Tribune Co. v. Thompson

• Decision Date: 15 December 1930
• Docket Number: Nos. 19264,19265.,s. 19264
• Citation: 174 N.E. 561,342 Ill. 503
• Parties: TRIBUNE CO. v. THOMPSON et al.
• Court: Illinois Supreme Court

342 Ill. 503

174 N.E. 561

TRIBUNE CO.

v.THOMPSON et al.

Nos. 19264, 19265.

Supreme Court of Illinois.

Oct. 25, 1930.

As Modified on Denial of Rehearing Dec. 15, 1930.

Suit by the Tribune Company against William Hale Thompson, George F. Harding, and others. Judgment for complainant, and defendants named appeal.

Reversed.Appeal from Circuit Court, Cook County; Hugo M. Friend, judge.

Schuyler, Weinfeld & Parker, of Chicago (William C. Graves, Carl J. Appell, and George W. Lennon, all of Chicago, of counsel), for appellants.

Kirkland, Fleming, Green & Martin, of Chicago (Weymouth Kirkland, Howard Ellis, William Wilson, and J. B. Martineau, Jr., all of Chicago, of counsel), for appellee.

ORR, J.

This is an appeal from a decree of the circuit court of Cook county finding the appellants, William Hale Thompson, George F. Harding, and other defendants, guitly of conspiracy and holding them jointly and severally liable to pay to the city of Chicago the total sum of $2,245,604.52, principal and interest, and pay the costs of suit.

An original bill of complaint in chancery in this cause was filed June 24, 1921, by the Tribune Company, a corporation, as a taxpayer of the city of Chicago, against William Hale Thompson, George F. Harding, Ernest H. Lyons, Edward C. Waller, Jr., Arthur S. Merigold, Michael J. Faherty, and the city of Chicago.An amended bill of complaint was filed March 30, 1925, naming Charles M. Nichols, Arnold H. Brautigam, Frank J. Koch, and Percival B. Coffin as codefendants. A second amended and supplemental bill of complaint was filed February 17, 1927, at the time complainant rested its case, for the purpose, as stated by counsel, of making the allegations of the bill conform to the proof. In substance, so far as the cause of action against appellants is concerned, there is no material difference between the original and amended bills of complaint. We shall therefore consider the allegations of the second amended and supplemental bill and in this opinion refer to it as the bill of complaint.

It is alleged in the bill that for more than two years next preceding the filing of the original bill of complaint, William Hale Thompson was mayor, George F. Harding was comptroller, and Michael J. Faherty was president of the board of local improvements of the city of Chicago; that Ernest H. Lyons, Edward C. Waller, Jr., and Arthur S. Merigold (hereinafter referred to as the experts) purported to be experts in the appraisal of real estate and were retained by the city in that capacity; that Charles M. Nichols and Arnold H. Brautigam also purported to be real estate experts; that Frank J. Koch was a copartner of Brautigam; and that Percival B. Coffin was a political lieutenant of Fred Lundin. Fred Lundin is termed in the bill a political boss, who devoted his time and attention to the affairs of a political organization known as the Thompson-Lundin machine, or the Thompson faction of the Republican Party, with which all of the defendants and real estate experts were affiliated. The bill alleges that for five or six years prior to the filing of the original bill, and subsequent thereto, this political organization controlled and directed the official acts and conduct of practically all the officers and employees of the city of Chicago, including the defendants, a majority of the members of the city council, and a majority of the members of the board of lacal improvements. It is alleged that this political organization termed the Thompson-Lundin machine obtained and retained its power by awarding offices and favors to its adherents and by intimidating those who opposed it, and that it was made up of persons who would obey its orders in return for favors, regardless of their own political affiliations. The bill alleges that this political machine was organized primarily to promote the welfare of its own members and not the public welfare.

It is further alleged that on July 21, 1919, the city passed certain ordinances known as the City Beautiful bond ordinances, to provide funds by the sale of bonds to pay the city's portion of the expense of widening, extending, and improving Western avenue, Ogden avenue, Robey street, South Water street, and Ashland avenue. These ordinances provided a total fund of $28,600,000, and copies were attached to the bill as exhibits. It appears that another ordinance was passed by the city submitting these five bond ordinances to a referendum vote, and at an election held November 4, 1919, these bond ordinances became effective by approval of a majority of the qualified voters voting on the question, and that many of the bonds were sold and the proceeds credited to certain corporate funds of the city called City Beautiful bond funds. The bill further alleges that both prior and subsequent to July 21, 1919, the city passed various local improvement ordinances for the making of certain parts of the City Beautiful improvements, and that the corporation counsel was directed by these ordinances to file petitions in court asking that steps be taken to ascertain the just compensation to be paid for property taken or damaged, also what property would be benefited by the improvement and the amount of such benefits. A list of the condemnation ordinances for the condemnation of lands under these City Beautiful improvements on the five streets above named is set forth in the bill, together with a statement that up to the time the original bill of complaint was filed no judgment had been entered in court for the condemnation of any private property or confirmation entered of any assessment on any of the five streets, excepting two named sections of Western avenue. The bill then proceeds to charge the defendants with unlawfully and wrongfully conspiring and confederating together for the purpose of defrauding the city of large amounts of money, charging that the defendants and divers other persons who were members of said political machine and whose names are to the complainant unknown, ‘unlawfully, wrongfully and fraudulently, and in violation of the duty owed by them and each of them to the city and the tax-payers thereof, conspired and confederated together for the purpose of wrongfully and unlawfully diverting for their own private use, benefit and advantage a large amount of the moneys belonging to the city, including a large amount of the proceeds from the sale of City Beautiful bonds for the purpose of cheating and defrauding the city and tax-payers thereof, including the complainant, out of large sums of money which would otherwise be used and lawfully could only be used by the city for the City Beautiful improvements or for other municipal purposes and for the purpose of obtaining large sums of money from the city and tax-payers thereof, including complainant, to be distributed among persons composing said political machine or among persons whose adherence the persons comprising said political machine desired to obtain, whose names are to the complainant unknown. All of the acts hereinafter charged to the said Ernest H. Lyons and said Arthur S. Merigold, or either of them, or to any or either of the defendants herein, were done in pursuance of said conspiracy and confederation and in behalf of each, every and all of the said defendants and of said Ernest H. Lyons and Arthur S. Merigold and with the knowledge and consent of each, every and all of said defendants and of the said Ernest H. Lyons and said Arthur S. Merigold and for the purpose of accomplishing the object of said conspiracy and confederation.’ In support of the alleged conspiracy the bill then proceeds with the following charges, in substance:

1. That on February 5, 1920, upon the procurement of defendants and the three experts, the city council purported to pass a certain order, hereafter referred to as the order of February 5, 1920, purporting to authorize the board of local improvements to employ four real estate experts for such periods of time during 1920 as might be necessary, at the rate of 1 per cent. of the value of the property and $50 per day for testifying in court on behalf of the city, such employment to be made upon securing the approval of the finance committee of the city council of the sum and rate of compensation to be paid.

[342 Ill. 508]2. That upon the procurement of the defendants and the three experts the city council further purported to approve the employment by the board of local improvements of said three experts at the rate of $50 per diem, and that neither the city council nor the finance committee approved their employment at any rate other than $50 per diem, or at any time during 1920 approved the employment of Nichols and Brautigam as real estate experts.

3. That in pursuance of said conspiracy, on or about March 2, 1920, the defendant Faherty, purporting to act in behalf of the city and under the authority of the order of February 5, 1920, pretended to employ the three experts, Lyons, Waller, and Merigold, at the percentage rates fixed in said order, for a period of five years, beginning with 1920, to make appraisals of real estate on the five City Beautiful improvements; and that defendants claim this employment is evidenced by contracts in writing, being three letters purporting to bear date March 2, 1920, from Faherty, as president of the board of local improvements, addressed, respectively, to said three experts, and that Lyons and Merigold orally accepted the terms of employment and Waller accepted by his purported letter of March 8, 1920, addressed to Faherty. The bill alleges that these contracts of employment are contrary to the provisions of the order of February 5, 1920, and are null and void.

4. That on March 31, 1920, through the procurement of defendants and the three experts, the city council passed the annual appropriation bill for the fiscal year beginning January 1, 1920, and ending December 31, 1920, in which was appropriated the sum of $235,000 for the...