author: Mr. Justice Baker

text:
    P. H. Montgomery, Collector, et al. v. Martha L. Wyman et al.

      Filed at Mt.Vernon

      October 31, 1889.

    1. Taxation — exemption■—strict construction. All laws exempting property from taxation are to be strictly construed, and all reasonable intendments will be indulged in favor of the State, and all doubts solved in its favor.
    2. Same—exemption—institutions of learning. Property, real or personal, used in carrying on and promoting the business of an institution of learning, in order to be exempt from taxation, must be the property of such institution, and it must not be “leased by such institutions, or otherwise used with a view to profit. Such property must be used exclusively for purposes of education or learning.”
    3. Land owned by a wife, with personal property belonging to both the husband and the wife, was devoted exclusively to the support and carrying on by them of an institution of learning, and h ad been so used and devoted for several years. There was no society composing or carrying on the institution, and the title of the property continued in the husband and wife, and there were some profits derived from the bugliness, from which the owners of the property derived a support, there being no understanding or agreement in respect to rent or pay for the services of the husband and the wife: Held, that neither the real nor the personal property was exempt from taxation.
    4. Private school houses, or houses of learning used for educational purposes or as institutions of learning, and with a view to profit, are not exempt from taxation.
    Appeal from the Circuit Court of Madison county; the Hon. William H. Snyder, Judge, presiding.
    Mr. George F. McNulty, State’s attorney, for the appellants :
    All laws exempting property from taxation will be strictly construed, and all doubts solved in favor of the State. In re Swigert, 123 Ill. 267; 119 id; 83; People v. Seamen’s Friend, 87 id. 246; Cooley on Taxation, 54; Theological Seminary v. People, 101 Ill. 579.

      Under the tax exemption laws of Illinois, private schools or institutes are not exempt from taxation, nor are educational institutions, when conducted with a view to profit. Northwestern University v. People, 80 Ill. 333; 86 id. 141; Frederick County v. Sisters, 48 Md. 34; Gerke v. Purcell, 25 Ohio St. 229; Appeal Tax Court v. St. Peters, 50 Md. 321; Appeal Tax Court v. Grand Lodge, id. 421; Library Association v. Pelton, 36 Ohio, 253; Chegary v. Mayor, 13 N. Y. 220; Willard v. Pike, 57 Vt. 202; Humphries v. Little Sisters, 29 Ohio, 206; Mayor v. Ward, 16 Lea, 27.
    This property being used in part for dwellings, is certainly, as to such part, liable to taxation. Red v. Johnson, 53 Texas, 284; Wyman v. St. Louis, 17 Mo. 335; State v. Ross, 24 N. J. 497.
    This property belonged to Mrs. Wyman, but the school was conducted by her husband. Even if it is such a school as is exempt from taxation, the property is not exempt if another than the owner conducts the school. Pace v. County Comrs. 20 Ill. 645; Armand v. Dumas, 28 La. Ann. 403.
    This case is appealed to settle the question whether private schools are exempt from taxation, and what “institutions of learning” are exempt. The facts are, for the most part, admitted, but the legal effect of these facts is disputed. There is no dispute that the property assessed and taxed is a school, or, as the owners put it, the “Wyman Institute—a home school for boys.”
    The appellants insist, first, it is a private school, and as such is liable to be taxed; second, if it is an institution of learning, within the meaning of our statute, as it is conducted for profit it is not exempt from taxation.
    An institution of learning seems generally to be recognized by the courts as meaning an institution for higher learning,— such as universities,—and such institutions should be owned and conducted by a corporation chartered by the State for such purposes. This seems to be the tendency of the decisions. Chegary v. Mayor, 13 N. Y. 220; Gerke v. Purcell, 25 Ohio St. 229; Indianapolis v. McLean, 7 Ind. 328.
    Property used for a profit is not exempt. M. E. Church v. Chicago, 26 Ill. 482; Northwestern University v. People, 80 id. 333; 86 id. 141; Pace v. County Comrs. 20 id. 645; Gerke v. Purcell, 25 Ohio St. 229; Hennepin v. Grace, 27 Minn. 503.
    Mr. John M. Holmes, for the appellees:
    If any of the property involved is exempt, all of it is. Pierce v. Cambridge, 2 Cush. 611; Female Seminary v. People, 106 Ill. 398; Trustees v. State, 46 Iowa, 275.
    A literal interpretation of the language of the statute, and a strict construction thereof as against the claimants, will not exclude from the benefit of the exemption institutions of learning owned and conducted by private individuals.
    The construction placed by other States upon their own statutes is not entitled to weight, when those statutes differ materially from the one under discussion. The true principle of construction to apply is, that the statute should be so construed as to effectuate the object for which it was enacted. Potter’s Dwarris on Stat. p. 175.
    Under this rule of construction, as well as under the rule of literal interpretation and strict construction, institutions of learning owned by private parties, and conducted with a view to profit, are within the benefit of the statute. Lefranc v. City of New Orleans, 27 La. Ann. 188.
    It may be as well to separate the questions which have been definitely settled, from those which remain open to discussion, and thus narrow the range of inquiry. In the first place, then, we contend, that inasmuch as the agreed statement shows that the property is all used for school purposes exclusively, is not leased or otherwise used for profit, and is no greater in extent than the requirements of the institution demand, it is all exempt from taxation, if any of it is. The portions used for dwellings by the teachers and assistants, not being leased to them, are exempt. Female Seminary v. People, 106 Ill. 398; Trustees v. State, 46 Iowa, 276; Pierce v. Cambridge, 2 Cush. 611.
    Mr. Henry S. Baker, and Mr. Henry S. Baker, Jr., also for the appellees:
    The remedy by injunction is a proper one, where property exempt by law from taxation has been assessed. Cooley on Taxation, chap. 24, p. 540; High on Injunctions, p. 200, sec. 357; Vieley v. Thompson, 44 Ill. 9; Railroad Co. v. Cole, 75 id. 591; Porter v. Railroad Co. 76 id. 561; Town of Lebanon v. Railroad Co. 77 id. 539; Railroad Co. v. Johnson, 108 id. 11; Railroad Co. v. Hodges, 113 id. 323.
    The real and personal property mentioned and set forth in the bill of complaint, constituting what is known as “Wyman Institute,” is exempt from taxation. Const. of 1870, sec. 3, art. 9; Starr & Curtis’ Stat. chap. 120, sec. 2, par. 1; Cooley on Taxation, pp. 145-172; Northwestern University v. People, 80 Ill. 333; Theological Seminary v. People, 101 id. 580; Female Seminary v. People, 106 id. 398; Lefranc v. City of New Orleans, 27 La. Ann. 188; Pierce v. Cambridge, 2 Cush. 611.
    Mr. John M. Palmer, also for the appellees.
    Mr. George Hunt, Attorney General, and Mr. George F. McNulta, for the appellants, in reply.
   Mr. Justice Baker

delivered the opinion of the Court:

Martha L. Wyman and Edward Wyman exhibited their bill of complaint, alleging they were the owners, proprietors and conductors of an institution of learning called “Wyman Institute,” located at Upper Alton, Illinois, and praying an injunction restraining the collection of the taxes levied for the year 1887 on the real estate upon which said institution was situated and maintained, and on the furniture and personal property connected therewith, and used exclusively in carrying "it on. Upon the filing of the bill a preliminary injunction was issued. Answer and replication were filed. While the suit was pending in the circuit court, the death of Edward Wyman was suggested, and his administrator, George H. Smiley, substituted as a party complainant. The cause was heard upon an agreed state of facts, the deposition of Martha L. Wyman being attached to and considered a part thereof. These facts are sufficiently hereinafter stated in this opinion. The final decree of the court made the injunction perpetual."

The claim of appellees is, that the real estate and personal property in question are exempt from taxation.

Section 3, of article 9, of the State constitution, provides: “The property of the State, counties, and other municipal corporations, both real and personal, and such other property as may be used exclusively for agricultural and horticultural societies, for school, religious, cemetery and charitable purposes, may be exempted from taxation; but such exemption shall be only by general law.” In section 2 of the Eevenue law it is provided, among other things, as follows: “All property described in this section, to the extent herein limited, shall be exempt from taxation,—that is to say: first, all lands donated by the United States for school purposes, not sold or leased; all public school houses; all property of institutions of learning, including the real estate on which the institutions are located, not leased by such institutions or otherwise used with a view to profit.”

That by the canons of construction all laws exempting property from taxation áre to be strictly construed, and all reasonable intendments indulged in favor of the State, and all doubts solved in its favor and against exemptions, goes without saying. The expression “institution of learning,” is broad enough to include every description of enterprise undertaken for educational purposes which is of higher grade than the public schools provided for in the statutes, and is not necessarily limited to either public or incorporated enterprises, or to both. Ordinarily, the word, “institution” implies an established and organized society; but here, the words “institution of learning” seem to refer, not so much to the society or person or persons in control of the enterprise, as to the institution itself,—that is to say, the thing which is established, founded or instituted. That which is exempt from taxation is the property of the institution of learning, which plainly means the property owned by the institution. The property of and the property owned by an individual or corporation, as commonly used and understood, mean precisely the same thing. (Ohio and Mississippi Ry. Co. v. Barker, 125 Ill. 303.) No matter where the legal title to the property may be vested, it is sufficient for the operation of the statute if the institution is the ultimate or beneficiary owner. Most usually the title is held by the society or corporation which manages and controls the institution of learning; but not necessarily so, for there may be no corpo-, ration or organized society and yet be an “institution of learning,” in respect to which the ownership of property, within the true intent and meaning of the law, can be predicated. But in such case, it would seem, there must, in the nature of things, be a trustee or trustees, to hold the legal title to the property in trust for the purposes and objects of the institution of learning. The idea of ownership of property can only be connected with that which we call an institution of learning by means of the interposition of either a society or corporation or a trust. If the title is in the-controlling corporation, or if it is vested in a trustee or trustees, for the objects to be accomplished through the instrumentality of the institution, in either event the property is, within the contemplation of the statute, the property of the institution of learning.

In The People v. Anderson, 117 Ill. 50, Anderson owned the lots, and erected a meeting house on two of them, and the latter were used exclusively for religious purposes, but the congregation which worshipped there was not incorporated or in any manner organized, and at any time Anderson saw proper the congregation might have been excluded from the use of the property, and it was held the property was not exempt from taxation, since church property, to be so exempt, must be owned by the congregation.

The constitution of the State of Ohio used the expressions, “public school houses,” and “institutions of purely public charity,” and the statute exempted from taxation “all public school houses, * * * all public colleges, public academies, all buildings connected with the same, and all lands connected with public institutions of learning not used with a view to profit.” In Gerke v. Purcell, 25 Ohio St. 229, it was held that the parochial schools, with their play grounds, were exempt from taxation; that while they were not “public school houses,” in the sense of the constitution, yet, inasmuch as they were open to the entire community, they were “institutions of purely public charity,” within the meaning of the constitution, and that the word “public,” as applied in the statute to school houses, colleges, academies, and other institutions of learning, is descriptive of the uses to which the property is devoted, and is not used to describe the ownership of property. But in that case, while the bare legal title was vested in Archbishop Purcell, he was not the real owner of the property, but held the same in trust, to be used for parochial schools.

In the case now under consideration, the real estate was all occupied by the institute, and, in one sense, devoted exclusively to the purposes and objects of the institution, and the personal property used by and in the institution was all a necessary part and adjunct of the institute, and no part of it was used or employed otherwise than in connection with and for said school. But it is a part of the agreed state of facts that the title to the real estate was in the appellee Martha L. Wyman, and that the same was exclusively and individually her property, and that the personal property was owned jointly by her and her now deceased husband, and that no other person or persons had, at the time of the assessment for taxation, any interest in or title to any of the real estate or personal property, and that after the payment of all the expenses of the school there remained a surplus or profit from the institution, and that the institute, in addition to said profits, furnished a means of livelihood to appellee Martha L. Wyman, and her now deceased husband, Edward Wyman, and that said institute had been in operation for about nine years, and that during that time the complainants in the bill, Edward and Martha L. Wyman, devoted their exclusive attention and all their abilities to it. The deposition of Mrs. Wyman was also made a part of the agreed state of facts, and it appears therefrom that the school was conducted by both the complainants in the bill; that Prof. Wyman managed the educational part of the institute; that Mrs. Wyman furnished her real estate and her attendance upon the home department of the school; that there was no agreement or understanding as to compensation for the services of either, or as to rents or other remuneration for the use of the property, and that Mrs. Wy-man had no distinct interest in the profits, but received from the school such support as a wife usually receives from her husband.

All property is, under the constitution, primarily subject to taxation. One of the conditions of exemption from such burden, under the statute enacted in conformity with the constitution, is, that the property connected with an institution of learning, in order to be exempted, must be the property of the institution. Here, all the property involved was the personal, exclusive and absolute property of either Mrs. Wyman, individually, or of her jointly with her husband. The institute had no property right in the premises, either legal or equitable. At any time Prof, and Mrs. Wyman saw fit, they had a perfect right to stop the school, exclude the institution from the premises and from the use of all the property, and' close the institute itself. In other words, that which is called “Wyman Institute,” although a school and institution of learning of high character, was, from a legal standpoint, hut private property belonging to the complainants, one or both, and was not only incapable of holding the legal or equitable title to property, but neither it, nor the lands upon which it was located, nor the personalty connected therewith, were the subjects of a trust which the courts could recognize or enforce at the instance of the public or of any supposed beneficiary or beneficiaries, either natural or artificial.

Our conclusion, then, is, that the property described in the bill of complaint can not be regarded as the property of an institution of learning, and that essential element being absent, such property can not properly be adjudged exempt from taxation.

It is also required by the statute, in order that the property should be exempt from taxation, that it should not.be “leased by such institutions, or otherwise used with a view to profit.” The constitution, as we have seen, provides that property used exclusively for school purposes may be exempted, by general law, from taxation. The General Assembly, therefore, could rightfully exempt only such property as is used exclusively for the attainment of the objects of the institution of learning, and it can not be understood that the statute is broader in its scope than the constitution itself. The premises in question were all occupied by the institute, and devoted exclusively to the purposes and objects of the institution, and the personal property was-a necessary part of and adjunct to the institute. But to conclude from these statements that the property was used exclusively for school purposes, and was not used with a view to profit, would be to stick in the bark. It seems, from the record, the “Wyman Institute” is so conducted as that there is an actual profit; but whether this were so or not is wholly immaterial, if only it was conducted “with a view to profit.” It appears, further, that these profits did not belong to the institute, but to Prof, and Mrs. Wyman, one or both,— one of them owning the realty, and the two owning the personalty, and both of them giving their time and services to the institution.

It can not be otherwise than that these profits, whether actual or merely contemplated, grow out of the use of the property upon which the school is located, and with and by which the school is conducted. It is true, the property is not leased; but the other clause of the statute, “otherwise used with a view to profit,” embraces within its terms and meaning all ways, other than by leasing, in or by which property may be used so as to realize a profit. If these taxes in controversy were abated, the benefits therefrom would be personal benefits to the proprietors of the school, and if they were paid, the burden would be borne by them personally. Even if we could assume that in some indirect way the institute gets the benefit of the profits, and thereby would be affected by the payment or nonpayment of the taxes, yet, after all, the institute is but a private business enterprise of its proprietors, and the ultimate profit or loss is to them. It does not appear it is intended that the institute or the course of education shall reap the benefit of any part of these profits, and if it did, the property would not be within the statute without it further affirmatively appeared the whole of such profits were intended and applied exclusively in furtherance of the purposes of the institution.

It seems to be assumed by appellees that the decision of this court in Monticello Seminary v. The People, 106 Ill. 398, is an authority in their favor, and decisive of this case. There are two marked distinctions between that case and this: There, Monticello Seminary was a corporation created by a special charter granted in 1843, and the lands involved were the property of that institution of learning; while here the property is the exclusive property of individuals, held in their own right. There, the lands were not used with a view to profit, but used strictly in the carrying on of the seminary, and exclusively for that purpose, what was realized over and above actual expenses being used as a fund for the education of indigent females; while here the profits of the school remaining after the payment of expenses are retained by the proprietors of the school and owners of the property.

The fact that by section 2 of the Revenue act it is provided that all public school houses shall be exempt from taxation, implies that private school houses in which are taught, with a view to private profit, the rudimentary branches of education, such as are ordinarily taught in the public schools, are subject to taxation. It is not perceived, from the act; that it was the legislative intention, while thus leaving schools of this inferior grade, which are maintained for private and personal gain, subject to taxation, at the same time to relieve therefrom schools of the grade of “institutions of learning,” which are likewise maintained for private and personal gain and profit, whether maintained by an individual or by a corporation. No reasonable or just ground for such a discrimination is apparent, nor is it manifest such discrimination is in fact made by the statute. It undoubtedly is the legislative policy to encourage and foster “institutions of learning,” thereby affording opportunities for a higher education; and this is done by not limiting the exemption from taxation to such institutions as are public and sustained by the State, but extending it to all “institutions of learning,” however managed and controlled,—whether by a corporation or by an individual,—but subject, however, to the restrictions that the property so to be exempted shall be owned by the institution, and shall not be leased or otherwise used with a view to profit. In order such property shall be exempt from taxation it must be dedicated to a use favored by law, and it mayy thus be dedicated by being owned by an institution of learning which has a corporate existence which authorizes it to hold the title to property, or by having the title thereto vested in a trustee or trustees, solely for the uses and purposes of the institution of learning; and in either event it must not be used with a view to profit. It is not contemplated by the constitution, or intended by the statute, that property owned by an individual in his or her own right, and used for his or her own gain and profit, or owned by a corporation formed with a view to profits and dividends to be paid to the stockholders, should be free from the burdens of taxation. Such an exemption would be violative of the principle of uniformity and equality of taxation prescribed by the constitution.

In our opinion, the circuit court erred in holding that the ' real estate and personal property described in the bill of complaint were exempt from taxation, in enjoining appellants from collecting the taxes due thereon for the year 1887, and in not dismissing the bill of complaint.

The decree is reversed, and the cause remanded, with directions to dismiss the bill at the cost of the complainants therein.

Decree reversed.


source: Caselaw Access Project

author: Mr. Justice Wilkin

license: Public Domain

text:
    George Schneider et al. v. Voluntine C. Turner.

      Filed at Ottawa

      October 31, 1889.

    1. Contracts—rule of construction. Unless there is some uncertainty as to the meaning of a contract, there is no room for construction; and when construction is resorted to, then all the parts of the instrument must be construed in such a way as to give force and validity to all of them, and to all of the language used, where that is possible; also, to give to the words their common and generally accepted meaning.
    2. Same—varying the terms of written contract—by parol—the statute construed. In the case of a written contract of sale, it is not competent to vary the terms of such writing by allegation and proof that no consideration was in fact paid or received -for the agreement to sell, and thus show that the transaction was a mere offer without consideration, which should become an agreement only upon its acceptance and offer to perform by the holder.
    3. The statute (chap. 98, sec. 9) does not authorize a plaintiff to prove a want of consideration for the purpose of varying the terms of his contract. The right to vary or explain the consideration expressed in a written contract, or to prove that it never was paid, does not authorize the introduction of such testimony to affect the terms or validity of the contract.
    4. Same—option to buy or sell in the future. A writing was as follows: “In consideration of one dollar and other valuable considerations, receipt of which is hereby acknowledged, I hereby agree to sell to O D 1786 shares of the capital stock of the North Chicago City Railway, at $600 per share, if taken on or before the 15th day of December, 1885:” Held, this was a contract for the refusal or privilege to buy the shares of stock at any time before December 15, 1885, at the price per share named. It was a contract to give to the holder an option to buy the shares of stock at a future time, which, but for section 130 of the Criminal Code, would be valid and enforceable.
    5. Section 130 of the Criminal Code was not intended to make unlawful merely such option contracts as contemplate a settlement by differences,—or, in other words, merely gambling contracts,—as such contracts were illegal and void before such section was ever enacted. The statute goes much further, and makes all contracts of options to buy or sell, at a future time, any grain or other commodity, stock, etc., gambling contracts, and void, whether intended to be settled by differences or not.
    6. Prior to this act it was lawful in this State to contract to have or give an option to sell or buy, at a future time, grain or other commodity. Such contracts were neither void nor voidable at the common law but the statute makes them void in Illinois.
    Appeal from the Appellate Court for the First District;— heard in that court on appeal from the Superior Court of Cook county; the Hon. Joseph E. Gary, Judge, presiding.
    This is an action of assumpsit, by appellants, against ap-pellee, begun in the Superior Court of Cook county. The original declaration consisted of eight special counts. The first four and the sixth were withdrawn. The remaining three are as follows:

      Fifth count—“And whereas, also, the said defendant after-wards, to-wit, on the 11th day of November, 1885, at the place aforesaid, made and delivered to said plaintiffs a certain writing, in words and figures as follows, to-wit:

      “ ‘Chicago, November 11, 1885.

    “ ‘In consideration of one dollar ($1.00) and othey valuable considerations, receipt of which is hereby acknowledged, I - hereby agree to sell to George Schneider, Walter L. Peck and Herd W. Peck seventeen hundred and eighty-six (1786) shares of the capital stock of the North Chicago City Railway, at six hundred dollars ($600) per share, if taken on or before the. 15th day of December, 1885. y, q. Turner.’
    “And plaintiffs aver, that thereafter, to-wit, the 14th day of December, 1885, at, to-wit, the county aforesaid, said plaintiffs tendered said defendant the aggregate price of said 1786. shares of capital stock mentioned in said writing, to-wit, the sum of $1,071,600, and said plaintiffs then and there requested said defendant to sell and deliver to said plaintiffs the aforesaid shares of stock; yet the said defendant then and there refused to deliver said shares of stock to the plaintiffs, and has since hitherto refused to deliver the same, whereby plaintiffs have been deprived of divers great gains and profits which would have accrued to them from the delivery of the said shares of stock.”

      Seventh count—“And whereas, also, the said defendant after-wards, to-wit, on the 11th day of November, 1885, at the county aforesaid, made, executed and delivered to said plaintiffs a certain instrument in writing, in the words and figures following, to-wit(Then follows a copy of the instrument; set out in the fifth count.) “And plaintiffs further aver, that, afterwards, to-wit, the 21st day of November, 1885, at the county aforesaid, the said defendant then and there agreed to' and with said plaintiffs to modify the aforesaid agreement expressed in said writing, in so far as to provide that the payment by said plaintiffs for said 1786 shares of capital stock should be made as follows, to-wit: The sum of $188,400 in cash, as and for payment for 314 shares of said capital stock, and for the sum of $883,200, representing the purchase price for the remaining 1472 shares of said capital stock, said plaintiffs were to execute their joint promissory notes, due in one year from the date thereof, with interest at the rate of five per centum per annum, and deliver the same to said defendant, with the privilege to them, said plaintiffs, to pay any or all of said notes at any time before the same should become due, in sums of not less than $100,000 at any one payment .that said plaintiffs should make before said notes should become due as aforesaid, and that said 1472 shares of said capital stock should be held by said defendant as collateral security to said promissory notes of said plaintiffs, for the payment thereof; and plaintiffs aver, that as to the other parts of the aforesaid writing, in all save and except the terms of payment of the purchase price for said capital stock, as so agreed by and between said plaintiffs and said defendant for the modification thereof in that behalf, as aforesaid, it was then and there agreed, by and between said plaintiffs and said defendant, that the same should remain and be in full force and virtue; and plaintiffs further aver, that thereafter, to-wit, on the 12th day of December, 1885, at the county aforesaid, they notified said defendant of their acceptance of the aforesaid agreement, as so modified ; and plaintiffs further aver, that thereafter, to-wit, on the 14th day of December, 1885, to-wit, at the county aforesaid, the said defendant notified said plaintiffs that he would refuse to receive said amount of the purchase price for said shares of capital stock,—that is to say, said sum of $188,400 in cash, and the joint promissory notes of said plaintiffs for said sum of $883,200, due in one year, etc.; and plaintiffs aver, that said defendant then and there waived any tender by said plaintiffs of said cash and promissory notes, though said plaintiffs were then and there ready and willing, as they have since hitherto been ready and willing, to pay and deliver the same to said defendant, and said defendant then and there refused to deliver the said plaintiffs said shares of capital stock, or any part thereof, whereby plaintiffs have lost,” etc.

      Amended, eighth count—Same as the seventh to and including a copy of said writing, and then follows this averment: “And said plaintiffs aver, that said written agreement was. made and signed by said defendant without any good or valuable consideration, and that said defendant did not receive, nor did said plaintiffs pay, the one dollar, or the other valuable consideration mentioned in said writing; and they further aver, that said plaintiffs did afterwards, to-wit, on the 14th day of December, 1885, tender said defendant the aggregate price,’aforesaid, of said 1786 shares of stock, to-wit, the sum of $1,071,600, and requested said defendant to deliver to them the aforesaid shares of capital stock; and they further aver, that at the time of said offer on the part of said defendant, and at the time of said tender on the part of said plaintiffs, said defendant was the owner of or had the control of, and the right to contract for, the sale of said shares of stock. Plaintiffs further aver, that said offer was made by defendant because it would probably require so much time to make examination into the condition, property and franchises of the North Chicago City Railway Company, and to ascertain the value of such property; and the time for the performance of said contract, and its acceptance, was not so fixed for the purpose of speculating upon the rise or fall in the value of said stocks, and that there was no intention on the part of said plaintiffs, and there was no agreement or understanding between plaintiffs and defendant, at that time or thereafter, that said contract should be performed by the settlement or adjustment of the difference in value between the contract price and the market price, if there should be any, of such stocks at the time fixed for such acceptance and performance; yet the said defendant then and there refused to deliver said shares of stock to the plaintiffs, and has since hitherto refused to deliver the same, whereby plaintiffs have been deprived of divers great gains and profits which would have accrued to them from the delivery of the said shares of stock.”

      To the fifth and eighth amended counts defendant filed general and special demurrers, the special ground alleged as to each count being, that the instrument declared on was made in violation of section 130 of the Criminal Code of this State. To the seventh count, among others, he filed his sixth special plea, and to it plaintiffs filed a demurrer. The demurrers to the fifth and eighth counts were sustained, and that of plaintiffs to the sixth plea, was carried back to the seventh count, and that count also held bad. Plaintiffs standing by these counts, judgment was rendered against them for costs. They appealed to the Appellate Court for the First District, where the judgment of the Superior Court was affirmed, and they again appeal.
    Messrs. Smith & Pence, for the appellants:
    The contract in question is not an option or offer, but it is an executory contract of sale,—the time of its performance being made of the essence thereof. The time of its performance becomes a condition subsequent, the non-performance of which would authorize the vendor either to rescind the contract, or, standing upon the contract, to sue for damages for its breach. Until rescission, the contract is binding on both' parties, and an offer to perform, by the vendee, before the time indicated, would prevent its rescission. 1 Benjamin on Sales, (Kerr’s ed.) p. 260, book 2, chap. 1; 1 Chitty on Contracts, (11th Am. ed.) 11; Barton v. McLean, 5 Hill, 256; Ives v. Hazzard, 4 R. I. 14; Aiken v. Railroad Co. 26 Barb. 298; Van Rensselaer v. Smith, 27 id. 140; Spalding v. Hallenbeck, 30 id. 298; Andrews v. Pontue, 24 Wend. 289; Davies v. Wilkinson, 10 A. & E. 98; Butler v. Thompson, 92 U. S. 412.
    This is a contract to sell, binding on both parties, but with a right of rescission on the part of the vendor in case the vendee refuses to perform, but with no right on the part of the vendee to rescind the same by non-performance. The contract is mutual as to both parties, and binding on both, and the right of rescission in favor of the vendor is simply a security or penalty in his hands by which to secure performance. He need not insist on his right to rescind, but may sue for damages for such non-performance, as may also the vendee, which makes the contract mutual. Spalding v. Hallenbeck, 30 Barb. 292; Dunham v. Pettee, 4 Seld. 508; Mason v. Caldwell, 5 Gill, 196; Carpenter v. Westcott, 5 Cow. 270; Raymond v. Caton, 24 Ill. 123; Moore v. Smith, id. 513.
    The statute provides that want of consideration may be proved. Honeyman v. Jarvis, 64 Ill. 366; Insurance Co. v. Rees, 29 id. 272; Mann v. Smyser, 76 id. 365 ; Gage v. Lewis, 68 id. 604; Monis v. Tillson, 81 id. 616; Wolf v. Fleetmeyer, 83 id. 418.
    A contract that does not involve in its performance the settlement thereof by an adjustment and payment of the difference between the contract price and the market value at the time of the supposed performance, is not a gambling contract per se, or under the statutes of this State, because it is not affected by the vice of a gaming intention. Pickering v. Cease, 79 Ill. 328; Tenney v. Foote, 4 Bradw. 594, and 95 Ill. 99; Pearce v. Foote, 113 Ill. 228; McCormick v. Nichols, 19 Bradw. 334; Beveridge v. Hewitt, 8 id. 467; Coffman v. Young, 20 id. 76; Bigelow v. Benedict, 70 N. Y. 202; Mortimer v. McCallan, 6 M. & W. 58; Thacher v. Hardy, L. R. (4 Q. B. Div.) 685; Kent v. Mittenberger, 17 Mo. App. 507; Whitesides v. Hunt, 97 Ind. 191; Cooper v. Niel, 13 Weekly Notes, (Eng.) 125.
    Messrs. Cooper & Gurley, also for the appellants:
    As to the meaning of the words “game,” “gamble” and “gambling contract,” see Johnson’s and Webster’s Dictionaries; 4 Bacon’s Abridgment, title “Gaming;” Dewey on Contracts for Future Delivery, 14, 18, 19-23; Taiman v. Strader, 23 Ill. 493.
    The section in question, when truly interpreted, will not hear the construction put upon it by the court below. Dewey on Contracts, 40; Kent v. Mittenberger, 13 Mo. App. 503; Wolcott v. Heath, 78 Ill. 437; Pickering v. Cease, 79 id. 330; Endlich on Interpretation of Statutes^ sec. 400.
    The statute being intended to punish only those who should be parties to option contracts containing the element of gambling, the contract here, even if the court should hold it to be within the literal words of the statute, should be excepted from the operation thereof, because it had no taint of gambling or wagering about it. Potter’s Dwarris on Stat. 212; Breevers v. Blougher, 14 Pet. 198; Thompson v. State, 15 Ind. 449; Dunnell v. State, 2 id. 658; United States v. Kirby, 7 Wall. 482.
    Messrs. Goudy, Green & Goudy, for the appellee:
    The contract set forth in the declaration is an option, and therefore void, under the statute of this State. Dewey on Contracts, 84; Crim. Code, sec. 130; Wolcott v. Heath, 78 Ill. 433; Pixley v. Boynton, 79 id. 351; Logan v. Musick, 81 id. 415; Lyon v. Culbertson, 83 id. 33; White v. Barber, 123 U. S. 392.
    Where an instrument recites a consideration, it can not be shown by extrinsic evidence that there was, in fact, no consideration, for the purpose of annulling the instrument or changing its legal import. 1 Greenleaf on Evidence, secs. 275, 276, 305; Davis v. Symonds, 1 Cox’s C. C. 402; Stackpole v. Arnold, 11 Mass. 27; Kimball v. Walker, 30 Ill. 482; McCloskey v. McCormick, 37 id. 66; O’Brien v. Palmer, 49 id. 72; Morris v. Tillson, 81 id. 607; Jones v. Buffum, 50 id. 277.
   Mr. Justice Wilkin

delivered the opinion of the Court:

The sufficiency of the fifth and seventh counts depends entirely upon the construction to be placed upon the instrument therein declared on; the eighth, whether or not that instrument can be aided by averment and parol proof.

The question upon which doubt is expressed in the opinion of the Appellate Court, viz., whether or not the paper set out in the several counts should be regarded as an agreement, or a mere proposition for a sale, is eliminated from the case as here presented, counsel for appellants admitting the correctness of the decision below in that regard, contending, however, that although a contract between the parties, of the date it bears, it is not an option contract, but a contract of purchase and sale of the shares of stock specified. It is said to be “an executory contract of sale, the time of its performance being of the essence thereof, the non-performance of which would authorize the vendor either to rescind the contract, or, standing upon it, sue for damages for the breach.” In support of this proposition many authorities are cited, and among them Andrews v. Pontue, 24 Wend. 289, Ives v. Hazard, 4 R. I. 27, Spalding v. Hallenbeck, 30 Barb. 299, Barton v. McLean, 5 Hill, 256, and Wain v. Walters, 5 East, 10, all of which are referred to in the opinion of the Appellate Court as holding the instrument in question, though executed by only one of the parties, t¡y.t delivered to and accepted by the other, a contract, and not a mere offer. A careful examination of these and other like cases cited will show, that while they sustain the position in support of which they were cited by the Appellate Court, they throw no light whatever upon the question as to whether that contract should be construed to be a contract for an option, or one of sale and purchase.

Looking at the instrument itself, it seems impossible to give it the construction contended for by appellants, without violating plain and well settled rules of law applicable to all instruments in writing. It must first be determined that there is some uncertainty as to the meaning of the contract, otherwise there is no room for construction. But if construction can be resorted to, then all parts of the instrument must be construed 'in such a way as to give force and validity to all of them, and to all of the language used, where that is possible; also, to give to the words their common and generally accepted meaning. Here, however, the construction contended for ig-ñores the first clause of the instrument entirely, and gives to the word “if, in the last sentence, an entirely different meaning from that ordinarily attached to it, thus making the contract in effect read, “I hereby agree to sell to George Schneider, Walter L. Peek and Ferdinand W. Peek 1786 shares of the capital stock of the North Chicago City Bailway stock, at $600 per share, to be taken (or they to take the same) on or before the 15th of December, 1885.” So read, it would undoubtedly, under the authorities cited, be an absolute contract of sale of the shares of stock. But, reading the entire instrument, the question arises, if appellee in fact meant by the language, “I hereby agree to sell,” that he then and there did sell the shares of stock, and if appellants, by accepting the instrument, thereby meant that they had then and there bought the same, where was the necessity for saying, “in consideration of one dollar,” etc., “I hereby agree to sell?” Why not have said, “I have this day sold, ” or, as was said in the Hazard case, supra, “I agree to sell,” etc., “at * * * $15,000 ?” And if the parties did intend, by the last clause, to make time of the essence of the contract, why say, “if taken,” instead of using words showing a mutual agreement to take within a time limited ?

The plain, unambiguous meaning of the contract (treating it as such) is, that appellants paid appellee a valuable consideration for the refusal or privilege to buy 1786 shares of stock of the North Chicago City Bailway Company, at $600 per share, at any time on or before the 15th of December, 1885, —a contract heretofore of frequent occurrence in commercial transactions, perfectly legal and enforceable at common law. In the absence of section 130, no one, it seems to us, would hesitate to pronounce this a contract to give to appellants the option to buy railroad stock at a future time. The argument in support of the eighth amended count admits that such is its effect, on its face; but it is insisted it is competent to vary its terms by allegation and proof that no consideration was in fact paid by appellants, or received by appellee, for the agreement to sell, and thus show the transaction a mere offer on the part of appellee, without consideration, which became an agreement only upon the acceptance and offer to perform on the part of appellants. The- general rule excluding parol evidence offered for the purpose of contradicting or varying the terms of a written instrument, is not questioned. The validity of this count is based exclusively on the provisions of section 9, chapter 98, of the Revised Statutes, entitled “Negotiable Instruments.” That section provides that a defendant may plead want or failure of consideration to a suit on a note or other contract, for the purpose of defeating a recovery in whole or in part, when the same was given without consideration, or when the consideration has failed. No authority is found in this section for permitting a plaintiff to prove a want of consideration, for the purpose of varying the terms of his contract. This proposition is too clear for argument. The parties must be held bound by the contract as they wrote it. 1 Greenleaf on Evidence, sec. 275.

The right to vary or explain the consideration expressed in a written contract, or to prove that it was never paid, does not authorize the introduction of such testimony to affect the terms or validity of the contract. O’Brien v. Palmer, 49 Ill. 72; Morris v. Tillson, 81 id. 607.

Still it is most earnestly insisted that notwithstanding the instrument sued on is, on its face, an option contract, and although it can not be changed into a mere offer by parol proof, yet it is not violative of section 130, by proper construction of that section. To maintain this position, it is insisted that by the prohibition of the statute, the legislature only intended to make unlawful such option contracts as contemplate a settlement by differences; that to come within the inhibition of section 130 the contract must be a gambling contract; that the option here meant is the option or right to elect whether to accept or deliver the stock or other commodity, or pay the difference between the contract price and the market price when the same should be accepted or delivered under the terms of the agreement. The language of the section, so far as applicable to this question, is as follows: “Whoever contracts to have or give to himself or another the option to sell or buy, at a future time, any grain or other commodity, stock of any railroad or other company, * * * shall be fined, * * * and all contracts made in violation of this section shall be considered gambling contracts, and shall be void.”

The first question which suggests itself in considering the construction of this statute contended for by appellants is, if their construction is the true one, why was the statute enacted at all? Nothing is more clearly and firmly established by the common law, than that all gambling contracts are void. It is equally well settled, that all contracts for the purchase and sale of property with the understanding or agreement of the parties (whether that agreement is expressed on the face of the contract or exists by secret understanding) that the property is not to be delivered or accepted, but the contract satisfied by an adjustment of the difference between the contract and market prices, are mere wagers, or gambling contracts, and void. (3 Am. and Eng. Ency. of Law, p. 873, and cases cited in note 1; Cothran v. Ellis et al. 125 Ill. 496.) Long prior to the passage of this statute it had been repeatedly so decided by this court. Therefore the section, as construed by counsel for appellants, serves no purpose whatever. If their construction is correct, when the legislature declared that all contracts made in violation of section 130 should be considered gambling contracts, and void, it only condemned contracts which were already gambling contracts, and void. Certainly more than this was intended. It must be presumed that the object of the legislature was to declare that unlawful which theretofore had been lawful. Prior to this act it was lawful to contract to have or give an option to sell or buy, at a future time, grain or other commodity. Such contracts were neither void nor voidable at the 'common law. The statute makes them unlawful and void m Illinois.

The case of Biglow v. Benedict, 70 N. Y. 202, cited by counsel for appellants, in which the contract sued on is admitted to be substantially the same as the one before us, well illustrates the effect of our statute upon option contracts of this character. In that case the language of the contract was as follows: “Know all men by these presents, that I, Charles B. Benedict, for and in consideration of the sum of $250, good and lawful money of the United States, to me in hand paid, the receipt of which is acknowledged, do agree to receive from W. C. Biglow, at any time within six months from date he may choose to deliver the same, $2500 in gold coin of the United States, for which I agree to pay to the said Biglow ninety-five per cent premium on the dollar, or at the rate of $195 in good current funds for each and every $100 of coin. The said Biglow does not contract to deliver the coin, but pays the $250 for the privilege of delivering or- not, at his option.” In the absence of statutory provision on the subject of option contracts, the New York Court of Appeals held the Biglow contract valid and binding on the parties. .We can perceive no good reason why it should not have done so. As we have before said, such contracts are valid at common law. But suppose the validity of that contract is tested by the foregoing section of our statute. Will it be seriously contended that a recovery could be had in this State ? If that contract is not in the teeth of section 130 of our Criminal Code, we are at a loss to perceive how one could be drafted that would be.

But it is said this court is committed to the construction insisted upon, and in support of the statement, Wolcott et al. v. Heath, 78 Ill. 437, Pickering et al. v. Cease, 79 id. 330, Pearce v. Foote, 113 id. 228, and Tenney v. Foote, 95 id. 99, are cited. We have carefully re-examined each of these cases, and are unable to discover anything in them inconsistent with the view here expressed. The only ease in which it can be said that this court has given its approval to a definition of the word “option,” as used in the statute, is that of Tenney v. Foote, supra. In that case a written opinion, rendered by the late Judge McAllister on the trial in the circuit court of Cook county, was, on appeal to the Appellate Court for the First District, adopted as the opinion of the Appellate Court, and on a further appeal to this court, the same opinion was approved. In that opinion Judge McAllister quotes the definition of the word “option,” as used in the stock exchange, from Webster’s Dictionary, (ed. of 1872, p. 917,) as follows: “A stipulation; privilege to a party, in a time contract, of demanding its fulfillment on any day within the specified time.” And the Judge proceeds to say: “In practice, on the stock

exchange it was often the intention of the parties that no stock should be delivered, hut the transaction settled upon differences. These became common, and the English statute was aimed at its repression, because it was, in effect, gambling. Our statute is directed against the same evil, and extends to transactions in grain and other commodities as well as stock, so that the word ‘option,’ as used in the statute here, taken with the context, means a mere choice, right or privilege of selling or buying, and it is the contract for such choice, right or privilege of selling or buying at a future time any commodity, the statute was intended to prohibit, as contradistinguished from an actual sale or purchase with the intention of delivering and accepting the commodity specified.” The logic of this opinion is certainly against the position sought to he maintained. White v. Barber, 123 U. S. 392, and Osgood v. Bauden, 75 Iowa, 550, are also authorities against the construction contended for. See, also, Webster v. Sturges, 7 Bradw. 560.

We agree fully with counsel for appellants as to the object of the statute. It manifestly is to break down the pernicious practice of gambling on the market prices of grain and other commodities. How is this object sought to be accomplished ? There was and is' nothing illegal or even immoral in an option contract, within itself. The evil aimed at, nevertheless, grew out of such contracts. As said by Judge McAllister, in the opinion referred to in Tenney v. Foote, “in practice it was often the intention of the parties that no stock should be delivered, but the transaction settled upon differences;’,’ and by Judge Andrews, in the Biglow case, supra, “contracts of this kind may be mere disguises for gambling.” In this case the parties might have intended, if appellants called for the stock, to settle on differences. The contract could have been made the disguise for gambling on the future price of stock of the North Chicago City Railway. The question is not, did they so intend, but, did not the legislature regard such contracts as lying at the root of the evil aimed at, and strike at them. The treatment is heroic, but the evil was most malignant.

We can neither read out of the contract language which the parties put in it, nor into the statute expressions which the legislature, for a manifest purpose, omitted. The contract, tested by the statute, is void, and therefore each count of the declaration obnoxious to the demurrer interposed.

The judgment must be affirmed.

Judgment affirmed.


text:
    The Chicago Municipal Gas Light and Fuel Company v. The Town of Lake.

      Filed at Ottawa

      October 31, 1889.

      1. Franchise—defined—and how determined. A franchise is a particular privilege conferred by grant from a sovereign or government, and vested in individuals or a corporation. The franchise of a private corporation organized under the general law is to be ascertained from the objects of the corporation, as stated in its articles of incorporation.
    2. Municipal corporations—use of streets—charter powers to gas company. By section 5 of the general Incorporation act, a corporation organized under that act for the purpose of the manufacture and sale of gas for illuminating and heating purposes in a city, is vested with all the powers necessary and requisite to carry into effect the objects for which it was formed; but the State does not thereby grant to the company a special privilege or franchise to occupy and use public streets of the city for the purpose of laying therein its mains and gas pipes.
    3. Same—use of streets—powers of municipality—granting use for laying gas pipes, etc. Under the power conferred by statute upon a city or town to control and regulate the streets, etc., within its limits, and to abate nuisances, such city or town may lawfully permit any use of such -streets and alleys that is consistent with the public objects for which they are held, and may make a grant of the right of way for the purpose of laying gas pipes and mains under the surface thereof.
    4. Same—ordinance—granting use of streets—whether a contract, or a mere license. The privilege of the use of the streets of a city or town, when granted by ordinance, is not always a mere license, and revocable at pleasure. If the grant is for an adequate consideration, and is accepted by the grantee, then the ordinance ceases to be a mere license, and becomes a valid and binding contract. And the same result is reached where, in case of a mere license, it is, prior to its revocation, acted upon in some substantial manner, so that to revoke it would be inequitable and unjust.
    5. Same—use of streets—granted to gas company—grant considered a contract. The corporate authorities of a town passed an ordinance giving a gas company the privilege to lay its gas mains and pipes in any and all of the streets, alleys and other public grounds, and the right to maintain and repair the same. In a few days thereafter the gas company executed a written acceptance of the ordinance, which the board of trustees spread upon the journal of their proceedings, and the company then undertook to perform its agreement, under which the privileges were granted. A new board of trustees was elected, who passed an ordinance expressly repealing the former one : Held, that the contract between the town and the company being a valid one, the repealing ordinance was void.
    6. Same—grant of use of streets to gas company—rights incident thereto. The board of trustees of a town, by ordinance, granted to a gas company the privilege of laying its mains, pipes, etc., in the streets, alleys and public grounds, upon the condition that the company should commence furnishing gas within one year thereafter, and fixing the price of gas to consumers: Held, that the gas company had the legal right to acquire, by lease or purchase, a gas plant to subserve the purpose of its incorporation, and thus enable it to comply with the conditions upon which it was granted the privilege of laying its pipes, etc., in the streets.

      7. Same—contract of gas company not performed in proper time — right to use of streets thereby defeated. A municipal corporation granted a gas company permission to lay its mains, pipes, etc., in the streets and alleys, upon condition that the latter should commence furnishing gas "within one year. A railway company in the same town leased its building and premises, used as gas works, to S., for the term of two years, who was to put into use therein his new process and apparatus for making gas, and furnish the railway company, during the two years, all the gas it required in its shops and houses. By this lease, the latter company, at the end of the term, had the option or right to take the plant at its net cost, for its own exclusive use. The new gas works were completed within one year after the contract with the town, and S. assigned his lease to the gas company for certain shares of its stock, and the gas company, after the time limited in its contract for commencing to furnish' the town with gas, undertook to lay its mains, pipes, etc., in the streets of the town, which the town authorities prevented, and the gas company filed its bill against the town, seeking to specifically enforce its contract: Held, that the bill would not lie, for the reason that the gas company had not, within one year, substantially performed the condition upon which its rights depended.
    8. In such case, the lease and contract with the railway company had reference to lighting only the railroad buildings and grounds, and did not contemplate the manufacture of gas for public use and consumption, and the lease, on its face, was temporary and provisional, only, in its character, and was made for the purpose of testing the new process of making gas. Such a lease was not' of the character contemplated by the contract, under the ordinance, with the town.
    9. Specific) pebeoemanoe—discretionary. The exercise of the jurisdiction to enforce the specific performance of a contract rests in the sound legal discretion of the court, in view of the terms of the contract and all the surrounding circumstances.
    10. Same—performance essential. In order to entitle a party to have the specific performance of a contract, he must show that the contract has been fully and fairly, and in good faith, performed on his part. If the terms of the contract have not been fully performed by the complainant, or are incapable of being substantially performed by him, a court of equity will not interfere.
    11. The complainant must not only show that he has complied with the terms of the contract, as far as they can and ought to be complied with, at the commencement of the suit, but he must also show that he is able, ready and willing to do such other future acts as the contract stipulates for as a part of his specific performance.
    12. Injunction—in restraint of action of municipal authorities. The courts will interfere, by injunction, with the acts of a municipal corporation, in respect to matters which are by law placed within the power and left to the discretion of the corporation, only in a case of clear and undoubted right.
    13. Same—to restrain the breach of a contract. An injunction restraining the breach of a contract is a negative specific performance of such contract, and the jurisdiction to grant such injunction is substantially coincident with the jurisdiction to compel a specific performance.
    14. As a general proposition, whenever the contract is one of a class which will be affirmatively specifically enforced, a court of equity will restrain its breach by injunction, if this is the only practical mode of enforcement which the terms of the contract will permit.
    Appeal from the Appellate Court for the First District;— heard in that court on appeal from the Circuit Court of Cook county; the Hon. M. F. Tuley, Judge, presiding.
    The town of Lake was incorporated under a special charter, approved March'26, 1869, and by the act it was given power “to control and regulate the streets, alleys and other public places, and abate any obstructions, encroachments or nuisances thereon.” The Chicago Municipal Gas Light and Fuel Company became incorporated on March 24,1884, under the general law, and on March 25,1884, at nine o’clock A. M., its certificate of organization was filed for record with the recorder of Cook county. The objects of the incorporation were “the manufacture and sale of gas for illuminating and heating purposes, in the city of Chicago and county of Cook, State of Illinois.” The capital stock of the company was $500,000, divided into 10,000 shares of $50 each, and certificates for 9998 shares of the stock were issued to M. A. Morse, the president of the company, and certificates for one share each issued to W. H. Cook and J. J. Eeed.
    On March 24, 1884, the ordinance in,question in this suit was presented at a meeting of the board of trustees of the town of Lake, and at a meeting of the board held on the evening of March 25, 1884, said ordinance was adopted. The first and third sections of the ordinance were as follows:

      “Sec. 1. That permission and authority be and the same is hereby granted to the ‘Chicago Municipal Gas Light and Fuel Company’ of Cook county, and State of Illinois, to lay their gas mains, pipes, feeders and service pipes in any and all of the streets, alleys, avenues, highways, parks and public grounds throughout said town of Lake, and to maintain and repair the same, provided that no permanent injury or damage shall be done to any street, alley, park or highway in the said town of Lake.
    “See. 3. Said company shall commence furnishing gas to the town of Lake within one year from the date of the passage of this ordinance, and the price of gas to consumers shall not exceed $2.50 per thousand cubic feet, with a rebate to such consumers, of fifty cents per thousand cubic feet in case of payment on or before ten days next after the expiration of the month in which the gas is used by such consumer: Provided,,' this rebate shall not apply to street lamps and public buildings,, the supply therefor to be subject to special agreement.”
    A written acceptance of said ordinance, dated March 27,. 1884, addressed to the board of trustees of the town, and signed by the president and secretary of the company, and with the seal of the company attached, was presented to said board at-its meeting held March 31, 1884, and, by a unanimous vote,, received, placed on file, and spread on the record.
    On March 29, 1884, the company laid one hundred feet of' gas pipe in State street, in the town of Lake, and was thereupon enjoined from laying any more, by an injunction writ, issued upon a bill filed by the Lake Gas Company. It appears, however, that this one hundred feet of pipe was all the pipe the company then had or had contracted for. The annual election for a board of trustees of the town was held on April 1,1884, and on April 23,1884, the new board of trustees passed an ordinance which purported, in terms, to repeal the ordinance of March 25, 1884. On April 25, 1884, the Lake Gas Company dismissed its bill of complaint upon which the injunction against the Chicago Municipal Gas Light and Fuel Company had issued.
    Some years prior to 1884, the Chicago, Bock Island and Pacific Bailway Company had acquired a tract of land in the town of Lake, and had built upon it car shops, and also houses for the use of its employes,, and, for the purpose of supplying gas for its shops and houses, had put up small oil gas works, and had used them for several years. One T. G. Springer had a patent for making coal gas, and was engaged in building gas works for a great many companies. On October 23, 1884, he entered into an agreement with the Chicago, Bock Island and Pacific Bailway Company, which was as follows:
    “This agreement, made this 23d day of October, in the year of our Lord 1884, by and between the Chicago, Bock Island and Pacific Bailway Company, party of the first part, and Theodore G. Springer, of the city of Chicago and State of Illinois, party of the second part:
    “ Witnesseth, that the said party of the first part, in consideration of the covenants and agreements of the party of the second part, herein contained, doth hereby lease and demise unto the said party of the second part, his executors, administrators and assigns, the following described premises, to-wit: The building and premises known as the gas works of the said party of the first part, near and adjacent to the foundry and machine shops of the said party of the first part, and located on the east half of the north-east quarter of section nine (9), in township thirty-eight (38) north, range 14, east of the third principal meridian, and lying between Forty-seventh street on the north, Fifty-first street on the south, Wentworth avenue on the west, and the right of way of the said party of the first part and the Lake Shore and Michigan Southern railway on the east, in the town of Lake, in said county of Cook, and State of Illinois, to have and to hold the same for the term of two years from the day of the date hereof, together with the privilege of laying gas pipes on the grounds of said company.

      “And the said party of the second part, for himself, his executors and administrators, doth hereby covenant and agree, to and with the said party of the first part, its successors and assigns, that he will immediately proceed to construct and put into the said demised premises, at his own expense, the Springer process and apparatus for the manufacture of burning gas, and will furnish to the said party of the first part all the gas necessary for or required by the said party of the first part for its use in and about its said shops, at the net cost of the same, for the period of two years, which said gas so furnished shall be of a quality and illuminating power in all respects equal to that now furnished by the city of Chicago.
    “And said party of the second part doth further covenant and agree, that the cost of the gas furnished, per thousand cubic feet, shall not exceed the price or cost now paid hy the said party of the first part per thousand cubic feet, the quality and illuminating power of the gas now manufactured and that to be furnished by the said party of the second part being relatively considered.
    “And said party of the second part doth further covenant and agree, that he will keep, or cause to be kept, an accurate account of all expenditures in the construction of said proposed new works, or in any additions thereto, together with vouchers for the same, and also like accounts of all cost and expense for the production or manufacture of such gas as may be required by the said party of the first part.
    “And it is further mutually covenanted and agreed, by and between the parties hereto, that at the expiration of this lease and agreement, if the said party of the second part shall have complied with the terms thereof, on his part, the said party of the first part, and its successors, will pay to the said party of the second part the cost and expense of constructing such new gas works, and any additions thereto, according to vouchers to be produced, and thereafter shall own and control the same.

      “And said party of the second part doth further covenant and agree, that in the construction of such new gas works or apparatus under the Springer process, the gas works and apparatus now in use shall be kept and preserved intact during the whole term of this lease, so that if the said party of the second part shall fail to comply with this lease and agreement, or to furnish gas for the said party of the first part, of a quality and in quantities required by said party of the first part, that then the present works of the said party of the first part may be used as at the present time.
    “And said party of the second part doth further covenant and agree, that the gas so to be manufactured and furnished by him shall not exceed in cost or price the cost or price of gas now manufactured by said party of the first part, provided the market price of materials for the manufacture of gas,—such as coal and oil,—shall not advance; but in the event of advance in the market price of such materials, then there shall be a corresponding advance in the price of gas to be furnished allowed to said party of the second part, but in no-event shall the price of gas so to be manufactured and furnished to the said party of the first part exceed the net cost of the same.
    “In witness whereof, the said party of the first part has caused these presents to be subscribed by its vice-president and general superintendent, and the said party of the second part has hereunto set his hand and seal the day and year first above written.
    Chicago, Rock Island and Pacific Railroad,
    (By A. Kimball, Y. P.)
    T. G. Springer.”
    It seems there was an understanding between Springer arid Morse, the president of the Chicago Municipal Gas Light and Fuel Company, that the lease was for the company; but Morse had no communications or negotiations with the railway company, and there is no evidence that company had any notice of any interest of the gas company in the lease or contract. About the date of the agreement, Morse assigned his 9998 shares of stock to the company, and a portion of them were re-issued to Springer, and a portion re-issued to Morse, in consideration of the assignment and his past services. In consideration of the stock which was issued to Springer, he assigned to the company the patent for the use of his process in the town of Lake, agreed to furnish about $8000 worth of gas pipe, and agreed to advance the money necessary to make the improvements in the Bock Island works, with the understanding the lease was to be assigned to the gas company. Springer, after the execution of the lease, at once proceeded to construct and put on the premises the Springer process and apparatus for the manufacture of gas, and expended and paid some $5000 in so doing. The new works were completed in January or February, 1885, and their generating capacity was 150,000 cubic feet per day, which was nearly three times the quantity then daily consumed in the town of Lake. On such completion, the company commenced to furnish gas to the shops and houses of the railroad company.
    The gas company made no attempt or offer to lay pipe in the streets of the town after the 29th of March, 1884, until on or about the 9th day of May, 1885. Until this latter date neither the town nor its officers had any notice or knowledge that the company either had or claimed any ownership or interest in the Bock Island works or any gas works in the town of Lake. On or about said 9th day of May, the company attempted to lay gas pipes in one of the streets of the town, and the police of the town, acting under authority of the board of trustees, forcibly prevented its servants from proceeding with said work. Thereupon, on May 14, 1885, the Chicago Municipal Gas Light and Fuel Company, appellant, exhibited its bill in equity, in the circuit court of Cook county, against the town of Lake, appellee. The object of the bill was to enjoin appellee from interfering with appellant in laying gas mains and gas pipes in the streets, alleys and public grounds of the town, under the ordinance of March 25, 1884. Answer and replication were filed, and the cause was heard on the pleadings and proofs. A decree was entered, which dismissed the hill without prejudice to the right to sue at law, and that decree was affirmed, on appeal, by the Appellate Court for the First District. A further appeal brings the record to this court.
    Mr. Francis Adams, for the appellant:
    The town of Lake had the power to pass the ordinance. 4 Private Laws of 1869, p. 328, sec. 11; City of Quincy v. Bull, 106 Ill. 349.
    The acceptance of the ordinance by appellant’s written communication, signed by its president and secretary, was a sufficient one, and was presumably authorized. Smith v. Smith, 62 Ill. 493; Sawyer v. Cox, 63 id. 130; Wood v. Whelen, 93 id. 153; Insurance Co. v. White, 106 id. 67.
    The ordinance, and the acceptance of it and acting under it by appellant, constituted a binding contract between appellant and the town, which the town, without appellant’s consent, was powerless to annul or set aside. Dillon on Mun. Corp. (3d ed.) secs. 314, 450; City of New Orleans v. Wardens, 11 La. Ann. 244; City of Chicago v. Sheldon, 9 Wall. 53; City of Quincy v. Bull, 106 Ill. 337; City of Burlington v. Railway Co. 49 Iowa, 144; Railway Co. v. Village of Carthage, 36 Ohio St. 631; Railway Co. v. Springfield,, 35 Mo. 674.
    Appellant, by virtue of the general Incorporation law of the State, and its recorded articles of organization, obtained a conditional grant from the State, of the right to lay gas pipes in the town of Lake, the condition being that the town would grant its consent, and upon the granting of such consent by the ordinance of March 25, 1884, the grant from the State, before conditional, became absolute, and the company’s right to lay pipes in the streets became a part of its franchise, and irrevocable. Railway Co. v. People, 73 Ill. 549; Gas Co. v.
      Gas Co. 115 U. S. 683; Gas Co. v. Gas Co. id. 650; Railroad Co. v. Reid, 13 Wall. 264.
    A bill for an injunction is the appropriate remedy. Chicago v. Turner, 80 Ill. 419; Frazier v. Miller, 16 id. 48.
    The bill in this case is not, as counsel for appellee have assumed, for the specific performance of a contract, but to enjoin appellee from interfering with or disturbing appellant in the enjoyment of its legal rights, vested in it by a valid contract.
    The remedy sought is an appropriate one, and there is no adequate legal remedy. City of Chicago v. Railroad Co. 105 Ill. 73; City of Quincy v. Bull, 106 id. 337; Railway Co. v. Springfield, 85 Mo. 674; Gas Co. v. Gas Co. 115 U. S. 650; Gas Co. v. Gas Co. id. 683; Lyon v. McLaughlin, 32 Vt. 424; Frazier v. Miller, 16 Ill. 48; Morris v. Thomas, 17 id. 112; High on Injunctions, (2d ed.) 1106, 1243.
    Messrs. Dexter, Herrick & Allen, for the appellee:
    The ordinance was not a contract. Railway Co. v. People, 73 Ill. 542; Railway Co. v. Railway Co. 87 id. 321. It was a mere license. Gas Light Co. v. Gas Light Co. 25 Conn. 31; Railroad Co. v. Railroad Co. 26 Am. and Eng. R. R. Cases, 116.
    The complainant has not shown performance of the conditions imposed by the ordinance; but even if it be assumed that a legal contract, and performance of its conditions, had been shown, the complainant has failed to establish such a ease as entitles it to the writ of injunction, which is a negative specific performance of the contract. Pomeroy’s Eq. Jur. sec. 1341; Railroad Co. v. Reno, 113 Ill. 39.
    The specific performance of a contract rests in the sound legal discretion of the court. Allen v. Woodruff, 96 Ill. 20; Cohn v. Mitchell, 115 id. 130.
    To entitle the complainant to a specific performance of a contract, it must be shown that at the time it was entered into it was capable of being enforced specifically by either of the parties against the other. In other words, there must be a mutuality, both as to the obligation and the remedy. Waterman on Specific Performance, secs. 196, 198; Pomeroy on Specific Performance, secs. 163,164, note 1, p. 131; id. secs. 165, 166; Marble Co. v. Ripley, 10 Wall. 339.
    As the alleged contract could not be specifically enforced by the town against the complainant, it can not be specifically enforced by the complainant against the town. Marble Co. v. Ripley, 10 Wall. 339; Blackett v. Bates, L. R. (1 Ch. App.) 117; Johnson v. Railway Co. 3 D., M. & G. 914; Peto v. Railroad Co. 1 H. & M. 468; Ross v. Railroad Co. Woolworth, 26; Johnson v. Railway Co. 22 Grant, U. C. 290; Fallon v. Railroad Co. 1 Dill. 121; Ranger v. Railroad Co. 1 Eng. Ry. and C. Cases, 50 ; Kansas Co. v. Topeka Co. 135 Mass. 34; Buck v. Smith, 29 Mich. 166 ; Cooper v. Pena, 21 Cal. 403; Mastin v. Halley, 61 Mo. 196.
   Mr. Justice Baker

delivered the opinion of the Court:

A franchise is a particular privilege conferred by grant from a sovereign or a government, and vested in individuals or a corporation. The franchises which were conferred by the State upon the appellant corporation, when it was organized under the general Incorporation law, are to be ascertained from the objects of the incorporation, as stated in the articles of incorporation, and these were, to manufacture and sell gas for illuminating and heating purposes in the city of Chicago and county of Cook. The corporation was also, by section 5 of the act under which it was organized, vested with and authorized to exercise all the powers necessary and requisite to carry into effect the objects for which it was formed. But these general powers intended by this section 5 are such powers only as are necessarily incident and supplemental to the special powers granted. The State did not assume, by this section, to grant to appellant a special privilege or franchise to occupy and use the public streets of the cities and villages in Cook county for the purpose of laying therein its mains and gas pipes, any more than it assumed thereby to vest it with the privilege of taking the private property of an individual land owner for the purpose of building thereon its gas works. The power to control and regulate the streets, alleys and other public places within the limits of the town of Lake, and abate any obstructions, encroachments or nuisances thereon, was given, in its charter, to the corporate authorities of the town. Under this power the town could lawfully permit any use of such streets and alleys that is consistent with the public objects for which they are held, and could make a grant of a right of way for the purpose of laying gas pipes and mains under the surface. (City of Quincy v. Bull et al. 106 Ill. 337.) If appellant has the right to place its mains and pipes in the streets of the town, it is either under a license from or a contract with the town. The right claimed in this case is based upon the provisions of the ordinance of March 25,.1884. That ordinance granted permission and authority to lay gas mains, pipes, feeders and service pipes in any and all of the streets, alleys, avenues, highways, parks and public grounds throughout the town of Lake, and to maintain and repair the same. If this was a mere license, then it was revocable at any time before it was acted upon. (Metropolitan City Ry. Co. v. Chicago West Division By. Co. 87 Ill. 317.) The privilege of the use of the public streets of a city or town, when granted by ordinance, is not always a mere license, and revocable at the pleasure of the municipality granting it, for if the grant is for an adequate consideration, and is accepted by the grantee, then the ordinance ceases to be a mere license, and becomes a valid and binding contract; and the same result is reached where, in case of a mere license, it is, prior to its revocation, acted upon in some substantial manner, so that to revoke it would be inequitable and unjust.

In Chicago City Ry. Co. v. The People, 73 Ill. 541, the court had under consideration the distinction between a franchise granted by the sovereign power of the State, and an authority given by an ordinance of a city to construct a railway on a certain street, and it was said: “The grant in the ordinance is not a franchise, but a mere license,—a permission to construct a railway in a certain street, within a limited period.” But notwithstanding this language, it is evident, from the opinion, that the court regarded the ordinance as a contract, —something more than a mere license, revocable at will,— for it is there said: “The common council had authority to amend, modify or annul the contract created by the ordinance of August 22,1864, with the consent of the railway company.” And it is further said: “The city was the sole judge whether the public exigency required an extension of time, or any other modification of the contract.”

In City of Quincy v. Bull, 106 Ill. 337, it was said: “The ordinance of August 7, 1873, and the acceptance of it by Prince, constituted a contract between him and the city of Quincy, by which there was granted the right of way which is claimed.” And further said: “This privilege of the use of the streets by Prince is not a mere license, revocable at the pleasure of the city council, but it is a grant under an express contract, for an adequate consideration received, and binding as such.”

In the case at bar there were like privileges granted by ordinance, to those granted in the case last cited. Here, there was a formal written. acceptance of the terms of the ordinance, and it was signed by the president and secretary of appellant, and attested with its seal, and this acceptance was, by the board of trustees of the town, ordered to be received, placed on file, and spread of record. The company, by this acceptance of the ordinance, undertook to perform a service for the public benefit of the town and its inhabitants, in furnishing them with gas for illuminating and heating purposes; and it expressly contracted to commence furnishing gas to the town within one year from the date of the passage of the ordinance, and that it would furnish gas to consumers at a price not exceeding $2.50 per thousand cubic feet, with a rebate of fifty cents per thousand cubic feet, and impliedly contracted that it would, within the year, either build or otherwise procure gas works with which to supply the demand in the town for gas. We think these undertakings on the part of appellant were a sufficient consideration for the contract based on the ordinance. The contract between the town and appellant being a valid and binding contract, the repealing ordinance of April 23,1884, adopted by the town, was ineffectual to abrogate it, and said last mentioned ordinance was consequently null and void.

The ordinance of March 25, 1884, contains this condition: “Said company shall commence furnishing gas to the town of Lake within one year from the date of the passage of this ordinance.” The theory of the bill of complaint is, that there has been a performance of this condition. The bill contains these allegations: “Complainant began the work of putting in its contemplated gas plant and getting ready to commence furnishing gas to the people of said town of Lake, within the period of one year from the passage of said ordinance therein named as the time when complainant should so commence to furnish gas; and complainant says that it did, within said period of one year, have its contemplated gas plant so far completed as to commence the manufacture and supply of gas to many of the people of said town, and in so doing complainant has expended many thousand dollars; * * * and complainant further represents, that * * * it did, within the said twelve months, so far advance with its said plant as to be able to commence furnishing gas as contemplated by said ordinance of March 25,1884, and complainant was, within said year mentioned in said ordinance, and is still, furnishing gas as therein contemplated.”

It is to be noted, that waiving the question of the passage of the repealing ordinance, on two occasions, only, was appellant interfered with in attempts made by it to lay gas pipes and mains in the streets of the town. The first of these occasions was on the 29th of March, 1884, and before it had, notified the authorities of the town of its acceptance of the provisions of the ordinance of March 25, 1884, and the interference then was not by or at the instance of the town, but by the service of a writ of injunction issued upon a bill filed by a third party,—the Lake Gas Company,—and that injunction was dissolved by the dismissal of the bill of complaint within one month after its issuance. The other occasion was on the 9th of May, 1885, when it was forcibly prevented by the town from laying gas pipes in the streets; but this was about a month and a half after the expiration of the year limited by the contract, and an interference after the expiration of the year could not, in the nature of things, have prevented the company from the performance of the condition within the year.

It is urged, however, the repeal of the ordinance was intended to be, and was, a constant menace and threat to use force, if necessary, to prevent appellant from proceeding with the work of laying pipe. No act or expression of the town authorities, prior to the expiration of the year, which tends to show an intention to interfere with the laying of pipe, except the fact of the passage of the repealing ordinance of April 23, 1884, is in proof; and the assumption the town would have interfered to stop by force the laying of pipe, is, under the evidence, of doubtful propriety. It would seem that if appellant regarded the repealing ordinance as of no force, and understood its contract, based upon the ordinance of March 25, 1884, was a subsisting contract, and was, in good faith, intending to carry out such contract, and desirous of performing its conditions, it would, at the very least, either have proceeded with the duties that contract imposed upon it, until forcibly prevented from so doing, or else would have notified appellee of its claim the contract was still in force, and of its readiness to perform the conditions of the same.

But if we waive this matter, and take for granted that the passage of the repealing ordinance fully justified appellant from making any attempt to lay gas pipes in the streets within the year designated in the first ordinance, yet it is manifest the act of the town in assuming to repeal the ordinance of March 25, 1884, did not prevent the gas company from constructing or acquiring gas works, by means of which it could comply with its undertaking to supply the town with gas. In fact, the case of appellant, as made by its bill of complaint, is not, as we have seen, that it was prevented from putting up its gas works, but that it did, within the year, procure the contemplated gas plant. It is admitted by appellant, both in its bill and by its conduct, that the procurement of gas works by it within the year was contemplated by the ordinance, and we doubt not that the company had the legal right to acquire, by lease or purchase, a gas plant to subserve the purposes of its incorporation, and enable it to comply with the conditions of the grant of a right of way in the public streets. It is far from clear, however, that the assignment to appellant of the agreement and lease made between the Bock Island railway company and Springer, was a performance by appellant of its contract with appellee, and a substantial compliance with the requirement contemplated by the ordinance. It seems to us the terms of that agreement preclude the idea the assignment was such performance and compliance. By that agreement the railway company demised and leased the building and premises, known as its gas works, to Springer for the term of two years, and Springer, who was engaged in the business of constructing gas works, agreed to put into the premises the Springer process and apparatus for the manufacture of gas, and furnish the company, during the two years, all the gas required for use in its shops and houses at net cost, with certain stated guaranties as to the quality and cost of such gas, and at the end of the two years, if the quality and cost of the gas furnished complied with the requirements of the contract, the railway company agreed to pay the cost and expense of constructing the new gas works, and any additions thereto; and the agreement provided that the railway company “thereafter shall own and control the same.” There was also a provision in the agreement the gas works and apparatus already in use should remain intact, so that if Springer failed to comply with his agreement, and furnish gas of the quality, etc., required, then the old works could again be used. Manifestly, the furnishing of gas to the town of Lake and its inhabitants for public consumption was not within the purview of this agreement. The intention of the railway company evidently was to test the Springer process and apparatus for a term of two years, and at the end of that time, if the guaranties were made good, and the test proved satisfactory, to pay for and own the new works and process furnished by Springer. The new works were undoubtedly wanted by the railway company solely for the purpose of lighting its own shops and buildings situate on its own grounds. It is not to be presumed it had any intention of engaging, either directly or indirectly, in the business of manufacturing and selling gas for public consumption, as that business would be wholly foreign to the purposes of its organization, and ultra vires. The objects of Springer in making the agreement and taking the lease, at least so far as they appear in the instrument which was executed, were to introduce his new process and apparatus for the manufacture of gas, and at the end of two years "effect a sale of the same and of the new gas works. The lease and contract had reference only to the railroad buildings and ground, and the lease, upon its face, was of a temporary and provisional character, and plainly made merely for the purpose of affording opportunity to test the Springer process and works.

It can not reasonably be claimed that a lease upon gas works for the short term and of the provisional character of that here in question, is such a procurement of gas works as was contemplated hy the ordinance of March 25, 1884. At the time fixed by the ordinance for appellant to commence furnishing gas to the town, the lease had only about a year and a half to run, with the right vested in the-railway company to pay for and own the works at the end of that time, or else, in the event they did not prove satisfactory, to compel their removal from its grounds. At the time the cause was heard and determined in the circuit court, the term demised by the lease had long since expired, and the extension of the lease, which had been given during the pendency of the suit, had much less than a month to run.

The bill of complaint in this case, though not strictly a bill for the specific performance of a contract, is, in substance,- a bill of that kind. In Pomeroy’s Equity Jurisprudence, (sec. 1341,) it is said: “An injunction restraining the breach of a contract is a negative specific enforcement of that contract. The jurisdiction of equity to grant such injunction is substantially coincident with its jurisdiction to compel a specific performance. Both are governed by the same doctrine and rules. It may be stated as a general proposition, that whenever the contract is one of a class which will be affirmatively specifically enforced, a court of equity will restrain its breach by injunction, if this is the only practical mode of enforcement which its terms permit.” The exercise of the jurisdiction to enforce the specific performance of a contract rests in the sound legal discretion of the chancery court, in view of the terms of the contract and all the surrounding circumstances. McCabe v. Crosier, 69 Ill. 501; Bowman v. Cunningham, 78 id. 48; Chicago, Burlington and Quincy Railroad Co. v. Reno, 113 id. 39.

One of the principles which govern, where a bill for specific performance is brought, is, that the complainant must show that the contract has been fully and fairly, and in good faith, performed. In Story’s Equity Jurisprudence, (sec. 736,) it is said, that “in cases of covenants and other contracts, where a specific performance is sought, it is often material to consider how far the reciprocal obligations of the party, seeking the relief, have been fairly and fully performed. For if the latter have been disregarded', or they are incapable of being substantially performed on the part of the party so seeking relief, * * * courts of equity will not interfere.” In Pomeroy on Specific Performance, (sec. 330,) it is said: “The party seeking aid in the court as actor,—generally the plaintiff,—must not only show that he has complied with the terms, so far as they can and ought to be complied with, at'the commencement of the suit; he must also show that he is able, ready and willing to do those other future acts which the contract stipulates for as a part of its specific performance.”

It was not the spirit and true intent of the ordinance of March 25,1884, that the gas company should get the assignment of a short and merely provisional lease of gas works, and thereby fulfill the bare letter of its contract, by commencing, within the year, to deliver gas tó the town of Lake, without making any provision for the continuance of such service. It would be inequitable and unjust, upon so uncertain a tenure of its future gas service, to compel the town, against its will, to permit appellant to dig up and obstruct its public streets and highways, and occupy and use them for the purpose of laying and maintaining therein its gas mains and gas pipes. It is settled doctrine that the courts will interfere, by injunction, with the acts of a municipal corporation, in respect to matters which are, by the law, placed within the power and left to the discretion of the corporation, only in a case of clear and undoubted right, and such a case, in our opinion, is not shown in the record now before us.

We are unable to say that the decree of the circuit court refusing the injunction and dismissing the bill was erroneous. The judgment of the Appellate Court is affirmed.

Judgment affirmed.