Edward R. Bacon Grain Co. v. City of Chicago

• Decision Date: 14 March 1945
• Docket Number: Gen. No. 43335.
• Parties: EDWARD R. BACON GRAIN CO. et al. v. CITY OF CHICAGO et al.
• Court: United States Appellate Court of Illinois

325 Ill.App. 245

59 N.E.2d 689

EDWARD R. BACON GRAIN CO. et al.

v.CITY OF CHICAGO et al.

Gen. No. 43335.

Appellate Court of Illinois, First District, First Division.

Feb. 21, 1945.

Rehearing Denied March 14, 1945.

Appeal from Circuit Court, Cook County; Robert J. Dunne, Judge.

Action by Edward R. Bacon Grain Company and others against the City of Chicago and others to enjoin defendants from enforcing an ordinance which required a license to conduct or operate a grain elevator and payment of license fees. From an order temporarily restraining the enforcement of the ordinance, the defendants appeal.

Reversed.Barnet Hodes, Corporation Counsel of City of Chicago, of Chicago (Martin H. Foss, Asst. Corporation Counsel, of Chicago, of counsel), for appellants.

Kirkland, Fleming, Green, Martin & Ellis, of Chicago (Joseph B. Fleming, William H. Symmes, and Edward C. Caldwell, all of Chicago, of counsel), for appellees.

NIEMEYER, Presiding Justice.

This is an interlocutory appeal from an order temporarily restraining the City of Chicago and its officers from enforcing against plaintiff an ordinance of the city (sections 134-1 to 134-5, inclusive, of the Municipal Code as amended December 15, 1943) which required a license to conduct or operate a grain elevator, and the payment of a license fee of $300 annually for elevators having a capacity of not more than one million bushels, and $600 for elevators having greater capacity.

The plaintiffs, a partnership and 12 corporations, operate 20 grain elevators or warehouses in Chicago having an aggregate storage capacity of approximately 35,000,000 bushels. Twelve of the elevators were licensed under the United States Warehouse Act, 7 U.S.C.A. § 241 et seq., three under the Illinois Warehouse Act, Ill.Rev.Stat.1943, c. 114, § 189 et seq., and the remaining five were not licensed to store grain for the public. The grain stored is alleged to be ‘in the flow of interstate commerce subject to regulation by congress.’ The complaint as amended charged that the ordinance was invalid and the license fee unreasonable and exorbitant. In this court the alleged invalidity of the ordinance is put upon the ground that the city is without power to pass the ordinance because there is no provision in the Cities and Villages Act which empowers the city to license grain elevators; the ordinance is in direct conflict with federal and state statutes, and the license fee provided for by the ordinance is an unconstitutional burden on interstate commerce.

The ordinance in question has been in force for a number of years. The amendment in December 1943 increased the annual license fees from $100 and $200, to $300 and $600. This increase in the license fee caused the attack on the ordinance. It provides that no person shall conduct or operate a grain elevator within the city without first obtaining a license therefor; that upon receipt of an application for license the division marshal in charge of the bureau of fire prevention shall make an investigation for the purpose of ascertaining whether or not the building or structure in which it is desired or intended to conduct a grain elevator is so situated that it would not be so dangerous as to constitute a nuisance or be a menace to the safety of the public or to the adjoining property; that the division marshal shall also investigate to see that proper measures are taken to reduce the fire hazard due to the heating of grains and the possibility of spontaneous combustion and explosion, and shall periodically inspect grain elevators for the purpose of determining whether the same comply with all of the fire regulations of the Municipal Code applicable thereto.

Defendants by their sworn answer take the position that the ordinance is a regulatory measure lawfully enacted by the city as a protection against the extra fire and explosion hazards arising from the operation of a grain elevator due to dust explosions and the likelihood of the grain stored in such elevators becoming heated and through chemical changes igniting and exploding by the physical phenomenon known as spontaneous combustion; that such grain elevators are classified as hazardous use units and constitute one of the greatest fire and explosion hazards with which the city and its fire and police departments have to cope; that there are within the City of Chicago approximately 41 grain elevators, having an aggregate storage capacity of approximately 47,757,000 bushels; that the approximate money value of the grain stored in said elevators in any one day of the year exceeds $75,670,000; that the fire department of the city, and particularly its fire prevention bureau, have given particular study and attention to the prevention of dust explosions and spontaneous combustion of grains in such elevators, and many regulatory provisions have been enacted by the city to prevent or neutralize the hazards of fire or explosions in such elevators. The temporary injunction was issued on the complaint, answer and supporting affidavits filed by the respective parties.

In Arnold v. City of Chicago, 387 Ill. 532, 56 N.E.2d 795, the court reviewed the sources pertaining to the power of municipalities to license, regulate and tax occupations, and said (at page 537, of 387 Ill., at page 798 of 56 N.E.2d): ‘Thus we see that local municipalities derive not only their existence but all their powers from the General Assembly, and having no inherent power they must always be able to point to the particular statutory provision giving them authority to legislate on a particular subject.’ Defendants refer to a number of sections of article 23 of the Revised Cities and Villages Act, Ill.Rev.Stat.1943, chap. 24, as supporting the right of the city to pass the ordinance under consideration. Principal reliance is placed upon section 23-75, which empowers cities and villages ‘To regulate and prevent the storage of turpentine, tar, pitch, resin, hemp, cotton, gunpowder, nitroglycerine, petroleum, or any of their products, and other similar combustible or explosive material.’ This section is substantially identical with paragraph 65.64 of the preceding Cities and Villages Act, Ill.Rev.Stat.1939, c. 24, which specified all of the materials enumerated above, and, in addition, coal oil and benzine, which were omitted from the revised act. The materials named are not confined to any particular class. They embrace solids and liquids, products of the field, things taken from the earth, and the products of distillation and manufacture. Grain is closely related to hemp and cotton, and is highly combustible and explosive. The phrase ‘other similar combustible or explosive material,’ as used in the foregoing sections of the Cities and Villages Acts, has not been construed by our courts of review, but in the case of Chicago Cosmetic Co. v. City of Chicago, 374 Ill. 384, 29 N.E.2d 495, in holding that the city had power to regulate and license the manufacture to cosmetics, perfumes, etc., the court referred to various sections of the then controlling Cities and Villages Act, including paragraph 65.64, granting powers to cities, and in speaking of the bases of power for the ordinance under consideration said (at page 393 of 374 Ill., at page 499 of 29 N.E.2d): ‘The use of petroleum products, alcohol (not named in the statute) and other inflammable or explosive substances in such business enterprises is one basis * * *.’ It seems plain to us that by section 23-75 and former paragraph 65.64 the legislature intended to vest municipalities with power to protect themselves against the hazards of fire and explosion arising from the storage of combustible or explosive material; that this power of protection was intended to be full, not partial, and to extend to the regulation of the storage of all combustible or explosive materials, and therefore, as said by defendants, ‘* * * the similarity which the legislature had in mind was not that found between substances, or between liquids, or between plants, or between manufactured products, but was a similarity in combustibility, inflammability or explosiveness.’ The power to license is an incident to the power to regulate. City of Chicago v. Arbuckle Bros., 344 Ill. 597, 602, 176 N.E. 761;Great Atlantic & Pacific Tea Co. v. Grosjean, 301 U.S. 412, 426, 57 S.Ct. 772, 81 L.Ed. 1193, 112 A.L.R. 293.

But plaintiffs say that the ordinance is not regulatory, but is purely a revenue measure. This contention is based upon the claim that the inspections required under the ordinance are merely inspections required under provisions of the building code of the city. Numerous sections of the Municipal Code are referred to. All except section 101-29 are parts of the building code. Section 101-29 requires inspection of hazardous use units (which include grain elevators) by the marshal of the bureau of fire prevention, and a certificate from him before the granting of any license to engage in any business, occupy or use any premises, structure or building for any purpose classified as a hazardous use unit, but no provisions of the code other than the ordinance before us are pointed out which require inspections in the regulation or prevention of grain dust accumulations, heating of grain, etc. Many of the general provisions of the building code and of fire ordinance are applicable to grain elevators and warehouses, but in the storage of grain there are hazards from spontaneous combustion and dust explosion peculiar to that business, requiring special regulations and inspections to prevent and neutralize those hazards. It was this condition peculiar to the storage of grain that the ordinance was designed to meet. As said in Klever Shampay Karpet Kleaners v. City of Chicago, 323 Ill. 368, 374, 154 N.E. 131, 134, 49 A.L.R. 103: ‘The record warrants the conclusion that the business creates greater danger of...