Cook County Brick Co. v. Labahn Brick Co.

Mr. Presiding Justice Adams delivered the opinion of the court. The question to be decided is, whether the court erred in granting a preliminary injunction on the verified bill, the substance of which is set forth in the preceding statement. In considering this question the facts alleged, in so far as well pleaded, must be assumed' to be true. The case made by the bill is extraordinary from a legal point of view. It appears that from 1897, when appellant was incorporated, until August 17, 1900, when the bill was filed, it had never done anything to promote its corporate objects as expressed in its articles of incorporation. It is too evident to admit of discussion that appellant did not procure the leases from appellee and others, the owners of brick yards and plants, for any of its numerous corporate purposes; because, at the time it obtained such leases it immediately sublet the demised premises to its lessors, the owners thereof. The lease from appellee to appellant and the sublease from the former to the latter having been made at the same time, and relating to the same subject-matter, must be construed together. Canterberry v. Miller, 76 Ill. 355; Wilson v. Roots, 119 lb. 379, 386. So construing them, it appears that appellee, for the expressed consideration of $13, to be paid annually by appellant, agreed to pay to appellant one dollar and fifty cents for each one thousand of brick manufactured on appellee’s premises, or by appellee, and delivered or used in Cook county, or north of the Joliet branch of the Michigan Central railroad, in Lake county, Indiana, excepting brick that were sold or optioned prior to November 11, 1897. It is averred in the bill that the number of brick manufactured by appellee each year was, and at the date of the execution of the sublease, December 15, 1807, was expected to be, largely in excess of the value of $13 per annum; that in each of the years 1898 and 1899, appellee manufactured 21.000. 000 brick; that in the year 1900 and up to the time of filing the bill, it had manufactured brick at the rate of 21.000. 000 per annum, and that in the month of July, 1900, it had sold and delivered 3,500,000 brick. Construing the lease and sublease together, appellee’s agreement, in the last analysis, was to pay to appellant $1.50 per 1,000 on all brick manufactured on appellee’s premises, or by appellee, and delivered or used as aforesaid, less $13 per annum. The agreed rent or royalty on 21.000. 000 brick is $31,500, and on 3,500,000 brick, the amount averred to have been sold and delivered by appellee in July, 1900, is $5,280, which amount, it is averred, appellant claimed would be due to it from appellee, under the terms of the sublease, August 20, 1900. On the hypothesis that appellee’s board of directors and managing officers are sane, it is absurd to suppose that it leased to appellant, for the sum of $13 per annum, premises on which it had erected and placed valuable buildings, improvements, and machinery and appliances for the manufacture of brick, at an expense, as averred in the bill, of about $55,000. The expressed consideration is so grossly and absurdly inadequate that a court of equity could not regard it otherwise than as equivalent to nothing. It would be equally absurd to suppose that appellee agreed, without consideration beyond that expressed, to pay to appellant $1.50 per 1,000 of brick manufactured by appellee and delivered or used as heretofore stated. From these considerations we are forced to the conclusion that there must have been some agreement or understanding between the parties other than that expressed in the written instruments—some secret agreement or understanding. Considering the lease and sublease alone, and assuming that they disclose the real agreement, and excluding from view the probability that the sublessees were stockholders of appellant and shared in its dividends, they tend to increase the price of brick in Cook county at least to the extent of $1.50 per 1,000, because if appellee had to pay that sum per 1,000 of brick manufactured by it, it would naturally add it to the selling price of the brick. But it can not reasonably be supposed that the written instruments express the real contract or arrangement between the parties. It is averred in the bill that appellant received similar leases from and made similar subleases to substantially all the brick manufacturers in Cook county, and that it obtained said leases and executed to the owners of the leased premises subleases “ for the purpose only and with the "effect of increasing and controlling the price, to the public, of bricks in said county of Cook, and thereby creating a monopoly or illegal arrangement and combination in restraint of trade.” A court of equity will inquire what the real consideration was, or whether there was any consideration, regardless of the rule at law that a seal imports a consideration. 1 Pomeroy’s Eq. Jur., Sec. 383. The bill is sufficient to admit of proof that there was a combination of the parties to the leases obtained and the subleases made by appellant to increase the price of brick, and prevent competition in the manufacture, sale and prices of brick in Cook county, and that appellant was a mere instrument or agent for effecting that purpose—in other words, the executive officer of the combination. Such a combination is a criminal misdemeanor and indictable and punishable as such. Hurd’s Stat. 1899, p. 615, Sec. 269a. From the facts that appellant acquired the leases in question for some purpose other than the promotion of the object for which it was incorporated, that the owners of the leased premises agreed to the subleases, for substantially no expressed consideration, to pay large rent or royalty, and that the parties diligently concealed and kept secret the real consideration and purpose of the execution of the instruments, it may reasonably be inferred that such purpose was one which will not bear legal scrutiny. Appellant’s counsel contend that if the agreement between appellant and appellee was illegal, the parties were in pari delicto, and therefore appellee can have no relief, and cite in support of this contention, Samuels v. Oliver, 130 Ill. 73; Kirkpatrick v. Clark, 132 Ill. 342; McNulta v. Corn Belt Bank, 164 lb. 427; Bishop v. Am. Preservers’ Co., 157 lb. 284, and Thomas v. Railroad Co., 11 Otto, 71. In Samuels v. Oliver, the plaintiff, a grain broker, sued for commissions and relied on his contract of employment, which was that he should purchase and sell grain for his principal, for the purpose of cornering the market. Held, that the contract which was the basis of his claim, being for an illegal purpose, he could not recover. Kirkpatrick v. Clark, supra, was ejectment by Clark, who offered in evidence a deed in support of his title. The defendant offered to prove that the deed was executed to Clark for the purpose of defrauding creditors, which proof the trial court excluded. The Supreme Court held the exclusion error, clearly on the ground that the deed, if so made, was illegal and fraudulent, and being so the plaintiff could not be permitted to rely on it in support of his title. McNulta v. Bank, supra, was a suit by McHulta, who was president of the bank, to recover a sum of money voted to him by the bank directors, for the performance by him of duties not appertaining to the office of president, and which sum was a bonus in addition to his salary as president. It was held that the resolution on which the plaintiff relied for recovery was illegal, and that there could be no recovery. In Bishop v. Am. P. Co., supra, the action was replevin, and the plaintiff became possessed of the goods replevied by means of an illegal contract. ' In Thomas v. Railroad Co., supra, the plaintiff relied on an illegal contract for a recovery. In the present case appellee does not seek enforcement of the contract. On the. contrary it seeks to prevent its enforcement by appellant. The doctrine of pari delieto is not applicable in such a case as the present. Evans v. Funk, 38 Ill. App. 441, 462. Whether appellee has paid anything to appellant under the sublease does not appear, but it does appear that appellee has refused and will refuse to pay the rent or royalty which, by the terms of the sublease fell due August 20, 1900, and therefore the agreement is, as to such rent and royalty, executory. An illegal agreement having been partially executed, a court of equity will grant relief by injunction restraining enforcement of the unexecuted part of the agreement. McCutcheon v. Meerz Capsule Co., 19 Ct. Ct. App. 108; Spring Co. v. Knowlton, 103 U. S. 49. The court in McNulta v. Corn Belt Bank, supra, recognize the distinction as to remedy between an executed and executory illegal agreement, saying: “ But while the rule is that the executed dealings of a corporation under such a contract will be allowed to stand, yet the rule is otherwise when the contract ultra vires remains executory. (Thomas v. Railroad Co., 11 Otto, 71; Kadish v. Garden City, etc., Building Ass’n, supra) In the latter case courts will oftentimes interfere to prevent- its enforcement.” 164 Ill. 451. Appellant’s counsel object that the bill is defective in not alleging insolvency of appellant. It is averred that if appellant shall enter upon and take possession of appellee’s premises, the result will be irreparable injury to appellee. In such case an allegation of appellant’s insolvency is not necessary. Edwards v. Haeger, 180 Ill. 99, 108; Village of Itasca v. Schroeder, 182 Ill. 192. But it is urged that the allegation of irreparable injury is too general. This contention can not be sustained. It is averred that appellee has built up and carries on at its premises a large, valuable and profitable business, and has a large number of customers in Cook county and the territory adjacent thereto, and that if appellant should enter upon and take possession of its premises, it would be unable to supply its customers with brick, and its trade, built up at great expense, would be destroyed and its customers lost, etc. The averment of loss of trade is a sufficiently specific averment of irreparable injury to support an injunction. 2 Story’s Eq. Juris., Sec. 926; Gilbert v. Mickle, 4 Sandf. Ch. 357; Parker v. Manfg. Co., 2 Black, 546, 551, and cases cited; Cicero Lumber Co. v. Town of Cicero, 176 Ill. 9. Appellee’s counsel urges that the leasing and subleasing between appellant and appellee, and the other owners of brick yards, was ultra vires as to appellant, but we do not find it necessary to pass on that question on this appeal, as, if the leasing and subleasing were for the purpose and with the effect averred in the bill, this is sufficient to sustain the' injunction. TheArder appealed from will be affirmed.