But a street railway company has no power, by virtue of its own charter, to pave the streets of the city outside and independently of the consent of the city itself. There is no provision in the present contract, that the company was to procure or obtain an ordinance from the city, permitting it .to pave the street. On the contrary, the contract provides as follows: “The said work shall be done in accordance with said specifications to the satisfaction of said Fogg and Kinney.” The paving was not to be done, under the provisions of the contract, to the satisfaction of the city or its officers, but it was to be done to the satisfaction of these appellees, private parties having no control over the street itself. Even if the contract was a valid one, the specifications, as charged in the answer, are indefinite and uncertain in many of their provisions. The engineer who, by the terms of the specifications, is to give directions as to the paving, is not necessarily the city engineer, nor does it appear whether he is to be an engineer employed by the Calumet company, or by the appellees.

An offer was made, upon the hearing of the cause below, to produce in evidence the charter of the Calumet Electric Street Railway Company for the purpose of showing that it had no power, by the terms of its charter, to engage in the paving of public streets. The charter might well have been admitted, but, independently of any provisions of the charter, it must be true that a street railway corporation, organized under the laws of Illinois as the Calumet company is shown to be, has no power from the.very nature of its organization to engage in the business of paving streets. This contract, therefore, was ultra vires the Calumet Electric Street Railway Company. In National Home Building Ass. v. Home Savings Bank, 181 Ill. 35, it was said: “A contract of a corporation which is ultra vires in the proper sense,—that is to say, outside the object of its creation as defined-in the law of its organization, and therefore beyond the powers conferred upon it by the legislature,—is not voidable only, but wholly void and of no legal effect.” It was held in the case last cited, that the rule, that a corporation is es-topped to make the defense of ultra vires where it has received the benefit of the contract, applies only to cases where the contract is within its power but there has been a failure to comply with some regulation, or there has been an-improper exercise of the power. It was there said: “If there is no power to make the contract, there can be no power to ratify it, and it would seem clear that the opposite party could not take away the incapacity and give the contract vitality by doing something under it. It would be contradictory to say that a contract is void for an absolute want of power to make it, and yet it may become legal and valid as a contract by way of estoppel through some other act of the party under such incapacity, or some act of the other party chargeable by law with notice of the want of power.” (See also Best Brewing Co. v. Klassen, 185 Ill. 37).

Where a contract is thus void, a court of equity will not enforce a specific performance of it.

A notable illustration of this principle may be found in the case of Sellers v. Greer, supra, where the contract under consideration by the court was a contract by stockholders to sell or dispose of the corporate property without, authority or ratification by the corporation, and such contract was held to have no binding effect; and the court there refused to sanction a decree granting a specific performance of it.

In Hurlbut v. Kantzler, 112 Ill. 482, a bill was filed for specific performance against Kantzler, Crilly & Blair, and also the board of education, to compel the assignment of a lease. There, Kantzler held a lease from the board of education, which was not assignable without the written consent of the board. Kantzler, however, gave to Hurlbut a written agreement to assign the lease, but it was held the agreement could not be enforced against the board as it had not assented to the agreement. In disposing of the case it is there said (p. 488): “There is no allegation in the bill, or proof, that the consent of the board of education will be given, or ever was given. * * * Hurlbut, at the time he took the contract from Kantzler, knew that the latter could not transfer his leasehold interest without the express consent of a third party, against whom he could claim no rights, legal or equitable, and consequently took his contract under such circumstances as to make its validity and effectiveness depend upon the exercise of the will of another under no obligation to do any act for him or for his benefit.”

So, in the case at bar, appellees knew at the time the present contract was executed, that the Calumet Electric Street Railway Company could not pave the street without the consent pf the city, even if it could do it with such consent. The appellees took their contract from the Calumet company, knowing that its validity depended upon the exercise of the will of the city, a third party. The city of Chicago is not a party to the present bill, and a contract to pave a public street could not be enforced without making the city of Chicago a party, if it could be enforced at all. Inasmuch, therefore, as the appellees accepted the contract with full knowledge that it could not be enforced without the consent of a third party, and that its validity depended upon the exercise of the will of a third party, they cannot enforce the specific performance of such contract by the present bill. The street had not been paved when the present bill was filed on July 21, 1897, although by the terms of the contract it was to be paved not later than December 1,1896. The city did not make it a condition to the grant to the Calumet company of the right to lay down its tracks in the street, that the company should pave the street, nor did the city in any way take any steps towards the paving of the street, or authorize any other person or corporation to do so. The fair inference, therefore, is that the city did not regard the paving of the street as a necessity, or as an act to be done for the benefit of the public. Knowing all this when they filed the present bill, appellees were not entitled to a specific performance of the contract.

This being so, there can be ño decree in the present case for damages, that is to say, for the amount of the check for $1000.00 and interest thereon. Where, in a bill for specific performance, a court of. equity grants a decree for damages, the decree for damages is merely anciliary to the relief of specific performance, and is the result of granting that relief. But, where the bill makes no case for a specific performance and shows no ground for such relief, a court of equity will not decree damages, because a court of equity does not sit for the purpose of entertaining bills, whose only object is to secure damages. The remedy in such case is at law, and not in equity.

It has been held in a number of cases, that a bill for specific performance will not be retained to assess damages for a failure to perform a contract, where the complainant, when he filed the bill, knew that the vendor had parted with the title to the property, or where the agreement is to convey property which has no existence, or to which the defendant has no title, and if the want of title was known to the complainant at the time of beginning suit. In all such cases, the bill will not be retained for the assessment of damag'es. (Doan, King & Co. v. Mauzey, 33 Ill. 227; Stikney v. Goudy, 132 id. 213; Kennedy v. Hazelton, 128 U. S. 667; Hurlbut v. Kantzler, supra; Sellers v. Greer, supra; Mack v. McIntosh, 181 Ill. 633). The principle of these cases is applicable here. The appellants, who made an agreement to pave a public street of the city of Chicago, had no right to control the street, and no power, without the consent of the city, to make any improvement of the street; and, this fact being well known to the appellees at the time of the beginning of this suit, the present bill, under the authorities referred to, wall not be retained for the assessment of damages.

For the reasons above stated, the judgment of the Appellate Court and the decree of the circuit court are reversed, and the cause is remanded to the circuit court with directions to dismiss the bill.

Reversed and remanded.