Commissioners of Highways of Towns of Annawan v. U.S., s. 80-2168

• Decision Date: 07 July 1981
• Docket Number: 80-2190,Nos. 80-2168,s. 80-2168
• Parties: The COMMISSIONERS OF HIGHWAYS OF the TOWNS OF ANNAWAN, et al., Plaintiffs-Appellants and Cross-Appellees, v. UNITED STATES of America, et al., Defendants, Cross Claimants, Third-Party Plaintiffs, Appellees and Cross-Appellants, v. Daniel WALKER, Individually, and as Governor of the State of Illinois, et al., Defendants, Cross-Defendants and Appellees, v. The STATE OF ILLINOIS, Third-Party Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 292

653 F.2d 292

The COMMISSIONERS OF HIGHWAYS OF the TOWNS OF ANNAWAN, et

al., Plaintiffs-Appellants and Cross-Appellees, v. UNITED STATES of America, et al., Defendants, Cross Claimants, Third-Party Plaintiffs, Appellees and Cross-Appellants, v. Daniel WALKER, Individually, and as Governor of the State of

Illinois, et al., Defendants, Cross-Defendants and Appellees, v. The STATE OF ILLINOIS, Third-Party Defendant-Appellee.

Nos. 80-2168, 80-2190.

United States Court of Appeals Seventh Circuit.

Argued April 29, 1981.

Decided July 7, 1981.

Ronald Butler, Chicago, Ill., for plaintiffs-appellants and cross-appellees.

Herbert Lee Caplan, Chicago, Ill., for defendants, cross-defendants and appellees.

Robert L. Klarquist, Dept. of Justice, Washington, D. C., for intervenor.

Before PELL and BAUER, Circuit Judges, and CAMPBELL, Senior District Judge. ^*

BAUER, Circuit Judge.

During the 1890's the United States exercised eminent domain over lands held by the Commissioners of Highways of several Illinois towns to obtain land to construct the Illinois-Mississippi Canal. ¹ The condemnations were authorized by the River and Harbor Act. The condemnation decrees awarded the Commissioners $1.00 and required the United States to construct and forever maintain bridges across the Canal for use as public highways.

The United States opened the Canal and 74 highway bridges in 1907. As early as 1938, the Government considered abandoning the Canal because it was obsolete. After several years of negotiations, the United States agreed to transfer title to the Canal to Illinois, and Illinois agreed to release the United States from any further obligation to maintain the Canal. The conveyance agreement was signed on December 14, 1960, ² but actual transfer of title did not occur until August 1970. From 1945 until 1970 the United States performed only minimal custodial maintenance on the Canal bridges.

In 1974 plaintiff Commissioners of Highways ³ filed this suit against the United States to enforce the 1890 condemnation decrees. The United States filed a third-party complaint against Illinois alleging that Illinois had released the United States from its obligation to maintain the bridges when it accepted title to the Canal in 1970. The parties submitted the case to the district court, the Honorable George N. Leighton presiding, on an agreed statement of facts. The court entered final judgment on April 29, 1980. The district court found that the obligation to maintain the bridges across the Canal was a covenant running with the land. Comm'rs of Highways of Towns of Annawan, et al. v. United States, 466 F.Supp. 745, 763-64 (N.D.Ill.1979). The court held that Illinois became responsible to maintain the bridges when it accepted title to the Canal. The court further held, however, that transfer of title did not transfer the United States' past due obligation to maintain the bridges from 1945 to 1970. Id. at 766-67. The court ordered the United States to pay $2,812,658 plus interest, the amount needed to put the bridges in the condition in which they should have been when the Canal was conveyed in 1970. Upon payment of the damage sum, the United States would be released from all future liability for maintenance of the bridges. Comm'rs of Highways of Towns of Annawan, et al. v. United States, No. 74 C 1861, slip op. at 12 (N.D.Ill. Apr. 29, 1980).

Commissioners and the United States cross-appeal from the judgment of the district court. Commissioners claim that the district court erred in finding that the obligation to maintain the bridges is a covenant running with the land. Plaintiffs urge us to reverse this portion of the court's judgment and hold the United States perpetually bound to comply with the 1890 condemnation decrees. The United States claims that Illinois assumed all of its obligations to maintain the bridges, both future and past, when it accepted title to the Canal and, thus, the district court erred in ordering the United States to pay the maintenance costs for repairs not performed between 1945 and 1970. The United States also claims that the court erred in awarding plaintiffs certain enumerated litigation costs. For the reasons discussed in this opinion, we affirm the judgment of the district court in part and reverse in part.

I

We address first the Commissioners' claim that the district court erred in finding that the obligation to maintain the bridges, which was memorialized in the 1890 condemnation decrees, is a covenant running with the land. Commissioners argue that the obligation to maintain the bridges was the compensation for the taking of Commissioners' land, and the United States' attempt to avoid this obligation by transferring title to Illinois amounts to an uncompensated taking of the Commissioners' property in violation of the Fifth Amendment.

We agree with Commissioners that the obligation to maintain the bridges is not a covenant running with the land. A covenant running with the land is a promise concerning the use and enjoyment of land agreed to by parties in privity. Leverich v. Roy, 402 Ill. 71, 73, 83 N.E.2d 335, 336 (1949); Purvis v. Shuman, 273 Ill. 286, 294-95, 112 N.E. 679, 682 (1916); Thompson on Real Property §§ 3152, 3155 (1962); Tiffany on Real Property § 851 (1939). "Strictly speaking, it is an agreement by deed to do or not to do some particular act." Thompson on Real Property § 3150 (1962). The district court concluded that the obligation to maintain the bridges is a covenant running with the land merely because the obligation concerns the use and enjoyment of the Canal lands. Comm'rs of Highways of Towns of Annawan, et al. v. United States, 466 F.Supp. at 763. Whether a condition affects the use and enjoyment of the land, however, is only one of three necessary qualities of a covenant that runs with the land. In this case, the first necessary quality, an agreement by deed, is lacking for there is no agreement between the United States and the Commissioners to create a covenant. Rather, the obligation to maintain the bridges was imposed by the district court in the 1890 condemnation decrees, which are not agreements by deed. See Harris v. Commissioner, 340 U.S. 106, 110-12, 71 S.Ct. 181, 183-84, 95 L.Ed. 111 (1950). Therefore, the obligation to maintain the bridges cannot properly be considered a covenant running with the land.

Although we find that the district court erred in concluding that the obligation to maintain the bridges is a covenant running with the land, we agree with the court's conclusion that the United States is no longer bound by the terms of the condemnation decrees. In 1955 the Illinois General Assembly enacted legislation authorizing the Illinois Departments of Conservation and of Public Works and Buildings to accept title to the Canal from the United States. Ill.Rev.Stat., ch. 105, §§ 482a-482d. The legislation provided that the local municipal corporations responsible for maintaining the roads of which the Canal bridges are a part would be responsible for maintaining the bridges after the State accepted title. Id. at § 482d. In 1958 Congress amended the River and Harbor Act authorizing the United States to convey the Canal to Illinois. The Act decreed that upon transfer the United States would have "no further obligations" with respect to the Canal. On December 4, 1960, Illinois agreed to accept title to the Canal and release the United States from any further obligations with respect to the Canal. The United States quitclaimed the Canal to Illinois in August 1970. Upon Illinois' acceptance of title, the United States' obligation to maintain the Canal bridges ceased.

Commissioners claim that the conveyance agreement releasing the United States from its obligation to maintain the bridges deprives them of their property without just compensation. It is not clear whether the property to which plaintiffs' argument refers is the land taken in 1890 or the Commissioners' property interest in the United States' duty to maintain the bridges. Regardless of on which property interest plaintiffs rely, their claim mischaracterizes the issue before us. The United States has not deprived plaintiffs of any property without just compensation. Plaintiffs were compensated for the original taking by the decree awarding them $1.00 and requiring the United States to maintain the bridges across the Canal for the Commissioners' benefit. Nor has the United States deprived plaintiffs of their property interest in perpetual maintenance of the bridges, for it is the State, not the United States, that has taken Commissioners' property by releasing the United States from its obligation to maintain the bridges.

Commissions of Highways, which are legislatively created municipal corporations, Ill.Rev.Stat. ch. 121, §§ 6-107, 6-112, are creatures of the State, possessing only those powers and privileges which the State may choose to grant. Trenton v. New Jersey, 262 U.S. 182, 187, 43 S.Ct. 534, 536, 67 L.Ed. 937 (1923); Heffner v. Cass & Morgan Counties, 193 Ill. 439, 448, 62 N.E. 201, 204 (1901). "A (municipal corporation) is merely a department of the State, and the State may withhold, grant or withdraw powers and privileges as it sees fit. However great or small its sphere of action, it remains the creature of the State exercising and holding powers and privileges subject to the sovereign will." Trenton v. New Jersey, 262 U.S. at 187, 43 S.Ct. at 536 (citation omitted).

As plaintiffs' creator, the State retains the power to control the disposition and use of its creatures' property. Hunter v. Pittsburgh, 207 U.S. 161, 28 S.Ct. 40, 52 L.Ed. 151 (1907); Worcester v. Worcester Consol. St. Ry. Co., 196 U.S. 539, 25 S.Ct. 327, 49 L.Ed. 591 (1905). See also Trenton v. New Jersey, 262 U.S. 182, 188, 43 S.Ct. 534, 537, 67 L.Ed. 937 (1923); Mount Pleasant v. Beckwith, 100 U.S. 514, 525, 25 L.Ed. 699 (1879); People v. Ill. Toll Highway Comm., 3 Ill.2d 218, 234, 120 N.E.2d 35, 44 (19...