Harts v. Kimball

Mr. Presiding Justice Puterbaugh delivered the opinion of the court. This is a bill in equity to set aside a contract between the Lincoln Sand and Gravel Company, a corporation, and one George H. Kimball, on the ground of fraud. The bill was filed by David H. Harts and Charles H. Johnson, as shareholders in said Lincoln Sand and Gravel Company, which corporation, together with its officers, and directors, and one George H. Kimball, are made defendants. The contract in question provides for the payment of a royalty by said company to said Kimball upon the output of said company from its gravel pits located on its lands in Broad-well township, Logan county, Hlinois, the consideration expressed being the discovery by Kimball of the deposits of sand and gravel, prior to the organization of said company, upon the lands afterwards purchased and now owned by said company, and the disclosure of said discovery to the persons who thereupon organized said defendant company and became its officers and principal shareholders. The contract was executed on or about June 5, 1905, and was filed for record in the office of the Recorder of Logan county, Hlinois, on February 20,1907. It contained a stipulation by which said Lincoln Sand and Gravel Company undertook to bind itself, and, in case said land should be sold, its grantees and successors, to the payment of the specified royalties. The bill alleges fraud in the execution of said contract, and prays that the same be set aside, and that the company be enjoined from making payments under the same, and that Kimball be enjoined from bringing suit to enforce the same. The corporation and certain of its officers were personally served with process; all other defendants, including Kimball, were served by publication and mailing according to statute, and the defendant Kimball was also served by the delivery to him at Detroit, Michigan, of a copy of the bill of complaint and a notice of the commencement of suit as provided by statute. Kimball thereupon entered a limited appearance and filed a plea to the jurisdiction of the court, claiming that he was a non-resident of Illinois; that said suit in no manner affected real estate in Logan county; that he had never been served with process and that the court had not jurisdiction of his person. To this plea complainants replied, denying that the suit did not affect real estate in Logan county, and alleging that the contract sought to be set aside was a cloud upon the title to lands in said county described in the bill of complaint, and further denying that Kimball had not been served with process of the Circuit Court of Logan county, and averring that service had been had upon him at Detroit, Michigan, by the delivery to him of a copy of the bill and a notice of the commencement of suit, according to the statutes of Illinois. The court upon hearing rendered a decree reciting that it appeared from the face of the bill that the proceeding was not mrem, but sought a personal decree against said Kimball; and finding that the court did not obtain jurisdiction of the person of said Kimball by service of a copy of the bill nor by publication, and decreed that the plea to the jurisdiction be sustained, and that as to him the bill of complaint be held for naught. From this decree the complainants have appealed, insisting that the chancellor erred in sustaining the plea. It is admitted by complainants in argument that so far as the defendant Kimball is concerned they are not entitled to an injunction upon the service shown by the record. They do contend, however, that in so far as the bill prays for relief from the alleged fraudulent contract as a cloud upon the title to the land of the Sand and Gravel Company, such service is ample to confer upon the court full jurisdiction of the subject-matter, and to furnish sufficient foundation for a decree setting such contract aside; that in this aspect of the case the proceeding is one in rem. The terms and provisions of the contract, so far as it is necessary to consider them, are as follows: “The first party (the Sand and Gravel Company), shall pay to second party (Kimball), three cents per cubic yard on the total amount of all merchantable sand or gravel excavated and sold by first party from the certain 318 acre tract of land located in Lincoln county, Illinois, the title of which said tract was acquired from Messrs. Frorer & Harts by E. W. Far-well, and by him deeded to first party in the month of February, 1905, and any other and additional 250 acres adjoining said 318 acres which said first party may hereafter acquire, so long as first party shall continue to excavate and sell sand and gravel from said tracts of land; and, in the event that first party shall sell or assign its interest in said tracts of land or any part thereof to another, first party agrees to obligate its grantee and his or their successors, heirs and assigns to assume and carry out the terms of this agreement in favor of second party.” The bill does not aver that the contract created a cloud upon the title to the land described in the bill, nor that any cloud existed, nor is it averred nor does it appear that any lien was declared or created by the contract. As we construe the instrument, the same is a mere personal covenant on the part of the company to pay the royalty mentioned, and that in case the land is sold, to bind its grantee and his or their successors to assume and carry out the terms of the contract so long as such grantee or successor shall continue to excavate gravel. A cloud is defined as a semblance of a title, either legal or equitable, or a claim to an interest in land appearing in some legal form, but which in fact is unfounded, or which it would be inequitable to enforce. Allott v. Am. Strawboard Co., 237 Ill. 55. It seems manifest that the contract can in no way be construed as creating a cloud within the purview of the foregoing definition. Moreover, a bill to remove a cloud from title can only be maintained where, at the time of filing the bill, the complainant is in possession of the premises, or where the same are vacant and unoccupied, and the bill must allege such possession, and the complainant must prove it. Glos v. Kemp, 192 Ill. 72; Glos v. Kenealy, 220 Ill. 540. The bill avers the possession of the land in question to he in the corporation. Even, therefore, if the contract could be properly held to be a cloud upon the title to the land mentioned therein, the corporation, and it only, could file a bill to remove the same. No such right exists in complainants by reason of their being shareholders in the corporation. We are of opinion that the decree is proper and the same is affirmed. Affirmed.