author: Mr. Justice Gridley Mr. Justice Barnes

text:
    Fred Halberg, Appellee, v. J. C. Fick. On Citation against J. C. Fick and Hansine Fick to reach assets. Hansine Fick, Appellant.
    Gen. No. 25,159.
    1. Appeal and ebrob, § 290

      —when order in supplemental proceedings is appealable. An order of the trial court made on proceedings supplemental to a judgment theretofore entered, and for the evident purpose of enabling the judgment creditor to realize on his judgment, is appealable.
    2. Appeal and ebrob, § 1303*—when order xoill be presumed supported by evidence. Where, on an appeal from an order entered in a supplementary proceeding under section 64 of the Municipal Court Act (J. & A. j[ 3381) directing the judgment debtor’s wife to transfer to the bailiff of the municipal court her title and interest in a judgment obtained by her against third persons, the evidence at the hearing under the citation is not preserved in the transcript, it will be presumed that there was sufficient evidence showing that the “right of possession” of said judgment in the judgment debtor was not substantially disputed, especially where it appears from a recital of such order that the sale by the wife which formed the basis of the judgment obtained by her was fraudulent as against the judgment creditor.

      3. Execution, § 270

      —when judgment may he ordered delivered in supplemental proceedings. A judgment obtained by a judgment debtor’s wife, the right of the judgment debtor to which is not substantially disputed, is a chose in action of the judgment debtor which the court may order delivered to the bailiff for the use of the judgment creditor, in a supplementary proceeding under Municipal Court Act, sec. 64 (J. & A. j[ 3381).
    Barnes, J., dissenting.
    Appeal from the Municipal Court of Chicago; the Hon. Hugh Stewabt, Judge, presiding. Heard in the Branch Appellate Court at the March term, 1919.
    Affirmed.
    Opinion filed April 30, 1920.
    William: R. Bullion, for appellant.
    No appearance for appellee.

      See Illinois Notes Digest, V„Is. XI to XV, and Cumulative Quarterly, same topic and section number.

      See Illinois Notes IMgest, Vols. XI to XV, and Cumulative (Quarterly, same topic" and section number.

   Mr. Justice Gridley

delivered the opinion of the court.

Fred Halberg, plaintiff, commenced a fourth-class action in the municipal court of Chicago against J. C. Fick, defendant, for a balance due upon a written con-. tract for the purchase of certain merchandise. Fick was served with process and was defaulted, and on October 31, 1918, the court heard evidence as to plaintiff’s damages and entered a finding and judgment against Fick for $106. On December 28, 1918, plaintiff filed a verified petition for a. citation to reach assets, under section 64 of the Municipal Court Act (J. & A. If 3381), against the judgment debtor and Hansine Fick, his wife. In said petition plaintiff set forth the entry of said judgment on October 31, 1918, and alleged that on November 8, 1918, execution on said judgment was issued and that a demand had been made on the judgment debtor but that he had failed to satisfy the judgment; that petitioner- believes that said judgment debtor has property in the City of Chicago which he unjustly refuses tó apply towards the satisfaction of said judgment, and further believes that Hansine Fick has in her possession personal property of said judgment debtor not exempt from execution or garnishment and that she is indebted to him in a sum exceeding the amount exempt by law from garnishment. On the same day the citation was issued and was subsequently served, and both J. C. Fick and Hansine Fick appeared and were examined under oath. On January 14, 1919, the court entered a draft order in which it was recited that it appeared from their admissions that J. C. Fick had theretofore purchased from plaintiff certain merchandise; that the judgment for $106 rendered against him was for a part of the purchase price of the same; that he had permitted his wife, Hansine Fick, to sell said merchandise to Waclav Kotecki and Frank Dani; that she had recently obtained a judgment in the municipal court, Case No. 656,463, against them for $200 for a part of the purchase price of said merchandise; and that said sale by her was fraudulent as against the plaintiff. And the court, in "said draft order, ordered that said Hansine Fick, wife of J. C. Fick, assign and transfer all her right, title and interest in and to said judgment against Waclav Kotecki and Frank Dani to Dennis J. Egan, bailiff of the municipal, court, to the amount of said judgment of $106, and costs, within 5 days. From this order Hansine Fick prayed and perfected this appeal.

No bill of exceptions, statement of "facts or stenographic report of the proceedings is contained in the transcript of the record before us. We have not been favored with a brief and argument by the appellee. The only error assigned by appellant is that “the court erred in ordering the appellant to assign to the bailiff of the municipal court any portion of a judgment in her favor to liquidate the debts of her husband, J. C. Fick, in the citation proceedings. ’ ’

Inasmuch as the order of the trial court was made on proceedings supplemental to a, judgment theretofore entered, and for the evident purpose of enabling the judgment creditor to realize on his judgment, we are inclined to • think that the order is an appealable one. (Illinois Brewing & Malting Co. v. Ilmberger, 155 Ill. App. 417; People v. Cohen, 163 Ill. App. 115, 118; Israelstam v. U. S. Casualty Co., 272 Ill. 161, 165.)

The order in question must be justified, if at all, by the provisions of the second paragraph of section 64 of the Municipal Court Act (J. & A. 3381), which is as follows:

“Second. Where it appears from the examination or testimony taken pursuant to the provisions of this section that the judgment debtor has in his possession or under his control money or other property belonging to him and not exempt from execution, or that money, dioses in action, or one or more artides of personal property capable of delivery, and the right of possession of which in said judgment debtor is not substantially disputed, and which are not exempt by law from execution or garnishment, are in the possession or under the control of such other person or cor-, poration, the court may, in its discretion, make an order directing the judgment debtor, or such other person or corporation, immediately to pay the money, assign the chose in action or deliver the articles of personal property to the bailiff of the municipal court to be by him collected or sold at public sale and the proceeds thereof applied towards the satisfaction of said execution and if the amount of money, or the proceeds of such collection or sale shall exceed the amount due upon such execution and the costs accrued thereon, the overplus shall be paid to the said judgment debtor.”

So far as authority is conferred upon the court by said second paragraph of said section to require any person or corporation, other than the judgment debtor, to turn over property in his or its possession or control to the bailiff for the use of the .judgment creditor, it is limitp.fi in its application to “money, dioses in action, or one or more articles of personal property capable of delivery,” and where “the right of possession of which in said judgment debtor is not substantially disputed, and which are not exempt by law from execution or garnishment.” (See People v. Cohen, 163 Ill. App. 115, 120.)

We are not advised that the statute in question has been construed by our Supreme Court. Somewhat similar provisions are contained or have been contained in the codes of the States of New York, Ohio, Indiana, Kentucky, Wisconsin and California, and several of the supplemental proceedings authorized by said codes have been held to be in the nature of a convenient substitute for a creditor’s bill. (Butler v. Jaffray, 12 Ind. 504, 507; Adams v. Hackett, 7 Cal. 187, 191; Kellogg v. Cotter, 47 Wis. 649, 655.)

The order in the present case was that Hansine Fick assign all her interest in a judgment of $200 which she had theretofore obtained against the two persons named, to the extent of $106 and costs, to the bailiff of the municipal court within 5 days. The question is: Can the $200 judgment in this case be construed as a “chose in action”? If it can, then we think that the order should be affirmed, and for the reason that, the evidence at the hearing under the citation not being preserved in the transcript, we must presume that there was sufficient evidence before the court showing that the “right of possession” of said chose in action in said J. C. Fick was “not substantially disputed.” Furthermore, it appears from one of the recitals in the court’s order that the sale of the merchandise by Hansine Fick to said persons named (which sale was the foundation for said judgment of $200) was “fraudulent as against the plaintiff.”

In 1 Bouvier’s Law Dictionary (Bawle’s 3rd Ed.), p. 483, in discussing the phrase “chose in action,” it is said; “It is difficult to find out the exact meaning of the expression; * * *. It now includes all personal chattels which are not in possession. * * * It includes * * * all debts and all claims for damages for breach of contract.” In the same volume (p. 786), a “judgment debt” is defined as “one which is evidenced by matter of record.” In 6 Amer. & Eng. Encyc. of Law, in a note on page 6, it is said: “A judgment is a chose -in action within the meaning of statutes authorizing the assignment of choses in action. ’’ (See Murphy v. Cochran, 1 Hill [N. Y.] 339, 342; Ware v. Bucksport & B. R. Co., 69 Me. 97, 100.) In 32 Cyc. p. 670, it is said: “While the application of the term ‘chose in action’ must in some cases be determined by the construction of a particular statute, it is, as ordinarily used, very broad and comprehensive, being applied both to the right of bringing an action and the thing itself, which is the subject-matter of the right, and it has been held to include bank notes, a bill of lading, * * * a judgment of a court, a life insurance policy, * * In McJilton v. Love, 13 Ill. 486, 495, it is said: “McJilton * * * was the assignee of the- judgment, and had the control of the execution. * * * He took the judgment subject to all the equities subsisting between the original parties.- * . * * A judgment cannot be so transferred as to vest the legal interest in the assignee. It is a mere chose in action, and the beneficial interest only passes by the assignment.” (See also Ballinger v. Tarbell, 16 Iowa 491, 494; Tiffany v. Stewart, 60 Iowa 207, 211 ; Hughes v. Trahern, 64 Ill. 48, 53; Pearson’s Ex’rs v. Luecht, 199 Ill. 475, 482; Dobbins v. Cruger, 108 Ill. 188, 191.)

Under the statute in question and under the circumstances disclosed, we are of the opinion that said $200 judgment should be construed as a chose in action, and for the reasons indicated the order of the municipal court is affirmed.

Affirmed,

Mr. Presiding Justice Matchett concurs, Mr. Justice Barnes dissenting.

Mr. Justice Barnes

dissenting: Whether under section 64 of the Municipal Court Act (J. & A. If 3381) a judgment debtor may be required to assign a judgment in his favor, is one question, but whether a judgment in favor of a third party can be reached by such procedure, is another. I do not think that a judgment in favor of a third party comes within the purview of said section as “a chose in action” that can be said to come within the meaning of the words “in the possession or under the control of such other person.”

Nor do I think that the section contemplates extending to the municipal court an equitable jurisdiction such as was exercised in the instant case in divesting a third party of rights that have been adjudicated in her favor and merged into a judgment in her name. The sole basis of the order of the lower court under review, as appears from its findings, is that a sale of merchandise by the judgment debtor’s wife was fraudulent as to plaintiff. Bnt there is no recital of a single fact that supports such a conclusion. From the facts recited fraud is not inferable. In substance they are that plaintiff sold the merchandise to the judgment debtor, for a part of the purchase price of which plaintiff obtained the judgment, and that later the merchandise was sold by defendant’s wife and she in turn obtained judgment against her vendee for part of the purchase price. On what theory her sale of the property to which plaintiff had no title and claims no lien could be a fraud against him, or on what equitable doctrine—assuming-the municipal court can exercise such equitable powers—plaintiff can divest a third party of a judgment or any other property in her favor without showing an indebtedness from her to plaintiff’s judgment debtor, is not readily apparent. As the proceeding is an equitable one in its nature, and there is no bill of exceptions, I think the order must he considered with reference to the findings of fact it contains, and should be reversed.


source: Caselaw Access Project

author: Mr. Justice Gridley

license: Public Domain

text:
    Auto Truck Steel Body Company, Appellant, v. Chicago Bonding & Insurance Company, Appellee.
    Gen. No. 25,174.
    1. Indemnity, § 9

      —what is nature of indemnity bond. A bond issued by a guaranty company to indemnify an employer against loss from the dishonesty of an employee is an insurance contract and subject to the rules of construction applicable to insurance policies generally.
    2. Indemnity, § 9*—how bonds are construed. Contracts of guaranty insurance are made in order to furnish indemnity to the assured, and they should be liberally construed to accomplish such purpose.
    3. Indemnity, § 6*—what is effect of misrepresentation. A misrepresentation of a material fact in reliance upon which a policy of fidelity insurance is issued will avoid' the policy even though the misrepresentation is made through mistake and in good faith.
    4. Indemnity, § 24*—when plaintiff is entitled to recover. In an action to recover upon an employer’s fidelity bond, held that, under the agreed facts, plaintiff was entitled to recover.
    5. Indemnity, § 6*—what examination of employer’s boohs is ■ 5required. The examination which it is stated, in an application by an employer for a fidelity bond, will be made of the employee’s books is not intended to mean such an examination as will necessarily reveal the slightest irregularity, however cunningly it may be concealed.
    6. Indemnity, § 6*—what is effect of negligence of auditor in examining boohs. Mere negligence on the part of an employer’s auditor in the manner in which he examines the employee’s books will not defeat recovery by the employer on a fidelity bond.
    7. Appeal and error, § 1414*—when findings may be reviewed.
      Since the amendment of section 81 of the Practice Act in 1911 (J. & A. 1 8618), there is no merit in the contention that the sufficiency of the evidence to support the judgment cannot be inquired into on appeal from the judgment in a case tried without a jury, where the bill of exceptions or stenographic report- does not disclose that plaintiff took an exception to entry of the judgment appealed from.
    Appeal from the Municipal Court of Chicago; the Hon. Leo J. Doyle, Judge, presiding. Heard in the Branch Appellate Court at the March term, 1920.
    Reversed and judgment here for $889.13.
    Opinion filed April 30, 1920.
    Statement by the Court. In an action, tried before the court without a jury, upon an employee’s fidelity bond issued to plaintiff, the court found the issues against plaintiff and entered judgment against it for costs and this appeal followed.
    The suit was commenced on July 16, 1918, in the Municipal Court of Chicago. In plaintiff’s statement of claim it is alleged, in substance, that on July 31, 1917, the defendant executed and delivered to plaintiff a certain bond in the sum of $1,000; that the condition of the bond was that, in consideration of a premium of $10, the defendant agreed to reimburse plaintiff, within 3 months after satisfactory proof of loss, for any pecuniary loss sustained by plaintiff by any act of fraud and dishonesty, including larceny or embezzlement, forgery or misappropriation of funds; committed by Frank Francis Witt, in the position of bookkeeper and cashier, during the term commencing May 1, 1917 and ending May 1, 1918; that on April 8, 1918, the defendant issued a continuation certificate by which it agreed that said bond should continue in full force until May 1, 1919, and, together with said continuation certificate, should constitute a single and continued contract of suretyship; that said Witt did not faithfully perform and discharge all his duties as bookkeeper and cashier; that by false entries in the books and records of plaintiff and by other false and fraudulent means he procured plaintiff to issue and pay out certain pay roll checks to persons who, as he then well knew, were not in plaintiff’s employ, by which means large sums of money of plaintiff were paid out to him and others acting in collusion with him, all of which payments were improper, unauthorized and procured by his fraud, to the pecuniary loss of plaintiff in the sum of $908.44; that notice was promptly given to defendant upon plaintiff becoming aware of said Witt’s dishonest acts, and within 90 days after the date of said notice plaintiff filed with defendant its verified and itemized claim; that plaintiff has not recovered any amount of said loss; that said bond is in full force and effect; and that defendant has refused to pay plaintiff any sum whatever on said bond. A copy of the bond, a copy of said continuation certificate and a copy of plaintiff’s said verified and itemized claim were attached as exhibits to plaintiff’s statement of claim. In said last-mentioned exhibit, dated in June, 1918, the following appears: .
    “The basis of this claim is a loss sustained by the undersigned on account of checks prepared by said Frank Francis Witt ostensibly for the payment of employees of the undersigned which were, in fact, made payable to persons who were not, at the date of said checks, employees of the undersigned and to whom nothing was due from the undersigned. Said checks were prepared by said Frank Francis Witt fraudulently and with the knowledge of the fact that the payments to be effected thereby were improper. The books of the company were falsified by said Frank Francis Witt to conceal' such misappropriation of funds and said checks were cashed by said Frank Francis Witt or other persons acting in collusion with him and with the intent to defraud the undersigned.
    “A list of said checks with the names of persons to ’ whom payable, check number, date of check, and date of payments is as follows:
    • Checks payable to Joseph Bereski.”
    (Here follows a tabulation of the" numbers of the several cheeks, the respective dates and amounts thereof, and the respective dates when actually paid. The first check is dated September 22, 1917, and the last is dated April 27, 1918. All of the checks are shown to have been actually paid on dates prior to May 1, 1918, except the last check, amounting to $19.31, which appears as having been paid on May 3,1918.)
    “Checks payable to Frank Warga.”
    (Here follows• a tabulation of the numbers of the several checks, the respective dates and amounts thereof, and the respective dates when actually paid. The first check is dated December 1, 1917, and the last is dated April 19, 1918. All of the checks are shown to have been actually paid on dates prior to May 1, 1918. The total amount of all checks in the two tabulations is $908.44.)
    “Each of the payments made by means of checks above listed was improper and fraudulent, and was made directly by the procurement of said Frank Francis Witt, and resulted in a loss to the undersigned of the amounts thereof.”
    No denial was made of said defalcations or of the amount thereof, but, in defendant’s affidavit of merits, as a defense, it was alleged that prior to the issuance of said bond, and as a part of the application for its issuance, plaintiff delivered to defendant a certain statement, dated July 25, 1917, designated as an “employer’s statement,” in part as follows:
    QUESTIONS.
    ANSWERS.
    4. (b) How long has applicant been in your service?
    (b) 4 months.
    (c) In what position?
    (c) Bookkeeper and cashier.
    6. (a) Will applicant be authorized to sign checks on your behalf?
    (a) No.
    9. (a) At what intervals will applicant’s books, accounts, stock . and securities be inspected and audited and verified with funds on hand or in bank?
    (a) At least once in every 4 months.

      (b) At what intervals and in what manner will oustanding accounts, a,s shown by applicant’s books or reports, be verified ?
    (b) At least once in every 4 months.
    (d) By whom will above in- , spections and audits be made?
    (d) J. B. Cook, Pub. Acc’t.
    10. (a) Has applicant always faithfully, honestly and . punctually accounted to you for all moneys and property heretofore under his control or custody as your employee?
    (a) Yes.
    (b) Are applicant’s accounts at this date in every respect correct, and proper securities, property and funds on hand to bai- - anee his accounts?
    (b) Yes.
    In consideration of the issuance of,the above bond * * * the undersigned agrees that the above answers shall be warranties and conditions precedent to the issuance and continuance of the said bond.
    Auto Truck Steel Body Co.
    H. R. Dailey,
    Pres.
    That the plaintiff did not comply with its agreements as set forth in answers to questions 6 and 9 in • said statement and did not comply with the said contract “in other respects”; that plaintiff cannot recover because on March 26, 1918, there was issued by defendant to plaintiff a certain expiration notice, as follows:
    “We hereby notify you that Bond No. 43250 for $1000, issued by this Company on behalf of Frank Francis Witt as bookkeeper and cashier, expires on the first day of May, 1918.
    “We are pleased to advise you that the Company will continue its suretyship on receipt of the annual premiuni of $10, and the attached certificate, and to that end request that you sign the certificate attached and forward with remittance. ’ ’
    That upon the receipt of said notice, as a consideration for the continuance of said bond, plaintiff sent to defendant the premium referred to and the following letter:
    “Chicago Bonding and Insurance Company,
    Chicago.
    '“This is to certify that since the issuance of the above bond, Mr. Frank Witt has faithfully, honestly and punctually accounted to me for all money and property in his control or custody as my employe, has always had proper security and funds, on hand to balance his accounts and is not now in default to me.
    Auto Truck Steel Body Co.
    “Dated March 27, 1918. H. B. Dailey,
    “Chicago, Illinois. President.”
    That the said last communication from plaintiff to defendant was not true; that prior to the date thereof the said Witt had failed to account for the money and property in his control and was short of moneys; that the renewal of said bond was obtained by fraud and misrepresentation and that no recovery can be had thereon; and that, therefore, defendant is not indebted to plaintiff in any sum whatsoever.
    At the beginning of the trial the attorney for plaintiff stated to the court in substance that the original bond was executed by defendant; that it covered the period from May 1,1917 to May 1,1918; that said Witt was employed by plaintiff as bookkeeper and cashier during said period; that Witt’s defalcations were brought about by his falsifying plaintiff’s books and records and fraudulently securing the issuance of certain pay roll checks; that the total amount received by him was $908.44; and that the only defenses to plaintiff’s claim were those as set forth in defendant’s affidavit of merits. Defendant’s attorney'did not contest any' of said statements. Plaintiff’s attorney further stated in substance that the only defalcations upon which plaintiff’s case is predicated occurred during the period of the original bond and not during the renewal' period, and that consequently defendant’s second defense as above set forth had no bearing upon the cáse. Thereupon defendant’s attorney said: “We don’t concede that; we say that on that statement you cannot recover on anything for any sum.”
    Plaintiff then introduced the original bond. Among the conditions precedent to any recovery, as stated in the bond, are the following:
    “6th. That the surety’s liability hereunder shall cease immediately, as to subsequent acts of the employee from and after (a) the first day of May, 1918; (b) discovery by the employer or any of its officers of any default hereunder on the part of the employee; * * * (d) # * * -claim of the employer against the surety must be duly presented to the surety not later than ttoelve months after any such termination of the surety’s'liability.”

    It appeared, in substance, from the testimony of H. E. Dailey, president of the plaintiff, that on July 25, 1917 (the date said employer’s statement was executed and delivered), Frank Witt had been in plaintiff’s employ as cashier and bookkeeper for about 4 months; that Witt was not authorized to sign checks for plaintiff and never did sign checks during his employment; that'during the year commencing May 1, 1917, and ending the latter part of April, 1918, when Witt was discharged, Witt’s books and accounts were inspected, audited and verified with funds on hand or in bank by J. B. Cook, a public accountant; that said Cook made four separate audits of said books and accounts during the said period, the last one being made dining the latter part of April, 1918, at which time the defalcations of said Witt were first discovered; and that on and prior to July 25, 1917, said Witt had always honestly and punctually accounted to plaintiff for all moneys and property in his custody or control, and on said date his accounts were correct and he had funds and property on hand to balance his accounts. There was no testimony to the contrary. It thus appeared that plaintiff’s representations contained in said employer’s statement were true and correct. It further appeared from Dailey’s testimony, in substance, that plaintiff during said year had over 75 men constantly in its employ; that one of Witt’s duties as cashier was to prepare plaintiff’s weekly pay roll, containing the names of the employees and the amount to be received by each; that this pay roll was prepared from time cards, issued by the superintendent to the several employees and subsequently placed in the possession of Witt; that after preparing the weekly pay roll list Witt wrote out checks for the amount due each employee, and then these checks, together with the pay roll list, were submitted to Dailey, as president, for his inspection; that then the checks were signed by Dailey and countersigned by the treasurer of plaintiff; that in September, 1917, Witt began inserting in each weekly pay roll list the name of a man who had left plaintiff’s employ and who was not entitled to receive any payment; that in December, 1917, he began inserting another such name; that these names thereafter appeared in each weekly pay roll list until some time in April, 1918; that Dailey did not know the names of the various employees; that Dailey signed checks payable to the order of these two men, respectively, supposing they were employees and entitled to receive the amount of the checks; that all checks after being signed were returned to Witt, and as to the checks payable to the order of said two men it subsequently developed that Witt, or a confederate, indorsed and cashed them; and that while Dailey generally compared the pay roll list with the checks presented for his signature, he did not compare said list with the time cards prepared and issued by the superintendent.
    It appeared from the testimony of plaintiff’s other witness, J. B. Cook, that he had been a certified public accountant since 1910;' that he made four audits of plaintiff’s books during the year from May 1, 1917 to May 1, 1918, and reported to plaintiff thereon; that the ends of the periods covered respectively by said audits were May 31, August 31 and December 31, 1917, and March 31, 1918; that he had about five employees assisting him in making said audits; that he worked on the audit for the period ending March 31, 1918, during the month of April, 1918, and that on April 27, 1918, he first discovered evidences of Witt’s defalcations and immediately notified plaintiff; that in making said four audits he conformed with the usual method of doing the work as done by auditors generally; that in each of the audits he personally did some of the detail checking work, but that the major part of said checking was done by his assistants; that he, however, supervised all work done; that in the first three of said audits the pay roll lists were checked against the pay roll checks, but that he did not personally check the pay roll lists with said superintendent’s pay roll cards; 'and that while working in April, 1918, on said last audit, he personally checked some of said lists with said cards and thereby Witt’s defalcations were first discovered.
    The only evidence introduced by defendant was the said letter or certificate of plaintiff, dated March 27, 1918, written in reply to defendant’s letter of' March 26,1918,'relative to the renewal of the bond for another year beginning May 1, 1918.
    Campbell & Fischer, for appellant.
    Sabath, Staepord & Sabath, for appellee; Charles B. Stafford, of counsel.

      See Illinois Notes Digest, Vols. XI to XV, and Cumulative Quarterly, same topic and section number.

   Mr. Justice Gridley

delivered the opinion of the court.

In United States Fidelity & Guaranty Co. v. First Nat. Bank of Dundee, 233 Ill. 475, 481, it is decided (1) that a bond which is issued by a guaranty company to indemnify an employer against loss from the dishonesty of an employee is “an insurance contract, and as such subject to the rules of construction applicable to insurance policies generally”; (see People v. Rose, 174 Ill. 310, 313); (2) that “contracts of guaranty insurance are made for the purpose of furnishing indemnity to the assured, and they should be liberally construed to accomplish the purpose for which they are made”; (see Guarantee Co. of North America v. Mechanics’ Sav. Bank & Trust Co., 80 Fed. 766, 772 et seq.); (3) that “the law is well settled, in its application to insurance contracts, that a misrepresentation of a material fact, in reliance upon which a contract of insurance is issued, will avoid the contract,” and that “a material misrepresentation, whether made intentionally and knowingly or through mistake and in good faith, will avoid the policy”; (see also T. Wilce v. Royal Indemnity Co., 289 Ill. 383, 389); and (4) that a statement in a renewal certificate of a bank cashier’s guaranty bond that his books and accounts were examined by the bank “from time to time in the regular course of business” and found to be correct, does not mean that such a thorough and exhaustive examination was made as would necessarily discover the slightest irregularity that might exist, however cunningly covered up; and (p. 484) that “if bank officers are to be held to such a rigid method of examination and supervision over the accounts of their employees there would be but little necessity, if any, for purchasing fidelity insurance.” In Title Guaranty & Surety Co. v. Nichols, 224 U. S. 346, where the action was on a fidelity bond given to protect a bank against the dishonesty of its cashier, it was decided in substance that the mere fact that the examination of the cashier’s books and accounts, made by a competent person, had failed to discover discrepancies covered up by false entries, or other bookkeeping devices, did not necessarily prove that the examination had not been a reasonable one and made in good faith. In Remington v. Fidelity Deposit Co., 27 Wash. 429, a guaranty bond for the faithfulness of an employee, a bookkeeper and cashier, provided that the bond might be continued from year to year, so long as the company should consent, upon payment of the agreed annual premium. About the time of the expiration of the period of the bond, the employer, in order to continue it in force for another year, signed and delivered to the company a certificate that the books and accounts of said employee had been examined and found “correct in every respect and all moneys handled by him accounted for,” and that “he has performed his duties in an acceptable and satisfactory manner and we know of no reason why his guaranty bond should not be continued. ’ ’ At the time this certificate was made the employer had no knowledge or suspicion that his employee was in default or dishonest in any way, but as a matter of fact at that time, as it subsequently developed, the employee had embezzled a considerable sum of money. After discovery of the defalcation the employer notified the company, and, upon its refusal to make any payment, brought suit. The bond insured the employer from “pecuniary loss * * * sustained by any act of fraud or dishonesty amounting to larceny or embezzlement * * * occurring during the continuance of this bond, and discovered during said continuance, or within six months after * * * the expiration or cancellation of this bond.” On the trial the court instructed the jury to find for the company and entered judgment in its favor. In reversing the judgment and remanding the cause the court said (p. 441) :

“The default was discovered within a month after the renewal was made. Certainly the respondent, under the original contract, was liable for any defalcation discovered within six months after the expiration of the contract, according to the terms thereof. A part of the defalcation complained of had accrued during the first year of the bond, and a part after the renewal thereof.”

In the present case it appears from the undisputed facts that prior to the issuance of the original bond plaintiff, the employer of Witt, delivered to the company a written statement making therein certain representations as to then existing facts and as to certain acts to be performed by plaintiff during the period of the bond, which expired (unless continued by future agreement) on May 1, 1918; that these representations were agreed to be considered as warranties and conditions precedent to the issuance and continuance of the bond; that said representations as to the then existing facts were true and correct when made, and that the acts which were represented would be performed by plaintiff during the continuance of the bond were in fact performed in good faith as represented; that Witt began his defalcations in September, 1917, and accomplished them in the manner as above shown by the testimony of the president of plaintiff; that under the conditions existing in.plaintiff’s business, these defalcations were somewhat cunningly performed; that he continued in his dishonest work until about April 27, 1918 (about 4 days prior to the expiration of the original bond), when his defalcations were first discovered; that plaintiff immediately notified the company thereof and fully complied with the conditions of the bond as to notice and proof of loss; that plaintiff as the result of Witt’s acts suffered a pecuniary loss of $908.44; that all of this loss was actually suffered before the expiration of the original bond on May 1,1918, with the exception of $19.31, the proceeds of one of the checks in question which as appears was actually paid out of plaintiff’s funds in bank on May 3,1918; that on March 27,1918, prior to the expiration of the original bond, plaintiff, desirous of continuing the bond in force for another year, delivered its certificate to the company in which it certified (as shown by the paper above set forth) to the honesty of Witt and that he was not then in default to plaintiff; that this certificate was made in good faith by plaintiff but as a matter of fact it was at the time untrue; that the company, relying on said certificate and the representations therein contained, continued said bond in force for another year, beginning May 1, 1918; and that, under the provisions of the original bond, the company was not liable thereunder for any act of the employee after May 1,1918, but that any claim thereunder might be presented within 12 months after May 1, 1918, or, in case of the discovery of the employee’s default prior to May 1,1918, within 12 months after such discovery.

We are of the opinion that, under the undisputed facts of the present case and under the law as disclosed from the decisions above referred to, the trial court erred in entering a finding and judgment in favor of the defendant company. We think' that plaintiff was entitled to recover the full amount of its pecuniary loss, less the sum of $19.31, or the sum of $889.13. The loss of the sum of $19.31 occurred during the time that the renewal bond was in force. That bond was issued by the company in reliance upon plaintiff’s certificate of March 27, 1918, above mentioned. The representations therein contained were in fact untrue, although at the time-they were made plaintiff had no knowledge of Witt’s defalcations, and believed said representations to be true and in good faith signed the certificate. But plaintiff as to said representations “assumed knowledge of the facts and cannot now allege want of knowledge.” (T. Wilce Co. v. Royal Indemnity Co., 289 Ill. 383, 389; Hartford Life & Annuity Ins. Co. v. Gray, 91 Ill. 159; Whyland v. Chicago Bonding & Surety Co., 209 Ill. App. 485, 489.)

It is here strenuously urged by- counsel for the defendant company that under the decision in the Why-land case, supra, this court should affirm the judgment entered by the trial court in. the present case. We do not construe the decision in the Whyland case as counsel does, and the facts in that case are different from the facts in the present case. In the Whyland case it appears in substance that the company insured the fidelity of plaintiff’s cashier and bookkeeper, Sprange, for one year from November 5, 1913, by delivering a bond containing almost identically the same conditions as the bond now in question, except as to amount; that before the bond was issued, plaintiff, in an “ employer’s statement” made certain representations as to audits and examinations of Sprange’s books and ac-‘ counts which, it was stated, would be made “at least once in every-months ’ ’ during the period the .proposed bond was to be in force; that it was agreed that said representations should be considered as warranties; that prior to the expiration of the original bond plaintiff, desiring a renewal thereof for another year, signed and delivered to the company a. certificate, certifying to the honesty of Sprange and his not being then in default, in language almost identical to the certificate in the present case, and the bond was renewed for another year; that during the period of the original bond Sprange became a defaulter; that he commenced embezzling plaintiff’s moneys in June, 1914, and continued doing so from time to time thereafter during the remaining period of the original bond and during a portion of the period of the renewal bond until his dishonest acts were discovered about March 1, 1915; that up to the time of the expiration of the period' of the original bond his embezzlements had amounted to about $1,900, and his subsequent embezzlements brought the total sum up to about $3,050; that no audits or inspections whatsoever of his books and accounts had been made by plaintiff during the period of the original bond; that his embezzlements had been performed in such a clumsy and obvious manner that even a superficial examination, made at any time, of his books and accounts would have disclosed them; and that the jury returned a verdict in favor of the company upon which verdict a judgment was entered accordingly. This court affirmed the judgment on appeal, holding in substance that under the facts and circumstances disclosed plaintiff could not recover for any amount, either for the sums embezzled during the period of the original bond or during the period of the renewal bond; and further holding that it was not a case where an alert examiner, making an honest examination, might not have discovered the frauds, as was the case of United States Fidelity & Guaranty Co. v. First Nat. Bank of Dundee, 233 Ill. 475. The obvious distinction between the facts in the Whyland case and those in the present case is that in the Whyland case the representations, made prior to the issuance of the original bond, as to audits and examinations of the employee’s books and accounts, had not been complied with in any particular, while in the present case they had been fully and in good faith carried out. Furthermore, even if in the present case it would seem, in the light of what subsequently developed, that plaintiff’s auditor, J. B. Cook, was somewhat negligent in not having extended his examination so as, on each audit, to have compared the pay roll lists made out by Witt with the pay roll cards prepared by plaintiff’s superintendent, still, we think, that such mere negligence, if any there was, should not militate against plaintiff’s recovery for the loss sustained during the period of the original bond. (19 Cyc. 831; Fidelity & Guaranty Co. of New York v. Western Bank [Ky.], 94 S. W. Rep. 3; Firemen’s Ins. Co. v. Appleton Paper & Pulp Co., 59 Ill. App. 511, 512; Holdom v. Ancient Order United Workmen, 159 Ill. 619, 623.).

It is further contended that, inasmuch as the bill of exceptions or stenographic report does not disclose that plaintiff took an exception to' entry of the judgment appealed from, the sufficiency of the evidence to support the judgment cannot here be inquired into. Previous to the amendment in 1911 of section 81 of the Practice Act (J. & A. 8618), where the case had been tried by the court without a jury as the present case was, this contention would have had merit. (Climax Tag Co. v. American Tag Co., 234 Ill. 179; Miller v. Anderson, 269 Ill. 608, 612.) But since the passage of the amendment to said section of our statutes it has no merit. (Miller v. Anderson, supra; City of Lewistown v. Harrison, 282 Ill. 461, 466.)

For the reasons indicated the judgment of the municipal court is reversed and judgment will be entered here in favor of the appellant, Auto Truck Steel Body Company, and against the appellee, Chicago Bonding & Insurance Company, in the sum of $889.13.

Reversed and judgment here for $889.13.

Mr. Presiding Justice Matchett and Mr. Justice Barnes concur.


text:
    Charles H. Sergel et al., Appellees, v. William J. Healy et al., Appellants.
    Gen. No. 26,170.
    1. Officers, § 39

      —who may determine title to office. A court of equity has no jurisdiction to adjudicate the title to a public office.
    2. Injunction, § 110*—what is extent of power of equity as to title to public office. A court of equity is without jurisdiction to maintain by injunction the stdtus quo of a political office which is in possession of a de jure or de facto officer and to restrain a claimant out of possession from attempting to take possession until he shall have established his title thereto by proper legal proceeding.
    Interlocutory appeal from the Circuit Court of Cook county; the Hon. George F. Barrett, Judge, presiding. Heard in the Branch Appellate Court.
    Reversed.
    Opinion filed May 3, 1920.
    Statement by the Court. This is an appeal from an interlocutory injunctional order entered by the circuit court of Cook county on April 21, 1920. The bill of complaint, sworn to by Charles H. Sergei, was filed on that day, and upon motion of the complainants the court ordered that the injunction as prayed for in the bill be issued immediately, without notice and without bond.
    The complainants are Charles H. Sergei, a member of the board of trustees of the Sanitary District of Chicago and claiming to be the president of said board, and James H. Lawley and Mathias Mueller, members of said board. They stated in the bill that they filed the same as such officials and also as residents, citizens and taxpayers of said district and on behalf of all other taxpayers thereof. Five of the defendants are William J. Healy, Wallace G. Clark, George W. Paullin, Harry E. Littler and Patrick J. Carr, “individually, and as members of the board of trustees of said Sanitary District.” These defendants comprise a majority of said board. The other three defendants are Leland S. Rapp, George M. Reynolds and Robert J. Taylor, respectively the clerk, treasurer and paymaster of said Sanitary District.
    The prayer of the bill is, in substance, that a writ of injunction issue commanding the defendants, and each of them and their attorneys and. agents, that they desist and refrain (1) from interfering with Charles H. Sergei, as president of said board of trustees, in his possession of the room, books and furniture occupied and held by him as such president, and from molesting or interfering with him in the discharge of his official duties; (2) from placing or attempting to place the defendant, William J. Healy, or any other member of said board, in the office of president of said board and from recognizing him as such president; and (3) from refusing to receive and consider any veto message of said Charles H. Sergei, as president of said board, and from interfering with his possession and control of his office as president; (4) that said defendant Rapp,' as clerk of said board, refrain from omitting from the records of the proceedings of said board any such veto message or messages, “and from signing and issuing any warrants upon the treasurer of said board and district for the payment or disbursement of any of its money or funds, in the event that the order, resolution or action of said board purporting to authorize any such payment or warrant shall have been vetoed by said Sergei as such president and not reconsidered by said board of trustees and not agreed to, by the ayes and nays, by two-thirds of all of the members of said board to pass the sums”; (5) that said defendant Reynolds, as treasurer of said board and district, and said Robert J. Taylor, as paymaster, refrain ‘ ‘ from certifying to any pay roll or paying any warrant he may know to have been issued in violation of this injunction”; and (6) that said defendant members and clerk refrain from withholding from said Sergei any part of the salary of president of said board under the pretext or alleged reason that they or any of them do not consider him to be said president; “all until said Healy shall by lawful proceeding cause the question of the correctness of his claim to be president of said board to be finally adjudicated, and until this court shall make other order to the contrary.”
    It is alleged in the bill, in substance, that the Sanitary District of Chicago is a body corporate and politic and has been for more than 30 years last past, and is located in Cook county, Illinois; that it owns and has the control and management of real and personal property of the value of many millions of dollars, and annually causes a tax to be levied upon the taxable property within said district, and collects the same, to the extent of about nine million dollars; that the board of trustees of the district have the control and disbursement of the funds of the district; that said board have adopted divers ordinances, rules and regulations for the conduct of the business of the district; that .each of the three complainants was duly elected at the November election of the year 1916 as a member of the board of trustees of said district, and that Charles H. Sergei was at that time duly elected as president of said board of trustees; that thereafter each of the three complainants took the oath of office as such member and trustee, and Sergei also took the oath of office as such president; and that a certificate of their election to said offices was delivered to them and filed in the office of the clerk of said district. (A copy of the certificate is attached to' and made a part of the bill. It is signed by the then county clerk of Cook county, Robert M. Sweitzer, is dated December 4, 1916, and certifies that on November 7, 1916, the said three complainants were respectively duly elected as members of the board of trustees of said district, and that said Charles H. Sergei was also duly elected as president of said board.) It is further alleged, in substance, that Sergei is, and has been continuously since his said election and qualification, in possession of said office as president of said board, and has been and is now acting in that capacity and performing the duties thereof, and is occupying the room of the president of said district; that “ it is his right and duty to continue in such exercise, performance, access and possession”; and that during all the time since his election, and until the time of the occurring of the acts complained of, he has been recognized as such president by all of the trustees, officers and employees of said district, and “was and is entitled to be so recognized.”
    It is further alleged in the bill that said five defendant trustees, conspiring and confederating together and in accordance with a prearranged plan, on or about April 8, 1920, removed the then clerk of said board of trustees and elected the present incumbent to the office, and on the same day caused to be presented at a regular meeting of the board a motion to take all business then pending before any and all committees of the board from said committees and have the same considered by the board itself, and that all officers and employees of the district refer, until further order, all matters to the board itself instead of to the respective committees thereof; that said resolution or order was vetoed by said Sergei, president of the board, and action thereon deferred; and that on April 15, 1920, said five defendant trustees caused to be presented at a regular meeting of the board an ordinance which provided, among other things, that each standing committee of said board should consist of the nine members of the board and that each trustee should be a member of each standing committee, that the chairman and vice chairman of each committee should be elected by a majority vote of the members of the board, and that a majority of the membership of any committee should constitute a quorum, but that said ordinance has not yet been passed.
    It is further alleged in the bill that at said regular meeting of said board, held on April 15, 1920, all of the members thereof were present, and said Sergei, as president of the board,. presided; that while the meeting was in progress, and in accordance with a prearranged plan between the five defendant trustees and between them and said Leland S. Rapp, clerk of the board, the defendant Wallace Gr. Clark, having received recognition from said Sergei as president, moved that said defendant William J. Healy be elected president of said board of trustees of said district; and then and there ‘ ‘ claimed that a vacancy existed in such office of president and asserted that his motion was that said Healy be elected president to fill such supposed vacancy”; that said Sergei, as president, then and there refused to entertain said motion, declared the same out of order and stated that he (Sergei) “was elected for a term of six years”; that said Sergei as president did not put the motion; that thereupon said defendant Wallace Gr. Clark “attempted and pretended to put his said motion to a vote of said board and then and there clamorously demanded that said clerk of the board call the roll of the members thereof”; that said Sergei, as such president, directed said clerk not to call the roll; that thereupon said five defendant members of said board “clamorously and illegally interfered with the proceedings of said board, and did by disorderly and violent outcries molest and interfere with said complainant Sergei in the discharge of his official duty as president and created great public confusion, * * * and by their conduct did endeavor to prevent the complainant Sergei from duly acting as such president, and said clerk did attempt and pretended to call said roll, and said defendant members did attempt and pretended to vote in favor of said so-called motion, and said defendant members by violent outcries proclaimed and asserted that said motion was carried, and that said Healy was elected and was then and there president of said board”; that said complainant members of said board did not vote on said “supposed motion,” either for or against the same, but that said clerk of said board “pretended to record the said supposed vote and declared that he had so recorded the same”; that thereupon the defendant Healy “attempted to act as president of said board”; that a motion to adjourn said meeting was made and duly put by said Sergei as president, but that, “before the vote on such motion could be taken, said Healy, amid shouts of said other defendant members, also attempted and pretended to put said motion to adjourn”; and “that motion, so put by said Sergei, was carried, and said meeting adjourned amid great uproar, confusion and disorder.”
    It is further alleged in the bill that said board has heretofore fixed the salary of the president at the sum of $7,500 per annum and the salary of the other trustees at the sum of $5,000 per annum; that “all of said disorderly, confusing, distracting, revolutionary and other acts” have been undertaken and done with the purpose of avoiding the force and power of the veto “of the duly and legally elected,qualified and acting president” of said board, and for the purpose of removing certain clerks and officers from the positions which they have held in the general conduct of the business and affairs of said district; that said five defendant trustees and said defendant clerk threaten and intend to deprive said Sergei of his compensation as president of said board and to pay said compensation to said Healy, to refuse to pay salaries due to persons legally employed by said board and to pay salaries to other persons illegally, to deprive said Sergei of his rights and power of veto and to deprive the residents and taxpayers of said district of the protection of that veto; that said five defendant trustees intend to pass resolutions and ordinances appropriating the moneys of said district, and to permit said clerk and paymaster to draw orders upon the treasurer “for improper allowances and payments”; that the acts, and doings herein objected to will greatly injure and damage said Sanitary District, the taxpayers thereof, and the said Sergei and the other complainants, and that unless the defendants are restrained irreparable mischief and injury will occur, etc. The complainants prayed for the issuance of a preliminary injunction, without notice and without bond, and that on final hearing such injunction might be made permanent.
    After this appeal had been perfected in this Appellate Court the appellants moved for an immediate hearing, which motion was granted, and on April 30, 1920, the cause was orally argued by respective counsel. At that hearing it developed that there is a bona fide dispute between the five trustees, made defendants to the bill in the circuit court, and Charles H. Sergei and the two other trustees, complainants in said bill, as to whether, when in November, 1916, said Sergei was elected as president of the board of trustees of said Sanitary District, he was elected to such office (as distinguished from the office of trustee) for the term of 6 years, or for only 2 years from said date. Our attention at said hearing was directed to section 3, as amended in 1907, of the Sanitary District Act (Hurd’s Stat. Ill. chap. 24, par. 345, J. & A. ft 4286), qf which section we may take judicial notice. Said act was approved. May 29, 1889, and became in force on July 1, 1889. Said section 3 was amended in 1905 and was ag’ain amended in 1907. In the section, as amended in 1905, there was a clause as follows: “Any president of such board elected subsequent to the election of November, 1905, shall hold office for six (6) years and until his successor shall be elected and qualified. ’ ’ In the amendment of 1907 of said section 3 said clause did not appear. (3 Jones & Addington’s Stat. Ill. par. 4286, note.) The pertinent portions of said section 3, as amended in 1907, and which section was in force in 1916 (when said Sergei was elected as president of said board) and which is now in force, are as follows:
    “In each sanitary district organized under this Act, there shall be elected at the November election 1905, nine trustees, three of which trustees shall hold their office for a term of one year, three for a term of three years, and three for a term of five years, and until their successors shall be elected and qualified.
    “At every regular county election occurring after the year 1905, there shall be elected three trustees who shall hold their office for six years, and until their successors shall be elected and qualified, to succeed those whose terms of office shall expire that year.
    “Each elector in such sanitary district may vote for and designate (upon his ballot cast for trustees for said sanitary district) one of the candidates for trustees to be president of said board and the person so designated who shall receive the highest number of such votes shall be declared elected president of such board. The person so elected president of such board at the November election of 1905 shall hold office for a term of five (5) years and until his successor shall be elected and qualified. When a vacancy shall occur in the office of president of such board, the board of trustees shall elect one of their number, who shall perform the duties of president until such vacancy shall be filled by an election. ’ ’
    . It was substantially agreed by respective counsel at said hearing that, if a court of equity under the facts alleged has jurisdiction of the bill and the controversy, a construction of said section 3, as amended, of said Act is involved.
    C. Arch Williams, for appellants.
    Willis E. Thorne, for appellees.

      See Illinois Notes Digest, Vols, XI to XV, and Cumulative Quarterly, same topic and section number.

   Mr. Justice Gridley

delivered the opinion of the court.

The main contention of counsel for appellants is that the interlocutory injunctional order appealed from should be reversed because a court of equity is without jurisdiction to entertain the bill or to enter said injunctional order. The argument is, in substance, that injury to civil or property rights is the foundation upon which the jurisdiction of courts of equity rests; that courts of equity will not interfere to protect any political right; that the right to hold a public office is a political right and involves no property rights except such as are incidental to the political right; that courts of equity will not interfere by injunction to determine questions concerning the appointment or election of public officers or their title to a particular office; that the present bill is an attempt to determine in a court of equity the title of Charles H. Sergei to the office of president of the board of trustees of the Sanitary District, and to protect him in the exercise of the powers of that office and in the emoluments thereof; _and that, hence, the circuit court, as a court of equity, has no jurisdiction to entertain the bill and that the order appealed from should be reversed. Counsel, in support of Ms contention and argument, directs our attention to many eases decided by the Supreme Court of this State commencing with the case of Sheridan v. Colvin, 78 Ill. 237, and continmng down to the recent case of Payne v. Emerson, 290 Ill. 490; also to several cases decided by the Appellate Courts of this State, particularly to the reported opinion of Mr. Presiding Justice Dibell in the case of Michels v. McCarty, 196 Ill. App. 493, decided by the Appellate Court for the Second District, wherein many of the Illinois cases are exhaustively reviewed. In 2 High on Injunctions (4th Ed.), sec. 1312, the author says:

“No principle of the law of injunctions, and perhaps no doctrine of equity jurisprudence is more definitely fixed or more clearly established than that courts of equity will not interfere by injunction to determine questions concerning the appointment or election of public officers or their title to office, such questions being of a purely legal nature, and cognizable only by courts of law. A court of equity will not permit itself to be made the forum for determining disputed questions of title to public offices, or for the trial of contested elections-, but will in all such cases leave the claimant of the office to pursue the statutory remedy, if there be such, or the common-law remedy by proceedings in the nature of a quo warranto.”

In Sheridan v. Colvin, supra, it appears that in April, 1875, an election was held in the City of Chicago to determine whether, the city should incorporate under the Cities & Villages Act of 1872. Upon a canvass of the votes by the common council, a majority was declared to be found in favor of such new incorporation. Proceedings, in the nature of quo warranto, were instituted to determine the validity of such alleged incorporation. On June 28, 1875, the City Council, assuming to act under such alleged new incorporation, passed an ordinance for the reorganization of the police department. On June 30, when such quo warranto proceedings were still pending, the police commissioners of the city at the time of such alleged incorporation filed a bill in equity against the mayor, members of the common council, and other city officers seeking to restrain all acts under said ordinance, upon the sole grounds that said police commissioners possessed the only authority to control the police force, and its organization and government, together with the right to the custody and control of all public property, books, records, etc., belonging to said department, and that the common council had no power or authority to divest them, by means of such ordinance, of such control, functions or custody, and confer the same upon a city marshal. A temporary injunction was issued, which the court afterward upon general demurrer dissolved, sustained the demurrer to the bill, and, complainants electing to stand by their bill, dismissed the bill for want of equity. This decree was affirmed by the Supreme Court. It is said in the opinion (p. 246):

“The subject is purely political. The only title to relief shown by the bill is that arising from the mere fact of complainants being police commissioners, vested, as it is alleged, with the entire control of the police force, etc. The bill does not go upon the theory of any property right, but is an application to a court of equity to restrain the City Council and other officers of the city from carrying said ordinance into effect, on the ground that it will deprive them of the functions of their office. It is elementary law, that the subject-matter of the jurisdiction of the court of chancery is civil property. The court is conversant only with questions of property and the maintenance of civil rights. * * * Nor. do matters of a political character come within the jurisdiction of this court of chancery. Nor has the" court of chancery jurisdiction to interfere with the public duties of any department of government, except under special circumstances, and where necessary for the protection of rights of property.”

In Marshall v. Illinois State Reformatory, 201 Ill. 9, Marshall filed a bill in equity to restrain the board of managers of the reformatory, and other of its officers, from removing him from the office of physician of said reformatory. .A complaint in writing had been made against him and he was notified to appear before the board to answer the charges. He filed his bill and obtained a preliminary injunction on the day previous to the time fixed for the hearing. The Supreme Court says (p. 14) :

“We think it clear that the trial court did not err in dissolving the temporary injunction and dismissing the bill for want of equity, as it is well settled that the title to a public office and the right to exercise it's functions cannot be determined by a court of chancery unless express authority so to do is conferred upon the court by statute, the remedy being in a court of law” (citing cases).

In People v. Rose, 211 Ill. 252, 253, it is said:

“Since the case of Sheridan v. Colvin, 78 Ill. 237, if the matter was ever in doubt or the question open, it has been settled in this court, that the jurisdiction of courts of chancery is confined to questions arising relative to property rights or civil rights, and that the mere right to office or of the nomination'to an office, or the acts of public officers in the discharge of their official duties, cannot be regulated or controlled by the writ of injunction; and in the view we take of the law, any order of a circuit court upon such question would be void for want of jurisdiction in the court over the subject-matter. ’ ’

In Payne v. Emmerson, 290 Ill. 490, a citizen and taxpayer filed a bill of complaint in the circuit court of Sangamon county seeking to enjoin Emmerson, as Secretary of State, from certifying to the correctness of three proposed questions of public policy, for the purpose of having said questions placed upon separate ballots and submitted to the electors of the State and voted upon at an election to be held on November 4, 1919. It was alleged that the certification of said questions by the Secretary of State and the submission of the same to the electors to be voted on at said election was unlawful, and that the printing of the questions would be an unauthorized and illegal use of the revenue and moneys of the taxpayers. On October 4, 1919, the circuit court, on motion, dissolved the temporary injunction theretofore granted, sustained a demurrer to the bill and dismissed it for want of equity. This action of the circuit court was affirmed by the Supreme Court on the sole ground that said circuit court had no jurisdiction to grant the in junctional relief prayed for. The Supreme Court in its opinion says (p. 494) :

“It is'clearly apparent that the settling of the issues in this case upon the merits involves the settling of political as distinguished from civil, personal or property rights. * * * A political right is defined by Anderson to be ‘a right exercised in the administration of government,’ while a civil right is ‘a right accorded to every member of a distinct community or nation.’ Bouvier puts it thus: ‘Political rights consist in the power to participate, directly or indirectly, in the establishment or management of government. ’ ‘Civil rights are those which have no relation to the establishment, support or management of government. These consist in the power of acquiring and enjoying property, of exercising the paternal and marital powers, and the like.’ (People v. Barrett, 203 Ill. 99.) To grant or refuse the injunction in this case upon the merits would amount to settling the political rights of the parties to this suit after passing upon the various contentions aforesaid. It is a general, well-established and recognized rule in this State that the jurisdiction of a court of equity pertains only to the maintenance of civil, personal and property rights, and that it has no jurisdiction over matters or questions of a political nature unless civil property rights are involved. (Spies v. Byers, 287 Ill. 627; People v. McWeency, 259 Ill. 161; People v. Barrett, supra.)

In People v. McWeeney, supra, it was decided, in substance, that the fact that the chairman of a county central committee of a political party, who is the proper officer to fix the time and place for the convention of precinct committeemen, has, acting for his party, leased a building for a day and has paid part of the rent and obligated himself for the balance and for damages to the building, does not give him such a property right as authorizes a court of equity to issue an injunction to enforce a provision of the lease that no one shall enter the building without his permission, as in such case the property right is merely incidental to the political question.

In his printed brief and argument here filed, counsel for appellees states, in substance, that it is not sought by the present bill to have the court adjudicate the title of Charles H. Sergei to the office of president of the board of trustees of the Sanitary District; that the purpose of the bill is rather to protect him in the performance of the functions of that office and to protect the orderly and proper transactions of the business affairs of the district and the funds and property thereof; that the allegations of the bill disclose an attempt on the part of the five defendant members of the board of trustees to dispossess said Sergei of the office of president and install the defendant Healy in that office; and that the injunction is asked for the purpose of maintaining the status quo until the defendant Healy, by quo warranto proceedings, shall establish, if he can, his right to said office. Counsel admits that it is the law of this State that a court of equity has no jurisdiction to adjudicate the title to a public office, but he contends that "where, as here, a party is in the possession of such an office, either de jure or de facto, and that possession is attempted to be interfered with, a court of equity has jurisdiction by injunction to maintain the status quo, and enjoin a claimant out of possession from taking possession of the office, by force or unseemly conduct, until such claimant shall have established his right by proceed* ings in the nature of quo warranto, or other proper legal proceeding. From the allegations of the bill, and particularly those as to what occurred on April 15, 1920, at a regular meeting of the board, it is difficult for us to determine what is the status quo as alleged, whether Sergei is still president of the board and in possession of the office, or whether Healy now is such president, and in possession. But assuming that Sergei is in possession and Healy is the claimant out of possession, as argued, we do not think that counsel’s contention as to the law is correct, at least under the decisions of the courts of this State. Counsel cites several cases from other States to support his contention, but no Illinois cases.. In the case of Michels v. McCarty, 196 Ill. App. 493, above referred to, it is said (p. 507):

“It appears that in some other jurisdictions equity will issue an injunction at the instance of the actual incumbent of an office to restrain an adverse claimant from interfering therewith until his title has been established at law. But the language of the Hlinois statutes” (cases) “above cited is so positive and unequivocal that we conclude.that such a rule cannot obtain in this State. ’ ’

Our conclusion is, after careful consideration of the allegations of the bill and of the arguments of respective counsel, that under the settled law of this State, the circuit court, as a court of equity, was without jurisdiction to entertain complainants’ bill of complaint and to enter the in junctional order appealed from. Said order of the circuit court is, therefore, reversed.

Reversed.

Mr. Presiding Justice Matohett and Mr. Justice Barnes concur.


author: Mr. Presiding Justice Thomson

text:
    Sereno W. Quinn, Appellee, v. The Fountain Inn and Louis Weiss, Appellants.
    Gen. No. 26,128.
    1. Injunction, § 48

      —when court of equity will interfere as to possession of 'property. While, as a general rule, courts of equity will not interfere by preliminary injunction to change the possession of real property until the right to such change is determined at law, they will do so where it is clear from the allegations of the bill that defendants’ possession is but an interruption of the prior possession of complainant to which the latter was entitled.
    2. Injunction, § 13*—when remedy at law as to possession of property is inadequate. On a bill to enjoin defendants from interfering with complainant’s occupation and use of certain premises, which complainant claims the right to occupy under a lease from defendants and their oral agreement to execute another lease, alleging that if complainant is deprived of the use of such premises and the improvements installed therein pursuant to such agreement, he will be unable to operate at a profit the business which he conducts on the premises, and that defendants have threatened the destruction' of such improvements, it is apparent that complainant did not have an adequate remedy at law.
    3. Injunction, § 48*—when mandatory writ as to possession of property will he granted. Where, on a bill to enjoin defendants from interfering with complainant in his occupation and use of certain premises which he alleges he has the right to occupy under a lease executed by defendants and their oral agreement to execute another lease, where it appears that complainant has established a going business on the premises and that defendants, under a claim that the oral agreement had not been entered into, ousted complainant from the part of the premises covered thereby, a temporary restraining order is properly granted though its effect is mandatory and it requires defendants to restore possession to complainant.
    Interlocutory appeal from the Superior Court of Cook county; the Hon. Denis E. Sullivan, Judge, presiding. Heard in the Branch Appellate Court.
    Affirmed.
    Opinion filed May 5, 1920.
    Adolph Makes, for appellants.

      John L. McInernet, for appellee.

      See Illinois Notes Digest, Vols. XI to XV, and Cumulative Quarterly, saíne topic and sectipn number.

   Mr. Presiding Justice Thomson

delivered the opinion of the court.

This is an appeal from an interlocutory restraining order obtained* by the complainant Quinn, without notice, by which the defendants were enjoined from interfering with him in his occupation and use of certain premises, which he alleged he had a right to occupy under the terms of a lease, executed by the defendants and their alleged agreement to execute another lease.

The bill alleged that complainant had a lease covering part of a building owned by defendants in which he conducted a restaurant and that they had orally agreed to execute a further written lease covering another portion of the building on condition that complainant would construct and maintain certain improvements and it was further alleged that, in reliance upon such agreement, the complainant did make said improvements to the value of $2,500.

The part of the building covered by the oral agreement to lease included certain space in the basement of the premises. The bill alleged that the improvements referred to involved the removal of an ice box and certain lavatories from the first floor space covered by complainant’s original lease,'to the basement, the erection of a partition on the first floor and the installation of certain gas and water connections' in the basement, and that under the oral agreement to lease referred to, it was provided that complainant was to be given the use of a doorway through the partition referred to and a passageway leading to another door in the outside wall of the building leading to an alley and the right to use the latter doorway and the right to the use of a stairway from the first floor to the basement giving access to the gas and water connections, the ice box and lavatories. It was further alleged that it was provided by ordinance that those maintaining lunch rooms or restaurants must provide la/vatories for patrons as well as help and that it would be impossible to operate complainant’s restaurant at a profit if he was deprived of the use of the premises covered by the oral agreement to lease and the improvements he had installed pursuant to that agreement and that in case he was so deprived, it would be impossible to estimate his damages in dollars and cents.

The bill further alleged that the defendants had barricaded the door leading through the partition which had been erected by complainant pursuant to the alleged agreement and that complainant ivas thus deprived of the use of said doorway and the passageway beyond, leading to the outer door, and that he was thus cut off from ingress to and egress from the alley and also deprived of the use of the stairway leading to the basement and the use of the various improvements he had installed there. It was further alleged that the defendant Weiss had stated to employees of complainant that he would see that any one who came through the barricaded door was shot and that the defendant corporation, by its officers and agents, had threatened to interfere with complainant in the occupation of that portion of the premises covered by the oral agreement to lease, claiming that no such agreement had been entered into.

When the bill was filed the complainant also filed an affidavit in which he alleged, among other things, that the president of the defendant corporation was without the jurisdiction of the court and “affiant fears that if notice is given to any other officer, they will carry out their threat previously given to destroy the property of the complainant in the premises above described. ’ ’

In our opinion there were sufficient allegations of fact in the bill and affidavit to warrant the trial court in issuing a preliminary injunction without notice. It is apparent from the bill that complainant did not have an adequate remedy at law. His damages could not be accurately ascertained if his fixtures were destroyed and his business thus disrupted.

While, as a general rule, courts of equity will not interfere by preliminary injunction, to change the possession of real property, until the right to such change is determined at law, they will do so where it is clear from the allegations in the bill that the defendants’ possession is but an interruption of the prior possession of the complainant, to which the latter was entitled. Thus, where a lessor or lessee has forcibly taken possession of the leased premises in violation of the terms of*the lease, he may be compelled by mandatory injunction (ex parte, if sufficient facts are alleged to warrant it) to surrender possession to the one entitled thereto. High on Injunctions, sec. 356; 2 Joyce on Injunctions, sec. 1249. By so doing, the status quo, as established by the terms of the lease, as described by the allegations of the bill (which we must take as true on such an appeal as this), is preserved until the controversy can be heard on its merits. Thus in Hodge v. Giese, 43 N. J. Eq. 342, where complainant had leased premises from a landlord by a lease giving him access to a heater through the basement of the building, which was an appurtenance to complainant’s premises, giving heat to no other part of the building, and subsequently, the landlord gave a lease of the basement to the defendant, and the latter notified the complainant that he would not thereafter be permitted to pass through the basement to the heater, to which there was no other means of access, it was held that this was such an irreparable injury to a settled legal right in real estate as equity would protect by mandatory injunction, on an interlocutory application.

In Pokegama Sugar-Pine Lumber Co. v. Klamath River Lumber & Improvement Co., 86 Fed. 529, it was alleged in the bill that the defendant had entered into a written agreement to lease a certain lumber plant to one Lindley and that subsequently such lease was executed and Lindley went into possession, and that he subsequently assigned the leasehold to complainant and the latter' entered into possession and proceeded to operate the plant. It was further alleged that the defendant, through its agents, drove complainant’s watchman away from the plant in the night and forcibly took possession of the plant and barricaded all approaches to it in such manner as to keep complainant out of possession and prevent its use of the premises and that defendant was in possession of the plant with an armed force of men.

Sufficient allegations were contained in the bill to show that the complainant would suffer irreparable damage unless the defendant were restrained from interfering with complainant in its occupation of the plant and its operation. A temporary restraining order was entered without notice, directing that a writ issue, restraining defendant from interfering with, impeding or hindering complainant in occupying, and operating the plant in question. The defendant made a motion to modify the temporary restraining order so that it “would not affect the status quo of any and all matters involved in this litigation up to the filing of the bill of complaint.” It was contended that the injunction, although preventive in form, was mandatory in effect, its execution resulting in a change in the status of the parties. The court said that this contention assumed that the court would recognize the respondent as asserting, at the time the hill was filed, a claim of possession to the property tinder a color of right to- such possession, and that the effect of the order was to oust it from that possession. “But,” the court said, “equity will not permit a mere form to conceal the real position and substantial rights of the parties. Equity always attempts to get at the substance of things, and to ascertain, uphold, and enforce rights and duties which spring from the real relations of the parties. It will never suffer the mere appearance and external form to conceal the true purposes, objects and consequences of a transaction. * * * It is clear * * * that the asserted right of possession, which respondent seeks to maintain in these proceedings, cannot be recognized by the court as anything’ more than a mere trespass and an interruption of the prior possession of the complainant.” The motion to modify the temporary injunction was denied.

Mandatory injunctions of the kind involved in the case at bar have frequently been recognized by the courts of this State. Hunt v. Sain, 181 Ill. 372; Baumgartner v. Bradt, 207 Ill. 345; Dorman v. Droll, 215 Ill. 262 Burrall v. American Tel. & Tel. Co., 224 Ill. 266; Spalding v. Macomb & W. I. Ry. Co., 225 Ill. 585; Watson v. Smith, 180 Ill. App. 289. In the latter case complainant was the assignee of a leasehold interest. The defendant had seized possession of the premises, claiming the right to declare a forfeiture. It was held that .equity had the power to issue a mandatory injunction enjoining the defendant from interfering with the complainant’s occupation of the premises. None of the cases last referred to involved a temporary injunction but the entering of such an order upon proper showing was sanctioned in City of Rock Island v. Central Union Telephone Co., 132 Ill. App. 248, where the court said: “It is not a correct statement of the law to say that a preliminary injunction will never be made mandatory. High on Injunctions, sec. 2, says that though mandatory injunctions are seldom allowed before the final hearing, they sometimes are granted on interlocutory applications. An interlocutory injunction does not anticipate or depend upon the ultimate conclusion to be reached upon the rights involved in the litigation. It only ¿shows that a sufficient case has been made out to authorize or require the court to preserve the property or rights in issue in statu quo until a final hearing upon the merits. Usually this is accomplished by keeping everything at rest and in its present condition. Sometimes, however, this will be fatal to the rights which the complainant alleges and seeks to establish. In discussing the propriety of a preliminary mandatory injunction, in Toledo, A. A. & N. M. Ry. Co. v. Pennsylvania Co. [54 Fed. 730], 19 L. R. A. 387, the court thus stated the true rule. ‘ The office of a preliminary injunction is to preserve the status quo until, upon final hearing, the court may grant full relief. Generally this can be accomplished by an injunction prohibitory in form, but it sometimes happens that the status quo is a condition not of rest, but of action, and the condition of rest is exactly what will inflict the irreparable injury upon complainant, which he appeals to a court of equity to protect him from. In such a case courts of equity issue mandatory writs before the case is heard on its merits.’ ”

That is precisely the situation in the case at bar. The complainant had an established going business in premises occupied under a lease from defendants and partly under an alleged agreement to lease. Under a claim that no such agreement had been entered into, as complainant claimed, the defendants ousted the complainant from that portion of the premises alleged to be covered by the oral agreement. That was the status when the bill was filed. To continue that condition pending a hearing on the merits was the very thing complainant alleged would inflict the irreparable injury from which he seeks relief. That being the situation it was proper for the court to enter the temporary restraining order appealed from though it was in effect mandatory and required defendants to restore complainant to full possession' of the premises and thus restore the status as it was before the defendants committed the acts complained of and maintain that sitúation until the rights of the parties can he fully determined.

As already stated, we are of the opinion that the bill and affidavit of complainant contained sufficient allegations of fact to warrant the court in issuing the restraining order without notice.

Finding no error in the record, the order appealed from is affirmed.

Affirmed.

Mr. Justice Taylor and Mr. Justice O’Connor concur.