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Wacker-wabash Corp. v. City of Chicago





Appeal by plaintiff from the Superior Court of Cook county; the Hon. DONALD S. McKINLAY, Judge, presiding. Heard in the third division of this court for the first district at the June term, 1952. Judgment affirmed. Opinion filed May 28, 1953. Rehearing denied June 24, 1953. Released for publication June 24, 1953.


Plaintiff appeals from a judgment in favor of defendant entered upon the verdict of a jury in an action at law to recover damages resulting from the alleged wrongful abandonment by the City of a proceeding to condemn certain lots for the purpose of opening a street under the provisions of the Local Improvement Act. Plaintiff's motions for judgment notwithstanding the verdict and, in the alternative, for a new trial were overruled. This cause was appealed directly to the Supreme Court, where it was ordered transferred to this court.

October 19, 1935 a complaint was filed consisting of five counts, and on August 4, 1950 plaintiff filed an amended complaint consisting of two counts, one in chancery and the other in law. Afterwards, upon defendant's motion to strike both counts, an order was entered sustaining defendant's motion to strike the chancery count and overruling its motion as to the law count. Defendant answered and plaintiff filed a reply to portions of defendant's answer. No question is raised on the pleadings.

Pursuant to the recommendations of the Chicago Plan Commission, the City Council passed certain ordinances for the improvement of Wacker Drive to relieve traffic congestion in the area of the City of Chicago known as the "Loop." Since the plan as a whole proposed by the Chicago Plan Commission was never adopted in one ordinance, the City Council enacted six different ordinances between the years 1919 and 1922 recommended by the Board of Local Improvements, relating to various parts of the plan. These ordinances provided for the construction of a double-deck roadway which followed in a westerly direction the south bank of the Chicago River from the Michigan Avenue bridge to west Lake Street, with convenient ramps to the lower level of Wacker Drive. The first two ordinances provided for the taking of land lying between the south bank of the Chicago River and the east and west street then known as South Water Street. The other ordinances related to the opening of four feeder streets for the purpose of providing ingress to and egress from the lower level of Wacker Drive. Among these proposed streets was Holden Court, to be located midway between Wabash Avenue and State Street and extending north from Lake Street to the lower level of Wacker Drive. The ordinance for the condemnation of the property necessary for the opening of Holden Court was passed by the City Council on July 21, 1922, and on October 22, 1923, condemnation proceedings were instituted.

Some time between July 24 and October 25, 1924, plaintiff's predecessor in title, Riverside Plaza Corporation, acquired title to lots to lots 8 to 15 inclusive in Block 18, Fort Dearborn Addition to Chicago. These lots are located at the southwest corner of Wacker Drive and Wabash Avenue. Lot 15 is the most easterly lot, facing Wacker Drive at the intersection of Wabash Avenue, and lot 8 is the most westerly. All of the lots are 160 feet 8 inches long. Lot 8, which is 22 1/2 feet wide, was one of four lots to be taken for the opening of Holden Court.

October 20, 1926 the entire Wacker Drive improvement was substantially completed except for the opening of the proposed Holden Court and Haddock Place.

October 27, 1933 the condemnation proceedings instituted by the City for the purpose of securing the necessary property to open Holden Court were dismissed and the project abandoned.

The uncontroverted evidence shows that the building was erected on lots 9 to 15 inclusive. The lower part of the building is 23 stories high and superimposed upon it is a tower consisting of 17 stories which occupies about one-fourth of the ground area. The structure was designed as an open and isolated building bounded on the east by Wabash Avenue, on the north by Wacker Drive, on the south by Haddock Place and on the west by the proposed Holden Court. All four sides of the building were faced with ornamental terra cotta from top to bottom and on the west side fronting the proposed street to be known as Holden Court there are approximately 300 windows. In the south-central part of the building from the basement to the twenty-third floor there was a garage serviced by four elevators. The entrance to the garage was designed to be on the proposed Holden Court where there were four doors leading to the elevators, and the two exit doors of the garage were on the east side of the building facing Wabash Avenue. The garage was designed to hold 550 automobiles and to be operated by electrical controls. Shortly after the garage had been in use mechanical difficulties developed and it then was manually operated. Subsequently nearly all of the garage area was converted to office use and leased to tenants. A party-wall agreement affecting the west side of lot 8 reduced the usable area of that lot to a width of 20 feet. Because of the lack of space in lot 8 it became impractical to use the entrance to the garage on the west side as originally planned, and the entrance and exit were therefore reversed.

Plaintiff contends that the undisputed facts show a contractual right in the plaintiff to have the proposed Holden Court opening completed.

Plaintiff's principal witness was one Lorenzo C. Dilks, former president of Starrett-Dilks Company, general contractors who erected the building on the premises here involved. Testifying by deposition, Dilks' testimony is substantially as follows. Some time in 1923 or 1924 Dilks told Sloan, president of the Board of Local Improvements of the City of Chicago, of the proposed plans for constructing an office and garage building on lots 8 to 15 inclusive. At this meeting Dilks either showed Sloan the plans or told him about them, whereupon Sloan stated that the plans would have to be revised because lot 8 was to be taken for the proposed street to be known as Holden Court. This was the first time Dilks learned of the opening of the proposed Holden Court. After conferring with the architects and others the plans were revised to omit lot 8 and to provide for the construction of the proposed building on lots 9 to 15 inclusive. Brochures and pamphlets were prepared and printed showing the proposed building bounded by four streets including the proposed Holden Court. Some time in May or June 1925 all of the old buildings on lots 8 to 15 were razed. In June 1925 Starrett-Dilks Company, the general contractors, applied for a permit to construct the building. Shortly thereafter Dilks had a conference with Doherty, the City Building Commissioner, who stated that he would turn over the plans to the Fire Commissioner and to the Board of Local Improvements. Doherty also stated that there were questions about a combination garage and office building which would have to be submitted to the Corporation Counsel. During this period Dilks, accompanied by one Ennis, had several conferences with the Fire Commissioner of the City relative to fire protection. Dilks and Ennis also conferred with the City's Corporation Counsel who advised them that he had been asked to issue a written opinion as to whether the structure which contained a garage completely surrounded by offices should be permitted, and that the Corporation Counsel said he had issued an opinion that the structure was permissible. June 15, 1925 the City Council passed an ordinance which recited in substance that since the Wacker Drive improvement then in progress of construction might conflict in some degree with the construction of the proposed building, the Commissioner of Buildings and the Fire Commissioner were directed to withhold the issuance of building permits until they received written advice from the Board of Local Improvements that such conflict no longer existed. About July 1925 Dilks, accompanied by Ennis and another person, had a conference with the then Mayor of Chicago, Wm. E. Dever. At this conference the Mayor inquired about the building plan and the arrangements to finance the cost of construction. According to Dilks the Mayor stated that he "would help as much as possible" and speak to the Corporation Counsel and the heads of some of the other city departments involved. During conferences between Dilks and the Fire Commissioner, Dilks was told that Siamese connections would have to be installed on the west side of the building, for the reason that it would face a public street. In accordance with the Fire Commissioner's request three Siamese connections were placed on the west side of the building and approved by him. About July 1925 Dinkelberg, one of the architects, accompanied by Ennis and Dilks, met with Sloan who requested a letter stating that the proposed building would conform to the city ordinances and the proposed improvement. Sloan also asked to examine the plans of the proposed building to make certain that lot 8 was omitted because it was to be taken for the proposed street to be known as Holden Court. At this conference Sloan also stated that the city officials were negotiating with the owners of the lots necessary to open Holden Court and if they could not agree on the fair value it would be submitted to a jury. Afterwards a letter dated July 23, 1925, signed by the Riverside Plaza Corporation, the architects, and Starrett-Dilks, addressed to Frank E. Doherty, Commissioner of Buildings, at Sloan's request, was delivered to him by Dilks, which reads:

"In order to justify you in issuing permit for the construction of the Jewelers Building, and in order to save time badly needed for the construction work, we hereby agree at the earliest possible moment to submit further detailed drawings showing the construction and location of the fire shield stairways and connections in form to comply with the ordinances and for your approval. In other words, it is not our intention to proceed with any construction in detail or items until after your formal approval has been secured for these things."

Shortly thereafter the building plans were approved, permits were issued and the construction of the building was begun.

The evidence further shows that the Wacker Drive improvement ordinance provided for an ornamental Bedford stone railing and a pylon cluster light at the upper level of Wacker Drive at the proposed Holden Court. This was not done. If it had been, the railing and light would have overhung lot 8 about three feet. Instead a wooden railing was built along the upper level and across the proposed street. More than fifty iron reinforcing rods were installed by the City in 1925. These iron rods extended about 2 1/2 or 3 feet south beyond the South Water Street lot line into lot 8 until January 1951 when they were removed by the City.

Besides Dilks, other witnesses testified in behalf of the plaintiff. John R. Fugard, an architect, engineer and manager of the building here in question since 1934, testified in substance that while the building was being erected he had a "close contact" with the general contractor; that he had possession of the original plans of the building erected on lots 9 to 15 inclusive; that he never saw any drawings of a plan for a structure covering the entire premises including lot 8; and that the garage became an economic liability because of defendant's failure to open the proposed Holden Court. Plaintiff's witnesses John R. Bailey and Glen C. Crawford, both real estate experts, testified to the fair cash market value of lots 8 to 15 and the improvements thereon before and after the abandonment of the proposed Holden Court improvement. Another witness, Stanley O. Chadwick, a real estate expert, testified particularly about the operation of the garage and the necessity to its successful operation of the opening of Holden Court. Other witnesses for plaintiff testified with respect to the rentals received from the building and the garage and the cost of their operation, the reorganization and financial difficulties of plaintiff's predecessor, and the transfer of the title to the premises here in controversy.

The record, consisting of more than seventeen hundred pages, also contains voluminous exhibits. It would unduly extend this opinion to relate plaintiff's evidence in greater detail.

The gist of the complaint is that the City required the plaintiff to conform its building to the proposed Wacker Drive improvement and refused to issue a building permit unless it did so; that the City agreed to complete the opening and improvement of the proposed Holden Court in consideration of the plaintiff's agreeing not to build any part of the building on lot 8 and that before issuing a permit the City requested as a prerequisite an agreement in writing executed by the plaintiff which was delivered to the City and accepted by it. The agreement in writing referred to in the complaint consists of ...

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