Illinois Central Railroad v. Baltimore & Ohio & Chicago Railroad

23 Ill. App. 531, 1887 Ill. App. LEXIS 50

• Court: Appellate Court of Illinois
• Decided: July 13, 1887
• Status: Published

Opinion

Moran, J.

The first term of five years mentioned in the lease under which appellee went into possession of the freight station grounds here in controversy having expired, appellee was holding over under circumstances that created a tenancy from year to year and appellant is entitled to recover possession, unless by a compliance with the terms of the lease, and of the contract of the same date between the parties, to which the lease refers, appellee has earned the right to continue in possession until such time as appellant shall deliver possession of other freight station grounds to be held in perpetuity by appellee. It is agreed in the lease, that if the second party elects to lease freight station grounds in perpetuity of the first party, as specified in the articles of agreement, and shall give notice as therein provided, then the lease is to be extended for a further term, or a lease of other suitable freight ground furnished until the first party delivers to the second party possession of the ground so leased in perpetuity, or is prevented from so doing as specified in said agreement. By the articles of agreement appellee is given-the right to run its cars, etc., in perpetuity, if within the five years it shall so elect, “ and shall also elect to lease the freight station grounds hereinafter named of the first party in perpetuity, and shall notify said party of the first part of such election in writing.”

Looking through the contract for a clause which names any grounds to be leased for freight grounds, we find this; “Should the second party elect to lease permanent freight grounds upon the lake front, the first party agree to enclose and fill the same ready for- occupancy to an extent and in a manner to be agreed upon between the parties.” And in another part of the contract this: “ If the second party elects to lease the above named freight grounds on the lake front in perpetuity, then the party of the first part will furnish it. a site for an engine house of ten stalls for the same time upon equitable terms.”

The evidence showed that the term “ lake front” had by popular usage a definite meaning and was applied to distinguish that portion of the lake shore lying between Randolph Streei on the north and Park Row on the south. And it appears from the record that it was the intention of the Illinois Central Company to fill up the submerged land along this front and use it for railroad purposes. It is piade plain by other references in the contract that the land to be leased in perpetuity on the lake front was land that -would have to be filled to be made ready for occupancy, and that the enclosing and filling thereof might be prevented by legal proceedings, and delay in procuring the legal title to the property was in the contemplation of the parties, and if such prevention or delay occurred, the lease was to be extended for another term of five years or for such portion thereof as might be necessary to enable the Illinois Central Company to obtain legal title and enclose and fill the ground. It was also present to the minds of the contracting parties that the Illinois Central Company might fail to secure the legal title to the land to be leased in perpetuity, and that, even if the legal title should be obtained and the land filled and enclosed for occupancy, yet the Baltimore Company might be unable to obtain convenient or proper access to said permanent freight grounds, and in the latter event, or if the legal title should not be obtained before three years from November 1, 1879, then the Baltimore Company should have the right to select other freight grounds not owned or claimed by the Illinois Central Company.

We are compelled by the terms of the contract and the evidence in the record to hold that the grounds upon which the Baltimore Company had the right to elect to lease in perpetuity permanent freight grounds, were the submerged lands claimed by the Illinois Company upon the lake front, that is, lands between liando! ph Street on the north and Park Bow on the south, and which was at the time of the making of the lease and contract, unfilled and unenclosed.

Was the notice or letter of October 23, 1879, which was sent by the general manager of the Baltimore Company to the president of the Illinois Central Company, an exercise of the right of election to lease freight station grounds in perpetuity under the term of the contract which bound the Illinois Central Company to enclose and fill and deliver to the Baltimore Company permanent freight station grounds upon the land covered by the contract, or to excuse itself from so doing by proving that it was prevented by legal proceedings from enclosing and filling such land, or that it was unable to secure the legal title thereto ?

If said notice was not effective to put the Illinois Central Company to these alternatives it was manifestly not a good election to lease freight station, grounds in perpetuity, under the provision of the written lease and contract of July 27, 1874.

We find from the evidence that in the fall of 1879, shortly before the expiration of the time for giving notice of the election to run its cars and lease freight grounds in perpetuity, Mr. Keyser, representing the Baltimore Company, came to Chicago to look into the subject of permanent depot ground. Mr. Hudson, who was also an officer of the Baltimore Company, living in Chicago, had been, prior to the coming of Mr. Keyser, in conference with officers of the Illinois Central Company upon the subject of freight depot grounds, and a certain piece of ground north of Randolph Street had been offered by the Illinois Central officials and informally fixed upon as ground which could be furnished to the Baltimore Company for a permanent freight station.

When Mr. Keyser came he went with Mr. Hudson and certain officers of the Illinois Central Company to view this piece of ground. During the conversation he stated to the Illinois Central officials that the Baltimore Company had determined to avail'itself of its option to take freight ground in perpetuity and according to the testimony of Mr. Jeffery, superintendent of the Illinois Central, reference was made to the ground which the Baltimore Company was entitled to expect under the terms of the original lease, and it was stated that the Illinois Central 'Company could not furnish ground south of Randolph Street owing to the legal difficulties and complications, but at some future time it might be done, and that the ground given north of Randolph Street, in lieu of that which was then occupied by the Baltimore Company would be subject, to vacation by them at some future time when other ground south of Randolph Street could be furnished, if such time should arrive.

While no detailed explanation why ground south of Randolph Street could not be furnished was made in presence of witness, it seemed to be well understood by all parties participating in the conversation.

Mr. Keyser examined the proposed new grounds carefully, a tracing of them was-f urnished him by the Illinois Central Company, the size and shape and facilities of approach to the ground was fully discussed and examined, and it was concluded by Mr. Keyser that it was a desirable location for a permanent freight yard for his company.

The rent of the new grounds was agreed upon between the representatives of the two companies' and §24,000 per year was fixed as the sum that should be paid.

The notice of election to lease the freight station grounds in perpetuity, which was afterward served upon the Illinois Central Company, was accompanied by a draft of lease containing a description of thenew freight lot north of ¡Randolph Street, which description had been furnished by the engineer of the Illinois Central to the Baltimore Company. We find in the record no evidence that any attempt was ever made to ■locate freight station grounds upon the land designated as “lake front” in the contract, nor of any examination of such land for the purpose of locating such grounds, nor of any discussion with reference to filling or inclosing said grounds by the officers of the companies, nor in the long correspondence that followed the giving of the notice of election do we find- a hint that it was at all contemplated that it was the duty of the Illinois Central Company to proceed to enclose and fill freight station grounds for the Baltimore Company upon the lake front. The notice of election was not intended by the Baltimore Company nor understood by the Illinois Central Company to have reference to land described by the terms of the lease and contract of July, 1874

The Baltimore Company must be held to know the location and limits of the land designated as “lake front” in the con. tract to which it was a party. The description accompanying their election to take in perpetuity, applies only to land which is outside of the territory within which, by the terms of the writing, they were entitled to exercise their election.

The notice can not be construed to be anything other than what the parties giving and receiving it understood it to be, and considering it in the light of the acts occurring prior and subsequent to the service of it and in connection with the draft of lease of the freig'ht station grounds which accompanied it, it is manifest that it was not an election to lease freight station grounds upon the submerged lands which the Illinois Central Company claimed upon the lake front, and which the latter company would, under the terms of the contract, be obliged to enclose and fill unless prevented by legal proceedings or a failure to secure legal title, but. was an election to lease freight station grounds upon lands outside the territory mentioned in the contract, which lands had been filled and reclaimed long before July, 1874, and as to the title and possession of which there was not and is not any controversy.

If, then, the appellee did not elect to lease freight station grounds, which, by the written contract, the Illinois Central Company wras to fill and enclose ready for occupancy, the inquiry as to whether the latter company have so filled and enclosed and delivered such grounds, and whether it was prevented by legal or other proceedings from so doing, becomes wholly immaterial. That company coukl not be required to do, nor to furnish an excuse for not doing, that which, by the election made by the Baltimore Company, it was wholly unnecessary for it to do or to attempt. Therefore we may dismiss that point of the controversy from further consideration.

It is contended that the lease and contract of July, 1874, was by the mutual agreement, the joint action of the parties thereto, modified so as .to extend its terms to embrace the new' freight grounds north of Randolph ¡Street.

It is said that the parties could agree to substitute other grounds for those originally intended in the contract,'and that such a substitution of grounds would be binding upon the parties as fully as though they were embraced in °the description of grounds in the original contract. It may be trae, as contended by counsel, that after a contract has been reduced to wwiting it is competent for the parties, by a subsequent verbal agreement, to add to, or subtract from, or to vary or qualify its terms, or to amend it and make a new contract, but this rule does not apply where the written contract is under seal. Here the lease and contract of July, 1874, are each under seal, and the clauses of each of those instruments which have reference to the subject-matter under consideration must be treated as if found in one sealed instrument.

The description in these sealed writings of the land upon which appellee was given the right to elect to lease freight grounds in perpetuity, could not be changed by parol agreement or understanding between the parties, so as that upon the change an action or defense could be predicated at law. By the instrument the right of election being confined to certain definite territory, it could not, be altered (at law) by parol so as to extend the right of election to other and different territory.

This is the well settled rule in this State, whatever departures may have been taken in other jurisdictions.

In Loach v. Farnum, 90 Ill. 368, this rule was applied to exclude from evidence a writing not under seal, but signed by the lessors, purporting to alter the monthly rent fixed by the lease under seal and upon which the suit was based; and in Hume v. Taylor, 63 Ill. 43, it was applied where a contract under seal was made to deliver 1,000 hogs of a certain weight and quality, and it was sought to show that the parties made a new parol contract by which it was agreed that a less number than 1,000 hogs would be received in full compliance with the original contract. In each case the parol contract modifying the sealed one was denied effect, upon the well settled rule of the common law that an executory contract under seal can not be modified or varied by a parol agreement.

Numerous other cases might be cited where the Supreme Court has applied the same rule, and we are not at liberty to apply a different one however respectable the authority which supports it.

It can not be contended that there ever was any such modification of the lease and contract of 1874, as was effective in law to extend its terms to the land selected as the permanent freight ground, north of Randolph Street. Therefore, appellant and appellee must stand in this suit as respects the rights of each, under said contract, as though there was no claim of any agreement or understanding extending the option given, so as to include the land elected to be leased in perpetuity north of ¡Randolph Street.

We conclude then that there was no election under the lease and contract to lease freight station grounds upon the lake front in perpetuity, and that there was no valid modification of the contract under seal by which its terms were extended so as to give the right of election upon lands north of Randolph Street, and it follows that under the strict terms of the contract and lease appellee had no right to retain the premises in suit after the expiration of the term limited in the lease of July 27,1874. It is contended, however (and this is the main ground on which appellee’s defense to this action is based), that appellant is estopped to deny that there was a valid election made by appellee to take freight station grounds in perpetuity under the contract. It is claimed by appellee that it is shown by the evidence that appellant induced by its conduct the election made by appellee upon the lands north of Randolph Street. That appellant offered those grounds to appellee as grounds embraced in the contract, and that before the expiration of the five years limited in the contract, appellee accepted those grounds in pursuance of the contract as being grounds embraced within it; that appellant knew that these grounds were so accepted by appellee, and that they had been mutually agreed upon; that the notice of election to run its cars and take freight station grounds in perpetuity, upon its face showed that it was given by appellee under the contract and for the purpose of securing rights, by exercising the option given by the contract; and that said notice was received by appellant together with the draft of lease describing the permanent freight grounds and leasing them in perpetuity, and the day before the expiration of the time for exercising the election under the contract, appellant’s president admitted that he had received such notice of appellee’s election to run its trains and occupy freight grounds in perpetuity and that it was all right, and that no objection was then made that appellee could not elect to lease said grounds in perpetuity under the contract. That having induced the selection of these grounds and having acquiesced in the election to take them till after the time to make a different election under the contract had expired, appellant is now estopped by its conduct to deny that -a valid election was made or that the grounds elected to fee taken were embraced in the contract. The court below sustained this view and at the request of appellee held the following proposition : “If the written notice of election of October 23, 1879, contained a description of premises to be leased for permanent freight grounds that had previously been agreed upon by the parties, and was served prior to November 1, 1879, on the officers of the plaintiff, and no objection to such notice was made by the plaintiff or its officers, but the president of the plaintiff stated to the superintendent of defendant, who had served the notice, after the service thereof, on October 31, 1879, that he had received the said notice of the election of the Baltimore & Ohio & Chicago Railroad Company to run its trains and occupy the freight grounds in perpetuity, and that it was all right, then the plaintiff is precluded from making any objections to said notice of election or the form thereof, on the ground that said notice referred to grounds which are situate in part north of Randolph Street, or to grounds which are not upon the lake front, as claimed by plaintiff.”

In the view we are compelled to take of this ease, we do not deem it proper that we should express any opinion as to whether the allegations of appellee, as to appellants offering the land north of Randolph Street as land covered by the com tract, and inducing its selection by appellee, and acquiescing without objection in the election made by appellee as being within the contract until after the period for exercising the option given had expired, are made out by the evidence, or whether, if made out, they constitute an estoppel in pais or equitable estoppel against appellant. And in anything said herein we are not to be understood as expressing or intimating any opinion in that regard. The question here is not whether an estoppel is made out, but whether such estoppel can be set up in this action to prevent appellant from recovering possession of land which, by the strict legal construction of the lease and contract and in strict legal right, and save for the alleged estoppel, it is entitled to recover.

It is the settled rule in this State that estoppel im, pais affecting permanent interests in lands can only be made available in a court of equity. Assuming the estoppel, is it here invoked in violation of this rule? Under the lease and contract this estoppel, if allowed here, converts a lease of the premises sought to be recovered, which by its own limitation expired at the end of a five years term, into aright in appellee to hold the premises for five years longer, and if appellant continues its failure or refusal to deliver the new freight lot elected to be leased, into a right to hold the premises in perpetuity, paying rent according to the terms of the written lease.

The equitable estoppel is then made as effective in this court of law to continue appellee in possession of the premises as if the estoppel was created by deed, or a formally executed and sealed lease for the additional term.

It can not be given this effect at law. Here we can not look to the equities of the parties but must enforce their strict legal rights. The legal rights of the parties as defined by the written lease and contract, and as affecting the lands therein described, may be here asserted, but any rights growing out of acts in pais which in equity would arrest the assertion of the legal right, must be presented in another form. In St. Louis Nat. Stock Yards v. Wiggins Ferry Co., 102 Ill. 514, an action of forcible entry and detainer, the Supreme Court have applied the rule that we are compelled to regard as decisive of the question in the case at bar. The court say: “Wo are aware of the fact that there is considerable conflict in the authorities upon this subject and that the tendency of modern decisions is to give effect to equitable estoppels affecting real estate in the legal forum as well as in courts of equity, yet it is believed the decided preponderance of authority is the other way, and it must be confessed that to allow such estoppels to avail in a court of law where ordinarily only legal title can be considered, is a wide departure from the fundamental principles which distinguish legal from equitable rights, and which require all permanent interests in land to pass by some solemn formal mode of conveyance. But whatever the rule may be elsewhere, it is well settled by the repeated decisions of this court, that estoppels in pais, affecting permanent interests in land, can only be made available in a court of equity. There are cases in this State, some of them cited by counsel for appellee, where estoppel in pais has been interposed to prevent recovery of real estate in an action at law, but they are cases relating to boundaries, or to dedication of land to public use by plat, and sale of lots with reference to such plat, and seem to be exceptions to and not contradictory of the rule laid down in the St. Louis Stock Yards v. Wiggins Ferry Co., supra. It is suggested that the case last cited is to be distinguished from this, for the reason that there, the facts relied on as constituting the estoppel, that is, the permanent structures erected, were upon and had relation to the particular land, the possession of which was sought to he recovered; and here, the estoppel relates in fact to other land than that sought to he recovered, and is invoiced to prevent the assertion that a contract was not complied with. We can not concur in this view. The lease terminated unless the condition contained in it was performed according to the terms of the contract. The right of possession of the premises sued for, and in certain contingencies a permanent interest therein, would he affected by the performance of the contract.

The contract was not performed, but it is said there are equitable reasons growing out of acts of the parties which shall affect the right of possession, or it may he the permanent interest in the land, as if the contract had been performed. The operation of the estoppel is to prevent the assertion of a right to the possession of the land which at law is clear. Hence, though there is a difference in the circumstances, the estoppel is invoked in each instance to accomplish the same result, i. e., to defeat the legal right of possession. Appellee has a full and complete remedy if the equitable estoppel here set up in fact exists. A court of equity may compel an execution of the lease of the freight grounds, and may enjoin the further prosecution of this suit till the rights of the parties are fully settled in equity.

That tribunal is most appropriate, and is entirely adequate to the settlement of all the points of difference that exist between the parties as to the terms of the lease to be executed, if it shall be found that appellee is entitled to the main relief.

Other questions discussed by respective counsel do not, in the view we have taken, require consideration. The judgment must be reversed and the case remanded.

Reversed and remanded.