Chicago Auditorium Ass'n v. Willing

• Decision Date: 30 August 1927
• Docket Number: No. 3733.,3733.
• Citation: 20 F.2d 837
• Parties: CHICAGO AUDITORIUM ASS'N v. WILLING et al.
• Court: U.S. Court of Appeals — Seventh Circuit

20 F.2d 837 (1927)

CHICAGO AUDITORIUM ASS'N v. WILLING et al.

No. 3733.

Circuit Court of Appeals, Seventh Circuit.

June 7, 1927.

Rehearing Denied August 30, 1927.

Walter L. Fisher, of Chicago, Ill., for appellant.

Homer H. Cooper, of Chicago, Ill., Watson Washburn, of New York City, and Frank H. McCulloch, of Chicago, Ill., for appellees.

Before ALSCHULER, EVANS, and PAGE, Circuit Judges.

EVAN A. EVANS, Circuit Judge.

This appeal involves solely a question of equity jurisdiction. The District Court dismissed the suit, concluding that the alleged facts were insufficient to invoke the jurisdiction of a court of equity. It did not pass upon the existence of facts necessary to sustain the relief sought, providing the court had jurisdiction. In other words, two questions were presented to the District Court. One was a question of law — the sufficiency of the allegations of the bill to invoke the court's jurisdiction. The other was one of fact — the sufficiency of the evidence to justify the relief sought. Having ruled adversely to appellant on the first question, the District Court made no findings on the second question.

It was agreed in this court — though the briefs are not so limited — that we should pass on the first question only, and in case we held for the appellant the cause should be returned to the District Court, that the issues of fact might be there tried and determined. Judge Wilkerson, in his opinion (8 F.2d 998), has so well and fully stated the facts as to meet the approval of both counsel. We adopt the statement thus made.

Speaking in a general way, appellant, at the outset of this argument, is confronted by two contentions, which it must meet, either one of which, if sustained, will be fatal to the maintenance of this suit. Both of them were upheld by the District Court. They are:

(a) The facts as alleged in the bill are insufficient to invoke the jurisdiction of a court of equity.

(b) The bill seeks nothing but a declaratory decree.

Perhaps the two objections are not so unrelated as might at first appear. Appellee's position under the first objection may be stated in a quotation from McElroy v. Masterson (C. C. A.) 156 F. 36:

"The bill of complaint should be dismissed, unless it can be maintained that there is a comprehensive discretion reposed by modern equity jurisprudence in the chancellor to make and unmake contracts of parties, sui juris, constrained only by no other limitations than those which meet the approval of his conscience. Courts of equity are now as much required as courts of law to enforce contracts free from vitiating elements of fraud, and to refrain from making contracts for the parties on which their minds never met. In the formative period of equity jurisprudence, the English Chancellors, in the absence of established principles and recognized sensible precedents, were much given to the pursuit of their own sense of absolute right and the dictates of their own individual conscience. But in the process of development equity jurisdiction has assumed more the qualities of a composite system of settled rules and principles, by which the property rights of parties are measured and limited, and are rendered more certain and stable."

To use their own language:

"Long-settled rules bound the exercise of equity jurisdiction, and, broad though they are, they do not validate invocation of an unlimited fount of remedies for any and all predicaments. Appellant would expand equity into `arbitrium boni viri,' a conception freely translatable as the decision upon the peculiar facts which would be made by a man of intelligence and good character, regardless of settled law. If that system of administering justice ever be accepted, every decision becomes a virtual arbitration, all certainty of lawful rights and obligations is prevented, and constitutional limitations upon the powers of courts are swept away. Hence the requirement that a plaintiff must predicate his prayer for relief upon some settled principle or head of jurisdiction constituting the department of equity. Observance of these rules affords security and stability to vested rights. Disregard means confusion, uncertainty, and, in this instance, unlawful taking of property."

Appellant challenges these limitations to equity jurisdiction, and asserts in the language of Pomeroy, Equity Jurisdiction (4th Ed.) § 62:

"The whole question by which the extent of the equity jurisdiction is practically determined is no longer whether the case is omitted by the law, or the legal rule is unjust, or even the legal remedy is inadequate, although the latter inquiry is still sometimes made and treated as though it were controlling. The question is, rather, whether the circumstances and relations presented by the particular case are fairly embraced within any of the settled principles and heads of jurisdiction which are generally acknowledged as constituting the department of equity. * * * A court of equity will not, unless perhaps in some very exceptional case, assume jurisdiction over a controversy the facts of which do not bring it within some general principle or acknowledged head of equitable jurisprudence."

To this statement counsel add their own views of the present litigation:

"While we think there should be no necessity of so doing, we expect to show that, if the bill in this case discloses meritorious grounds for equitable relief, there is nothing to prevent the court, should it prefer that alternative, from accrediting the bill with a conventional name. It may be convenient for ordinary purposes of classification to have at hand a cabinet of standard labels, but our position is that no such catalogue can deprive equity of its fundamental and most valuable attribute of administering relief according to the exigencies of each case as it arises."

While the opposing counsel thus approach the controversy at issue from different angles, they do not differ widely when they reach the narrow issue here involved.

While it may be, and in most instances is, entirely satisfactory and practical to predicate jurisdiction upon our ability to bring the facts within some recognized head of equity jurisdiction, we cannot believe that the doors opening to the courts of equity are numbered, or labeled, or limited. The origin and growth and entire history of equity jurisdiction repels the conclusion that it has ceased to grow, or that only those cases may be recognized which fall within the heretofore existing heads or branches of equity.

Perhaps these foregoing abstract statements have been pursued too far, for after all it is asserted by appellant's counsel that its cause falls under one of the recognized heads of equity, namely, a bill to remove a cloud on title. In fact, it may be that the so-called enlargement of equity jurisdiction applies more to the rules governing these recognized heads of equity jurisdiction, and to the remedies and the relief obtainable thereunder, than to the general subject of equity jurisdiction.

Further concessions on the part of appellant, that the equity jurisdiction of the District Court, from which this appeal is taken, has not been enlarged by any statute of the state of Illinois; that its bill is not a bill of peace, or a bill to relieve from a declared forfeiture, or a bill quia timet, or one to enjoin a breach of contract, narrow the issue. In other words, it asserts that, while "its right to relief" is "one of substance and not of form," yet if "an old label" must be applied "it is a bill to remove a cloud on title." It asserts that its bill alleges the existence of the three necessary facts which, when present, invoke the jurisdiction of a court of equity: (1) The existence of a substantial property right; (2) present or imminent deprivation of the beneficial use and enjoyment of that right; (3) lack of adequate legal remedy to protect the owner of such right in the use and enjoyment thereof.

Citations of authorities are hardly necessary to sustain the proposition that in a proper case equity will relieve a holder of real estate from the injury or damages which arise from the presence of a hostile or adverse claim. Holland v. Challen, 110 U. S. 15, 3 S. Ct. 495, 28 L. Ed. 52; McArthur v. Hood Rubber Co., 221 Mass. 372, 109 N. E. 162.

The objections to the bill as one to remove a cloud on title may be considered under the following four heads:

(a) Appellant's title under the Illinois decisions was not a legal title, and therefore not susceptible of being clouded.

(b) No hostile or adverse claim is asserted by any appellee, and therefore no cloud exists.

(c) Whatever adverse claim or cloud is alleged to exist grew out of the very instrument which constitutes the basis of appellant's title, and being in the same instrument, it is not a cloud on title removable in equity.

(d) If doubt respecting appellant's title exists by virtue of certain provisions of the lease, then appellees' claim is more than a cloud, and the parties must resort to an action at law to determine the same.

(a) Appellant's interest in the real estate involved consists of several leases, some for 198 years and others for 99 years. Appellees insist that under the Ilinois law these leases are chattels (Chicago v. Tribune Co., 248 Ill. 242, 93 N. E. 757; Thornton v. Mehring, 117 Ill. 55, 25 N. E. 958), and do not convey an interest in land. From this fact they argue that equity will not grant relief to a mere holder of a chattel, a lessee for a term of years.

There are two answers to this contention. The first one assumes that appellant's leases are mere chattels; the other assumes they are chattels real, as defined by Judge Wilkerson.

Assuming the leases to be chattels, we adopt the rule announced in many well considered cases and contended for by Pomeroy (Pomeroy's Equitable Remedies 2d Ed. § 2151), and hold that equity will take jurisdiction to relieve against a cloud, even though the subject-matter be personal,...