text:
    Wallace C. Abbott, Defendant in Error, v. Carl A. Anderson et al., Plaintiffs in Error.
    Gen. No. 18,630.
    1. Bankruptcy, § 59

      —when discharge of partnership in bankruptcy releases individual partners. Where a bankruptcy court adjudicated a partnership a bankrupt without adjudicating as bankrupts the individual members thereof or requiring .them to file schedules of their individual property and entered a judgment confirming a composition agreement whereby the partnership creditors were paid seventy-five cents on the dollar, held that not only was the indebtedness of the partnership discharged but the individual partners were also discharged from the payment of such indebtedness, and that the partnership creditors had no right to pursue the adjudicated partners by actions at law or in equity to recover the deficiency upon their claims.
    2. Bankruptcy, § 54

      —conclusiveness of judgment of bankruptcy court. A judgment of a bankruptcy court adjudicating a partnership a bankrupt and confirming a composition agreement without adjudging the members of the partnership individually bankrupt is res adjudicata until reversed in a direct proceeding, and cannot be collaterally attacked as not being a valid discharge of the partnership without an individual adjudication in bankruptcy of the members thereof.
    3. Bankbuptcy, § 55

      —effect of interlocutory order as construing decision of bankruptcy court. On adjudication of a partnership as a bankrupt, an interlocutory order of the bankruptcy court approving a referee’s report recommending that a proviso to the composition agreement should be withdrawn because it deprived creditors of the right to proceed against the individual partners for deficiencies, is not conclusive to show that the court decided that the partners were to remain individually liable.
    4. Estoppel, § 6

      —when acts of parties in bankruptcy do not create an estoppel. Where upon the adjudication of a partnership in bankruptcy the referee’s report recommended that a proviso to the composition agreement should be withdrawn to give partnership creditors the right to proceed against the individual partners for deficiencies, and thg court by an interlocutory order approved such report, held that the fact that the partners withdrew such proviso did not estop them from denying their individual liability for the deficiencies.
    5. Injunction, § 15

      —when issues to restrain suits against partners discharged in bankruptcy. Permanent injunction will issue to restrain partnership creditors from bringing suits against individual copartners released from payment of partnership debts by a discharge of the partnership in bankruptcy.
    Error to the Circuit Court of Cook county; the Hon. Chables M. Walkeb, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1912.
    Affirmed.
    Opinion filed January 22, 1914.

      Certiorari granted by Supreme Court.
    Statement by the Court. Plaintiffs in error, defendants below, seek by this writ to reverse a decree of the Circuit Court of Cook county, entered March 21,1911, by which they were perpetually enjoined from further prosecuting certain suits severally brought by them in the Municipal Court of Chicago, and from beginning any suits at law or in equity against the defendant in error, complainant below, for the recovery of any indebtedness which they or any of them, as creditors of the Ravenswood Exchange Bank, a co-partnership, claimed to be due from complainant as a former member of said copartnership.
    Complainant’s amended bill was filed on January 23, 1909, and complainant alleged therein, in substance, that on and prior to February 25, 1908, complainant and nine other individuals were associated together as copartners in conducting a banking business at Ravenswood, Chicago, under the name and style of “Ravenswood Exchange Bank;” that the number of the depositors in the bank exceeded 2,000; that on said date certain of those depositors, exceeding three in number and whose claims in the aggregate exceeded $500, etc., filed a petition in bankruptcy in the United States District Court for the Northern District of Illinois, Eastern Division, against complainant and said nine others, “copartners, trading as Ravenswood Exchange Bank,” alleging that they were insolvent and that they, as such copartners, had committed certain acts of bankruptcy, and praying for the service of a subpoena upon them and that the “copartnership” might be adjudged bankrupt; that thereafter complainant and said nine others duly appeared in said proceedings and on March 31, 1908, by order of said court, complainant and said nine others, “copartners, trading as Ravenswood Exchange Bank,” were “declared and adjudged bankrupt;” that thereafter, at the first meeting of the creditors of said copartnership, complainant and said nine others were examined in open court and they filed in court a schedule of property and a list of creditors; that thereafter complainant and said copartners offered terms of composition to the creditors of said copartnership, to wit, an amount sufficient to pay all of them seventy-five cents on the dollar of their respective claims; that said offer of composition was thereafter duly accepted in writing by a majority in number of all the creditors of said co-partnership whose claims were allowed, which number represented a majority in amount of such claims; that application was thereafter made for the confirmation of said composition, to which objections were filed and a hearing thereupon had; that thereafter on June 10, 1908, an order was entered by said United States Court confirming said composition, and that the consideration for said composition was duly deposited in court, and said composition is now in full force and effect; that all of the creditors of said copartnership, including the defendants, have been paid the full amount of seventy-five cents upon the dollar of their respective claims pursuant to the terms of said composition; that by virtue of the Bankruptcy Act of 1898, and the amendments thereto, upon the confirmation of said offer of composition, the bankruptcy proceedings terminated and all of the indebtedness of the partnership was discharged and wiped out, and that complainant and his copartners were also individually discharged from the payment of the indebtedness of said copartnership.
    The complainant further alleged in said bill, in substance, that notwithstanding the fact that complainant and his copartners, by virtue of said bankruptcy proceedings, had been discharged from all liability for the indebtedness of the copartnership, certain of the defendants to this bill, who were depositors in said bank on and prior to said February 25, 1908, have recently brought separate and independent actions at law against complainant and said copartners in the Municipal Court of Chicago, seeking thereby to recover the balance of twenty-five per cent, of their respective original claims against said Bavenswood Exchange Bank; that all of the creditors who have so commenced said suits appeared in said bankruptcy proceedings and proved their claims and received in full their respective dividends by virtue of said composition; that other defendants to this bill have threatened to bring suits at law of like character against complainant and said copartners, and complainant fears that these threats will be carried into execution; that the suits pending involve the sum of about $3,000, and that the claims of the other defendants who are threatening suit amount to about $15,000; that the respective claims of all of the defendants were filed in said bankruptcy proceedings and were allowed and said allowance constitutes an adjudication as to the respective amounts thereof; that the sole question of law involved in all of said suits at law, those brought and those threatened to be brought, is the effect of said judgment of said bankruptcy court confirming said composition, as to complainant and said copartners, upon the indebtedness of said copartnership firm, and that to prevent needless expense and a multiplicity of suits a court of equity should decide the question. The complainant offered to indemnify the defendants against any loss and damage which they might suffer by reason of delay in case of their being enjoined from prosecuting or bringing said suits until the determination of the present suit, and further offered, in case the court should find him liable to the defendants, to pay any amount decreed to be due from him. .The bill prayed that the defendants and all other depositors of said Ravenswood Exchange Bank might be restrained from prosecuting or bringing said suits; that the claims of said defendants and all other depositors might be decreed to have been wholly discharged by virtue of the confirmation of said composition, and that said defendants and all other creditors of said bank be required to litigate in this suit the question of the liability of complainant and his copartners to1 them, etc.
    Demurrers to the bill were overruled, but no point is now here made that said Circuit Court erred in not dismissing the bill on the ground that the defendants were entitled to a trial of the issues in a court of law. One of the defendants, Carl A. Anderson, filed a lengthy answer to the bill, which answer was adopted by the other defendants, and the canse was put at issue.
    It appears from the evidence, heard in open court before the chancellor, that the Ravenswood Exchange Bank was a joint stock association, or copartnership; that prior to the filing of said petition in bankruptcy a receiver was in charge of the assets of the bank, appointed by order of the Circuit Court of Cook county on or about November 12, 1907; that after the filing of said petition the administration of the affairs of the bank was transferred from said Circuit Court to said United States Court; that when said petition was filed the complainant and said nine others were the only shareholders or copartners of the bank, called “present partners”; that prior to the appointment of said receiver in November, 1907, there had been other shareholders, called “past partners,” who had retired from the copartnership by the transfer of their shares of stock; that after the appointment of said receiver an attempt was made by said past and present partners to bring about a common law composition with the creditors of the bank; that a certain Realization Company agreed to assist in bringing about such a settlement but required that large contributions be made to it in cash; that several of said past partners, under the belief that they might be held to some extent liable with the present partners for the indebtedness of the bank, made contributions to this fund; that the effect of the filing of said petition in bankruptcy was to retard but did not terminate the efforts of said Realization Company to bring about a composition with the creditors of the bank, and that through its efforts and assistance the money necessary to be deposited for said bankruptcy composition was deposited in court, the Realization Company taking as security for the money advanced by it a conveyance of the assets of the bank.
    It further appears from the evidence, or from the stipulations of respective counsel in evidence, that after complainant and said nine others, “copartners trading as Ravenswood Exchange Bank,” had been by the court adjudged bankrupt, from which judgment no appeal was taken, they were, at the first meeting of the creditors of said copartnership, examined as to the copartnership assets and liabilities, and also as to their individual assets and liabilities, and that schedules of the property of the copartnership and a list of the creditors thereof were filed; that these schedules did not contain, or purport to contain, any of the individual property of said copartners, and that none of said copartners at any time either filed or offered to file schedules of their individual property or a list of their individual creditors, and that no attempt was made by defendants or any of the creditors of said copartnership to compel them so to do, and that neither complainant nor any of his copartners were at any time individually adjudged bankrupt. It is not disclosed from the evidence whether, from said examination of said copartners at said first meeting of the creditors of the copartnership, it was ascertained that the assets of the copartnership, plus the individual assets of the copartners in excess of their individual debts, were sufficient or insufficient to pay the partnership debts. A stipulation by counsel is in evidence that, pending the hearing of the offer of composition, complainant was further examined, and from all examinations it appeared that “a few of said individual partners, including complainant, were men of some pecuniary means individually.” It further appears from the evidence that on April 17,1908, the “Bavenswood Exchange Bank, the above named bankrupt,” offered to its creditors terms of composition, whereby it agreed to pay or cause to be paid to its creditors, upon such composition being confirmed by the court, seventy-five per cent, of their respective claims, together with all costs and expenses of administration in the United States Court and in said Circuit Court, but said offer contained a proviso that “said creditors and each of them do expressly accept said composition payment in full satisfaction and discharge * * * of their several respective claims against said Bavenswood Exchange Bank, or against any of its past or present members, stockholders, shareholders, officers and directors.” On April 20, 1908, the bankrupt firm filed a petition praying that said offer of composition be confirmed. This petition was referred to Beferee Eastman, as a special master, and he was directed to give notice to the creditors, to hear any objections which might be filed, and to take proofs and to report his conclusions and recommendations to the court. Some of the defendants to the present bill filed written objections to the confirmation of said offer to the effect that, inasmuch as no one of said copartners as to his individual estate had been adjudicated a bankrupt, the court had no jurisdiction over the individual estates of the copartners, or, in other words, had no jurisdiction of any of the “past or present members, stockholders,” etc., and was, therefore, without power to confirm the offer of composition as made. On May 12, 1908, the referee, as such special master, filed a lengthy report in which, in conclusion, he recommended to the court that the offer of composition “be denied submission unless the bankrupt firm elects, within a reasonable time to be fixed by the court, to strike out from its offer the proviso in question.” The referee stated in said report, in substance, that in his opinion, under the authority of the case of In re Bertenshaiv, 85 C. C. A. 61, 157 Fed. 363, decided November 19, 1907, by the United States Court of Appeals for the Eighth Circuit, a partnership is a distinct entity by reason of the provisions of the Bankruptcy Act of 1898, in other words, a “person” separate from the partners who compose it; that the adjudication in bankruptcy of a copartnership does not draw after it the adjudication of the partners themselves; that a court of bankruptcy has no jurisdiction to summarily take and administer in proceedings against a partnership the individual estate of the solvent partners without their consent; and that the result is that, upon the approval of an offer of composition by a bankrupt partnership, the partnership creditors have a right to pursue the unadjudicated partners by actions at law and suits in equity in appropriate courts for the deficiencies owing them. The referee further stated in said report that in his opinion the proviso in said offer of composition was unlawful, in that it might possibly deprive “a minority and objecting creditor” of the above mentioned right, which the law gave him, in case the offer of composition was confirmed as made, and that even if the proviso would not militate against objecting creditor's pursuing their remedies to collect their deficiencies, it would at least be a doubtful question as to whether those creditors, who had accepted in writing the offer as made, would not be estopped from suing for their deficiencies, “which would leave the result, if it were so, of two classes of creditors, one with a right of action over to collect their deficiencies and the others without.”
    On the same day, May 12, 1908, the United States Court entered an order that, upon consideration of the said report of the referee as special master, and after hearing arguments of counsel for the different parties in interest, “said report be approved,” and the court further ordered, upon motion of said bankrupt, that “said bankrupt have and leave is hereby given to it to modify its offer of terms of composition heretofore made by withdrawing therefrom and striking out of said offer” the proviso above mentioned.
    On the same day, also, the “Ravenswood Exchange Bank, the above named bankrupt,” by its attorneys, filed a written modification of its offer of composition, “withdrawing from said offer” the said proviso.
    On June 10,1908, said referee as special master filed in court his final report in which he stated, inter alia, that objections had been filed to the composition by many creditors; that certain legal points were presented by specifications on which elaborate arguments were made by respective counsel; that he had made an “interlocutory report” to the court which report had been confirmed and the offer of composition modified to meet the objections; that thereafter a lengthy hearing was had on the facts, and that “at this time appear the objectors by their counsel and withdraw the further prosecution of their objections and consent to the offer of composition as made.” In this report the referee found that the offer of composition had been accepted by a majority in number and amount of creditors whose claims were filed, that sufficient money had been deposited, etc., that it was for the best interests of the creditors that the composition be confirmed, etc. On the same day the United States Court approved this report, entered an order expressly finding that the composition (i. e. as modified) was for the best interests of the creditors, etc., and adjudging that “said composition be and it hereby is confirmed. ’ ’
    The Circuit Court, in the present case, found in its decree that by said.order of the United States Court, entered June 10, 1908, the said composition was confirmed and that the same was in full force and effect; that all the creditors of said copartnership, including all of the defendants herein, had received the full amount of seventy-five cents on the dollar upon their respective claims pursuant to the terms of said composition; that upon the confirmation of said composition said bankruptcy proceedings terminated, and that all the indebtedness of said copartnership was discharged and wiped out, and that complainant and his said copartners were also individually discharged from the payment of the indebtedness of said copartnership firm, and that the creditors of said copartnership ceased to have any further claims or demands against it and to have any further claim or demand against any of the individual members thereof, including the complainant, for the copartnership indebtedness or obligations; that all of the material allegations of the amended bill were true, that the equities were with the complainant and that the complainant had no adequate remedy at law. The court decreed that the complainant was not indebted to any of the defendants herein, or to any depositor of said bank, arising out of any indebtedness or obligation of said bank to any of the defendants or to any such depositor, and ordered the issuance of the perpetual injunction, as first above mentioned.
    Hubert E. Page and Newton Wyeth, for plaintiffs in error.
    Herman Frank and Harry J. Lurie, for defendant in error.

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

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

   Mr. Justice Gridley

delivered the opinion of the court.

Section 14c of the Bankruptcy Act of 1898 provides that “the confirmation of a composition shall discharge the bankrupt from his debts, other than those agreed to be paid by the terms of the composition and those not affected by a discharge.” It appears from the evidence in this case that in an involuntary proceeding-in bankruptcy on the ground of insolvency the complainant and nine other persons, “copartners trading as Ravenswood Exchange Bank” were, on March 31, 1908, adjudged bankrupt by said United States District Court, that the copartnership subsequently offered terms of composition to its creditors, to wit, seventy-five cents on the dollar of their respective claims, which offer was accepted by a majority of those creditors in number and amount, and that on June 10, 1908, the composition was confirmed by said court. Counsel for defendant, relying on the so-called “entity theory” of a partnership and particularly on the case of In re Bertenshaw, 85 C. C. A. 61, 157 Fed. 363, contend that a partnership can be adjudged a bankrupt and discharged in bankruptcy without the adjudication individually of the members composing that partnership, and that in such case said members will not be individually discharged from the partnership debts. Arid counsel argue that, in the present case, where it appears from the evidence that complainant and a few of his partners were men of some pecuniary means individually and none of them were individually adjudged bankrupt and none of them either filed or offered to file schedules of their individual property or a list of their individual creditors, and where it further appears that an offer of composition was made by the partnership, Bavenswood Exchange Bank, and confirmed by the bankruptcy court, the effect of that judgment of confirmation is not to discharge complainant and his partners from the debts of the partnership, but that they are still liable to each creditor of the partnership for the amount of his claim less the sum received by virtue of said composition proceedings, and that the Circuit Court erred in entering the decree in this case. Counsel for complainant contend on the contrary that a discharge in bankruptcy of a partnership, whether by way of composition or otherwise, operates not only to release the partnership but also the individual partners from the debts of the partnership, and that in this case complainant and his co-partners are now under no liability to the defendants, and that the decree should be affirmed.

Shortly before the bankruptcy proceedings in question were commenced, the case of In re Bertenshaw, 85 C. C. A. 61, 157 Fed. 363, was, on November 19, 1907, decided by the United States Court of Appeals for the Eighth Circuit. The exhaustive opinion of the court was written by Judge Sanborn; and it was therein decided, as we read that opinion, that under the Bankruptcy Act of 1898 a partnership is a distinct entity, i. e. a “person,” separate from the partners who compose it; that the partners and their individual property are to a limited extent sureties for the debts of the partnership; that the partnership may be adjudged bankrupt although the partners who compose it are not individually so adjudicated; that in such event the individual estate of a solvent partner is not drawn into the proceedings, and the bankruptcy court is without jurisdiction to summarily take and administer in the proceedings against the partnership such individual estate without that partner’s consent; that in such event, also, the partnership creditors may pursue unadjudicated partners by actions at law and suits in equity before, during and after the proceedings in bankruptcy against the partnership; and that the discharge of the partnership, where the partners are not individually adjudged bankrupt, does not discharge the partners from their liability for the debts of the partnership. In the dissenting opinion of Judge Hook it was stated that portions of the majority opinion were at variance with principles enunciated in the prior cases of Dickas v. Barnes, 72 C. C. A. 261, 140 Fed. 849; In re Meyer, 39 C. C. A. 368, 98 Fed. 976, and In re Stokes, 106 Fed. 312. And we think that portions of said majority opinion were also at variance with principles enunciated in the other prior cases of In re Forbes, 128 Fed. 137, 139, and Vaccaro v. Security Bank of Memphis, 43 C. C. A. 279, 103 Fed. 436, 442.

About two weeks before the decree in the present case was entered by the Circuit Court of Cook county, the opinion of the United States Court of Appeals, for the Third Circuit, in the case of Francis v. McNeal, 108 C. C. A. 459, 186 Fed. 481, was on March 7, 1911, filed. In that case, in the District Court, a partnership had been adjudicated a bankrupt. Francis there contended that he was not a partner but the court after a hearing found otherwise. On petition of the trustee in bankruptcy, the District Court entered an order, adjudging that Francis’ separate estate was subject to administration by the trustee of a bankrupt partnership and directing him to deliver his property to the trustee for the purpose of such administration. This order was affirmed by the Court of Appeals, and in the course of its opinion the Court said (p. 484): “If the act charged be one involving insolvency, since every partner is liable in solido for all the partnership debts, the adjudication against the partnership must be based on allegations and proof that the assets of its members, in excess of their individual debts, plus the assets of the partnership, are insufficient to pay the partnership debts. Otherwise there is no partnership insolvency, notwithstanding the entity doctrine.” (Citing cases.) And the Court further said (p. 485, italics ours): “In an involuntary proceeding, where the act of bankruptcy charged is one that does involve insolvency of the partnership, there can be no adjudication against the partnership, unless it and all its members are insolvent; and that in such a case, though the adjudication be against the partnership only, or against the partnership and some, but not all, of its members, the estates of all the members are drawn into the proceeding for administrationOne of the cases cited in the above opinion was that of In re Forbes, supra. In this case Judge Lowell, of the United States District Court for Massachusetts, said (128 Fed. 137, 139, italics ours): “The equal and equitable distribution of the estates of insolvents and their discharge from the obligation of their debts are the ends sought by proceedings in bankruptcy. Bankruptcy, without insolvency, actual or presumed, is almost inconceivable. Bankruptcy without discharge for the honest debtor is a contradiction in terms. It is impossible to declare a partnership insolvent so long as the partners are able to pay its debts and theirs, whether out of joint or separate estate. * * * Not the insolvency of any imaginary entity, as in the case of a corporation, but the insolvency of its human component parts, lies at the foundation of the bankruptcy of a partnership. * * * As the bankruptcy of a partnership begins with an inquiry into the condition of its individual partners, the end of the proceedings is normally their discharge. So far as I know, the discharge of a partnership as an entity has never been suggested, and what would be the effect of such a discharge can hardly be imagined. Herein appears the difference between a partnership and a corporation. Under an adjudication merely joint, it is impossible to discharge the partners as individuals, even from their joint debts, for every joint debt of the partnership is also a separate debt of each partner, and separate debts can be discharged only after an individual adjudication operating upon the separate estate.”

The case of Francis v. McNeal was taken to the Supreme Court of the United States and that court affirmed the decisions of the District Court and the Court of Appeals. In the opinion, filed May 26, 1913 (228 U. S. 695), Mr. Justice Holmes referred to the opinion of Judge Lowell in the Forbes case, supra, as an “able opinion” and stated that, so far as the Vaccaro v. Security Bank case, supra, was inconsistent with the opinion of the majority in the Bertenshcm case, supra, he regarded the former “as sustained by the stronger reasons and as correct.” The learned Justice further said (p. 699, italics burs): “The notion that the firm is an entity distinct from its members has grown in popularity. * * * But the fact remains as true as ever that partnership debts are debts of the members of the firm, and that the, individual liability of the members is not collateral like that of a surety, but primary and direct, whatever priorities there may be in the marshalling of assets. The nature of the liability is determined by the common law, not by the possible intervention of the Bankruptcy Act.” He further said (p. 701): “It would be an anomaly to allow proceedings in bankruptcy against joint debtors from some of whom, at any time before, pending, or after the proceeding, the debt could be collected in full. If such proceedings were allowed it would be a further anomaly not to distribute all the partnership assets. Yet the individual estate after paying private debts is part of those assets so far as needed. Section 5f. Finally, it would be a third incongruity to grant a discharge in such a case from the debt considered as joint but to leave the same persons liable for it considered as several. We say the same persons, for however much the difference between firm and member under the statute be dwelt upon, the firm remains at common law a group of men and will be dealt with as such in the ordinary courts for use in which the discharge is granted.”

It thus appears that some of the principles enunciated in the Bertenshaw case, supra, upon which case counsel for defendants rely to support their contention, are not sustained by the current of authority or by the recent decision of the Supreme Court of the United States in the case of Francis v. McNeal, supra.

Counsel for defendants further contended during the oral argument before us that, if the entity theory of a partnership to the extent as urg’ed by them must be given up, there can be no valid discharge of a partnership firm without an individual adjudication in bankruptcy of the members thereof. Counsel direct our attention to the statement contained in the opinion in the Forbes case, supra, that “under an adjudication merely joint it is impossible to discharge the partners as individuals.” In our opinion this position amounts to a collateral attack on the judgment of the bankruptcy court confirming’ the composition and is untenable. The bankruptcy court had jurisdiction to enter the order, even admitting for the sake of the argument .only, that it may have erred in so doing without previously having adjudged the members of the partnership individually bankrupt. No appeal was taken from that order and, until reversed in a direct proceeding, it is res adjudícala. Young v. Lorain, 11 Ill. 624; People v. Seelye, 146 Ill. 189, 221; Sumner v. Village of Milford, 214 Ill. 388, 393; Waller v. Village of River Forest, 259 Ill. 223, 230. A certified copy of the order was introduced in evidence in the present case. And by section 21f of the Bankruptcy Act it is provided that.“a certified copy of an order confirming or setting aside a composition, * * * not revoked, shall be evidence of the jurisdiction of the court, the regularity of the proceedings, and of the fact that the order was made. ’ ’

Our conclusion, therefore, is that the Circuit Court did not err in finding in its decree that by said order of the bankruptcy court complainant and his copartners were released from the payment of the indebtedness of the copartnership, Bavenswood Exchange Bank, and in issuing the permanent injunction mentioned. By section 14c of the Bankruptcy Act the order confirming the composition discharged “the bankrupt from his debts,” and as stated in the Supreme Court opinion in Francis v. McNeal, supra, “the firm remains at common law a group of men and will be dealt with as such in the ordinary courts for use in which the discharge is granted.” And while it is provided by section 16 of the Bankruptcy Act that the liability of a person “in any manner as surety for a bankrupt” shall not be altered by the discharge of such bankrupt, it is decided in said Francis v. McNeal case that the individual liability of the members of the firm “is not collateral like that of a surety, but primary and direct.”

But counsel for defendants further contend that the question, whether complainant and his copartners after confirmation of the composition would remain individually liable to the defendants for the deficiencies on their respective claims, was decided by the bankruptcy court, that that decision was that the partners would remain so liable, and that, no matter how erroneous the same may have been, no appeal having been taken from it, the decision is now res adjudícala. Counsel’s argument, as we understand it, is to the effect that the original offer of composition contained the proviso that the acceptance of the offer would discharge the past and present partners; that objections to the offer were made by some of the present defendants; that after a full hearing the special master reported to thé bankruptcy court, recommending that the offer be denied submission unless the bankrupt, firm would withdraw the proviso; that in said report the master stated certain reasons for his recommendation, and further stated that in his opinion, upon the confirmation of the offer of composition of the firm, the creditors of the firm could collect the deficiencies on their claims from the individual partners; that on May 12, 1908, this report was approved by order of the bankruptcy court; that the court gave the bankrupt firm leave to withdraw the proviso; that the bankrupt firm did not appeal from this ruling but on the contrary withdrew the proviso, thereby acquiescing in the ruling of the court and thereby acknowledging that a confirmation of the composition offer as modified would not release the partners of the firm from their individual liability for the deficiencies on the claims of the firm’s creditors; and that, hence, the partners are now estopped by the judgment of the bankruptcy court from denying their individual liability for said deficiencies.

We cannot agree with counsel’s contention. The order of May 12th of the bankruptcy court was not a final order but an interlocutory one, and it did not purport to decide the question here involved. “The character of conclusiveness, by way of estoppel, attaches only to final judgments, not to interlocutory judgments or orders, which remain under the control of the court, except where they dispose finally of some distinct branch or part of the case, or are appealable as being orders affecting the substantial rights of the parties.” (23 Cyc. 1232.) All that the master said in the report as to his opinion of the law was not so decided by the court (23 Cyc. 1227). Furthermore, we do not think the order was an appealable one (In re McVoy Hardware Co., 119 C. C. A. 337, 200 Fed. 949). And no investigation had then been made by the judge to determine whether or not he was satisfied that the composition was for the best interests of the creditors, or satisfied as to the other matters mentioned in section 12d of the Bankruptcy Act. The judge did not determine that he was satisfied as to these matters until after the filing of the master’s final report on June 10, 1908. Furthermore “the right to a discharge, and the effect of a discharge, are wholly distinct propositions. The proper time and place for the determination of the effect of a discharge is when the same is pleaded or relied upon by the debtor as a defense to the enforcement of a particular claim. The issue upon the effect of a discharge cannot properly arise or be considered in determining the right to a discharge.” (In re Marshall Paper Co., 43 C. C. A. 38, 102 Fed. 872, 874.)

And we do not think that under the facts of this case the complainant and his copartners are estopped, under the doctrine of equitable estoppel, from taking the position that they were, by said order of the bankruptcy court of June 10,1908, released from the claims of the defendants against said copartnership, which claims were proved in said bankruptcy proceedings.One of the essential elements in equitable estoppel is that the party claiming the estoppel must have relied and acted to his prejudice upon an act, representation or promise of the other party. Counsel for defendants contend that, after the bankruptcy court had approved the special master’s report of May 12th, and after the proviso to the offer had been withdrawn, the defendants, relying upon the order of the court granting leave to the bankrupt to withdraw the proviso and also relying upon that withdrawal, thereupon withdrew their objections to the confirmation of the composition to their prejudice. A sufficient answer to this is, we think, that there is nothing in this record to show that the bankruptcy court would not have confirmed the composition offer as modified, the same having been accepted by a majority in number of the creditors whose claims had been allowed and of such allowed claims, even if said objections of the defendants had not been withdrawn.

The decree of the Circuit Court is affirmed.

Affirmed.


source: Caselaw Access Project

author: Mr. Justice Gridley

license: Public Domain

text:
    Chicago Embossed Moulding Company, Defendant in Error, v. Max G. J. Hoffman, Plaintiff in Error.
    Gen. No. 18,675.
    (Not to be reported in full.)
    Error to the Municipal Court of Chicago; the Hon. Rufus F. Robinson, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1912.
    Affirmed.
    Opinion filed January 22, 1914.
    Statement of the Case.
    Action by Chicago Embossed Moulding Company, a corporation, against Max G. J. Hoffman in the Municipal Court in a fourth class case to recover a certain sum claimed to be due to plaintiff from defendant for rent of space in plaintiff’s building. From a judgment in favor of plaintiff for $111.32, defendant brings error.
    Paul J. Huxmann, for plaintiff in error.
    Abner Smith, for defendant in error.

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

   Mr. Justice Gridley

delivered the opinion of the court.

Abstract of the Decision.

1. Landlord and tenant, § 289 —-when tenant holding over liable for amount of rent fixed by landlord. Where a tenant occupying premises under a verbal lease, paying rent from month to month, served notice of his intention to vacate at the end of the month and the landlord accepted such notice but offered to permit tenant to hold over a few months at a certain rental payable in advance, held that tenant by holding over for ten days after the time for vacating was liable for a month’s rent at the rate specified by the landlord.

2. Landlord and tenant, § 188 —when tenant not entitled to damages for failure of landlord to furnish power. In an action on a verbal lease for rent of space in a building where the tenant claimed damages for failure of landlord to furnish power to run tenant’s machinery, a judgment in favor of landlord disallowing damages held sustained by the evidence, it appearing that the lease only required the landlord to furnish such power as he had and his failure to furnish power resulted from an unavoidable breakdown of the landlord’s power plant which occasioned only temporary cessation of power.


text:
    Anna Drago, Appellee, v. The Prudential Insurance Company of America, Appellant.
    Gen. No. 18,691.
    (Not to be reported in full.)
    Appeal from the Municipal Court of Chicago; the Hon. John D. Toenbaugh, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1912.
    Reversed and remanded.
    Opinion filed January 22, 1914.
    Statement of the Case.
    Action by Anna Drago against The Prudential Insurance Company of America, a corporation, to recover upon a policy of life insurance claimed to have been issued and delivered by the defendant upon the life of Marian E. Baum to the amount of $1,000, the plaintiff, the mother of the insured, being mentioned in the policy as beneficiary. Plaintiff’s amended statement of claim alleged that said sum was due her under a term insurance contract issued in connection with an endowment policy. From a judgment in favor of plaintiff for $1,091.67, defendant appeals.
    Abstract of the Decision.
    1. Insurance, § 113

      —when delivery of policy to agent completes contract of insurance. A delivery of an insurance policy to the agent is sufficient to complete the contract of insurance only where there is an unqualified acceptance of the application and a completed policy has been placed in the hands of the agent for delivery without condition.
    2. Insurance, § 704

      —when exclusion of testimony as to instructions given agent when policy was delivered to him is prejudicial error. In an action to recover on a term insurance contract where it appears that the insured never made application for term insurance and that the policy together with the term insurance contract were delivered to an agent of the insurance company, refusal of court to permit defendant’s witnesses to testify as to what instructions were given to the agent when the policy was placed in his hands, held prejudicial error.
    3. Insurance, § 704

      —when instruction assuming facts prejudicial. In an action to recover on a term insurance contract, where the defense is that the insurer made application only for a twenty-year endowment policy, the giving of an instruction which assumes that the insured made application for term insurance held prejudicial error.
    Hoyne, O’Connor & Irwin, for appellant; Carl J. Appell, of counsel.
    Adler & Lederer, for appellee.

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

   Mr. Justice Gridley

delivered the opinion of the court.


text:
    Michael Davranges, Defendant in Error, v. Peter Olff et al., Plaintiffs in Error.
    Gen. No. 18,725.
    (Not to be reported in full.)
    Abstract of the Decision.
    Trover and conversion, § 39

      —when evidence sufficient to sustain recovery against livery stable Keeper for conversion. Livery stable keepers refused to deliver certain horses, wagons and harness to the owner thereof on demand after a certain sum was tendered for board and keep. The stable keepers claimed that the owner owed them a greater amount than the sum tendered and that they had traded a horse for one of the horses and a certain sum additional. Held in an action of replevin, which action was changed to trover, upon the trial, that a judgment in favor of plaintiff was sustained by the evidence, the jury having returned special findings that there had been no horse trade and that the sum tendered was the amount owing the defendants.
    Error to the Municipal Court of Chicago; the Hon. Oscab M. Tobbison, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1912.
    Affirmed.
    Opinion filed January 22, 1914.
    Statement of the Case.
    Action by Michael Davranges against Peter Olff, Samuel B. Olff and Arthur Olff, trading as Peter Olff & Sons, in replevin to recover possession of two horses, two wagons and two sets of harness, which were kept in defendant’s livery stable. Upon the trial plaintiff was given leave to change the form of action to trover and filed a count in trover. From a judgment in favor of plaintiff for four hundred and sixty-five dollars, defendants bring error.
    Adolph Marks, for plaintiffs in error.
    Andrew E. Lindas, for defendant in error.

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

   Mr. Justice Gridley

delivered the opinion of the court.


author: Mr. Justice Scanlan

text:
    Morris Brown, Defendant in Error, v. Max Malter Company, Plaintiff in Error.
    Gen. No. 18,582.
    1. Sales, § 141

      —basis for determining whether goods equal samples. The condition and quality of goods at the time and place of delivery- to the buyer is the basis for determining whether the goods sold were equal to the samples.
    2. Sales, § 200

      —title to goods when seller is made consignee in bill of lading. Where a shipper of goods makes himself the consignee in the bill of lading, the carrier is but a bailee for the shipper.
    3. Sales, § 200

      —when title to shipment passes, the seller being named in bill of lading as consignee. Where a seller in making a shipment of goods to a buyer has himself named in the bill of lading as consignee, and sends the bill of lading with draft attached to a bank to collect from the buyer, the delivery to the railroad company does not constitute a delivery to the buyer. In such case the seller retains title and control of the property while the goods are in possession of the carrier and the title does not pass nor is there any lawful delivery to the buyer until he pays the draft and receives from the bank the bill of lading.
    4. Sales, § 352

      —when buyer entitled to recover money paid on shipment of frozen eggs unfit for use. A produce company in Boston wired a commission merchant in Chicago to ship a quantity of frozen eggs, the same as samples. The- commission company shipped the eggs from Milwaukee, having the bill of lading name itself as consignee and sent the bill of lading with a draft attached to a bank in Boston for collection. After the produce company paid the draft and freight the eggs were condemned by the government officials as unfit for food. Held, in an action against the commission company by the produce company to recover the amount of the draft and the freight charges paid, alleging a breach of warranty and that the eggs were unfit for use, that plaintiff was entitled to recover, the evidence being, sufficient to show that the eggs were unfit for food and not equal to samples at the time and place of delivery, whether the place of delivery be considered as Boston or Milwaukee.
    5. Judgment, § 401

      —when judgment in rem res adjudicata. Where a consignment of frozen eggs purchased by plaintiff according to sample was seized by the government before delivery to plaintiff as unfit for human consumption, proceedings in rem being commenced by the government in the Federal Court, of which both plaintiff and defendant had notice, and a decree of forfeiture being entered ordering the destruction of the eggs, in an action by the purchaser to recover the purchase price and freight charges paid by him, on the ground of breach of warranty in the sale by sample, the decree in the in rem proceeding is res adjudicata as to both parties as to the condition of the eggs at the time of seizure by the government.
    Error to the Municipal Court of Chicago; the Hon. Feed C. Hill, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1912.
    Affirmed.
    Opinion filed January 22, 1914.
    Statement by the Court. This is a writ of error sued out to reverse a judgment of $863.83 and costs, recovered by Morris Brown, defendant in error (hereinafter referred to as plaintiff), against Max Malter Company, a corporation, plaintiff in error (hereinafter referred to as defendant) in a fourth class action in the Municipal Court of Chicago. The case was tried without a jury. The plaintiff was engaged in the produce business in Boston, Massachusetts, and the defendant in the commission business in the city of Chicago. In the month of February, 1910, the defendant sent the following telegram to the plaintiff: “Can you use ten thousand pounds frozen eggs ten and half Chicago good quality will ship sample, wire answer,” to which plaintiff sent the defendant the following answer: “Can use at ten cents Boston express sample if satisfactory.” To this the defendant answered: “Ten cents Chicago is cheapest if want wire for samples,” to which the plaintiff answered: “Express samples if satisfactory will accept balance. ’ ’ On February 17, 1910, defendant shipped to the plaintiff at Boston six sample cans of frozen eggs, obtained from A. J. Grossenbach & Company of Milwaukee, dealers in produce, eggs, etc., and these samples were received by the plaintiff on February 19th. It appears from the evidence that “frozen eggs” means eggs broken out of the shell into cans, and solidly frozen therein, to be kept in cold storage until sold. The undisputed evidence is that 'the sample cans of frozen eggs contained first-class eggs, fit for food consumption. On February 21, 1910, plaintiff wired the defendant:' “Sample received if balance is the same ship.” The defendant upon receipt of the telegram wired the plaintiff: “Wire received will ship tomorrow.” On the evening of February 21st, Max Malter, the president of the defendant Company, went to the city of Milwaukee, Wisconsin, and on the next day purchased from G-rossenbach & Co. 574 cans of frozen eggs. These eggs were loaded on the railroad car at Milwaukee. The defendant had the bill of lading from the carrier name the defendant as the consignee. On the bill of lading appeared the words “notify M. Brown.” The defendant then drew a draft on the plaintiff for $805.10, attached the bill of lading to the draft, and forwarded the draft and the bill of lading to the National Bank of Commerce, in Boston for collection. A day or two later the bank in Boston presented the draft to the plaintiff and it was paid by him. The bank then gave the plaintiff the bill of lading. The plaintiff also paid freight charges on the eggs to the amount of $58.73. The car containing the cans of frozen eggs did not arrive in Boston until March 2, 1910, and the plaintiff then received notice from the railroad company of the arrival of the car. On the following morning, George H. Adams, a drug and food inspector for the United States government at Boston, called on the plaintiff to make inquiries about the eggs in question. Mr. Adams and the plaintiff then went over to the place where the car containing the eggs was sidetracked. Mr. Adams broke the seals of the car and an inspection of the eggs was made by the plaintiff and Adams. The plaintiff testified that he had been in the egg business for many years and that he was an expert in the matter of testing the quality of eggs; that he tasted and smelled the eggs in question; that there was a strong odor to them; that they had a bad taste; a sour taste; that compared in looks, taste and smell with the samples that he had received they “differed as much as day and night/’ that the sample eggs were good eggs and the eggs that he saw in the car on March 3d were not fit to use; that they were not worth anything for human food consumption; that they were absolutely useless; that it was his opinion, as an expert, that the eggs could not have been in good condition at the time of the shipment; that there was ice around the cans in the car; that the weather had been pretty cold in Boston for eight or ten days prior to the arrival of the car; that the eggs were frozen hard when he examined them in the car; that in his opinion, as an expert, it would have taken frozen eggs, shipped with ice, thirty days to spoil in transit in the kind of weather that prevailed in Boston on the day of the arrival of the car and that had prevailed for a few days prior thereto; that in his opinion, if the eggs had been in good condition at the time of shipment they would have been in good condition when they arrived in Boston. Mr. Adams, the inspector, testified that he had been a food and drug inspector for the United States government for five years; that before that time he was a pharmacist ; that his duties required him to inspect various articles of food for the purpose of ascertaining whether they were pure and-fit for human food; that he had made a great many tests of .frozen eggs to ascertain if they were suitable for human food consumption; that he made a physical examination of the eggs in question; that he also took samples of the same and submitted them to government bacteriologists and chemists; that in making the physical test of the eggs in question he used the senses of sight, smell and taste; that he found the doors of the car regularly sealed; that he opened a door of the car and examined the cans of frozen eggs; that perhaps one quarter of the cans were without covers; that there were small pieces of ice on the floor of the car and around the cans; that the weather in Boston had been cold for five or six, days prior to the arrival of the eggs; that in order to keep frozen eggs in a wholesome condition it is necessary that they be kept in a frozen condition and that they be handled in a clean and sanitary manner, and protected from all contamination; that he opened a great many of the cans and examined the contents of the same; the eggs were frozen and showed no signs of melting; the color was not abnormal bnt the eggs had a decidedly bad odor; they seemed to be partly decomposed ; he tested some of the samples; from his examination of the frozen eggs he was of the opinion that they were unfit for human food; from his experience as an expert he would say that the eggs were in a bad condition when they were shipped; either the eggs were bad when the shells were broken, or else they were handled and cared for at the time of canning and freezing in such a way as to produce the bad condition he found. Mr. Adams took samples of the eggs, had them packed in ice and shipped by express to the Bureau of Chemistry, United States Department of Agriculture, Washington. The samples were then examined by the bacteriological chemist of the said Bureau; the government expert made an examination of the samples; he noted a sour odor from the eggs at the time he opened the bottle containing the sample; he made a bacteriological examination of the sample and it showed that there were present 1,180,000,000 organisms per gram of egg, of which number at least 10,000,000 were of the B, coli type and 1,000 were streptococci; as an expert, he would say that beyond any question the egg stuff was decomposed at the time of freezing, due either to the use of (1 rots5 ’ or “ spots ” or to very insanitary handling of the eggs at the time of the breaking or freezing of the same. On the day that the government inspector at Boston examined the eggs in the car, the government officials seized the shipment of eggs while they were still in the custody of the railroad company, and after the experts in Washington had forwarded to the officials in Boston their findings as to the eggs, the United States food officials in Boston caused to be started in the United States District Court at Boston a proceedings in rem against the frozen eggs. These proceedings, entitled United States v. 574 Cans of Frozen Egg Material, resulted in a decree of forfeiture on May 31, 1910, the eggs were ordered by the court to be destroyed and the marshal of the district carried out this order. The hearing of the in rem case was set for March 8, 1910. On March 9, 1910, the plaintiff notified the defendant by letter of the seizure of the eggs, and also inclosed in the letter a publication notice from the government to all persons interested in the eggs. The defendant took no steps to protect its rights in the proceedings in rem and the judgment was entered by default. Charles Lindloff, a witness for the defendant, testified that he was present when the eggs were loaded on the car in Milwaukee; that he examined 75 of the 574 cans shipped; that the eggs were frozen solid and were in good condition; they were sweet and of good quality; they were wholesome and fit for consumption as food; they were as good as the samples that had been sent. Max Malter, testifying for the defendant, said that he was treasurer and general manager of the Max Malter Co.; that he had dealt in eggs eighteen years and had often bought, sold and examined frozen eggs;- the sample eggs sent to plaintiff were No. 1 quality; after he received the telegram from the plaintiff accepting the eggs, on the evening of the same day he went to Milwaukee and purchased the eggs from Grossenbach & Co.; he examined the eggs before they were shipped; they were frozen hard and he chopped off pieces of them to taste; the eggs were all good; No. 1 eggs; better than the samples; the odor was fine and they tasted sweet; out of the 574 cans shipped he examined from 50 to 75 cans; he did not notice any filthy, decomposed or putrid substance frozen in with the egg material; the weather was cold in Milwaukee and Chicago. Plaintiff brought suit to recover the amount of the draft and the amount of the freight on the eg’gs. He alleged a breach of warranty and that the eggs delivered were valueless to the plaintiff.
    McEwen, Weissenbach, Shrimski & Meloan, for plaintiff in error.
    Baker & Holder, for defendant in error.

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

   Mr. Justice Scanlan

delivered the opinion of the court.

There is no dispute between the parties as to the quality of the sample eggs sent to the plaintiff by the defendant. The plaintiff in his brief says that the evidence of both parties proves that the sample cans of eggs contained first-class eggs that were fit for consumption as food. The defendant in his brief speaks of the sample eggs as “good and wholesome and fit and suitable for food purposes.”

The first question for us to decide is, was Chicago or Boston, under the facts of this case, the place of delivery to the plaintiff of the 574 cans of frozen eggs?

“The effect of a consignment of goods in a bill of lading is to vest the property therein in the consignee. A delivery of goods to a common carrier consigned to a particular person, without specific directions different from ordinary usage, is constructively a delivery to the consignee. Where the vendee is the consignee the delivery of goods to a common carrier without qualifications, consigned to that vendee, is in law a constructive delivery to the consignee from the time of shipment and the commencement of the carriage. ‘It is well settled that delivery of goods to a common carrier * * * for conveyance to him (the purchaser) or to a place designated by him constitutes an actual receipt by the purchaser. In such cases the carrier is, in contemplation of law, the bailee of the person to whom,—not by whom,—the goods are sent, the latter, in employing the carrier, being considered as an agent of the former for that purpose.’ Benjamin on Sales,— 2d Am. Ed.—par. 693, p. 648.

In Merchants’ Despatch Co. v. Smith, 76 Ill. 542, we said: ‘Where goods are consigned without reservation on the part of the consignor, the legal presumption is the consignee is the owner.’ (Angell on Carriers, sec. 497.) This court held in Diversy v. Kellogg, 44 Ill. 114, that when goods were delivered to a carrier under a contract of sale, the title to the property vests in the consignee, subject to stoppage in transitu, but with no other lien unless expressed in the terms of sale.” Lake Shore & M. S. Ry. Co. v. National Live Stock Bank, 178 Ill. 506, 515.

Numerous authorities to the same effect might be cited but it is not necessary to do this, for the reason that neither side to this controversy disputes the correctness of the principles laid down by the Supreme Court in the last mentioned case. Had the defendant carried out the terms of the contract between the parties, there is no doubt but that Chicago would have ■been the place of delivery to the plaintiff. It is apparent, however, that the defendant did not carry out the terms of the contract. Instead of shipping the eggs from Chicago and making the plaintiff the consignee in the bill of lading, the defendant had the eggs shipped from Milwaukee, Wisconsin, and it obtained a bill of lading for the eggs from the carrier, in which the defendant was made the consignee. The defendant then drew a draft upon the plaintiff for the amount of the bill for the eggs, attached the bill of lading to the same, and caused the draft, with the bill of lading attached, to be sent to a bank in Boston for collection. This draft was paid by the plaintiff, and thereupon the draft and the bill of lading were handed to him.

It seems clear, from the authorities, that the delivery of the eggs by the defendant to the railroad company, under these circumstances, did not constitute a delivery to the plaintiff; that it was in fact merely a delivery to the carrier as bailee for the defendant; that the defendant retained the jus disponendi over the property, and that the title to the same did not pass from the defendant to the plaintiff, nor was there any delivery in law to the plaintiff until he paid the draft in Boston, and received from the bank the bill of lading. Jones & Co. v. Brewer, 79 Ala. 545, 549; Dorns v. National Exch. Bank, 91 U. S. 618; First Nat. Bank of Cairo v. Crocker, 111 Mass. 163. Where a shipper of goods makes himself the consignee in a bill of lading, the carrier is but a bailee for the shipper. The shipper retains title and control of the property and there can be no delivery of the goods to another party, under such circumstances, until that other, party has received from the shipper the bill of lading for the goods. Kitchin v. Clark, 120 Ill. App. 105, 107. The defendant by its conduct waived Chicago as the place of delivery, and substituted Boston in its place. Both parties agree and it is undoubtedly the law that the condition and quality of the 574 cans of eggs at the time and place of delivery to the plaintiff is the basis for determining whether the eggs sold were equal to the samples.

In determining, therefore, the question as to whether the 574 cans of eggs sold to the plaintiff were equal to the samples furnished him, the question is, not whether the eggs sold when they left Chicago were equal to the samples, but whether they were equal to the samples when they arrived in Boston. The defendant during the trial and now insists that Chicago was the delivery place, and that the only question to determine was: Were the 574 cans of eggs, when they left Chicago, like the samples ? The defendant offered no evidence as to the condition of the eggs when they arrived in Boston. The testimony, in our judgment, is conclusive that the eggs when they arrived in Boston were unfit for food purposes. In addition to the testimony of witnesses as to the condition of the eggs when they arrived in Boston, the plaintiff offered in evidence the record of the proceedings in the in rem case. From this record we leam the following facts: The information in the case charged that the eggs in question “consisted in part of filthy, decomposed and putrid animal and vegetable ’ substance. ’ ’ A default was taken in the case and a decree of forfeiture entered, and the eggs were destroyed by the United States marshal, in pursuance of an order of the United States District Court. Because of the action of the government the plaintiff never had physical possession of the eggs.

The plaintiff strenuously insists that the judgment of the United States District Court condemning the eggs in question is res adjudicaba as to the physical condition of the eggs at the time of the shipment. In the view that we have taken of this case, it is not necessary for us to pass upon this contention of counsel. The judgment in the in rem case was res adjudicaba as to all parties as to the condition of the eggs at the time of the seizure by the government. Makins Produce Co. v. Callison, 67 Wash. 434.

The trial judge (in order to be on the safe side, as he stated in his decision) held with the defendant that the place of delivery of the eggs was Chicago, and that the decree of the United States Court was not res adjudicaba as to the condition and the quality of the eggs at the time of the shipment. The Court held, however, that the evidence in the case proved to his satisfaction that the eggs at the time of the shipment were very bad and valueless to the plaintiff, and that they were not like the samples that had been sent to the plaintiff by the defendant. We have examined the evidence in this case with great care, and we are satisfied that if we followed the law of the trial court (the law contended for by the defendant in this case), we would arrive at the same conclusion that the trial court did in reference to the facts. That the eggs when they arrived at Boston were very bad and unfit for human consumption is undisputed. In addition to the plaintiff, several able and disinterested witnesses, holding responsible positions with the United States government, testified that the bad condition of the eggs at Boston was not the result of changes in the condition of the eggs after they were shipped, hut that the same conditions that were found in Boston existed at the time the egg fluid was placed in the cans, and that this condition of the frozen eggs was caused by the use of decomposed eggs, known as “rots” and “spots,” or was due to insanitary handling of the eggs at the time of the breaking of the eggs and the placing" of the liquid material into the cans.

The defendant had two witnesses testify as to the condition of the eggs at the time of the shipment. Max Malter, the president of the defendant corporation, was one, and Charles Lindloff, an employe of the Milwaukee firm, from whom the defendant bought the eggs, was the other. The witness Malter testified that he was present at the time the eggs were loaded on the car at Milwaukee, and that he made a test of 50 or 75 cans of the 574 cans that were shipped, and that the eggs tested by him were all No. 1 eggs and of good quality,—better in quality than the sample eggs. When the government seized the eggs in Boston, the plaintiff notified the defendant of that fact, told it where the eggs were in storage, and demanded of it a check for the amount of the draft that had been paid by the plaintiff, and for the amount of the freight on the eggs that had also been paid by the plaintiff. In response to this letter, the defendant through Max Malter wrote a letter to the plaintiff containing the following: “We are in receipt of yours of the 9th inst. and are very sorry to note what you say. In reply will say we have immediately taken this matter up with our Milwaukee party and are awaiting their answer. As soon as we hear from them will let you know immediately. We are very sorry to cause you all this trouble, but you see that it is not our fault, as on the strength of the sample that we shipped you ive bought the balance when we heard from you,. The eggs were shipped direct from Milwaukee loaded by said party direct to the car and never came to our possession.” In a later letter to the plaintiff, the defendant said: “What we are trying to do is to connect the Milwaukee party with this, as you know well that we acted in this only as brokers. On the strength of the sample that we shipped you, we then on your acceptance bought the remainder of the eggs and shipped it direct from there. You saw according to their guarantee what they think of it.” A number of letters dictated by Max Malter passed between the plaintiff and" the defendant after the seizure of the eggs, and in none of these was there any suggestion made that the witness Malter had inspected the eggs prior to the shipment from Milwaukee. From a reading of the entire correspondence, we are not satisfied that, the attitude of the defendant Company towards the plaintiff in this transaction was frank and honorable. The position of the defendant at first was that it had purchased the eggs from the .Milwaukee concern under a guaranty, and that it intended to look to the Milwaukee people for reimbursement for any loss that it might sustain in the matter. Finally, after the matter had been dragged out for months through the evasive tactics of the defendant Company, it ended the correspondence by notifying the plaintiff that it would not be held responsible for any loss the plaintiff might sustain in the matter. The affidavit of merits of the defendant Company in this case was subscribed and sworn to by the witness Max Malter. In this affidavit •appears the following: “Whereupon the said Gfrossenbach & Company, by direction of the defendant consigned about 10,000 pounds of frozen eggs to the plaintiff at Boston, Massachusetts, and the said Grossenbach & Company then and there guaranteed to the defendant here that the said frozen eggs were in all respects equal to the samples so received by the defendant from said Grossenbach & Company, and affiant says that he is informed and believes, and so states the fact to be, that the frozen eggs so consigned by the said Grossenbach & Company by and under the direction of the defendant were in all things equal to said sample.” When all the evidence is considered together, it is exceedingly doubtful, in our judgment, if the witness Halter made a test of the eggs at the time of the shipment. We are satisfied, that the evidence proves that the eggs at the time of the shipment from Milwaukee were not of a good quality and fit for human food, and that they were not equal in quality to the samples that had been forwarded to the plaintiff by the defendant. Therefore, if we adopt, as did the trial court, the defendant’s theory of the law, we are nevertheless forced to the conclusion that the judgment of the Municipal Court in this ease is a just one and that it should be affirmed.

The judgment of the Municipal Court will therefore be affirmed.

Affirmed.


text:
    Emma Thiele, Plaintiff in Error, v. John Hetzel, Defendant in Error.
    Gen. No. 18,724.
    (Not to be reported in full.)
    Error to the Superior Court of Cook county; the Hon. Charles A. McDonald, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1912.
    Reversed and remanded.
    Opinion filed January 22, 1914.
    Statement of the Case.
    Action by Emma Thiele originally commenced against John Hetzel and Chicago Bailways Company to recover for personal injuries sustained by plaintiff alleged to have been caused by a collision between a street car of the defendant Bailways Company and a wagon of defendant Hetzel at a street intersection where plaintiff was standing to take the car, the collision causing the wagon to be thrown towards the curbing in the direction of plaintiff so that the horses stepped upon and the wagon passed over plaintiff. Plaintiff in consideration of two hundred dollars entered into a “peace covenant” with defendant Railways Company and the suit was dismissed as to it but retained against the defendant Hetzel as the sole defendant. From a judgment entered upon a verdict of not guilty, plaintiff brings error.
    Abstract of the Decision.
    1. Istructions, § 129

      —when instructions directing verdict upon determination of preponderance of the evidence improper. In as action for personal injuries, an instruction given at the instance of defendant in the words: “If the evidence in this case preponderates in favor of the defendant, then your verdict should be not guilty. Or, if the evidence fails to preponderate in favor of plaintiff, the jury should find the defendant not guilty. Or, if the evidence in the case is evenly balanced, the jury should find the defendant not guilty,” held misleading because it does not restrict the evidence referred to, to the issues essential to the maintenance of the action, and also subject to criticism because it too frequently uses words to the effect that the jury should find the defendant not guilty.
    Hattie M. Balsley, who was standing by plaintiff at the time of the accident, was also injured. She prosecuted a suit against the same defendant and recovered a judgment on substantially the same evidence as in the case at bar. Judgment in that case was affirmed by the Appellate Court in Balsley v. Hetzel, 182 Ill. App. 136.
    C. Helmer Johnson and Daniel Belasco, for plaintiff in error.
    Miller, Gorham & Wales and W. G. Shockey, for defendant in error.

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

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

   Mr. Justice Scanlan

delivered the opinion of the court.

2. Instructions, § 82 —when instruction as to credibility of testimony of one party improper. Where both plaintiff and defendant testify in the suit, an instruction to consider the interest of the plaintiff in giving credence to her testimony, without any reference to the interest of the defendant, held calculated to impress the jury that the court entertained a special reason for discrediting the testimony of plaintiff.

3. Instructions, § 59 —when instruction as to relative rights of defendant and third party misleading. In an action for personal injuries alleged to have resulted from the negligent driving of a wagon, an instruction given for defendant with reference to the relative rights of defendant and the street railway company as to the use of the street at the place of the accident, held, misleading where the street railway is not a party to the action.

4. Damages, § 209 —when instruction limiting damages to sum received by plaintiff in consideration of dismissing suit against party made codefendant prejudicial. In an action for personal injuries where the action was originally .commenced against the defendant and a street railway company, but plaintiff in consideration of two hundred dollars entered into a peace covenant as to the railway company and dismissed the action as it only, an instruction given for defendant that the jury must find for defendant in case the damages sustained were not in excess of the two hundred dollars received by plaintiff from the railway company, held erroneous and prejudicial.


text:
    The People of the State of Illinois for use of State Board of Health, Defendant in Error, v. Jasper B. McTier, Plaintiff in Error.
    Gen. No. 18,740.
    (Not to be reported in full.)
    Error to the Municipal Court of Chicago; the Hon. Freeman K. Blake, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1912.
    Affirmed.
    Opinion filed January 22, 1914.
    Statement of the Case.
    Action of debt by the People of the State of Illinois for the use of the State Board of Health against Jasper B. McTier to recover the statutory penalty of one hun dred dollars for practicing medicine without a license. The defendant waived a trial by jury. The court heard the evidence and found the defendant guilty and imposed a fine of one hundred dollars and costs and entered a judgment for that amount. To reverse the judgment defendant prosecutes a writ of error.
    Abstract of the Decision.
    1. Physicians and surgeons, § 8

      —when evidence sufficient to show practice without a license. In an action to recover a penalty for practicing medicine without a license, the facts showing that defendant had distributed from house to house a circular in which he claimed to have power to heal through prayer and that investigators submitting to treatment as patients were charged a fee, held that a finding of guilty was sustained by the evidence.
    2. Physicians and surgeons, § 8

      —when printed circular admissible in an action for penalty for practicing without a license. In an action to recover the statutory penalty for practicing medicine without a license, a printed circular distributed by the defendant from house to house and tending to support the charge of the commission of the offense, held competent evidence.
    3. Physicians and surgeons, § 8

      —when action for penalty for practicing without a license may be based on evidence provided by investigators. An action to recover the statutory penalty for practicing medicine without a license may be based on evidence procured by investigators who applied for treatment to determine whether the defendant would commit the offense, the investigators not advising or encouraging the defendant to commit the acts constituting such offense.
    4. Penalties, § 10

      —necessity of proving venue of offense. Action of debt to recover statutory penalty for practicing medicine without a license is not a criminal proceeding in which the venue of the offense must be proved.
    T. Webster Brown for plaintiff in error; Edward H. Morris, of counsel.
    Charles Alling, Jr., for defendant in error; Thomas F. Burke, of counsel.

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

   Mr. Justice Scanlan

delivered the opinion of the court.

6. Physicians and subgeons, § 8 —constitutional provisions. Although article II, § 3 of the Constitution of 1870, J. & A. p. 130, gives to a person a legal right to pray for the cure of sickness and disease, it does not give him the right to practice medicine without a license.


text:
    In the matter of the Petition of Jacob Bremer. On Appeal of Jacob Bremer, Appellant, v. William Murray, Appellee.
    Gen. No. 18,816.
    (Not to be reported in full.)
    Abstract of the Decision.
    1. Execution, § 302

      —when evidence on question of malice for discharge from custody under a ca. sa. On petition filed by a judgment debtor in the County Court under the Insolvent Debtor’s Act, J. & A. ¶ 6199, to be released from custody under a capias ad satisfaciendum issued on a judgment, refusal of court to permit the petitioner to show by evidence that malice was not the gist of the action for the reason that the judgment record was res adjudicata on the question, held proper.

      Appeal from the County Court of Cook county; the Hon. John E. Owens, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1912.
    Affirmed.
    Opinion filed January 22, 1914.
    Statement of the Case.
    Petition filed by Jacob Bremer in the County Court under the Insolvent Debtors’ Act to be released from custody under a capias ad satisfaciendum issued upon a judgment of tort recovered against the petitioner in the Municipal Court of Chicago in an action brought by William Murray. From a judgment denying the petition, petitioner appeals.
    George Remus, for appellant.
    Kruse & Peden and R. C. Merrick, for appellee.

      See Illinois Notes Digest, Vols. XI to XV, sama topic and section number.

   Mr. Justice Scanlan

delivered the opinion of the court.

2. Execution, § 295 —when record of judgment conclusive on question of malice on petition for discharge from custody under a ca. sa. The record of a judgment in tort recovered against defendant in an action charging defendant with making fraudulent representations that a trust deed was first lien upon real estate described therein to induce the plaintiff to purchase the deed, held res adjudicata on the question whether malice was the gist of the action, it appearing that the jury returned a special finding and the court found that the misrepresentations were made with malicious and fraudulent intent.