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H.k.h. Devel. Corp. v. Metropolitan San. Dist.

FEBRUARY 13, 1964.

H.K.H. DEVELOPMENT CORP., AN ILLINOIS CORPORATION, PLAINTIFF-APPELLEE,

v.

THE METROPOLITAN SANITARY DISTRICT OF GREATER CHICAGO, A MUNICIPAL CORPORATION, ET AL., DEFENDANT-APPELLANT.



Appeal from the Superior Court of Cook County; the Hon. JOHN J. LUPE, Judge, presiding. Affirmed.

MR. JUSTICE DEMPSEY DELIVERED THE OPINION OF THE COURT.

Rehearing denied March 9, 1964.

This is an interlocutory appeal by the defendant, The Metropolitan Sanitary District of Greater Chicago, from an order granting a temporary injunction to the plaintiff, the H.K.H. Development Corporation. The injunction restrained the Sanitary District from interfering with the use of certain land it had leased to the plaintiff.

The Sanitary District, in 1950, leased two parcels of land for 20 years to the Thomas McQueen Company. In 1961 the term of the lease was extended from 20 to 60 years, with an option to renew for 49 additional years; the lease was amended to permit an additional use of the land, and the District consented to the assignment of the lease, as amended, to the plaintiff. Also in 1961, the District leased more of its acres to the plaintiff for a period of 50 years with an option for a further 49-year term.

In May 1963 the Board of Trustees of the Sanitary District passed an order canceling both leases and directing the plaintiff to surrender possession of the premises. In June the plaintiff commenced the present action requesting a declaratory judgment to the effect that the leases were valid and that the cancellation of them was null and void. The complaint stated that the plaintiff had performed its obligations under the leases, had paid its rent, was in the process of developing the land as an industrial area and had spent in excess of $50,000 in grading, filling, laying out sewer and water mains, and in otherwise improving the site, and intended to spend $150,000 more in preparing the land for this purpose. An injunction was prayed for enjoining the District from ousting, attempting to oust, or interfering with the plaintiff's peaceable possession of the tracts of land described in the two leases.

The motion for injunction was continued generally, the defendant was given time to answer or plead and, by agreement of the parties, the order provided that nothing would be done to change the status of the property until the case was concluded.

In October 1963, the plaintiff filed a petition for a rule to show cause charging that the District had violated the agreed order. It followed this with a supplement to its complaint which renewed the request for an injunction based upon the following averments: (1) that under the amendment to its lease it was permitted to conduct manufacturing and to store dry and liquid materials incidental thereto; (2) that since filing the complaint it had undertaken the preparation of top dressing for lawns, parks and golf courses; (3) that air-dried sludge was a substantial ingredient of the product being manufactured; (4) that it had been accumulating this ingredient on lots 109 and 109A of the leased premises and (5) that on September 30th the District stopped the trucks which were delivering the sludge and stationed police officers on the lots to prevent further unloading.

The principal question confronting the court at the hearing on the injunction was whether the plaintiff was entitled to place dried sludge on the leased property for the purpose stated in the supplemental complaint: future use in the manufacture of fertilizer. Inasmuch as the supplemental complaint related specifically to Lots 109 and 109A which were part of the McQueen lease of 1950, this is the lease which the court had to construe in arriving at its conclusion.

The following is the pertinent part of the McQueen lease:

"(3.05) (Use of Premises.) It is understood that the said demised premises is to be used by said Lessee for the purpose of depositing thereon excavated materials consisting of top soil, sand, gravel, glacial drift and rock, broken concrete and masonry, and solid inorganic materials, as hereinafter set forth. Under no circumstances, however, shall any refuse, garbage or domestic or industrial waste be so deposited thereon; . . ."

In 1961, when the lease was assigned to the plaintiff, it was amended as follows:

". . . paragraph (3.05) (Use of Premises) in the hereinabove described lease be modified and amended by adding the following words `and for the storage of dry and liquid materials, manufacturing and such other purposes as shall be incident thereto.'"

The District contended that placing dried sludge on the property was not permissible under the provision of the lease prohibiting the deposit of "domestic or industrial waste." The plaintiff contended that it was permissible under the amendment to the lease allowing storage of "dry and liquid materials."

In support of its contention that sludge was waste, the District called as a witness its Chief Engineer. He testified that sludge was a residue of domestic and industrial waste, but he also testified that it could be used as fertilizer if it were combined with chemicals or with other additives and black soil. The District places great stress on this testimony and argues that since it was the only evidence before the court on the most important factual issue involved, the court erred in not finding ...


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