Northern Trust Co. v. Buck & Rayner

• Decision Date: 23 April 1914
• Docket Number: No. 9404.,9404.
• Citation: 263 Ill. 222,104 N.E. 1114
• Court: Illinois Supreme Court
• Parties: NORTHERN TRUST CO. v. BUCK & RAYNER.

263 Ill. 222

104 N.E. 1114

NORTHERN TRUST CO.

v.BUCK & RAYNER.

No. 9404.

Supreme Court of Illinois.

April 23, 1914.

Appeal from Appellate Court, First District, on Appeal from Circuit Court, Cook County; John P. McGoorty, Judge.

Action by the Northern Trust Company against Buck & Payner. From a judgment for defendant, plaintiff appeals. Affirmed.

Mason Brothers, of Chicago (Henry B. Mason, of Chicago, of counsel), for appellant.

D'Ancona & Pflaum, of Chicago, for appellee.

VICKERS, J.

The sole question in the case at bar is whether appellee, Buck & Rayner, a corporation, being the assignee of the lessee interest in a 99-year lease, is liable, under the covenants in that lease, to repay appellant, as trustee and executor under the last will and testament of the lessor, the amount of the inheritance tax which appellant was compelled to pay to the county treasurer of Cook county. The action was in covenant for the recovery of $8,010.85, which appellant paid as inheritance tax to the state by reason of the passing of the demised premises under the last will of the lessor, Ralph E. Starkweather. The suit being upon the lease and its assignment, those documents were brought into court, and copies thereof attached to the declaration, and in the same manner, by an amendment to the declaration, the will of the original lessor was brought into court, and a copy thereof attached to the declaration as an exhibit. Appellee craved and obtained oyer of the lease and the assignments thereof and the will of the lessor, and thereupon filed a general demurrer to the declaration, which was sustained. Appellant having elected to abide by its amended declaration, final judgment was rendered against it, which upon an appeal to the Appellate Court for the First District was affirmed. The case comes to this court on a certificate of importance.

[1] The course of the pleadings here pursued is in accordance with the authorities (1 Chitty's Pl. [Am. Ed. 1872] 13; Collins v. Ayers, 13 Ill. 358;Matthews v. Storms, 72 Ill. 316), and presents the legal question whether under the terms of the lease appellee is liable to reimburse appellantfor the amount of inheritance taxes paid by the executor of the lessor.

It appears from the averments of the declaration that the testator, Ralph E. Starkweather, was the owner in his lifetime of certain real estate located on the southwest corner of State and Adams streets, in the city of Chicago; that on May 1, 1903, the testator executed a 99-year lease on said premises, at an annual rental of $15,000 for the first two years, and $17,000 yearly rental for the remaining 97 years. This lease by successive assignments became the property of appellee, and after the death of the lessor appellee attorned to appellant and recognized appellant as the successor to the title of the lessor. The declaration shows that after the death of the lessor an appraiser was appointed by the county judge of Cook county to appraise the property of the testator for the purpose of determining the amount of inheritance taxes to be paid. The appraiser reported that the property described in the declaration was worth $425,000, and that after allowing for all legal deductions the amount of inheritance taxes payable was $8,010.85. The declaration avers that appellant was compelled to, and did, pay the above amount, which it now seeks in this action to recover from appellee, basing its right to such recovery upon the terms and covenants of the lease. All the facts properly alleged in the declaration are admitted by the demurrer, but appellee insists that it is not liable to reimburse appellant under any of the covenants contained in the lease. The determination of the question presented depends upon the construction to be given to certain clauses of the lease.

The second paragraph of the lease is as follows: ‘Second.-The lessee covenant to pay in the name of the lessor, as additional rent for the property above demised, promptly when due, all water rates and all taxes, assessments and municipal or governmental charges, general and special, ordinary and extraordinary, of every natureand kind whatsoever, which may after April 30, A. D. 1905, during the life of this lease, become payable, (a) levied, imposed or assessed upon any land hereby demised or upon any improvements at any time during the life of this lease situated upon said land; or (b) levied, imposed or assessed upon any interest of the lessor in or under this lease; or (c) which the lessor shall be required to pay by reason of or on account of his interest in said land and improvements or in or under this lease, the first general annual taxes to be paid by the lessees being those levied for the year 1905 and payable in the year 1906, and the last being those levied for the year 2001. Every such tax, assessment and charge shall in any event be paid in time to prevent the addition of any interest or penalty thereto.’

The sixth paragraph provides: ‘Sixth.-The lessees further covenant that they will, at all times prior to the termination of this lease and to the delivery to the lessor of possession of said land and improvements, pay and discharge and indemnify the lessor against (1) any and all liens and charges, of any and every nature and kind, which may at any time be established against said land and improvements, or any part thereof, as a consequence, direct or indirect, of any act or omission of the lessees or as a consequence, direct or indirect, of the existence of the lessees' interest under this lease; (2) any and all loss, cost, damage or expense sustained by the lessor (including the attorney's and solicitor's fees and the expenses of the lessor); (a) on account of or through the use of said land or improvements, or of any part thereof, by the lessees or by any other person whomsoever, for any purpose inconsistent with the provisions of this lease; (b) arising out of or directly or indirectly due to any failure of the lessees in any respect promptly and faithfully to satisfy their obligations under this lease; (c) arising out of or directly or indirectly due to any accident or other occurrence causing injury to any person or persons or propertywhomsoever or whatsoever, resulting from the use of said land and improvements. or any part thereof, under this lease; (d) for which the said land and improvements, or any part thereof, or the lessor, as owner thereof or interested therein, may hereafter, without the fault of the lessor, prior to the termination of this lease and to the delivery to the lessor of said land and improvements, become liable, and especially (but not exclusively) any such loss, cost, damage or expense that may arise under any ordinance or statute or any municipal or governmental regulation.’

By other paragraphs of the lease it is provided that in case of the lessees' failure to promptly satisfy the foregoing obligations the lessor may advance and pay the same and recover the amount thereof from the lessess with interest, expenses, and attorney fees. By the nineteenth paragraph of the lease all covenants, promises, agreements and requirements of the lease, except the obligation to pay rent, shall be construed as covenants running with the land, and held to apply to and be binding upon the several parties, their heirs, legal representatives, and assigns. The legal and proper assignments of the lease are not controverted.

The will of the lessor, dated January 17, 1907, is filed as an exhibit with the declaration, and is one of the instruments of which appellee craved and was given oyer. Those portions of the will which are regarded by the parties as having some bearing upon the question involved are as follows:

‘The real estate I own on State street, in the city of Chicago, at the southwest corner of Adams street, constitutes the greater portion of my estate and will be designated by me herein as the State street property, and is at present under a long-term lease.’

‘If any lease in force at the time of my death of my State street property shall for any reason be terminated during the existence of this trust, then I expressly authorize said trustee to lease said State street property, or any portionthereof belonging to the trust estate, from time to time and as often as occasion may arise, for such a term, not exceeding ninety-nine (99) years, as it in its discretion shall deem for the best interest of the trust estate and the beneficiary or beneficiaries,’ etc.

‘In the event thay my estate outside of my State street property shall be insufficient to pay my just...