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Exchange Nat. Bk. v. City of Des Plaines

JUNE 26, 1970.

EXCHANGE NATIONAL BANK OF CHICAGO, AS TRUSTEE UNDER TRUST AGREEMENT DATED DECEMBER 15, 1964, AND KNOWN AS TRUST NO. 17988, PLAINTIFF-APPELLANT,

v.

CITY OF DES PLAINES, A MUNICIPAL CORPORATION, DEFENDANT-APPELLEE, AND CHURCH OF THE MASTER — UNITED CHURCH OF CHRIST, ET AL., INTERVENORS-APPELLEES.



Appeal from the Circuit Court of Cook County, County Department, Law Division; the Hon. EDWARD J. EGAN, Judge, presiding. Reversed and remanded.

ALLOY, J.

The action in the instant case was filed as a declaratory judgment suit to challenge the validity of a single-family zoning of the property of plaintiff Exchange National Bank of Chicago as trustee under a certain trust under the zoning ordinance of the City of Des Plaines. In determining the cause, the propriety of the existing zoning was not determined by the trial court, but the court entered judgment against plaintiff on the collateral issue involving the existence of a subdivision restriction. An appeal is taken to this court from orders which held the restriction valid and binding on the plaintiff.

The record disclosed that plaintiff owned Lots 11, 12, and 13 in a subdivision known as A.T. McIntosh & Co.'s Des Plaines Acres in Cook County, Illinois. There are a total of 25 lots in the subdivision. Plaintiff desired to have the property rezoned and when all rezoning attempts failed, it filed a declaratory judgment action to declare the Des Plaines zoning ordinance invalid as applied to the three lots. The lots were zoned as R-2 (single-family residential). It was alleged in the complaint that plaintiff desired to use the lots for commercial display in the sale of model vacation homes. It was shown in the complaint that the property adjoining the lots on the west is occupied by a drive-in restaurant and a gas station, and that to the east of the lots there is a church and a residence type of property used by the church. On the north and south of the lots are two well-traveled roads, both of which are used for business traffic. The property just west of plaintiff's lots is outside Cook County, but plaintiff alleged that its lots took on the character of the business triangle just to the south of the lots. There were the usual contentions as to the highest and best use of the property and that the zoning restriction had no relation to health, safety and welfare. A declaration was sought to the effect that the zoning ordinance restriction, as applied to the lots of plaintiff, was invalid.

In its answer, the City of Des Plaines denied the allegations of the complaint and set forth that when the plat of the subdivision was filed in 1938, it contained a restriction that only single-family residences could be put on any of the 25 lots. The trial court allowed several property owners in the subdivision, including the church just east of plaintiff's lots, to intervene. These intervenors adopted the answer of the City of Des Plaines and also counterclaimed for declaratory judgment declaring that the use restrictions set forth for the subdivision were valid and enforceable as applied to plaintiff's lots. In the counterclaim, an injunction was also requested restraining plaintiff from using the lots for anything other than single-family residences. Plaintiff replied to the allegations of the intervenors and the city, by pointing out that there was a written agreement between some of the lot owners in the subdivision and the church, which provided that all covenants, agreements, conditions, reservations, restrictions, and charges established in any way prohibiting or preventing the construction, use and maintenance of buildings other than private residences or single-family dwellings on Lots 9 and 10 inclusive in the subdivision, were expressly abrogated and declared null and void as though the same had never been created. The agreement was signed by the owners of 13 of the 25 lots in the subdivision. Plaintiff did not sign the agreement. It is plaintiff's contention that the agreement "abrogated, terminated and nullified" all of the restrictions in regard to the subdivision and the use which could be made of the lots.

When the parties appeared for a hearing before the court, the attorney for the plaintiff suggested that the court first proceed on the counterclaim filed by intervenors which requested a declaratory judgment that the plat restriction was still binding upon plaintiff. The parties therefore stipulated that plaintiff took title to the lots with notice of the recorded restriction; that the intervenors took title to their lots in reliance upon a continued enforcement of the restrictions and desired that the restriction be maintained; that the entire subdivision of 25 lots is developed with single-family homes except for the church lots and the 3 lots of plaintiff. It was also stipulated that the 1961 agreement referred to was signed by a majority of the lot owners, and that pursuant to the 1961 agreement a church was constructed on Lots 9 and 10 and continues to be used for a church. It was also stipulated that the City of Des Plaines allows churches in single-family residence districts.

Section 7A.3 of the Des Plaines Zoning Ordinance was read into the record. It provided that the zoning ordinance was not intended to abrogate any easement, covenant or other private agreement and also provided that where the regulations of the ordinance are more restrictive than the easements, covenants or other private agreements, the requirement of the zoning ordinance shall govern. Following argument on the issues, with no evidence other than the preliminary oral stipulation being presented, the trial court entered an order on October 22, 1968, which provided: "Now, therefore, it is ordered, adjudged and decreed that the intervenors, Church of the Master — United Church of Christ, et al., are hereby granted the relief prayed for in their counterclaim and the court hereby declares that the restriction contained in the plat . . . providing that all the lots in the subdivision are subject to the restriction that all buildings erected on such lots shall be single-family residences only is a valid and enforceable restriction and the plaintiff, its agents, servants, successors, grantees and assigns are enjoined from using the property . . . for any purpose other than that permitted by the restriction."

Following the entry of such order, the City of Des Plaines moved to have the plaintiff's first amended complaint dismissed. Plaintiff moved to set aside the judgment order of October 22, 1968. The trial court entered an order denying plaintiff's motion to vacate and then entered an order dismissing plaintiff's first amended complaint against the City of Des Plaines with prejudice. The dismissal was based upon the previous order of the court which determined that the private restriction was valid and that plaintiff could only use its property for single-family residence purposes, and that, therefore, there was nothing left to litigate between the plaintiff and the City of Des Plaines.

The important issue in the cause before us is whether the trial court conducted a proper hearing on intervenors' counterclaim, which requested a determination of the effect of the building restriction, as applied to the plaintiff's lots. This issue is required to be determined in light of the fact that Illinois restrictive covenants are not favored and their enforcement for years has rested in the chancery court, with emphasis on the equities involved in the cause. As has been noted in numerous cases in Illinois, the courts will not enforce restrictive building covenants when there has been such a change in the character or environment of the property involved, that either the purpose of the restriction is no longer aided by enforcement of the restriction, or if it would amount to an unreasonable hardship on the property owner to enforce such restriction. In light of such rule of law, plaintiff was entitled to present evidence, at the hearing on the counterclaim to enforce the restriction, showing any changes in the character and environment of the area. The failure of the trial judge to permit the introduction of such evidence was clearly erroneous and the cause should be remanded to permit a full hearing on the questions presented. In such hearing the trial court should permit evidence relating to the question of the enforceability of the restriction at this time, and, in the event that the trial court finds that such restriction is now a nullity, the court should then hear evidence on the declaratory judgment request as to the effect of the City of Des Plaines zoning ordinance.

It has long been the established rule in the State of Illinois that restrictive covenants in deeds will not be automatically enforced by the court. As early as 1896, the Illinois courts began to look for ways to avoid the application of deed restrictions when equities were with the property owner who was hampered by such restrictions. In Ewertsen v. Gerstenberg, 186 Ill. 344, 57 N.E. 1051, the court quotes the general rule (at 349-50):

"Equity will not, as a rule, enforce a restriction, where, by the acts of the grantor who imposed it or of those who derived title under him, the property, and that in the vicinage, has so changed in its character and environment and in the uses to which it may be put as to make it unfit or unprofitable for use if the restriction be enforced, or where to grant the relief would be a great hardship on the owner and of no benefit to the complainant, or where the complainant has waived or abandoned the restriction, — or, in short, it may be said that where, from all of the evidence, it appears that it would be against equity to enforce the restriction by injunction relief will be denied, and the party seeking its enforcement will be left to whatever remedy he may have at law."

In Piper v. Reder, 44 Ill. App.2d 431, 195 N.E.2d 224, the court in citing Ewertsen v. Gerstenberg, said (at 436):

"Restrictive covenants respecting buildings will not be enforced where there has been such a change in the character and environment of the property that either the objective of the restrictions cannot be accomplished by their enforcement, or if by such change it would be unreasonable or oppressive to enforce them."

As stated in Wallace v. Hoffman, 336 Ill. App. 545, 84 N.E.2d 654, at 554:

"The law is well settled that even where a general plan is shown the restrictions under the plan will not be enforced where violations have been acquiesced in (McGovern v. Brown, 317 Ill. 73; Curtis v. Rubin, 244 Ill. 88; Restatement, Property, § 561) or where the character of the neighborhood has so changed since the restrictions were ...


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