SUPREME COURT OF ILLINOIS.

(116 III. 11)

WILLOUGHBY and others v. LAWRENCE and others.

Filed January 25, 1886.

1. SERVITUDE-USE OF FENCE FOR ADVERTISING RIGHT OF ACCESS IMPLIED RIGHTS IN GROSS AND APPURTENANT.

An agreement to build a fence around certain lands, in consideration that the builder shall have the right to use "all the surface of the fence" for advertising, includes the right to use the inside of such fence; and such right includes the incidental rights of entry upon such premises, and access to such inside. It includes a right of way for such purpose, which is a servitude upon the land. This, being a right in and upon certain land, not annexed to the use of other land, is a right in gross, and not appurtenant. 2. SAME-SERVITUDE AND LICENSE IN LAND.

A right of access and way, for which the grantee has paid a valuable consideration, as, in this case, by building a valuable fence upon the grantor's land, is such as to invest the grantee with more than a license; and equity will treat it as a burden upon the land of the grantor.

8. SAME-PURCHASER WITH NOTICE CHARGED WITH BURDEN.

If the owner of land enters into a covenant subjecting it to easements or personal servitudes, and the land is afterwards sold to one who has actual or constructive notice, the purchaser will take the premises bound by the covenant, and it will be enforced in equity, whether or not it is one which in law "runs with the land."

4. SAME-COVENANT BY LESSEE FOR USE OF FENCE FOR ADVERTISING, ENTITLED TO RECORD.

Section 31 of the conveyance act makes all instruments of writing relating to real estate entitled to record, and charges the world with notice thereof from the time of their recording. Section 38 defines "real estate" as embracing all chattels real. 1 Starr & C. St. c. 30, §§ 31, 38. A contract by a lessee, conveying the use of fences on land for advertising purposes, is an instrument relating to a chattel real, and is entitled to record.

5. SAME-PURCHASER PENDENTE LITE CHARGED WITH NOTICE.

A purchaser of such property, taking during the pendency of a suit upon such a contract, is charged with notice of such contract.

6. LESSEE'S CONTRACT GRANTING USE OF PROPERTY CONTRARY TO LEASE, VOIDABLE ONLY.

A contract by a lessee in violation of the terms of a lease, and which, by the terms of the lease, is a ground for forfeiture, is not therefore void. The lessor may ratify it, or consent to such use of the property. The contract is not void, but voidable.

Appeal from appellate court, First district.

Dent, Black & Cratty Bros., for appellants.

Dow & Burnham, for appellees.

MAGRUDER, J. On May 1, 1878, Magie & Tree executed to Lawrence & Martin a lease of the W. of the N. W. of section 14, township 39 N., of range 13 E., in Cook county, for 10 years from its date, with the privilege, on the part of the lessees, of terminating the lease at the end of five years, upon giving three months' written notice to the lessors. The lessees therein agreed not to sublet any portions of the land, or to assign any less portion of the leasehold interest than the whole, and not to permit

the erection thereon of any buildings, except those necessary or convenient in the use and management of a trotting-park or race-course, and not to use said premises for any other purpose than a trotting-park or racecourse, and the holding of fairs, and other exhibitions of a like character. On July 11, 1878, Lawrence & Martin made with Willoughby, Hill & Co. the following contract:

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"Articles of agreement entered into this eleventh day of July, A. D. 1878, by and between Lawrence & Martin, of the city of Chicago and state of Illinois, party of the first part, and Willoughby, Hill & Co., of the same city and state, party of the second part: Witnesseth that, for the consideration hereinafter mentioned, the party of the first part has sold and conveyed, and by these presents does sell and convey, all of the right and title to use the following described property for advertising purposes, to-wit, the fences and all the buildings to be erected upon the following described land, (excepting the building to be called the 'Club-house,' which building is not to be used for advertising purposes save by the party of the first part only,) to-wit, the west half of the north-west quarter of section 14, T. 39 N., R. 13, in the county of Cook and state of IHinois. It is further agreed by the parties hereto that the party of the second part shall have the sole and exclusive control of said fences and buildings (with the exception above stated) for advertising purposes, and, under their exclusive control, to use all of the surface of said fences and buildings to advertise thereon for themselves or any other person, and to sell or dispose of any or all of said surface for the purposes aforesaid; that said right to so advertise shall continue until the first day of May, 1883, and as much longer as the party of the first part or their assigns shall occupy said tract of land. It is further agreed that the privilege to advertise any business, profession, or occupation in or about the premises aforesaid shall be the property of and belong to the party of the second part exclusively, and that the party of the first part shall not permit any other person to advertise in or about said premises without the consent of the party of the second part. For and in consideration of the premises, privileges, and appurtenances aforesaid, and in consideration of one dollar in hand paid to them, the party of the second part hereby agrees to furnish the material for and erect a fence around so much of the aforesaid tract of land as lies east of Crawford avenue. The said party of the second part agrees to build said fence of good, merchantable, common lumber, tight, and ten feet high, and to maintain the same in good condition during the continuation of this contract. It is further agreed by the party of the first part that, after the completion of said fence, they will pay to the said party of the second part the sum of four hundred dollars on demand as part of the expenses of building said fence. It is further agreed by the parties hereto that, in case the said party of the first part or their assigns shall cease to occupy said land after the first of May, 1883, the party of the second part may remove said fence as their own property; but if this contract, with its privileges to the party of the second part, shall continue for the space of ten years from the first day of May, 1878, then said fence shall become the property of the party of the first part. It is further agreed by the parties hereto that the terms of this contract shall be binding upon the executors, administrators, heirs, and assigns of each of the parties severally hereto. "Witness the hands and seals of said parties on the day and year above written. "LAWRENCE & MARTIN. [Seal.] "WILLOUGHBY, HILL & Co." [Seal.]

In pursuance of this contract the appellants, Willoughby & Hill, began the construction of the fence on the twenty-seventh day of July, 1878, and finished it in about three weeks. It cost them $2,700, of which Lawrence & Martin paid them only $400, leaving $2,300 of the actual cost unpaid, and for the expenditure of which they would receive no return except from the exercise of the advertising privileges conferred by the contract. On August 20, 1878, about the time the fence was finished, and while it was yet under the control of Willoughby & Hill, proceedings were begun for the organization of the Chicago Jockey & Trotting Club, under the thirty-second chapter of the Revised Statutes in re

ference to corporations for pecuniary profit. The preliminary statement required by the act was acknowledged on August 20, 1878, and filed in the office of the secretary of state on August 21, 1878. On September 6, 1878, the subscribers to the stock met, in pursuance of 10 days' previous notice, and elected directors. The certificate of organization was issued on the ninth day of September, 1878, and recorded in the recorder's office of Cook county on September 20, 1878. The capital stock was $75,000, divided into 750 shares, of which 10 gentlemen took each one share, making $1,000, and Lawrence & Martin subscribed for 740 shares, amounting to $74,000. The corporation act provides that, upon recording the certificates of organization, together with the copies. thereto attached, the "corporation shall be deemed fully organized, and may proceed to business;" yet on the sixteenth day of September, 1878, four days before the recording of the certificate, Lawrence & Martin assigned all their interest in the lease with Magie & Tree to the Chicago Jockey & Trotting Club. The following indorsement appears on the lease introduced in evidence:

"In consideration that we have sold to the Chicago Jockey & Trotting Club, for the sum of $75,000, our new race-course, described as follows: Situated in the city of Chicago, county of Cook, and state of Illinois, and lying south of Madison street, west of Central park, north of Harrison street, and east of Crawford avenue, with all the improvements thereon, and this lease, we, Henry C. Lawrence and Morris T. Martin, within named lessees, do hereby transfer, assign, set over, and deliver to the said Chicago Jockey & Trotting Club all our right, title, and interest in and to the above lease, subject to the agreements and covenants therein contained.

"Witness our hands and seals this sixteenth day of September, A. D. 1878. "H. C. LAWRENCE. [Seal.] "M. T. MARTIN.” [Seal.1

Lawrence & Martin paid the $400 to appellants after they had received their stock. When the club went into possession of the premises, it refused to allow the appellants to exercise all the advertising privileges provided for in the contract. The testimony shows that, for a considerable length of time, their advertisements were allowed upon the outer surface of the outside fence; but neither the jockey club, nor any of their assigns, would permit such advertisements to be placed on the inner side of the main fence, or upon any of the buildings or fences inside of the inclosure. Accordingly, in March, 1879, the appellants filed a bill against Lawrence & Martin and the jockey club, and its president, secretary, and directors, praying for an injunction against any interference with the use of the premises for the purposes named in the contract, and for an allowance of damages sustained, etc. Pending the original bill, and under a judgment against the club in favor of Henry V. Bemis, the sheriff, on October 27, 1880, sold to A. W. Richmond, for $29,500, subject to redemption, the leasehold interest of the club in said premises, "and all improvements, fixtures, and appurtenances thereto belonging, meaning all buildings, fences, stables, club-houses, stands, gates, sheds, etc.," and issued to Richmond the usual sheriff's certificate of sale. On October 29, 1880, proceedings were taken, under the corporation act, for the organization of a new corporation called the "Chicago Driving Park," of

which the certificate of organization was issued on December 9, 1880, and recorded on December 16, 1880. On December 11, 1880, the sheriff's certificate was assigned by Richmond to the Chicago Driving Park, and a sheriff's deed was issued to it on April 6, 1882. On December 11, 1880, Bemis and Richmond also executed to the driving park a bill of sale of said leasehold interest, improvements, buildings, sheds, fences, etc., and of certain personal property on the premises. March 13, 1882, appellants filed their amended and supplemental bill, setting up substantially the above facts, and that the driving park refused to allow them to use fences and buildings for advertising purposes, and alleging the insolvency of Lawrence & Martin and the jockey club, and the questionable solvency of the driving park, charging notice of their rights against the latter by lis pendens, and praying for a decree declaring themselves to be the owners of the privileges named in said contract, and for an injunction as in original bill, and for an accounting of the value of the use of said premises while withheld from them, and making the same parties defendant as in original bill, with the addition thereto of the Chicago Driving Park.

The first question is as to the nature of the interest acquired by appellants under their contract. It gave them, and their heirs, representatives, and assigns, the right to use all of the surfaces of the fences and buildings (except the club-house) for advertising purposes, for a period of nearly five years, or ten years if Lawrence & Martin, or their assigns, should occupy the premises so long. "All of the surface of said fences" included the inside as well as the outside of the main fence. The buildings were inside of the inclosure. Therefore the right to use the fences and buildings for the purpose of posting advertising notices upon them involved and included the right of entry upon the premises to reach the buildings and the inner surface of the fence. The privileges accorded involved and implied a right of way upon the land to the inside of the fence and to the surface of the buildings. Such a right, if not actually an easement, was a burden of servitude in the nature of an easement. The general rule is that two distinct tenements are necessary to the creation of an easement: the dominant, to which the right belongs; and the servient, upon which the obligation rests,-as, if the owner of one farm has the right of way over the adjoining farm, that in favor of which the right is exercised is the dominant tenement; that over which it is exercised is the servient tenement. Washb. Easem. 3 et seq.; Garrison v. Rudd, 19 Ill. 558. In easements of this character the burden rests upon one piece of land in favor of another piece of land; but there is a class of rights which one may have in another's land, without their being exercised in connection with the occupancy of other lands, and therefore called rights in gross. Washb. Easem. 4. In such cases the burden rests upon one piece of land in favor of a person or individual. The principal distinction between an easement and a right of way in gross is found in the fact that in the first there is, and in the second there is not, a dominant tenement. The right of way is in gross, and personal to the grantee, because it is not appurtenant to other premises. The owner of

premises may grant the right of way in either form. Wagner v. Hanna, 38 Cal. 111. There is, moreover, a kind of appendancy or appurtenancy of one easement to or upon another easement in some cases, which is sometimes called a secondary easement. It passes with the principal easement, as being necessary or convenient to the enjoyment of the same. The grant of a right of pasturage carries the right of way to and from the pasture. So, that of drawing water or of fishing or hunting gives a right of access and egress to and from the estate in which it is to be enjoyed. Washb. Easem. 39; Alexander v. Tolleston Club, 110 Ill. 65.

In the case at bar a certain right of way, or right of access and egress to and from the trotting park, passed with the privilege of using the fences and buildings for advertising purposes, as being necessary and convenient to the enjoyment of such privileges. The right conferred upon appellants by the contract was more than a mere revocable license, as claimed by appellees, because Willoughby & Hill actually constructed the fence at an expense to themselves of $2,300, and fully executed their part of the agreement. 1 Washb. Easem. 29, 30, et seq.; Van Ohlen v. Van Ohlen, 56 Ill. 528. They acquired, by the terms of their contract, a certain interest in these premises, which was in the nature of a right of way in gross, and which a court of equity will regard as at least an equitable charge or burden thereon in their favor.

The next question is whether the Chicago Jockey & Trotting Club, immediate assignee from Lawrence & Martin, took the lease and improvements subject to this burden, or freed from it. In order to determine this question it is necessary to determine whether the club had notice, actual or constructive, of the rights of appellants under the contract, or made its purchase under such circumstances as put it upon inquiry as to those rights. To bind a purchaser of a servient estate by a servitude charged thereon, he should have notice thereof, as in case of other incumbrances upon land. Washb. Easem. 42, and note 2; McCann v. Day, 57 Ill. 101. The contract was recorded on the second day of August, 1878. Was it an instrument of such a character that its record operated as notice to the club? The thirty-first section of the convey.ance act provides that "deeds, mortgages, and other instruments of writing relating to real estate shall be deemed, from the time of being filed for record, notice to subsequent purchasers and creditors, though not acknowledged or proven according to law." The thirty-eighth section of the same act provides that "the term 'real estate,' as used in this act, shall be construed as co-extensive in meaning with lands, tenements, and hereditaments,' and as embracing all chattels real." The lease from Magie & Tree to Lawrence & Martin was a chattel real, and was entitled to record to give notice of the leasehold interest of the lessees therein. The contract in question, conveying the use for certain purposes of the fences and buildings upon land, which is particularly described, and involving a right of way upon the land, in order to enjoy such use, is an instrument in writing relating to a chattel real. Under the thirty-eighth section of the conveyance act, it is an instrument "relating to or affecting the title to a chattel real." It imposes a charge or burden upon the lease