author: Mr. Justice Gridley

text:
    Anna L. Jones, Appellee, v. James F. Bishop, Administrator, Appellant.
    Gen. No. 25,199.
    1. Arbitration and award, § 60

      —how defense of fraud must be raised. The defense of fraud or misconduct on the part of arbitrators under an arbitration agreement may be made by plea in bar in an action at law brought to enforce the award, and it1 is unnecessary to resort to a court of chancery.
    2. Arbitration and award, § 43*—when award is void. Where the arbitrators under an arbitration agreement held several meetings, heard the evidence and received and considered a digest thereof and, without reaching an agreement, adjourned to reconvene later, and thereafter two of such arbitrators met secretly before the date fixed and without notice to the third or giving him opportunity to attend and made an award without consulting him, such award is void and a judgment based thereon cannot stand.
    3. Arbitration and award, § 36*—when award is in excess of submission. Where an arbitration agreement provides that the arbitrators shall determine what damages, if any, one of the parties had sustained up to the date of the submission by the reason of the falsity of the representations- of the other as to the rental which the former would -receive from certain property which she had taken in an exchange with the latter, an award which attempts to fix the damages to a date over 3 years after the date of submission and makes no allowance for the future receipt of rents from the property but is based on speculation as to the damages which may accrue in the future from possible loss of rent and assumes that no rent will be received, is in excess of the submission.
    Appeal from the Superior Court of Cook county; the Hon. Joseph Sabath, Judge, presiding. Heard 'in the Branch Appellate Court at the March term, 1919.
    Reversed with finding of facts.
    Opinion filed May 28, 1920.
    Statement by the Court. This is an appeal from a judgment for $10,511, entered after verdict on January 30, 1919, by the superior court of Cook county against the defendant, as administrator, etc., to be paid in due course of administration. The action is in assumpsit and was commenced on December 19, 1916, against Olof H. Ahlgren in his lifetime. Before trial Ahlgren died and James F. Bishop, administrator, was substituted as defendant. The action is based upon a written award, signed by two or three arbitrators, appointed under an arbitration agreement signed and sealed by the plaintiff and said Ahlgren.
    • The arbitration agreement is dated July 14, 1916. It is therein recited, in substance, that on January 17,1916, Ahlgren and wife conveyed by warranty deed to Anna L. Jones, plaintiff, certain property in the City of Chicago known as 824 and 826 East 39th street, improved by a four-story brick building, in consideration of a deed by Anna L. Jones and husband to Ahlgren of certain real estate situated in the City of Evanston, Illinois; that Anna L. Jones claims that Ahlgren, his agents and representatives, as a part of the consideration of the transfer and as an inducement to make the same, made certain representations to Anna L. Jones, her agents and representatives, as to the rents derived from said 39th street premises, to the effect that the second and third floors of said premises were pnder lease from October 1, 1914 to October 1, 1919 to Duffy and Patterson at a monthly rental of $225, and that Duffy and Patterson had been and were paying rent at such rate, and that Anna L. Jones relied upon said representations in making said exchange of properties; that she further claims that Duffy and Patterson had not paid any rent for said floors since April, 1915, which was well known to Ahlgren, his agents and representatives, at the time said representations were made to her, and her agents and representatives, and that Duffy and Patterson were unable to pay any part of said rents, and she was compelled to terminate their tenancy and lease of said floors; and that Ahlgren denies that any such representations were made by him, his agents or representatives, and denies that she has sustained any damages. The arbitration agreement then sets forth, in substance, that it is agreed that to avoid a suit said matters in dispute be submitted to arbitration by a bohrd of arbitrators; that each party shall select a person to act as arbitrator, and said two arbitrators shall select a third arbitrator; that said board shall"hear and determine all of said matters and that “each witness shall testify in private”; that an award may be reached and made by any two of the arbitrators and such award may be as binding as if the three members had agreed thereto; and that either party shall be privileged to have judgment of the circuit or superior court of Cook county entered upon the award rendered by any two of the arbitrators, pursuant to the submission. The sixth clause of said agreement is as follows:
    ‘ ‘ 6. That the said arbitrators shall pass upon the following questions:
    “ (a) Were any false statements, or fraudulent representations made by the party of the second part, his agents or representatives to the party of the first part, her agents or representatives, prior to the consummation of the exchange of properties hereinbefore mentioned with reference to the lease of the second and third floors of the aforesaid premises by the said Duffy and Patterson; and as to whether or not the said Duffy and Patterson had been and were paying rent for said premises at the rate stipulated in said lease, and after the consummation of said transaction whether the said Duffy and Patterson had paid their rent for said premises for the month of February, A. D. 1916, whereby said first party was deceived and suffered loss;
    “ (b) Whether the said party of the first part has been damaged by any false or fraudulent act or statement of second party or representative if such statements or representations were made, and to what extent she has been so damaged, to state the amount of such damage, and render an award in her favor for the amount so found.”
    Under the agreement Anna L. Jones selected H. L. Schmitz, and Ahlgren selected L. C. Cooper to act as two of the arbitrators, and they in turn selected George A. Jackson to act as the third arbitrator. Under date of December 7, 1916, Jackson and Schmitz signed and sealed their written award.
    In the award it is stated that false statements and fraudulent representations were made by N. P. Severin, agent of "Ahlgren, to Herbert D. Jones, agent of Anna L. Jones, prior to the consummation of the exchange of properties, with reference to said lease of said floors of the 39th street premises by said Duffy and Patterson; that said false statements and fraudulent representations were that said Duffy and Patterson had been and were paying rent for said floors at the rate of $225 per month as stipulated in their lease, whereas they had not paid any rent therefor since April, 1915, whereby Anna L. Jones was deceived and suffered loss; that she has been unable to rent said floors except upon a month to month tenancy beginning December 1, 1916, at the rate of $100 per month “for an indefinite period”;
    “That said Anna L. Jones was to receive the rent of said premises beginning March 1, 1916, and has been damaged by said false and fraudulent statements and representations in the sum of $9,575, being the amount provided by said lease as the rent of said second and third floors of said premises during the period beginning March 1, 1916,. and ending September 30, 1919, less the amount of $100 received by her for the December, 1916, rent; and the said sum of $9,575 is hereby awarded said Anna L. Jones as and for her damages against said Olof H. Ahlgren;
    “That said Olof H. Ahlgren may satisfy said damages by paying to said Anna L. Jones on or before December 18,1916, the said sum of $9,575; or by paying to said Anna L. Jones on or before said date the sum of $2,150 in cash, being the loss of the rent to date, and depositing the balance of $7,425 in escrow with a responsible bank or trust company as security for the loss and damage of said Anna L. Jones from the date of this report to September 30, 1919, to be paid out as hereinafter provided;
    “That if the deposit is made by said Olof H. Ahlgren as above provided, then said parties shall have an accounting on the first days of January and July of each year beginning July 1, 1917, until the time provided in said lease shall have elapsed (September 30, 1919); and upon each such accounting the said Anna L. Jones shall be paid out of the amount so deposited by said Olof H. Ahlgren the sum of $1,350 less the total amount of rent which said Anna L. Jones shall have received for said second and third floors of said building during the six months immediately prior to such accounting, and said Olof H. Ahlgren shall be paid on each such accounting the difference between said $1,350 and the amount so paid to Anna L. Jones as herein provided; and that either party shall have the right to procure a tenant or tenants for said floors of said building at the highest rent that may be obtained therefor, and the amount of rent paid by said tenant or tenants to said Anna L. Jones shall be credited to said Olof H. Ahlgren in the accountings to be taken every six months as herein provided. ’ ’

      The declaration consists of four counts. In the first the arbitration agreement and the award are set out in Imbc verba, and it is alleged that defendant had notice of the award on December 7, 1916, and that, although he was requested on December 16, 1916, to pay said sum of $9,575, or to pay $2,150 in cash and deposit the balance of $7,425 in escrow, according to said award, he has not done either. To all counts the defendant pleaded the general issue and five special pleas. The substance of the amended third special plea is that the three arbitrators, after holding several meetings at which evidence was heard, met again on December 6, 1916, before any award had been reached, and received a digest of the evidence and considered the same, and, without making an award, adjourned to reconvene upon December 13, 1916; that subsequent to December 6 and prior to December 13, Schmitz and Jackson, two of said arbitrators, secretly met and held a session without the presence or knowledge of the third arbitrator, L. C. Cooper, and reached and made the award set up in the first count of the declaration; and that said Cooper was not given any opportunity of being present at said meeting "and was not consulted as to the making of said award, and the same ivas not submitted to him at any time. The substance of the amended fourth special plea is that the award is not based upon the arbitration agreement and does not conform thereto. Replications were filed to all special pleas.
    On the trial plaintiff called as witnesses Herbert D. Jones, husband of plaintiff, GL A. Buresh, attorney for plaintiff, and H. L. Schmitz, and the arbitration agreement and the award were admitted in evidence. Subsequently all testimony of Herbert D. Jones was on motion of plaintiff’s attorney stricken from the record.
    As to the issue made by the amended third special plea and replication thereto, L. C. Cooper, one of the arbitrators, testified in substance that he is an attorney at law; that he.was selected to act as arbitrator by Ahlgren; that the last meeting of the arbitrators-, at which all were present, was held on December 6, 1916$ that at that time he presented to each of the other arbitrators a digest, prepared by him, of the evidence previously taken, bearing on the question of alleged fraudulent representations by Ahlgren or his agent, Severin; that said other arbitrators read said digest, whereupon one of them stated, “I thought there was something more said in regard to that”; that Cooper replied,‘ ‘If you can find it, I would like to have you”; that said other arbitrators examined the record of the evidence taken and “hunted for some time and found nothing”; that thereupon Jackson said, “It don’t malee any difference, I think Mrs. Jones got the worst of it”; that Schmitz said that “something ought to be done in regard to the difference in the rent”; that Cooper said that that would be difficult because the lease had a long time to run and might end with no loss; that Jackson said that Ahlgren “ought to do something in that way”; that thereupon Cooper suggested that he (Cooper) would see Ahlgren and find out if he would do anything and report the facts; that both Schmitz and Jackson agreed to this and all agreed that the meeting should be adjourned for one week and until December 13, with the understanding that if Schmitz (who was contemplating going out of town) had not returned by that time, the meeting would be held on December 20, and that the meeting of December 6 was adjourned accordingly, and that he never thereafter saw Schmitz; that nothing was said by any of the arbitrators at said meeting on December 6, or at any prior meeting, about the making of an award or as to any amount to be awarded Mrs. Jones, or about arriving at any decision; that after December 6 he heard nothing further from either of said other arbitrators until December 13, 1916, when he called on Jackson to ascertain if Schmitz was in town and if the adjourned meeting would be held that day, or on December 20, as agreed; that Jackson said: “We have made an award”; that Cooper expressed surprise; that thereupon Jackson requested Cooper to loan him a copy of the arbitration agreement, saying that he (Jackson) had never had one; that Cooper gave Jackson a copy of the agreement and the interview terminated, and he has never spoken to Jackson since; that Cooper first saw the award, as signed by Schmitz and Jackson, when testifying as a witness upon the present trial; that neither the same, nor any copy thereof, had ever been submitted to him by either Schmitz or Jackson; and that he was never consulted by either of them regarding said award, or given any opportunity by them to consider said award or any award.
    In rebuttal, both Jackson and Schmitz testified on behalf of plaintiff. Jackson testified, in substance, that he did not remember the date when the three arbitrators met together for the last time; that he thinks it was on December 7 and not December 6; that his recollection as to what was said at the various meetings is “somewhat hazy”; that at the meeting on December 7 all three arbitrators discussed the case, that something was said about damages and about the amount thereof, that some figuring was done, and that there was some discussion about Cooper seeing Ahlgren and reporting to an adjourned meeting to be held in one or two weeks; that at said meeting he and Schmitz “went to one side and discussed the case in the absence of Cooper”; that he signed the award on December 7; that he did not draft or prepare the award; that “Schmitz and myself agreed on a certain amount”; that he is under the impression that he telephoned the amount to Gr. A. Buresh, attorney for Mrs. Jones, and said attorney “made- out the paper” and sent it to him and he (Jackson) signed it; and that he does not remember whether he gave the information, which he gave to Buresh, to Cooper or not, or whether the award was ever shown to Cooper before it was delivered to Mrs. Jones. Schmitz testified, in substance, that he does not remember the day in December, 1916, that the three arbitrators last met, but that at that meeting they were in session for a couple of hours and “reviewed the testimony,” that some figuring was done as to Mrs. Jones’.damages, that nothing was said about meeting again, that no memorandum of an award was made, and that nothing was said regarding who should draft an award; that subsequently Jackson telephoned him and gave him. certain figures over the telephone which he agreed tó; and that on the same day a man from Buresh’s office called on him with an award written out and he read it over and signed it, “without consulting Cooper or anybody else.”
    The jury returned a verdict finding the issues for plaintiff and assessing her damages at $9,575 “with interest thereon at the rate of 5 per cent per annum from the date thereof.” Subsequently defendant’s motion for a new trial was overruled, and, on motion of plaintiff and over defendant’s objection, the court ordered that said verdict be amended by adding thereto the words “making a total of $10,511,” and entered the judgment appealed from.
    Archibald Cattell and Gael A. Waldron, for appellant.
    G-. A. Bubesh, for appellee.

      See Illinois Notes Digest, Vols. XI to XV, and Cumulative Quarterly, game tople and section number.

   Mr. Justice Gridley

delivered the opinion of the court.

It is contended, in substance, by counsel for defendant that the judgment should be reversed (a) because an adjournment of the meeting of all three arbitrators was talcen on December 6 or 7, 1916, to meet again within one week for further proceedings, and during the interval two of the arbitrators reached a decision and signed an award without consulting the third arbitrator or giving him any opportunity of participating in the proceedings which resulted in such action, and (b) because the award does not conform to the submission.

In Morse on Arbitration and Award (Ed. 1872) the author says on pages 151-152:

“It is an imperative rule that where the submission is to several arbitrators jointly, all must act together during the proceedings. * * * All must be present throughout each and every meeting, equally whether the meeting be for hearing the evidence or arguments of the parties or for consultation or determination of the award. The disputants are entitled to the exercise of the judgment and discretion, and to the benefit Of the views, arguments, and influence, of each one of the persons whom they have chosen to judge between them; and they are entitled to these, not only in the award, but at every state of the arbitration.” (Citing Smith v. Smith, 28 Ill. 56, 60.) “No exception to the general rule obtains even where a statutory provision, or a stipulation in thé submission, declares that the award of the majority shall be binding. All must nevertheless meet both for hearing and consultation; and the fact that the hearing or consultation has been conducted in whole or in part by a majority only will suffice to avoid the award. * * * The opinions and arguments of one may have such an effect upon the rest that he will turn them to his view of the case.”

In 2 Ruling Case Law, p. 384, sec. 29, it is said:

“Even when it is stated in the agreement of submission that a. majority award shall be valid, it is none the less necessary that the arbitrators shall act jointly; that all shall be present, or shall have been given an opportunity to be present, when the award is considered. A party to arbitration proceedings has the right to expect that all the arbitrators will participate in the proceedings. If they are not at least given an opportunity to do so, the award will be invalid in spite of the fact that it is signed by a number of arbitrators sufficient under the terms of submission.’’ (Citing Blin v. Hay, 2 Tyler [Vt.] 304.)

In Blin v. Hay, supra, (decided in 1803), a controversy arose between Blin and one Trimble, and by an arbitration agreement it was submitted for decision to five arbitrators with the provision that a finding of a majority of the arbitrators would be binding. Three of the arbitrators signed an award in which it was de-. cided that Trimble should pay Blin a certain1 sum of money. Blin brought an action in debt on the award against Trimble, who afterwards died and his administrator was substituted as defendant. It was contended that the declaration was faulty because it did not allege that the two arbitrators who did not sign the award were present at the meeting, or notified thereof, when the award was made and signed. The court held that the declaration was insufficient in this regard, saying (p. 309):

“When a person submits a controversy to five arbitrators, he has reason to expect all will be present at the hearing of his cause, or at least that all will be notified of the time and place of meeting; for the absence of one might materially affect the award. His superior judgment in the matter in controversy may have been relied upon by the party in preference to that of all the others, and might have altered the opinion of the others; and although a majority, after a candid discussion, may make the award, yet all the arbitrators * * * . ought to be present at the hearing, or at least it should appear that they were notified of the time and place of meeting. ” .

In Doherty v. Doherty, 148 Mass. 367, where the submission provided that the award made by a majority of the arbitrators should be final, it appears that the award was signed by only two of the three arbitrators, and that the third arbitrator, being absent from home, did not receive notice of the meeting of the arbitrators until after the same was returned into court and was not present at said meeting. The court refused to confirm the award and that action was affirmed, the Supreme Court saying (p. 368) that the award “was not the result of deliberation by all the arbitrators, and that one of the arbitrators had no opportunity to consider it. Although the submission provides that the award of the majority shall be final, yet all must meet in consultation upon the decision, unless, indeed, one •refuses after notice to attend, because if the absent arbitrator had been present ‘he might have drawn his brethren to a different opinion. ’ ”

In Novak v. Rochester German Ins. Co., 156 Ill. App. 352, it appears that an action in assumpsit was originally brought in the circuit court of Cook county on an award made pursuant to an arbitration agreement contained in a fire insurance policy; that the parties had been unable to agree upon the amount of a loss occasioned by a fire; that the policy provided in case of such a disagreement the loss should be determined by appraisers, one selected by the insured and the other by the insurer, who should select a disinterested umpire, and the award in writing of any two should determine the amount of the loss; that the insured chose one Miller and the insurer one Isaacs to act as appraisers, and they selected one Filbert as umpire; that the three examined the property in the premises where the fire had occurred; that 4 days later Miller and Filbert signed an award in favor of the insured, but Isaacs did not sign the same; and that the insurer excepted to the sufficiency of the award and refused to pay it. At the trial in the circuit court without a jury there was a finding and judgment for plaintiff. The couid refused to hold as law four propositions which were submitted by the defendant, one of which was that “if the two appraisers who signed the award made and executed the same without notice to the third appraiser, or giving the third appraiser an opportunity to be present at the time of the execution of the award, said award is void.” On appeal this Appellate Court 'held that the trial court erred in refusing to hold each of said four propositions and on that account the judgment of the circuit court was reversed and the cause remanded. After redocketing, the cause was transferred to the municipal court of Chicago, and it was stipulated on the trial in that court that the bill of exceptions taken on the former trial might be read as depositions. On this second trial, without a jury, only the evidence given on the former trial was introduced, and there was a finding and judgment for the defendant. On the second appeal this Appellate Court affirmed this judgment, holding that the decision on the former appeal, as to said four propositions of law, was the law of the case on said second appeal. (See also Bannister v. Read, 6 Ill. [1 Gilm.] 92, 102; Smith v. Smith, 28 Ill. 56, 60; Vessel Owners’ Towing Co. v. Taylor, 126 Ill. 250, 259.)

And it appears to be the law of this State that the defense of fraud or misconduct on the part of the arbitrators may be made by plea in bar in an action a.t law brought to enforce the award, and that it is unnecessary to resort to a court of chancery. (Wiley v. Platter, 17 Ill. 538, 540; Newlan v. Dunham, 60 Ill. 233, 235; Alexander v. Cunningham, 111 Ill. 511, 517.) In the Alexander case, it is said: “We do not deem it necessary to enter upon an examination of cases cited by counsel for appellants holding a rule different from that laid down in Elmendorf v. Harris, supra.”" (23 Wend. [N. Y.] 628.) “Very many and respectable courts have held that the objection of a want of notice in such cases cannot be raised by plea in bar, but that it can only be urged by bill in equity or motion to set aside the award. * •* * But, as has been seen, this court in Ingraham v. Whitmore, supra” (75 Ill. 24), “is committed to the doctrine of Elmendorf v. Harris, which holds the award absolutely void where there is want of notice of hearing.” (See also Graham v. Woodhall, 86 Ala. 313, 314.) In the case of Elmendorf v. Harris, referred to, it is said (p. 633): “Why should the party against whom the award is made be compelled to go into a court of chancery for relief* instead of defending himself against the void award in the action brought thereon in a court of law? The validity of the award in such a case is purely a legal question, proceeding upon the ground that it was not within the power of the arbitrator to make the award without hearing of the parties, and I am of the opinion that the defendant had a right to set up this objection to the award in the court of law; although perhaps the court of chancery, upon the authority of some of the cases cited on the argument, might have had concurrent jurisdiction.”

Under the facts of this case, as to the manner in which the award of the two arbitrators was made and the time when made, without consultation with, or notice to, the third arbitrator, as disclosed by the testimony of the various witnesses (outlined in the above statement of the case), and under the law, we are of the opinion that the award is void and that any judgment based thereon cannot stand.

As to counsel’s point, secondly above mentioned, that the award does not conform to the submission, it is said in Taylor v. Scott, Foresman & Co., 178 Ill. App. 487, 498: “As a general rule, an award of arbitrators, in order to be binding, must follow the contract of submission as made by the parties. It is not for a board of arbitrators to change the terms of the submission or to determine any matter not therein contained. Their sole authority is the contract of submission. If the award is broader or narrower than the submission, the whole award is void.” This seems to be the settled law of this State. (McDonald v. Bacon, 3 Scam. 428; Buntain v. Curtis, 27 Ill. 374, 377; Alfred v. Kankakee & S. W. R. Co., 92 Ill. 609, 611; Snead & Co. Iron Works v. Merchants’ Loan & Trust Co., 225 Ill. 442, 454; Clark v. Courter, 280 Ill. 590, 604.) Under section 6 of the arbitration agreement in the present case the arbitrators were asked to first determine, in substance, whether'any false representations had been made by Ahlgren or his agents as to rent payments by Duffy and Patterson, and, if they so found, to secondly determine to what extent Mrs. Jones had been damaged thereby, and to render an award for the amount so found. As we construe this submission it means that the arbitrators were to determine what damages, if any, Mrs. Jones had sustained up to the time of the submission, July 14, 1916. But in the award as rendered, Ahlgren was charged, as damages, for the entire rent of the premises at $225 per month, as stipulated in the Duffy and Patterson lease, from March 1, 1916, up to and including September 30, 1919, or $9,675, less $100 received' by Mrs. Jones for rent of the premises for the month of December, 1916, or the net sum of $9,575. And it is stated in the award, made in December, 1916, that this $100 was received upon a month to month tenancy beginning December 1, 1916, “for an indefinite period.” It thus appears that the two arbitrators, in fixing the amount of the award, made no allowance for any future receipts for rent, and that they speculated as to what Mrs. Jones’ damage might be in the future from possible loss of rent, and on the assumption that she would receive no rent for said premises. In our opinion such an award is not justified by the terms of the submission.

In' view of our holdings it is unnecessary for us to consider the other points raised by counsel for defendant as grounds for reversal.

For the reasons indicated the judgment of the superior court is reversed.

Reversed without remanding with finding of facts.

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

Finding of facts. We find as ultimate facts in this case that after the three arbitrators had adjourned their meeting on December 6 or 7, 1916, to meet at a future date, two of said arbitrators reached a decision and signed the award in question, without consulting with the third arbitrator, or giving him any notice or opportunity of participating in the proceedings which resulted in the signing and delivering of said award, and that said award is void and of no effect.


source: Caselaw Access Project

license: Public Domain

text:
    Chicago Metal Refining Company, Appellee, v. Jerome Trading Company, Appellant.
    Gen. No. 25,230.
    1. Sales, § 143

      —when receipt of goods is necessary. Under Uniform Sales Act, sec. 4, subdivs. 1 and 3 [Callaghan’s 1916 Stat. H 10021(7)], actual and intentional receipt of the goods by tho buyer is essential,' even though before delivery the buyer expresses by words or conduct his assent to becoming the owner of the specific goods.
    2. Sales, § 18*—when acceptance is necessary. Under the Uniform Sales Act [Callaghan’s 1916 Stat. f 10021(7)], a contract for the purchase of goods the value of which exceeds $500 which were not to be manufactured especially for the buyer by the seller and which the buyer did not accept wholly or in part, and nothing being given in earnest to bind the contract or in part payment and no note or written memorandum of the contract being signed by the buyer, is unenforceable.
    Appeal from the Municipal. Court of Chicago; the Hon". Charles A. Williams, Judge, presiding. Heard in the Branch Appellate Court at the March term, 1919.
    Reversed with finding of facts.
    Opinion filed May 28, 1920.
    George B. Cohen, for appellant.

      No appearance for appellee.

      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.

This is an appeal from a judgment for $290.70 rendered by the municipal court of Chicago against the defendant (appellant) in an action in contract tried before the court without a jury.

In plaintiff’s statement of claim it is alléged, in substance, that on or about November 19, 1916, plaintiff sold to defendant 68,400 pounds of cement sacks at $25 per net ton, f. o. b. plaintiff’s yard; that on or about November 29, 1916, at defendant’s request, it shipped a car of such sacks to defendant; that defendant refused to accept the car; and that thereafter plaintiff resold the sacks on the open market at the then market price of $13.50 per net ton and thereby suffered damage. In its amended affidavit of merits defendant denied the sale of said cement sacks, and alleged, in substance, that some time in November, 1916, plaintiff submitted to it a sample of a secondhand cement bag, saying that plaintiff had a carload of bags like the sample; that defendant said it would buy the carload if the same was like the sample at $25 per net ton; and that when the car came the bags were inspected and were found not to be like the sample, in that the bags were wet and frozen, and defendant refused to accept the same and returned the car to plaintiff. As a further defense it is stated in said affidavit of merits that defendant “pleads the statute of frauds”; that the alleged sale referred to in plaintiff’s statement of claim “was a sale of goods of the value of $500 or upwards,” that “the buyer did not accept part of the goods sold and actually receive the same,” and did not “give something in earnest to bind the contract or in part payment,” and -that “there was no note or memorandum in writing of the sale signed by the defendant or any agent in its behalf.”

Morris Goldstein, president of plaintiff, was the only witness called in its behalf, and Jacob J. Cohen, president of defendant, and Moses Lieberman, foreman of defendant’s shop, were the only witnesses for defendant. As to what occurred at the first meeting of Gold-stein and Cohen there is a sharp conflict in their testimony. Goldstein testified, in substance, that in November, 1916, he showed Cohen a car of secondhand cement bags then standing in plaintiff’s yard; that Cohen examined the contents of the car and said he would give plaintiff $25 a ton for the bags, which offer was accepted; that Cohen directed Goldstein to have the car delivered to defendant; and that Goldstein gave an order to the carriers to deliver the car to defendant. Cohen denied seeing or making any examination of any car of cement bags in plaintiff’s yard, and testified, in substance, that at the interview Goldstein said plaintiff had a car of secondhand cement bags to sell; that Cohen said he would only buy such bags by sample; that-Goldstein showed him a sample of the bags, which sample Cohen retained; that Cohen then said defendant would purchase the car if the bags therein were like the sample shown; that the price agreed upon subject to said condition was $25 per ton; and that he (Cohen) directed Goldstein to “send down the car.” Cohen further testified, in substance, that about December 10, 1916, the car arrived on the Santa Fe team track about 15th and Dearborn streets; that on December 12, 1916, he personally inspected the contents of the car and found that the bags did not comply with the sample shown; that on the same day defendant wrote plaintiff a letter, as follows: “We have thoroughly inspected car and found the same to be all wet and frozen, and cannot use the same at any price. This car is not like sample shown us or anywhere near it. We have notified the Santa Fe R. R. Co. that we have rejected the car”; and that subsequently the car was returned to plaintiff. Goldstein admitted that plaintiff received said letter and that the car was returned to plaintiff. The witness Lieberman also inspected the contents of the car and corroborated Cohen as to the bad condition of the bags and of their not conforming to the sample. G-oldstein further testified, in substance, that there were over 60,000 pounds of bags in the car, and that, after the return of the car to plaintiff, he sold the bags for $16 a ton, being the best price he could obtain for them.

In addition to the contention that the finding and judgment are against the weight of the evidence, counsel for appellant contends that the judgment cannot stand, for the reason that, if any contract to sell the bags was made (the value being oyer $500), such contract is not enforceable under section 4 of the Uniform Sales Act, in force July 1, 1915. (Hurd’s Stat. 1917, eh. 121a, sec. 4, Callaghan’s 1916 Stat. if 10021 [7].) We have not been favored with any brief or argument on behalf of appellee (plaintiff). The section of the statute referred to is as follows: -

“Sec. 4. Statute of frauds. (1) A contract to sell or a sale of any goods or choses in action of the value of five hundred dollars or upwards shall not be enforceable by action unless the buyer shall accept part of the goods or choses in action so contracted to be sold or sold, and actually receive the same, or give something in earnest to bind the contract, or in part payment, or unless some note or memorandum in writing of the contract or sale be signed by the party to be charged or his agent in that behalf.

“(2) The provisions of this section apply to every such contract or sale, notwithstanding that the goods may be intended to be delivered at some future time or may not at the time of such contract or sale be actually made, procured, or provided, or fit or ready for delivery, or some act may be requisite for the making or completing thereof, or rendering the same fit for delivery; but if the goods are to be manufactured by the seller especially for the buyer and are not suitable for sale to others in the ordinary course of the seller’s business, the provisions of this section shall not apply.

“ (3) There is an acceptance of goods within the meaning of this section when the buyer, either before or after delivery of the goods, expresses by words or conduct his assent to becoming the owner of those specific goods.”

Plaintiff alleged, in substance, that it made a contract to sell to defendant more than 30 tons of secondhand cement bags at an agreed price of $25 per ton, that pursuant to the contract it shipped the bags to defendant but defendant refused to accept them. The value of the bags was over $500. It is undisputed that the alleged contract was a verbal one, that no note or memorandum in writing of the same was signed by defendant or any agent of defendant, that nothing was given by defendant in earnest to bind the contract or in part payment, and that the bags, being secondhand bags, were not to be manufactured by plaintiff especially for defendant. Even on the assumption that Goldstein’s testimony as above outlined is correct and that, after Cohen had inspected the bags contained in the car in plaintiff’s yard, Cohen told Goldstein that defendant would buy the bags at a certain price, defendant did not then or at any time thereafter “actually receive the same,” or any part thereof. In 25 Biding Case Law, p. 621, sec. 237, it is said:

“For the purpose of taking a contract of sale out of the operation of the statute the excepting clause as to delivery usually requires ‘receipt and acceptance’ by the buyer of some part of the goods. This exception has been a standing puzzle to the courts of England and America for more than two centuries. * * * The principal difficulty has been to determine precisely what is meant by the term ‘acceptance,’ as used in the statute. In order to comply with the requirement there must be delivery, receipt and acceptance. All three must exist. While some eminent judges have supposed that the terms ‘accept’ and ‘actually receive,’ as used in the English statute, were synonymous, it may now be regarded as definitely and finally settled that these terms have distinct meanings, and that both acceptance and actual receipt, which imply delivery, are essential to take the case out of the statute.”

In Hinchman v. Lincoln, 124 U. S. 38, 49, it is said:

“In order to take the contract out of the operation of the statute, it was said by the New York Court of Appeals in Marsh v. Rouse, 44 N. Y. 643, 647, that there must be ‘acts of such a character as to unequivocally place the property within the power and under the exclusive dominion of the buyer as absolute owner, discharged of all lien for the price. ’ • * * * In Shindler v. Houston, 1 N. Y. (1 Comstock) 261, Gardiner, J., adopts the language of the court in Phillips v. Bristol, 2 Bam. & C. 511, ‘that to satisfy the statute there must be a delivery by the vendor with an intention of vesting the right of possession in the vendee, and there must be an actual acceptance by the latter with the intent of taking possession as owner.’ ■ And adds: ‘ This, I apprehend, is the correct rule, and it is obvious that it can only be satisfied by something done subsequent to the sale unequivocally indicating the mutual intentions of the parties. Mere words are not sufficient. ’ ”

In Johnson v. Cuttle, 105 Mass. 447, 449, it is said :

“Mere delivery is not sufficient; there must be unequivocal proof of an acceptance and receipt by him. Such acceptance and receipt may indeed be through an authorized agent. But a common carrier (whether selected by the- seller or by the buyer), to whom the goods are intrusted without express instructions to do anything but to carry and deliver them to the buyer, is no more than an agent to carry and deliver the goods, and has no implied authority to do the acts required to constitute an acceptance and receipt on the part of the buyer and to take the case out of the statute of frauds.” (See also Rodgers v. Jones, 129 Mass. 420, 422.)

In Alderton v. Buchoz, 3 Mich. 322, the court, in referring to the statute of frauds concerning contracts for the sale of goods, then in force in the State of Michigan, said that it was not a new provision of law, or of recent origin, but that it was, with some few verbal alterations, a copy of the 17th section of the old English Statute of Frauds, and further said:

“The effect of this statute, in the prevention of frauds and perjuries, has always been regarded as salutary, and has been generally sanctioned and steadily upheld by the judiciary in England and this country; and every rational person must be convinced, upon a moment’s reflection, that every provision of this statute ought to -be strictly observed, and steadily enforced by courts, without the least laxity through unauthorized or latitudinarian constructions, be the consequences, occasionally to individuals, whatever they may. ’ ’

In the section of the Illinois statute in question (passed in 1915) the third subdivision thereof provides that “there is an acceptance of goods within the meaning of this section when the buyer, either before or after delivery of the goods, expresses by words or conduct his assent to becoming the owner of those specific goods.” In view, however, of the provisions of the first subdivision of said section “unless the buyer shall accept part of the goods * * * so contracted to be sold or sold, and actually receive the same,” we are of the opinion that actual and intentional receipt of the goods by the buyer is essential to satisfy the provisions of the statute, even though before delivery the buyer expresses by words or conduct his assent to becoming the owner of the specific goods. In Friedman v. Plous, 158 Wis. 435, 438, it appears that there is a section in the Uniform Sales Act in force in Wisconsin, substantially if not exactly the same as the section of the statute of this State above mentioned, and, in commenting thereon, the court says:

“The statute last referred to seems to separate acceptance from receipt and provides that the former requirement may be satisfied by words or conduct, while the latter presupposes a delivery by the seller and requires some intentional act or receipt on the part of the purchaser. * * * Acceptance and receipt includes a delivery by the vendor. There could be no receipt and acceptance on the part of the vendee unless the vendor delivered the goods. The acceptance and receipt must be intentional, and mere words are not sufficient to establish delivery and receipt.”

In view of the provisions of the statute, and under the facts disclosed in this record, our conclusion is that the trial court erred in entering the judgment. The basis for the judgment was an alleged contract to sell certain secondhand bags to defendant, the value of which was more than $500. Under the statute that contract was unenforceable because the buyer (defendant) did not give something in earnest to bind the contract or in part payment, and no note or memorandum in writing of the contract was signed by the defendant or its agents, and the bags were not to be manufactured by plaintiff especially for defendant, and the defendant did not accept the bags or any part thereof and actually receive the same.

Accordingly the judgment of the municipal court is reversed.

Reversed with -finding of facts.

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

Finding of facts. We find as facts in this case that, in the alleged contract for the sale of certain secondhand bags to the defendant, Jerome Trading Company, the value of the goods was more than $500; that said defendant did not give something in earnest to bind the contract or in part payment; that no note or memorandum in writing of the contract was signed by said defendant or its agent in that behalf; that the bags were not to be. manufactured by the plaintiff, Chicago Metal Refining Company, especially for said defendant ; and that said defendant did not accept the goods or any part thereof and actually receive the same.


text:
    Anton J. Cermak, Bailiff, for use of M. A. Ezerski and Anton Ezerski, Appellants, v. Helena Pauksztis et al., Appellees.
    Gen. No. 25,242.
    1. Dead bodies, § 1

      —who is entitled to tody. One who is the sister, or the nearest relative of the deceased, is entitled to the custody of his body for the purpose of burying it.
    2. Replevin; § 165*—what is essential to recover on replevin bond. There can be no recovery in an action upon a replevin bond without proof of a judgment in the replevin suit awarding a return of the property replevied, and in the absence of such judgment it must be assumed that it was made to appear to the court that the plaintiff in replevin had become entitled to the property.
    Appeal from the Municipal Court of Chicago; the Hon. Leo J. Doyle, Judge, presiding. Heard in the Branch Appellate Court at the March term, 1919.
    Affirmed.
    Opinion filed May 28, 1920.
    John S. Charque, for appellants.
    McInerney & Power, for appellees; B. B. Collins, of counsel.

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

   Mr. Justice Gridley

delivered the opinion of the court.

In an action upon a replevin bond, tried without a jury, the court found the. issues against the plaintiff and entered a judgment against him for costs, and this appeal followed.

It is alleged in plaintiff’s amended statement of claim, in substance, that Joseph Kubada died on August 26,1917; that Joseph Bagdonas, a nephew of said deceased, requested M. A. Ezerski, a licensed undertaker, to obtain from the morgue of the county hospital of Cook county the body of said deceased and prepare it for interment; that said M. A. Ezerski, and his agent Anton Ezerski, obtained said body and on August 30, 1917, while they were engaged in preparing said body for interment, the defendant Helena Pauksztis caused a writ of replevin to be issued, commanding plaintiff, as bailiff of the municipal court of Chicago, to replevy said body and deliver the same to her; that before said writ was issued out of said municipal .court said Helena Pauksztis, as principal, and said defendants, Anestezaiy Eudeikes and John Eudeikes as sureties, executed a replevin bond in the sum of $200, running to plaintiff, as bailiff, etc.; that the condition of said bond was that “if the said Helena Pauksztis shall prosecute her suit to effect, and without delay, and make return of said property if .return thereof shall be awarded, and save and keep harmless the said bailiff in replevying said property, and pay all costs and damages occasioned by wrongfully suing out said writ of replevin, then this obligation to be void, otherwise to remain in full force and effect”; that the said plaintiff, as bailiff, etc., did replevy said body, and deliver the same to said Helena Pauksztis; that thereafter said replevin suit was heard by one of the judges of the municipal court, who, on November 24, 1917, dismissed said suit ‘/for want of jurisdiction”; that said replevin suit was wrongfully and unlawfully sued out; and that said M. A. Ezerski and Anton Ezerski have been damaged thereby for drayage, for expenditures in preparing said body for burial, for embalmer’s fee and for attorney fees in defending said replevin suit-in the total sum of $116.65.

In defendant’s amended affidavit of merits it is alleged, inter alia, that said Helena Pauksztis is the next of kin of said deceased and had the sole right to prepare said body for burial; that on August 28,1917, she called at the undertaking establishment of said M. A. Ezerski and requested that the body of said deceased be delivered to her, and offered to pay drayage charges, but that said Ezerski refused to deliver up said body unless she paid the sum of $50; and that she notified said Ezerski not to prepare said body for burial before any services had been performed thereon.

It appears that the defendant, Helena Pauksztis, was the sister and nearest relative of the deceased. As such we think she was entitled to the custody of the body for the purpose of burying it. In Palenzke v. Bruning, 98 Ill. App. 644, 650, this Appellate Court said:

“While it may be true there is no right of property in a dead body, in the ordinary sense, it is also true that the nearest relatives of the deceased are and have been in all ages, so far as known, except under ecclesiastical law, recognized as legally entitled to its custody, to lay it away in burial. It is the duty no less than the right of such relatives to protect it from unnecessary violation, and any infringement upon that right, except where made necessary for the discovery and punishment of crime, violates the tenderest sentiments of humanity.”

It further appears that, after the refusal of said M. A. Ezerski, who had obtained possession of said body, to deliver it up to said defendant except upon certain conditions, said defendant, Helena Pauksztis, commenced a replevin suit in said municipal court, gave the bond sued upon in the present case and conditioned as aforesaid, and that under the replevin writ the said bailiff replevied said body and delivered it to said defendant; and that subsequently, upon the trial of said replevin suit, the court dismissed said suit for want of jurisdiction and without entering an order for a writ of retomo habendo, In view of the decision in Vinyard v. Barnes, 124 Ill. 346, we think that the judgment appealed from was right. In said Vinyard case the condition of the replevin bond' was the same as in the present case and it was held, in substance, that there could be no recovery in a suit upon a replevin bond without proof of a judgment in the replevin suit awarding a return of the property replevied, and that in the absence of such judgment awarding a return it-must be assumed that it was made to appear to the court that the plaintiff in the replevin suit had become entitled to the possession'of the property. See also Rosen v. Fischel, 44 Conn. 371, where it was decided, in substance, that there was no liability on a bond given in a replevin suit where that suit had been dismissed for want of jurisdiction.

For the reasons indicated the judgment of the municipal court is affirmed.

Affirmed.

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


author: Mr. Presiding Justice Thomson

text:
    Kelly-Atkinson Construction Company, Plaintiff in Error, v. Foreman Brothers Banking Company, Administrator of the Estate of Michael Cahill, Deceased, et al., Defendants in Error.
    Gen. No. 24,907.
    1. Workmen's Compensation Act, § 2

      —what establishes acceptance of Compensation Act. From the fact that at the time of an injury to an employee both his employer and the third person causing the injury had elected to be bound by the Workmen’s Compensation Act and were engaged in hazardous occupations and that the employee had not elected to reject the act, it does not necessarily follow that the employee's injuries came under the act or that he would not have a common-law right of action against such third person.
    2. Workmen’s Compensation Act, § 18*—when Compensation Act applies. To render the Workmen’s Compensation Act applicable to injuries to an .employee by a third person, both of whom and the employer are under the act, the injury must be one for which, under all the circumstances surrounding it, compensation would be legally payable under the act.
    3. Workmen’s Compensation Act, § 18*—who has burden of establishing acceptance of Compensation Act. Where, on a bill in equity to restrain' defendant from enforcing a judgment recovered in a common-law action to recover against a third person for the wrongful death of an employee, complainant sets up that he, the employee and employer were all subject to the Workmen’s Compensation Act, complainant has the burden of establishing not only the applicability of the act to all of them, but also that the injury was an accidental injury; that it arose out of and in the course of intestate’s employment; that the employment in which the intestate was employed when injured was not some nonhazardous branch of his employer’s business; that the negligent acts of complainant causing the injury were not done in connection with some nonhazardous branch of its- business; that intestate was an employee within the meaning of the act and not a casual.
    4. Workmen’s Compensation Act, § 12*—lohat is extent of rule as to burden of proving application of Workmen’s Compensation Act. The rule that the burden of proof is on one who seeks relief under the Workmen's Compensation Act asserting that it applies and that compensation is payable under it, applies also to one seeking to enjoip. the enforcement of a judgment recovered in a common-law action on the ground that the injuries for which recovery was had came under such act.
    5. Workmen’s Compensation Act, § 12

      —what evidence is admissible to show application of Compensation Act. On a hill to enjoin the enforcement of a judgment recovered for personal injuries on the ground that such injuries came under the Workmen’s Compensation Act, the circumstances surrounding the injury cannot be established by an investigator’s written report to an insurance company nor by a letter from the injured person’s employer to complainant nor by the testimony of an insurance investigator who was not present when the injury was received.
    6. Workmen’s Compensation Act, § 12*—what are effect of admissions in pleadings as to applicability of Compensation Act. On a-bill to enjoin the enforcement of a judgment recovered for personal injuries to an employee on the ground that the injuries came under the Workmen’s Compensation Act, the admission in the answer that the employee was injured “while performing his duties as an employee” of the employer is not sufficient to bring the claim within the act, but complainant must also show the nonexistence of the other conditions which render the act inapplicable.
    7. Workmen's Compensation Act, § 11*—how words of Compensation Act as to injury are construed. In the Workmen’s Compensation Act, the words “in the course of” relate to the circumstances under which the accident takes place, while the words “out of” are descriptive of the character or quality of the accident.
    8. Workmen’s Compensation Act, § 11*—when injury is within Compensation Act. To render an accidental injury compensable under the Workmen’s Compensation Act, it must not only have been sustained in the course of the employment, but must have arisen out of it.
    9. Workmen’s Compensation Act, § 18*—when Compensation Act does not apply. The Workmen’s Compensation Act does not apply to an injury received in a nonhazardous branch of the employer’s business or, where a third person causes such injury, received in connection with a nonhazardous branch of such third person’s business.
    10. Workmen’s Compensation Act, § 14*—what is effect of long employment as to Compensation Act. That an employee is such within the meaning of the Workmen’s Compensation Act and not a casual is not shown by proof that he had worked a long time for the one for whom he was working when injured.
    11. Workmen’s Compensation Act, § 12*—how question of whether injuries are within Compensation Act is determined. The question whether injuries to an employee are or are not within the Workmen’s Compensation Act is not determined by the fact that he actually received some payments from the employer in the form of compensation under the act.
    12. Wobkmen’s Compensation Act, § 18

      —when judgment under Compensation Act is not fraudulent. On a bill to enjoin the enforcement of a judgment recovered against a third person for injuries to an employee on the ground that such injuries came under the Workmen’s Compensation Act, evidence examined and held sufficient to support a finding that it was not fraud on the court on the part of the employee and his attorneys to secure such judgment after he had accepted payments from his employer under the act and had given a receipt in full for the damages occasioned by his injury, which receipt was not, however, shown to have been approved by the Industrial Board.
    13. Injunctions, § 16*—when failure to defend action is not excused. On a bill to enjoin the enforcement of a judgment recovered for personal injuries, • held that complainant had failed to establish by competent evidence any sufficient reason for its failure to defend the action or to move to vacate the judgment, and to warrant the trial court in concluding that the failure to make any defense was owing to complainant’s failure to notify his insurer.
    Error to the Circuit Court of Cook county; the Hon. Thomas G. Windes, Judge, presiding. Heard in the Branch Appellate Court at the March term, 1919.
    Affirmed.
    Opinion filed June 2, 1920.
    Rehearing denied June 17, 1920.

      Certiorari denied by Supreme Court (making opinion final).
    Zane, Morse & McKinney, for plaintiff in error.
    Charles Le Roy Brown, for defendants in error.

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

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

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

   Mr. Presiding Justice Thomson

delivered the opinion of the court.

This was a bill in equity by the complainant, Kelly-Atkinson Construction Company,' by which it was sought to restrain the defendant administrator from enforcing a judgment at law, which said administrator had recovered against it. By this writ of error, complainant seeks to reverse the decree dismissing its bill for want of equity.

It is alleged in the bill of complaint that the deceased, Cahill, was employed by the Ralph & Sumner Sollitt Company as a laborer, which company was engaged in constructing a tower house for the Pennsylvania Railroad Company. The complainant, Kelly-Atkinson Construction Company, was engaged in building a bridge across the Calumet River for said railroad" company and, in so doing, employed a hoisting engine and tackle, near the tower house, and it was alleged that the deceased received the injuries there complained of, when a certain cable and block, which was being negligently used and operated by complainant, broke and struck him.

The suit at law having been regularly instituted and service had on the defendant and the latter having filed no appearance or plea, an order of default was entered on April 13, 1914. It would seem from the record that nothing further was done in the action at law until it was reached on the trial call, for judgment was- rendered against the defendant October 19, 1916, on a verdict fixing the plaintiff’s damages at $4,000.

The deceased suffered his injuries in October, 1913. His employer, Ralph & Sumner Sollitt Company, was insured against loss or damage to its employees, by the Employers’ Liability Assurance Corporation, Ltd. During the several months succeeding his injuries, the deceased received several payments from the Employers’ Corporation, signing receipts for the same. These receipts read in part, ‘1 Receipt for compensation under Illinois Workmen’s Compensation Act, Laws of 1913. * * * Received of Ralph & Sumner Sollitt Company the sum of * * * "being that proportion of my weekly wages for the period * * * to which I am entitled under the above Act.” Early in January, Cahill received hie last payment from the Employers’ Corporation and signed a receipt or release acknowledging that he had received the amount then paid him together with all previous payments (a total of $93.10) “in full satisfaction and discharge of all claims accruing or to accrue in respect of all injuries or injurious results, direct or indirect, arising or to arise from” the accident in question. About a week later counsel for Cahill wrote the Kelly-Atkinson Company advising them that their client claimed damages from them for the injuries he had received. The Kelly-Atkinson Company was insured by the United States Fidelity & Guaranty Company to whom the communication just referred to was sent. Later the Employers’ Corporation advised the United States Company of the payments it had made Cahill and claimed it was entitled to reimbursement from the United States Company, under the provisions of section 29 of the Workmen’s Compensation Act [Callaghan’s 1916 Stat. [f 5475(29)]. In March, 1914, the United States Company reimbursed the Employers’ Corporation for the amounts they had paid out in behalf of the Kalph & Sumner Sollitt 'Company. Meanwhile, in February, Cahill had instituted his action at law against the Kelly-Atkinson Company.

It is claimed by complainant that Cahill, his employer and the third party (complainant) were all under the Workmen’s Compensation Act and that therefore the circuit court was without jurisdiction of the subject-matter in the action at law and that under. the provisions of section 29 of the Act [Callaghan’s 1916 Stat. [f 5475(29)], Cahill had no claim against the complainant but was confined to a claim against his employer for the compensation provided for by the act and that the employer would then be subrogated to Cahill’s rights as against the third person to the extent of the compensation paid; that Cahill had received compensation under the a.ct from his employer and the latter had been fully reimbursed by the complainant third party and that the trial court should therefore have granted the relief prayed for and enjoined the collection of the judgment.

It is conceded by the defendant that the record establishes that, at the time of the injury to Cahill, both his employer and complainant had elected to be bound by the act and were engaged in hazardous occupations, and it is further admitted that Cahill had not elected to reject the act, but assuming that to be true, it would not necessarily follow that the injuries to Cahill came within the provisions of the act or that he would not have a common-law right of -action against the third party to recover the damages he had sustained. Although all parties were under the act, Cahill’s rights arising out of-his injuries, would not be governed by the terms of the act, unless, under all the circumstances surrounding the injury, it was one for which compensation would be legally payable under the act. There might be a number of situations which would prevent the application of the act to the rights and liabilities of the parties even though they were all operating under it. To make the terms of the act applicable, it would be necessary, not only that all parties be operating under the act, but that Cahill’s injury was an accidental injury; that it arose out of and in the course of his employment; that the employment in which Cahill was employed at the time he was injured was not some nonhazardous branch of his employer’s business; that the negligent acts of the third party which brought about the injury were not done in connection with some nonhazardous branch of the third party’s business; and that Cahill was an employee within the meaning of the act and not a casual. The burden of establishing the existence of these facts was upon the complainant company which had filed its bill praying affirmative equitable relief alleging that the situation was such as to bring the rights and liabilities of the parties within the act. Complainant’s contention to the contrary is not tenable. The cases holding that the burden is upon an employer defending a claim brought under the act, who relies on an exception to take it out of the act, to plead and prove .the exception, once it is proved that the occupations were hazardous, do not apply to the situation presented here. It has been expressly and repeatedly held that the burden of proof is on the claimant who seeks relief under the act asserting that it applies and that compensation is legally payable under its provisions. Savoy Hotel Co. v. Industrial Board, 279 Ill. 329; International Harvester Co. v. Industrial Board, 282 Ill. 489. The same rule applies to the third party who files such a bill as the one involved here, seeking affirmative equitable relief, alleging;, as' a basis for the relief claimed-, that the act applies, to the situation involved.

The record shows that the complainant failed to prove the things we have referred to as necessary to bring Cahill’s claim within the act. There is no competent evidence of the circumstances of the occurrence in the record. Such circumstances could not be established by an investigator’s written report to the insurance company or by a letter from the employer to the third party or the testimony of an investigator of the insurance company who was not present at the time of the occurrence.

There are not sufficient admissions in the defendant's answer, as complainant contends, to bring Cahill’s claim within the act. ' It is admitted in the answer that Cahill was injured, “while performing his duties as an employee” of the Sollitt Company. That is not sufficient to bring his case within the act. In Keeran v. Peoria, B. & C. Traction Co., 277 Ill. 413, it was alleged that the claimant was injured “while he was engaged in the line of his duty” for his employer. It was held that this allegation did not bring the case within the act, because it was not shown what his duties were, or what he was doing, or how he was engaged at the time of his injury or whether he was engaged in the course of his employment, or whether he was engaged in the extrahazardous occupation of his employer or in some nonhazardous branch of the business. If it be taken that, an admission that Cahill was injured “while performing his duties as an'employee” is sufficient to establish that he was injured “in the course of” his employment, it would still be necessary for complainant to establish that the injury arose “out of” his employment, in order to bring the case within the act. The words “in the course of” relate to the circumstances under which the accident takes place, while the words “out of” are descriptive of the character or quality of the accident. Eugene Dietzen Co. v. Industrial Board, 279 Ill. 11 [14 N. C. C. A. 125.] It is necessary to establish both propositions to bring the case within the terms of the act. The compensation provided for by the Workmen’s Compensation Act does not apply to all accidental injuries which may be sustained by an employee “in the course of” his employment but only for such as arise “out of” the employment. There must be some causal, relation between the employment and the injury. Pekin Cooperage Co. v. Industrial Commission, 285 Ill. 31. To bring this case within the act it was necessary for complainant to show what Cahill’s employment was and also what he was doing at the time of his- injury and establish that his injury arose out of his employment and was sustained in the course of that employment. This was not done.

It may be that Cahill was injured while engaged in some nonhazardous branch of his employer’s business. If so, his claim was not within the act. Sanitary District of Chicago v. Industrial Board, 282 Ill. 182; Vaughan’s Seed Store v. Simonini, 275 Ill. 477, 14 N. C. C. A. 1075. Or it may be that the negligent acts of the third party causing Cahill’s injuries were connected with a nonhazardous branch of the business of said third party and, if so, the case did not come within the act. Klonowski v. Crescent Paper Box Mfg. Co., 217 Ill. App. 150.

To bring this case within the act, Cahill must be shown to have been an employee within the meaning of that term as used in the act, and not a casual. Such fact was not established by showing that he had worked for the Sollitt Company for a long time. Aurora Brewing Co. v. Industrial Board, 277 Ill. 142, 15 N. C. C. A. 802.

The record containing no competent evidence as to these matters, complainant failed to meet the burden it had of showing that the case came within the Workmen’s Compensation Act, and it therefore failed to establish any ground for equitable relief on that basis.

It is clear that, notwithstanding the fact that all parties were operating under the act, if, for any of the reasons we have referred to, the circumstances surrounding Cahill’s injury were such that the act did not apply, then he had a common-law right of action against complainant—the third party—and in that case the circuit court had full jurisdiction of the subject-matter. For the reasons we have pointed out, complainant has failed to establish by competent proof that such was not the ease. This it was bound to do before it could establish any right to the equitable relief sought, on the ground that the judgment in the action at law was void for want of jurisdiction of the subject-matter.

In our opinion the situation is not changed by-reason of the fact that Cahill actually received some payments from his employer in the form of compensation under the act. The act applies only when compensation is legally payable for the injury in question. The fact that it may actually be paid cannot affect the question of whether the circumstances of the injury are such as to bring it within the terms of the act.

This leads us to complainant’s contention that it was a fraud upon the court on the part of both Cahill and his counsel to secure a judgment at law after he had accepted payments from his employer under the act and received a receipt in full for all damages occasioned by his injury and after Cahill had been advised by an investigator for the insurance company as to his rights under the act, as against his employer and also as against the third party. As to Cahill, we could not say that the trial court was not warranted, from the evidence in the record, in concluding that he had no knowledge either that he had no cause of action against complainant or that he had released it, if he had one. He was an uneducated laborer. The advice given him by the investigator as to his rights under the act was certainly erroneous. It would not be strange if Cahill, ignorant to begin with and ill-advised, would comprehend nothing whatever of the provisions of such a complicated statute as the Workmen’s Compensation Act, over the meaning of which such learned counsel as represent the parties in the suit at bar do not agree. There is some evidence from which it might be inferred that Cahill thought the payments- he received were gratuities from his employer as part of his wages for the time he was laid up. It was not shown that the so-called release he signed was ever approved by the Industrial Board, which the act requires before the release can be effective. As to his attorneys, as well as to Cahill, the question of their knowledge of the facts, relied upon to show Cahill had no cause of action, or had released it if he did have one, was the subject of conflicting evidence, and so far as it is concerned we cannot say the trial court erred in finding for the defendant.

Complainant further failed to establish, by competent evidence, any sufficient reason for its failure to defend the action at law, or to move to vacate it within the judgment term. If, in fact, Cahill had no cause of action against complainant or having one had released it, complainant had a complete remedy at law in the action there brought. That complainant was duly served with summons in the law action is admitted. The trial court was warranted in concluding from the evidence that complainant neglected to send the summons to its insurer and for that reason no defense was made.

It follows from what we have already said that complainant has failed to establish that it was entitled to the equitable relief sought, on the ground that the judgment sought to be enjoined required a debt to be paid twice, as the complainant contends. Complainant had the burden of establishing that the circumstances of the injury were such as to bring the case within the act. This it failed to do. If the case was not within the act, Cahill had a common-law right of action against complainant and such payments as were made to him by his employer’s insurer, as to which they were ¿'reimbursed by complainant’s insurer, in no way took away such right of action.

For the reasons we have referred to, we are of the opinion that the trial court did not err in dismissing complainant’s bill for want of equity and the decree of the circuit court is therefore affirmed.

Affirmed.

Mr. Presiding Justice Taylor and Mr. Justice 0 ’Connor concur.


text:
    Foreman Brothers Banking Company, Administrator of Estate of Michael Cahill, Deceased, Defendant in Error, v. Kelly-Atkinson Construction Company, Plaintiff in Error.
    Gen. No. 24,987.
    1. Judgment, § 3

      —what is effect of defective declaration. It does not follow that a judgment for plaintiff is void because the declaration does not show a cause of action, but the judgment is, at most, erroneous.
    2. Pleading, § 45*—what is effect of defective declaration as to jurisdiction. A court may have full jurisdiction of an action—the parties and the subject-matter—though the declaration may wholly fail to state a cause of action.
    3. Coubts, § 38*—what is nature of jurisdiction. The jurisdiction of a court over the subject of a given case is the power of the court to hear and determine 'cases of the general class to which the case in question belongs.
    4. Coubts, § 83*—what is extent of jurisdiction of circuit court. The circuit court of Cook county is a court of general jurisdiction, having jurisdiction of the subject-matter of a common-law action to recover damages for a personal injury.
    5. Appeal and ebbob, § 1303*—what -will he presumed as to evidence when pleadings allege party is not unthin Compensation Act. Even though the declaration in an action by the administrator of a deceased employee against a third person to recover for personal injuries to the employee discloses that the employer, the employee and the defendant were all engaged in hazardous occupations as defined by the Workmen’s Compensation Act and does not allege that any of them had rejected the act, on an appeal from the judgment of the circuit court therein, the record in which warrants the inference that the parties were not operating under the act, it will be presumed that sufficient evidence was submitted to the court to sustain the judgment, as against the contention that the declaration did not state a cause of action whose subject-matter was within the circuit court’s jurisdiction but one placed by such act under the exclusive jurisdiction of the Industrial Board.
    6. Wobkmen’s Compensation Act, § 5*—-what is effect of Compensation Act. Section 6 of the Workmen’s Compensation Act [Callaghan’s 1916 Stat. H 5475(6)] does not have the effect of abolishing all common-law actions where it appears that all the parties were operating under the act; as there are conditions which may be present, although all of the parties are under the act, under which the act would not apply and the employee could bring a common-law action in the circuit .court, which would have jurisdiction.
    7. Appeal and erbob, § 1290

      —what will he presumed on appeal as to jurisdiction. On appeal, where the record discloses no motion for a new trial, no motion in arrest of judgment and there is no bill of exceptions embodying the evidence presented to .the jury, it will be assumed that the evidence showed the presence of such circumstances as gave the circuit court jurisdiction of a common-law action by the administrator of a deceased employee against a third person to recover for personal injuries, notwithstanding the declaration alleges that the employer, employee and defendant were all engaged in hazardous occupations as defined by the act.
    8. Appeal and ebrok, § 25*—what is test of jurisdiction on appeal. On appeal, the test of the question whether a court had jurisdiction of the subject-matter of the action is, would such court, under any circumstances, have authority to enter the judgment.
    9. Judgment, § 281*—when motion to vacate judgment will he denied. , A motion to vacate a judgment made 2 years after its entry is properly overruled where the judgment is not void.
    Error to the Circuit Court of Cook county; the Hon. David F. Hatchett, Judge, presiding. Heard in the Branch Appellate Court at the March term, 1919.
    Affirmed.
    Opinion filed June 2, 1920.
    Rehearing denied June 17, 1920.

      Certiorari denied by Supreme Court (making opinion final).
    Zane, Morse, McKinney & Marshall, for plaintiff in error.
    Charles Le Boy Brown and Edward P. Morse, for defendant in error.

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

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

   Mr. Presiding Justice Thomson

delivered the opinion of the court.

By this writ of error, the defendant, Kelly-Atkinson Construction Company, seeks to reverse a judgment for $4,000 recovered by the plaintiff.

The defendant filed a bill in equity seeking to enjoin the collection of this judgment, and secured a temporary restraining order which was dissolved when the case was heard and the bill was dismissed for want of equity. The suit in equity has also been brought to this court by writ of error and in the opinion this day filed in that case we have sufficiently set forth the facts on which this action at law was based and we will not repeat them here. Kelly-Atkinson Const. Co. v. Foreman Bros. Banking Co., ante, p. 345.

As we point out in that opinion this action at law having been regularly instituted and service had on defendant and the latter having filed no appearance or plea, an order of default was entered on April 13, 1914. It would seem, from the record, that nothing further was done in the case until it was regularly reached on the trial call, for the record recites that on October 19, 1916, “this cause being called for trial, come the parties to this suit by their attorneys respectively and issues being joined herein it is ordered that a jury come * * * who, being duly elected, tried and sworn well and truly to try the issues joined herein and a true verdict render according to the evidence, after hearing all the evidence adduced,” found the defendant guilty and assessed the plaintiff’s damages at the sum of $4,000. The record discloses no motion for a. new trial and no motion in arrest of judgment and there is no bill of exceptions embodying such evidence as was submitted to the jury.

In urging that the judgment be reversed, the defendant first contends that the judgment was void because the declaration showed no cause of action and no jurisdiction of the court to enter it. In our opinion the judgment was not void. We need not pass upon the question of whether the declaration showed a cause of action for, assuming it did not, it would not follolw that the judgment is void. It would be erroneous at most. Likewise the sufficiency of the declaration has nothing to do with the court’s jurisdiction. A court may have full jurisdiction of an action—the parties and the subject-matter—though the declaration may wholly fail to state a cause of action. O’Brien v. People, 216 Ill. 354; Franklin Union No. 4 v. People, 220 Ill. 355; O’Connor v. Board of Trustees of Firemen’s Pension Fund, 247 Ill. 54; Miller v. Rowan, 251 Ill. 344. It is not denied that the court had jurisdiction Of the parties to this suit. The jurisdiction of a court over the subject of a given case is the power of the court to hear and determine cases of the general class to which the case in question belongs. 11 Cyc. 669; People v. Talmadge, 194 Ill. 67; People v. Harper, 244 Ill. 121; Miller v. Rowan, 251 Ill. 344. The circuit court of Cook county is a court of general jurisdiction, having jurisdiction of the subject-matter of a common-law action to recover damages for a personal injury. But it is contended that the declaration discloses, by its allegations, that the deceased, Cahill, his employer, Ralph & Sumner Sollitt Company and the defendant, Kelly-Atkinson Construction Company, were all engaged in hazardous occupations as defined in the Workmen’s Compensation Act; that the declaration fails to allege that any of the parties had rejected the act and, under the terms of the act, it must therefore be presumed that they were all operating under the act, in which case there could be no common-law right of action against the defendant; and further that such a declaration does not state a cause of action whose subject-matter is within the jurisdiction of the circuit court but rather one which, by the Workmen’s Compensation Act, is placed within the exclusive jurisdiction of the Industrial Board. Our Supreme Court has decided to the contrary in Zukas v. Appleton Mfg. Co., 279 Ill. 171, which was an action by an employee against an employer. The court there said: “Whether the court had jurisdiction to determine defendant’s liability to an injured employee in a common-law action depended upon the fact-whether defendant had elected not to be bound by the statute. * * * If, in truth and in fact, it had made such election, then the court had jurisdiction to entertain a suit at common law to determine defendant’s liability to an injured employee.” The déclaration in that case failed to allege that the parties had elected not to be bound by the act. Plaintiff offered to prove that such was the case and defendant did not deny the truth of the facts offered to be proved, which proof was prevented by defendant’s objection that the question was not in isspe in the ease as it had not been raised by any of the pleadings. The court said the inference was warranted from the record that the parties were not operating under the act. The same is true of the record in the case at bar. We must presume that sufficient evidence was submitted to the court to sustain the judgment. The record, as indicated by the portions we have referred to, does not support the contention that the sole matter submitted to the jury was the question of the damages to be awarded the plaintiff.

But even if all the parties were under the act as defendant contends, it would not follow necessarily that the circuit court did not have jurisdiction of the subject-matter in this action at law. The contention that section 6 of the Workmen’s Compensation Act [Callaghan’s 1916 Stat. 1J 5475(6)] abolished all common-law actions where it appeared that all parties were operating under the act is manifestly unsound. Assuming all parties to be so operating, there are a number of situations that may have been present and which are entirely consistent with the allegations in the declaration, under which the act would not apply and Cahill would be entitled to bring a common-law action against this defendant third party, in which event the circuit court would have complete jurisdiction of the subject-matter. We shall not discuss those situations here, as we have done so fully in the opinion filed in affirming the decree entered in the suit in equity, to which we have referred. As we point out in that opinion, if the circumstances surrounding Cahill’s injury were such, that compensation would not be legally payable to him by his employer under the terms of the act, then even though all parties were operating under the act, the act would not apply and in that event he would have the right to bring a common-law right of action against this defendant, and in such a case the circuit court would have jurisdiction of the subject-matter. If, under any circumstances, Cahill would have a right to sue this defendant for a tort, it cannot be said that the trial court was without jurisdiction of the subject-matter. That there were such circumstances has been pointed out. It must be assumed on this record, that the evidence showed the presence of such circumstances as gave the court jurisdiction of the subject-matter. Figge v. Rowlen, 185 Ill. 234.

As to whether the circuit court had jurisdiction of the subject-matter in the case at bar, the test is, would that court, under any circumstances, have authority to enter this judgment. Figge v. Rowlen, 84 Ill. App. 238; 185 Ill. 234; O’Connor v. Board of Trustees of Firemen’s Pension Fund, 247 Ill. 54. By this test it seems clear that the circuit court did have jurisdiction over the subject-matter.

The trial court having had jurisdiction over the parties and of the subject-matter and the judgment not being void, it becomes unnecessary for us to pass upon the question whether it was erroneous. The plaintiff has filed pleas of release of errors in this court, basing them upon the fact that the defendant, subsequent to the rendition of the judgment, filed the bill in equity seeking to enjoin plaintiff from enforcing the judgment, and obtained a temporary injunction. The defendant filed a replication to the pleas of release of errors and the plaintiff filed a general and special demurrer to the replication. Subsequently defendant moved that the plaintiff’s demurrer to its replication be carried back to the plaintiff’s pleas. Counsel for defendant in their briefs concede 1 ‘ that errors occurring in the course of the proceedings at law, which are errors that could be rectified only by a writ of error, and could not be rectified by a motion to vacate the judgment, were released,” by the chancery proceedings referred to and the temporary injunction which was obtained. Subsequent to the conclusion of the chancery suit and more than 2 years after the judgment in the case at bar was entered, defendant made a motion to vacate it. The judgment not being void, that motion was properly overruled.

For the reasons we have discussed, the demurrer to the pleas of release of errors must be overruled, the pleas held to be good and the judgment of the circuit court affirmed.

Affirmed.

Mr. Justices Taylor and O’Connor concur.