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Fox v. Fox Valley Trotting Club

DECEMBER 29, 1954.




Appeal from the Circuit Court of Cook county; the Hon. ELMER J. SCHNACKENBERG, Judge, presiding. Affirmed.


This is an equitable action for an accounting of moneys claimed "as rental or damages for loss of rental" under a lease of a race track. The issues were referred to a master who recommended a decree allowing plaintiff more than $100,000 including attorney's fees. The chancellor rejected the recommendation and entered a decree dismissing the complaint for want of equity. Plaintiff has appealed.

Plaintiff owns a race track in Aurora, Illinois. He leased it to defendant in 1946 for five years with an option to renew. Defendant exercised its option in 1951 and the lease was renewed for an additional five-year term. In 1952 defendant made an agreement to conduct a meet at the Maywood, Illinois race track. The Maywood meet was conducted by defendant under a license from the State. Since only one meet in a year can be conducted in Illinois by a licensee, defendant was precluded from racing at the Aurora track. Plaintiff objected to the issuance of the license for the Maywood meet and subsequently brought this suit.

Under his original complaint plaintiff succeeded in having defendant post a bond in lieu of appointment of a receiver. We allowed an appeal, Fox v. Fox Valley Trotting Club, Inc., 349 Ill. App. 132, and reversed the order. After our decision plaintiff filed an amended and supplemental complaint. The issues joined on this pleading were decided by the master in favor of plaintiff.

The original complaint alleged that defendant was compelled by an implied covenant in the lease to conduct a racing meet each year at and only at the Aurora track. The idea of an implied covenant was subsequently abandoned. In our opinion on the previous appeal we construed the lease, which was part of the complaint. We decided that the complaint alleged no facts from which it appeared or could be inferred that defendant was not free to conduct meets elsewhere. The amended complaint omitted any allegation of an implied covenant limiting defendant's meets to Aurora. It is conceded in this court that there is no express covenant to that effect.

Plaintiff's theory in the amended complaint is that the lease, in the light of the objective facts, must be construed as imposing the obligation on defendant to race at Aurora.

The substance of the new allegations in the amended complaint are; that the lease provided that the Aurora track "may be occupied and used" for purposes other than harness racing; that the parties intended that the principal use should be racing; that this intention was expressed by the language providing that should racing meets be outlawed in Illinois or Kane county or, at the Aurora track by any authority without defendant's fault then defendant could cancel the lease; and that until 1952 defendant used the premises for practically no other purpose but harness racing and up to the time of the trial stabled horses on the premises. It was further alleged that defendant by means of the Maywood meet intended to and did cheat and defraud plaintiff of his "just rentals"; that the value of the Aurora track was approximately $1,500,000; and that the reasonable rental was far in excess of the base rental. An amendment to this pleading filed after the master's report alleged failure of the defendant to account, as required by the lease, for the gross income of the meet at Maywood and that the accounting would necessarily be "long, complicated and intricate."

The master admitted as evidence the conversations and negotiations of the parties leading to the execution of the lease. This was for the express purpose of explaining what the parties meant by the terms "occupied and used," in the following context:

". . . said premises are to be occupied and used solely for the purposes stated below, namely. . . ."

There were then listed, harness racing meets, horse sale auctions, saddle horse shows, rodeos and concessions in connection with these uses.

The chancellor in sustaining exceptions to the report found no ambiguities in the lease and no express or implied covenant requiring defendant to conduct a harness racing meet on the premises each year. We think the chancellor was right.

The chancellor thought his interpretation was justified by the "percentage provision" which called for a sum equal to 1 1/2 per cent of the amount bet on the races "conducted and operated on the demised premises." The last four words he thought excluded plaintiff from a percentage of races conducted off the premises. Those words were used in the folowing context:

"The lessee agrees to pay the lessor the following sums:

(a) A sum equal to one half (1/2) of one (1) per cent of the total amount wagered or bet on the pari-mutuel machines operated in conjunction with the harness racing meets ...

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