Sixty-Third & Halsted Realty Co. v. Goldblatt Bros.

• Decision Date: 29 January 1951
• Docket Number: Gen. Nos. 45266,45361,SIXTY-THIRD
• Citation: 342 Ill.App. 389,96 N.E.2d 838
• Parties: & HALSTED REALTY CO. v. GOLDBLATT BROS., Inc. GOLDBLATT BROS., Inc. v.& HALSTED REALTY CO. et al.
• Court: United States Appellate Court of Illinois

Page 838

96 N.E.2d 838

342 Ill.App. 389

SIXTY-THIRD & HALSTED REALTY CO. v. GOLDBLATT BROS., Inc.

GOLDBLATT BROS., Inc. v. SIXTY-THIRD & HALSTED REALTY CO. et al.

Gen. Nos. 45266, 45361.

Appellate Court of Illinois, First District, First Division.

Jan. 29, 1951.

Rehearing Denied Feb. 9, 1951.

Clausen, Hirsh & Miller, Nash, Ahern & McNally, of Chicago, for Sixty-Third & Halsted Realty Co. Pritzker, Pritzker & Clinton, of Chicago, Stanford Clinton, Robert A. Sprecher, of Chicago, of counsel, for Goldblatt Bros., Inc.

Eckhart, Klein, McSwain & Campbell, of Chicago, John Neal Campbell, Howard F. Husum, of Chicago, of counsel, for Chicago Title & Trust Co.

NIEMEYER, Presiding Justice.

In Case Number 45361, the plaintiff, Goldblatt Bros., Inc., sublessee of the premises at the northwest corner of 63rd and Halsted streets, Chicago (hereafter called sublessee), and defendant Chicago Title and Trust Company, as trustee, present fee owner and underlying lessor of the premises (hereafter called fee owner), appealed separately to the Supreme Court from a decree of the Circuit court of Cook county declaring that the sublessee has the right and is obligated under its sublease from defendant Sixty-Third and Halsted Realty Company (hereafter called sublessor) and the underlying leases, to build a single building on the demised premises.

In Case Number 45266, sublessor appeals from a summary judgment of the Superior court of Cook county, entered during the pendency of the foregoing appeals in the Supreme Court, denying its claim for rent and taxes accruing under the sublease referred to above amounting to $53,402.34, finding, contrary to the decree of the Circuit court, that the erection of a single building covering the demised premises would violate and breach the provision of the underlying leases, and decreeing that the sublease as amended be rescinded, canceled, set aside and held for naught. The fee owner did not follow its appeal. The record was filed in the Supreme Court by sublessee. On its motion the case was transferred to this court. Over objection of the sublessor, and several months after the expiration of the time for filing its brief in the Supreme Court, we permitted the fee owner to prosecute its appeal here. The two appeals were consolidated.

The demised premises, fronting 116 feet on Halsted street and 139 feet on 63rd street, were acquired by William Bromstedt, Jr., in 1885 and 1886. On December 2, 1899 he conveyed the north 22 1/3 feet of the 116 feet fronting on Halsted street (hereafter sometimes referred to as Parcel 2) to a grantee who conveyed it to Catherine L. Bromstedt, wife of William, by deed dated December 8, 1899. May 1, 1909, Bromstedt leased the entire premises--that owned by himself and his wife--for a term expiring April 30, 1924. By the exercise of an option in the lease the term was extended to April 30, 1934.

On March 6, 1922, Bromstedt leased the south 93 2/3 feet of the 116 feet fronting on Halsted street (hereafter sometimes called Parcel 1) to Lenz, Dehning and Meyn for a term of 99 years commencing May 1, 1934. On March 9, 1922, Bromstedt, as conservator of his wife Catherine L. Bromstedt, an insane person, pursuant to an order of the Probate court of Cook county, executed a lease to Lenz, Dehning and Meyn of the north 22 1/3 feet of the Halsted street frontage for 99 years commencing May 1, 1934. Except for the description of the premises demised and the names of the lessor, these leases are identical in all material provisions. Authorization of the lease by Bromstedt as conservator was procured on his verified petition, and the recommendation of his attorney endorsed thereon. In his petition Bromstedt stated that the property of his ward was improved with a 3-story brick building, used for commercial purposes; that the property was a gift from the petitioner, who owns the south and adjoining 93 and a fraction feet; that he had entered into an undertaking with Lenz, Dehning and Meyn whereby he agreed to lease the premises owned by him and to execute subject to the approval of the court, a lease of the property of his ward for 99 years, beginning at the expiration of the Schoenfeld lease, May 1, 1934, 'at an annual rental for the entire property, both that owned by him in his own right and that of his ward,' of $20,000 for the first five years and $25,000 per year thereafter; that in addition to these rentals the lessees have agreed to pay taxes, etc., and are required to 'maintain a building upon the required (sic) premises of not less in value than the structures then upon the premises at the time of the beginning of the term'; that while the rental value of his property is greater than the rental value of the property of his ward, 'he is willing that that portion of the rental to be paid by the lessees under said lease shall be adjusted on the basis of the Halsted street frontage so that the ward's property shall receive proportionately the same rate as that which he owns in his own right'; that 'by making this lease at this time and in connection with his property, his ward's property will produce a greater net income than if the same was rented separate and apart from that which petitioner owns in his own right.' March 22, 1928 this lease was ratified and confirmed in all its terms by a decree of the Circuit court of Cook county in which the court found that the foregoing statements in the petition of Bromstedt were true when made and at the time of the entry of the decree. Sublessor is successor in interest to Lenz, Dehning and Meyn under both leases, herein referred to as underlying leases. Upon the death of William and Catherine L. Bromstedt, the three children born to them and two children of William by a former marriage (hereafter called beneficial owners) became the fee owners of the demised premises. In December 1939 they caused the legal title to be conveyed to the Chicago Title and Trust Company as trustee under a trust agreement whereby each of them became an equitable owner of an undivided fifth part of the real property and entitled to a fifth part of the net income therefrom.

The sublease from the sublessor to sublessee dated May 1, 1934, is for an initial term of five years ending April 30, 1939, with an option for an additional term of 94 years (less one day), commencing May 1, 1939 and ending April 29, 2033. The option was exercised. Sublessee thereupon became obligated to fully and completely erect on the demised premises, not later than the 30th day of April 1941, a building which 'shall be a new building at least three stories in heighth, * * * adapted for commercial purposes, and shall cover substantially the whole of the demised premises.' This requirement was modified at the request of the sublessee by two supplemental agreements or amendments, extending the time to commence the construction of the building to December 31, 1948, or thereafter, in the event labor, materials and equipment necessary to construct the building should not be available as of December 31, 1948. Sublessee agreed to fully erect and complete the building within twelve months after construction is commenced. Negotiations for the sublease began in April 1933. The underlying leases were in the possession of the attorneys for sublessee not later than March 23, 1934. The sublease recites that the sublessee's title to the demised premises is under and by virtue of the underlying leases, and the parties expressly agree that 'This lease is in all respects subject and subordinate to the terms of the underlying leases.' Each underlying lease contains the following provisions: 'The lessees shall have the right to change, repair, remodel, add to or take from the structures upon the said premises during the term herein created, provided, however, that such remodeling, adding to or changing said building shall not impair or diminish the value of said premises'; and 'It is expressly understood and agreed that the lessees may erect or construct upon said demised premises a new building of a permanent nature, suitable for commercial purposes, which shall be at least three stories in heighth, and may wreck and remove the building on the premises.'

In the latter part of 1948 the sublessee approached the sublessor with the suggestion that the building requirement be waived for ten years, stating that due to financial conditions and the then credit buying it would not be good policy for Goldblatts to invest money in the capital improvement required by the sublease. Sublessee also asked that it be permitted to put up a one-floor and basement building instead of the 3-story building specified in the lease. Sublessor did not react favorably to these suggestions. Sublessee submitted plans for a 2-story building. Plans and specifications for a building 139 feet on 63rd street by 165 feet on Halsted street, costing more than a million dollars and consisting of three stories on the demised premises and two stories on the adjoining 50 feet to the north, were submitted later. These plans made provision for the ultimate separation of the portion of the building north of the demised premises by providing two sets of columns, beams and girders, each set of...