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Nat'l Blvd. Bk. v. Citizens Utilities Co.

OPINION FILED JUNE 3, 1982.

NATIONAL BOULEVARD BANK OF CHICAGO, TRUSTEE, ET AL., PLAINTIFFS-APPELLANTS,

v.

CITIZENS UTILITIES CO. OF ILLINOIS, DEFENDANT-APPELLEE.



APPEAL from the Circuit Court of Cook County; the Hon. RICHARD L. CURRY, Judge, presiding.

JUSTICE ROMITI DELIVERED THE OPINION OF THE COURT:

Rehearing denied August 5, 1982.

Plaintiffs initially objected to being charged sewage rates by the defendant and went before the Illinois Commerce Commission. That body determined that its decision depended on the ownership of certain sewer mains; an issue it had no jurisdiction to decide. Accordingly, this declaratory judgment action was filed in the Chancery Division because plaintiffs also sought equitable relief. The trial court held that the conduct of the parties and certain documents acknowledging defendant's ownership of mains used by it established defendant's ownership of the mains in question. We hold that the trial court erred in holding (1) that the mains embedded in plaintiffs' property were personal property; (2) that plaintiffs' predecessor's conduct gave rise to an estoppel and (3) that the evidence shows ownership in defendant. Accordingly, we reverse and enter judgment for plaintiffs.

The pleadings, documentary evidence and testimony disclose that the property in question, Gladstone Glen Apartments, is a multiple-unit complex consisting of 466 units. While now part of the village of Prospect Heights, the area originally was part of unincorporated Cook County. It lies on the east side of Wolf Road and the north side of Willow Road. It runs approximately 1975 feet along Wolf and 625.7 feet along Willow. In 1965 the property line along Wolf Road extended to the center of that road. In 1963 the Metropolitan Sanitary District of Greater Chicago (MSD) was given an easement for its interceptor sewer within the property line east of the center of Wolf Road. The easement agreement provided that the grantor and its successors and assigns should have the right, at any time after the completion of that portion of the intercepting sewer located on the property, to connect its own sewers with the intercepting sewer.

In 1965 the developer-owner, Oakview Builders, started to build on the property. The project was constructed in three phases, the first 144 units being completed and occupied in 1965 and 1966; the remaining 322 apartments were completed at a later date. Collecting sewers connecting the various buildings were built by Oakview's contractor on Oakview's property. They ran, by gravitational pull, into a 23-foot-long, 12-inch-wide sewer main which connected directly into the MSD interceptor sewer. The 23-foot connecting sewer main ran from the edge of Wolf Road to the MSD interceptor sewer. In 1965 this was all on Oakview's property. MSD granted the connection permit on July 8, 1965. The permit provided that it was not transferable without the written permission of the MSD. It was stipulated by the parties that the only sewer mains used in collecting Gladstone Glen's sewage are the 2,600 feet of collecting sewers located within plaintiffs' present property line and the 23-foot sewer connection, all of which were built and paid for by Oakview, and the MSD interceptor sewer. Unless either the 2,600 feet of collecting sewers or the 23-foot sewer connection built at Oakview's direction belong to defendant, no part of the system used is defendant's. In other words, no connections were made into any part of defendant's already existing sewerage system. No sewer main belonging to defendant was ever extended to Gladstone Glen.

Defendant, Citizens Utilities Company of Illinois, is a public utility engaged in furnishing water and sewer service in certain areas of Cook, Du Page and Will Counties, Illinois. On January 25, 1965, Oakview Builders sent a formal request to defendant for water and sanitary sewer service for parcels 1 and 3 of the property. On July 30, 1965, the Illinois Commerce Commission entered an order and certificate of convenience and necessity allowing defendant to render such service finding that there was no other service available in the area to meet the need. As already noted, three weeks before MSD had granted Oakview permission to hook up to its interceptor main.

Besides the 23-foot sewer main which was built in 1965 and the other sewer mains, Oakview also extended defendant's water main 2,085 feet to its own property. Beginning on January 1, 1966, Oakview filed applications for service for the nine buildings of the first development, a total of 144 units, as each was completed and ready for occupancy. The applications, on forms prepared by defendant, read as follows:

"NO. MOV — 1600

SERVICE APPLICATION AND AGREEMENT

The undersigned applicant requests that CITIZENS UTILITIES COMPANY OF ILLINOIS hereinafter referred to as the `Company' provide water and sanitary sewer service requirements at the premises described below, and agrees to accept and pay for service in accordance with the Company's rates, rules, regulations and conditions of service from time to time on file with the Illinois Commerce Commission.

The applicant agrees to install, if not already installed, and to maintain at his own expense in good condition all service lines in the premises described below and that the Company owns and shall maintain at the Company's expense all mains and other facilities used in rendering service to the applicant, including any meter located in the premises described below. The Company shall have free access to said meter at all reasonable times. If the meter is not read during any billing period, the Company shall render and the applicant agrees to pay an estimated bill for said billing period."

No applications for service to the rest of the buildings, if there were any, were introduced into evidence.

On July 15, 1966, an interoffice memo was sent by I. Jacobson stating they had to have improvement orders, easements, as-built engineering drawings, lien waivers and invoices showing the costs of all of the construction involved on the property, including the connecting mains. The easement was to confirm that the facilities within the subdivision were defendant's. Exhibit A attached to the easement was to cover the entire tract. Both the easement and Exhibit A were to be recorded. In fact they were not.

The easement was not signed until December 8, 1966, over one year after the sewer connection was finished and the sewer put in operation. Relevant portions of the "Grant of Perpetual Right and Easement" read as follows:

"In consideration of Ten Dollars ($10.00) and other good and valuable consideration, receipt of which is hereby acknowledged, WOLF PALATINE GARDENS, AS AGENT FOR EXCHANGE NATIONAL BANK, TRUST U/T No. 18621, a partnership (hereinafter called `Grantor') duly authorized to transact business in the State of Illinois, being the owner of that certain tract of real estate to be subdivided and known as of this date as Lamplighter Apartments, shown on and legally described on Exhibit A attached hereto and made a part hereof, hereby grants to Citizens Utilities Company of Illinois, an Illinois corporation (hereinafter called `Utility'), its successors and assigns, a perpetual right and easement in, upon, along and under the parcels of real estate designated or to be designated, within the tract of real estate shown by said Exhibit A, as `streets', `roads', `boulevards', `lanes', `drives', and other public places, and also in, upon, along and under those parcels of real estate designated or to be designated therein as utility or drainage easements, to install, construct, operate, maintain, repair and renew water mains, pipes, gates, valves, hydrants, sewage collection lines, manholes, lampholes, effluent lines and all other appurtenances or facilities which may be used by Utility in furnishing water service and sewage collection, treatment and disposal service in the tract of real estate shown on and described by said Exhibit A, or in any adjacent or other territory, including, without being limited to, the right to enter upon said parcels of real estate designated or to be designated as aforesaid, to make openings therein, to excavate beneath the surface thereof for the purpose of installing, constructing, operating, maintaining, repairing or renewing any facilities of Utility, and to carry on its business as a public utility by means of the facilities located in, upon, along or under such streets, roads, boulevards, lanes, drives, public places, utility and drainage easements; provided, however, that any excavation or other work by Utility shall be completed in a reasonable time, and after completion Utility shall restore the surface of the area opened to substantially as good condition as it was in before such opening.

Grantor, for itself and for its successors or assigns to any or all parcels of real estate within the tract of real estate shown by said Exhibit A, hereby acknowledges that ownership of, control of, and title to all water mains, pipes, gates, valves, hydrants, sewage collection lines, manholes, lampholes, effluent lines and all other appurtenances or facilities which may be used by Utility in furnishing water service and sewage collection, treatment and disposal service in the tract of real estate shown on and described by said Exhibit A is vested solely in Utility, free and clear of all encumbrances or claims including claims for payment by Grantor, its successors or assigns or parties claiming under Grantor, its successors or assigns."

Exhibit A attached to and referred to in the easement contains no legal description. It shows the west boundary line, Wolf Road, and the easement along it. While Willow Road is shown on the drawing, the length of the property along Willow is not shown. The northern boundary of the property is not shown at all and the eastern boundary is not designated. The drawing merely shows a 15-foot easement along Wolf and a 100-foot temporary easement. These appear to be identical easements given in 1963 to the MSD.

Also on December 8, 1966, a lien waiver was given by Oakview as contractor to defendant for and in consideration of $48,607.86. Certain other lien waivers naming Oakview Builders, Inc., as employer and signed by Oakview and others working on the site were also signed early in 1967 and turned over to defendant as a condition to Oakview's receiving a refund. Likewise invoices for building water and sewer mains for phase I of the project were turned over to defendant. They were paid, however, by Oakview, not defendant. An improvement order covering the project was prepared on December 9, 1966, over one year after the sewer facilities were constructed and placed in service. And on February 24, 1967, a journal entry for the month of December 1966 was prepared, transferring the cost of water and sewer mains, in the amount of $60,945, from "Construction Work in Progress" to various accounts, primarily "Customers Advances for Construction." In fact the total cost of all of the water and sewer mains now claimed by defendant was over $120,000. ...


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