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American Transp. Co. v. U.s. Specialties Corp.





Appeal by plaintiffs from the Superior Court of Cook county; the Hon. FRANK M. PADDEN, Judge, presiding. Heard in the second division of this court for the first district at the June term, 1953. Affirmed in part, reversed in part and cause remanded with directions. Opinion filed April 8, 1954. Released for publication April 27, 1954.


The American Transportation Company, Inc., a corporation, Standard Freight Lines, Inc., a corporation, and Harry F. Chaddick, plaintiffs, sued the City of Chicago, a municipal corporation, Harry A. Lipsky, Mabel G. Reinecke and William B. Daly, known as The Board of Election Commissioners of the City of Chicago, parties defendant to Count I of the amended complaint, the U.S. Sanitary Specialties Corporation, a corporation, defendant to Count II, and the U.S. Sanitary Specialties Corporation, Economy Plumbing and Heating Company, a corporation, and Goodwin Construction Company, a corporation, defendants to Count III. The City and the Election Commissioners filed their answer and counterclaim. The defendants to Counts II and III filed a motion to strike the amended complaint, which, after hearing, was allowed by the trial court. Plaintiffs elected to stand on their amended complaint and appealed to this court.

The trial court made no findings in its order of dismissal, so we must consider the defenses raised by the respective defendants in their motions to dismiss Counts II and III.

It is not necessary for us to pass on Count I except for the purpose of considering its allegations in connection with the other two counts. In substance it alleges that the City of Chicago and Election Commissioners and one of the plaintiffs, the American Transportation Company, Inc., entered into an agreement dated August 23, 1948, for the purpose of furnishing office, repair shop and storage space for voting machines to the City and Election Commissioners. The lessor also agreed for a separate consideration to make deliveries and pickups of said machines. The American Transportation Company agreed that the machines would be stored in a building of fireproof construction free from dampness. They were to be stored on a part of the third-floor premises occupied by the plaintiffs, and leased by them from the U.S. Sanitary Specialties Corporation. The answer and counterclaim of the City and Election Commissioners alleges constructive eviction and asks damages because of it. The defendants to Count I are not involved in this appeal.

Count II alleges that defendant U.S. Sanitary Specialties Corporation, the lessor in a lease with the plaintiffs, breached the implied covenant of quiet enjoyment in the lease by breaking into and entering the premises leased to the plaintiffs and causing the City and Election Commissioners to vacate the part of the premises occupied by them under an agreement with plaintiffs. The breach, it is alleged, was caused by the defendant when it remodeled a part or portion of the premises that it occupied and changed the air pressure in the water system causing it to overflow and cover the premises, in which the voting machines were stored, with water. It is further alleged that contractors employed by the defendant punched holes through the cement ceiling, causing pieces of cement to fall upon the premises where the voting machines were stored.

Count III alleges that the defendants U.S. Sanitary Specialties Corporation, Goodwin Construction Company and Economy Plumbing and Heating Company trespassed upon the premises of the plaintiff by breaking into and entering without notice and consent upon the portion of the premises occupied by the plaintiff and that portion of the premises sublet to the Election Commissioners; that the defendants negligently caused concrete to fall upon the voting machines, and caused water to cover the floor of the premises occupied by the City and the Election Commissioners, which resulted in the cancellation of the agreement between the City and the Election Commissioners and the plaintiffs.

We will first consider the motion to strike made by defendant U.S. Sanitary Specialties Corporation, which is the sole defendant to Count II and one of the defendants to Count III. The pertinent provisions of the lease between it and plaintiffs read as follows:

"5. Lessee covenants and agrees that he will protect and save and keep the Lessor forever harmless and indemnified against and from any penalty or damage or charges imposed for any violation of any laws or ordinances, whether occasioned by the neglect of Lessee or those holding under Lessee, and that Lessee will at all times protect, indemnify and save and keep harmless the Lessor against and from any and all loss, cost, damage or expense, arising out of or from any accident or other occurrence on or about said premises, causing injury to any person or property whomsoever or whatsoever and will protect, indemnify and save and keep harmless the Lessor against and from any and all claims and against and from any and all loss, cost, damage or expense arising out of any failure of Lessee in any respect to comply with and perform all the requirements and provisions hereof.

"6. Lessor shall not be liable for any damage occasioned by failure to keep said premises in repair, nor for any damage done or occasioned by or from plumbing, gas, water, sprinkler, steam or other pipes or sewerage or the bursting, leaking or running of any pipes, tank or plumbing fixtures, in, above, upon or about said building or premises, nor for any damage occasioned by water, snow or ice being upon or coming through the roof, skylights, trap door or otherwise, nor for any damages arising from acts, or neglect of co-tenants, or other occupants of the same building, or of any owners, or occupants, of adjacent or contiguous property."

These are what are commonly known as exculpatory clauses. Plaintiffs cite several cases in support of their contention that these clauses should not apply because they are against public policy. We are aware that the effectiveness of these provisions has in some decisions in the past few years been considered with some disfavor. The Supreme Court in a very carefully considered opinion in the recent case of Jackson v. First Nat. Bank, 415 Ill. 453, put any question to rest that we might have had in the instant case. The court said at page 462:

"An examination of the authorities in other jurisdictions leads us to the conclusion that by the great weight of authority the rule is that an exculpatory clause, specifically or generally providing that the lessor shall not be liable for damages or injuries to the lessee or his property from all or certain causes, is not against public policy but is valid and enforceable. . . .

"In accordance with former decisions of this court and those of other jurisdictions, the provisions of the lease now before us are valid and enforceable unless there is something in the social position or social relationship of the parties opposed to its operation. It is suggested by appellant that there is a disparity of bargaining power between the parties to this agreement, so that to enforce it would result in great injustice. The inference sought to be drawn from this line of argument is that the lessee had no freedom of choice; that he had either to accept what was offered or be deprived of the advantages of the relationship. There is nothing in the record or the circumstances surrounding the parties to bear out this contention. This is a business lease. There is nothing to suggest that the parties were not dealing at arms' length and upon equal footing. No facts are brought to our attention from which it might be reasonable to infer that the lessee was forced to take the storeroom upon lessor's terms. Certainly we are not prepared to say that in all transactions involving business leases there is always a balance of bargaining power in favor of the landlord."

We conclude that the exculpatory clauses of the lease, between defendant U.S. Sanitary Specialties Corporation and the plaintiffs, absolved U.S. Sanitary Specialties Corporation from any liability for the acts charged in Counts II and III of the complaint.

[3-5] It is contended that there is improper joinder of plaintiffs because Standard Freight Lines and Harry Chaddick, colessees of the premises, were not parties to the agreement with the City and the Election Commissioners. They were, however, colessees of the premises involved. Although not parties to the contract between the American Transportation Company and the City and Election Commissioners, nevertheless, the premises involved in their agreement were leased jointly by all three plaintiffs. They were bound by the lease and all were entitled to the use, enjoyment and profits therefrom. Where one of several cotenants, equally bound by a lease and having joint rights and obligations ...

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