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10/11/89 Crain Enterprises, Inc., v. the City of Mound City

October 11, 1989





544 N.E.2d 1329, 189 Ill. App. 3d 130, 136 Ill. Dec. 554 1989.IL.1617

Appeal from the Circuit Court of Pulaski County; the Hon. Louis G. Horman, Judge, presiding.


JUSTICE CHAPMAN delivered the opinion of the court. GOLDENHERSH and RARICK, JJ., concur.


Defendant Consolidated Grain and Barge Company (Consolidated), successor in interest to Behimer & Kissner, appeals from an order of the circuit court of Pulaski County granting injunctive relief to the plaintiffs, Crain Enterprises, Inc., James W. Crain, Stephen Crain, Jeffrey Crain, and Tom Jennings (Crain). The injunction requires defendant Consolidated to remove certain obstructions, more specifically railroad tracks and related structures, which it placed on the west one-half of Commercial Avenue in Mound City, Illinois, because they interfered with plaintiffs' easement rights. Crain has cross-appealed the finding of the trial court that certain ordinances enacted by defendant Mound City (the city) are valid exercises of its home rule powers.

While the facts of this case are largely undisputed, the procedural history is extensive. We will relate only so much of that history as is necessary for resolution of the issues involved. Crain Enterprises owns a manufacturing facility located at the intersection of Commercial Avenue and First Avenue in Mound City. Its warehouse complex is also on Commercial Avenue, approximately 3,000 feet north of the manufacturing facility. In 1980 defendant Consolidated became interested in constructing a grain elevator and transportation facility in Mound City. The purpose of this facility is to transfer bulk commodities such as grain or fertilizer from truck or rail transportation into barges, or vice versa. Consolidated determined that the only feasible site for this facility included property parallel and adjacent to the west half of Commercial Avenue. In other words, the Consolidated facility abuts Commercial Avenue on the west, while the Crain facility abuts Commercial Avenue on the east. Commercial Avenue had been a public street for over 100 years. The east half of Commercial Avenue contained two sets of railroad tracks which had been in place for over 60 years. Because these tracks were placed on and parallel to Commercial Avenue, the east half of Commercial Avenue was not used as a public thoroughfare, nor was it suitable for such use. Consolidated determined that it would be necessary, if its project was to succeed, to place three additional rail lines on the west half of Commercial Avenue, thereby closing the street to vehicular traffic.

After being approached by Consolidated concerning its need to close Commercial Avenue, the city enacted the three ordinances that are the subject matter of Crain's cross-appeal. Ordinance No. 589 granted Consolidated a railroad franchise and leased the west 44 feet of Commercial Avenue to Consolidated to implement the franchise. Ordinance No. 612 vacated certain side streets to permit the installation of Consolidated's grain elevator. Ordinance No. 625 vacated the west 44 feet of Commercial Avenue as a public street.

Prior to passage of the ordinances, James Crain appeared at the city council meetings to object to the closing of Commercial Avenue. Crain's objections were: (1) that ordinance No. 589 was in violation of the street railway act because it would close Commercial Avenue to vehicles and pedestrians; (2) the ordinances were for a private purpose; (3) the ordinances would injure his company by restricting ingress and egress and by increasing rail traffic on the street; and (4) his own plans for business expansion would be stifled.

Despite the plaintiffs' objections, on January 6, 1981, Mound City enacted ordinance No. 589, a franchise ordinance granting Consolidated the right to construct and operate railway lines over the west half of Commercial Avenue. Crain filed a complaint on April 1, 1981 (cause No. 81--CH--2), seeking to enjoin the proposed railway and to have ordinance No. 589 declared invalid. In July of 1981 Consolidated began construction of the railway, and Crain obtained a temporary restraining order on July 14, which was dissolved on July 23. Consolidated resumed construction, and on September 15, 1981, the trial court entered a final order denying a preliminary injunction and dismissing Crain's complaint with prejudice. Plaintiffs appealed to this court, arguing that they were entitled to amend their pleadings as a matter of right. On November 3, 1982, this court entered an order reversing the trial court and remanding with instructions to permit Crain leave to file an amended complaint. Crain Enterprises, Inc. v. City of Mound City (1982), 109 Ill. App. 3d 1223, 451 N.E.2d 2045 (unpublished Rule 23 order).

After remand, the trial court entered an order consolidating cause Nos. 81--CH--2 and 81--MR--15. Cause No. 81--MR--15 had been initiated by Bulk Services, a competitor and neighbor of Consolidated, on December 3, 1981. In that complaint Bulk Services alleged that certain actions of Consolidated relating to the removal of a portion of the Conrail track on Commercial Avenue would injure Bulk Services' business and it requested that the trial court enter a temporary restraining order preventing Consolidated from cutting or otherwise interfering with the railroad track. The Bulk Services cause of action was dismissed based upon a stipulation between the parties. Prior to the dismissal, however, Crain filed a motion to intervene in cause No. 81--MR--15, maintaining that the actions of Consolidated, as alleged in the Bulk Services' complaint, would also irreparably damage them. Accordingly, at the time of the order which consolidated cause Nos. 81--CH--2 and 81--MR--15, Crain's claim was the only remaining cause of action in No. 81--MR--15.

In the meantime, Consolidated had completed the railway and siding as well as other construction, including a seed warehouse, an office building, and two grain silos. In June of 1983, the city passed ordinance Nos. 612 and 625, which vacated certain side streets and the west 44 feet of Commercial Avenue. Plaintiffs amended their complaint in November of 1983 and in December added count II, seeking to have ordinance No. 625 declared void. Crain also instituted an additional lawsuit, cause No. 81--MC--1, alleging that ordinance No. 612 was ultra vires because it was enacted for Consolidated's exclusive use and for private purposes. By August of 1984 Consolidated completed construction of its facility. The total cost of the project was approximately $7.5 million. In May of 1985 plaintiffs amended their complaint and added count III, alleging that they had an easement right of access along Commercial Avenue based upon a plat originally recorded in 1856. A second count was also added to the complaint in cause No. 81--MC--1 in which plaintiffs alleged that they had an easement in the streets and alleys conveyed by ordinance No. 612 pursuant to the same recorded plat.

The trial began on July 8, 1985, and concluded on July 12. On August 11, 1986, the trial court entered its judgment order and found: (1) that ordinance Nos. 589, 612 and 625 were legitimate exercises of the powers of a home rule municipality and served a substantial public purpose and provided a substantial public benefit; (2) Crain had a private right of easement, which arose from the recorded plat, over the vacated streets for ingress and egress to its property abutting those streets; (3) the structures and tracks placed upon the vacated streets constituted a nuisance, subject to abatement, to the extent that they deprived the plaintiffs of their private right to use the streets for ingress and egress to their property, and Consolidated was therefore required to remove the obstructions; (4) that the loss to the public from the issuance of an injunction, including the benefits derived from an annual payroll in excess of $1 million, utility taxes in excess of $15,000, and recapture of $400,000 plus interest in grant monies clearly exceeded the benefit to be derived by the plaintiffs; and (5) the court was not permitted to consider the public interest or balance the equities between the parties because the actions of Consolidated were intentional in starting, continuing, and completing construction after notice by the plaintiffs at public meetings prior to the enactment of ordinance No. 589 that the closing of Commercial Avenue would interfere with Crain's ability to travel the streets sought to be closed, and in continuing and completing construction of the project after the filing of cause No. 81--MC--1 on April 1, 1981, challenged the legal authority of the city to enact ordinance No. 589. Defendant Consolidated filed a post-trial motion on September 15, 1986, which was denied by the trial court on March 26, 1987. Consolidated now appeals the trial court's grant of injunctive relief to the plaintiffs, and the plaintiffs have cross-appealed from the finding by the court that the ordinances in question were valid.

We first address the issue of the validity of ordinance Nos. 589, 612, and 625. As previously stated, ordinance No. 589 granted defendant Consolidated a franchise to construct and operate railway lines over the west half of Commercial Avenue. The plaintiffs contend that ordinance No. 625, which subsequently vacated the west half of Commercial Avenue, effectively repealed ordinance No. 589, notwithstanding a provision in ordinance No. 625 that ordinance No. 589 was to remain in full force and effect. Plaintiffs maintain that a franchise ordinance is incompatible with a vacation ordinance and both cannot cover the same subject matter at the same time. We do not agree. In vacating a portion of Commercial Avenue which abutted Consolidated's land, ordinance No. 625 effected a conveyance of that land to Consolidated. This conveyance was, by its express terms, subject to the terms of the prior franchise agreement. The franchise ordinance, in turn, set forth the rights, duties, and obligations of the parties with respect to the construction, maintenance, and operation of the railway. We do not find these two ordinances to be incompatible.

Plaintiffs next argue that ordinance No. 589 is invalid because a municipality has no power to grant the exclusive use or control of a public thoroughfare to a private person for any private purpose. (Greenlee Foundry Co. v. Borin Art Products Corp. (1942), 379 Ill. 494, 41 N.E.2d 532; Gerstley v. Globe Wernicke Co. (1930), 340 Ill. 270, 172 N.E. 829; General Electric Ry. Co. v. Chicago & Western Indiana R.R. Co. (1900), 184 Ill. 588, 56 N.E. 963; Ill. Rev. Stat. 1985, ch. 131 1/4, par. 1 (authorizing the laying of railroad tracks in streets "in such manner as not to unnecessarily obstruct the public use of such street").) Plaintiffs also contend that ordinance Nos. 612 and 625 are invalid because they were enacted for the private benefit of defendant Consolidated without any showing that the public interest was served by vacation of the streets and alleys. Defendants Mound City and Consolidated maintain, and the trial court found, that the ordinances were a legitimate exercise of the city's home rule powers. We agree.

Article VII, section 6(a) of the 1970 Illinois Constitution granted broad powers to home rule units of local government:

"Except as limited by this Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs including, but not limited to, the power to regulate for the protection of the public health, safety, morals and welfare; to license; to tax; and to incur debt." Ill. Const. 1970, art. VII, § 6(a).

Furthermore, article VII, section 6(m), states that the powers and functions of home rule units are to be liberally construed. In City of Carbondale v. Yehling (1983), 96 Ill. 2d 495, 451 N.E.2d 837, the Illinois Supreme Court explained the two-part test to be used in determining the validity of an ordinance passed by a home rule unit. First, the subject matter of the ordinance must pertain to the city's government and affairs. If it does, then it is necessary to determine whether the ordinance is preempted by State regulation of the subject matter.

We find that the regulation and vacation of streets and alleys located wholly within the borders of Mound City, which do not form a link in a State highway, are matters which pertain to the city's government and affairs. While we acknowledge that some language in the cases cited by the plaintiffs indicates that the State has an interest in a city's streets (see People's Gas Light & Coke Co. v. City of Chicago (1953),413 Ill. 457, 464, 109 N.E.2d 777, 781 (the "right of the people in the streets and highways of the State . . . is a paramount right. The municipality cannot . . . perform anything in derogation of this right of the sovereign people, nor may the city permit any uses or encroachments which are unreasonable and against the public interest"); People ex rel. Hill v. Eakin (1943), 383 Ill. 383, 391, 50 N.E.2d 474, 478 ("[t]he fee in streets and alleys is vested in the local municipality in trust for all the citizens of the State and not merely for local use")), we note that those cases were decided long before the adoption of the 1970 Constitution. We therefore do not find them to be dispositive of the issue before us. Mound City passed the ordinances in question to stimulate economic development, provide an additional tax base for the city, and provide local employment. Plaintiffs do not deny that the city was beset by severe economic problems: an unemployment rate which was three times the State average, substandard housing, and a large percentage of residents with below average incomes. We believe that Mound City acted well within the limits of its home rule powers in enacting ordinance Nos. 589, 612 and 625.

Nor do we find persuasive the plaintiffs' argument that the ordinances are outside the city's home rule powers because they deal with real property. Plaintiffs quote the following language in support of this argument:

"he powers of home-rule units relate to their own problems, not to those of the state or nation. Their powers should not extend to such matters as divorce, real property law, trusts, contracts, etc. which are generally recognized as falling within the competence of state rather than local authorities." Ill. Ann. Stat., 1970 Const., art. VII, § 6, Constitutional Commentary, at 23 (Smith-Hurd 1971).

In City of Carbondale v. Yehling (1983), 96 Ill. 2d 495, 451 N.E.2d 837, our supreme court addressed the same argument in the context of Carbondale's use of its eminent domain power for the purpose of redevelopment of its business district. The court stated:

"We do not believe that the inclusion of real property law in the comments as to the matters to which home rule powers should not extend proscribes a home rule eminent domain ordinance. It is apparent that the language quoted in the context of the comments was a further clarification in leaving to the State those traditional areas of the law that are of statewide concern. Those comments reflect an intention that a divorce decree entered in Chicago will be honored in Waukegan, a contract signed in Evanston will not require additional consideration to constitute a valid contract in Peoria, and what is essential for a valid conveyance of a parcel of land in Joliet is also essential if the land is to be conveyed in Kankakee." (Yehling, 96 Ill. 2d at 499, 451 N.E.2d at 839.)

Similarly, we do not believe that the regulation and vacation of the streets and alleys of Mound City are matters of real property law "which are generally recognized as falling within the ...

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