author: Mr. Justice Barnes

text:
    John Frederick Wallach et al., Appellants, v. Cornelius K. G. Billings et al., Appellees.
    Gen. No. 20,733.
    1. Equity, § 146

      —when bill by stockholders against directors of corporation not multifarious. On general demurrer to a bill by stockholders of a bank seeking to enforce against one of its directors liability for losses sustained by the bank by reason of the unlawful manipulation of its funds by its president, where the liability sought to be enforced against such defendant was predicated on allegations that (1) defendant failed to perform his duties as such director, and (2) that such failure was due to defendant’s “secret” agreement with such president to abdicate his functions as such director, allegations held to present only the single ground of failure to perform defendant’s official duties, and not to justify the legal conclusion of an independent and different liability, for the reason that from the mere allegation that the understanding was secret it was not necessarily inferable that defendant entered thereinto with intent to facilitate unlawful acts or with knowledge that any such were being committed,' and also because such an understanding, unless made with an unlawful or ulterior purpose, which was not alleged, was not inconsistent with a mere understanding that defendant would act as director if not required to take an active part in the affairs of the bank. .
    2. Equity, § 147

      —how bill by stockholders against director of corporation should he construed. Where, in a bill seeking to enforce against a director of a bank liability for losses sustained by it while he held office as such director, the liability sought to be enforced is predicated on allegations that he failed to perform his official duties as such director, while at the same time such bill charges directors other than such defendant with more than mere nonfeasance in regard to the transactions resulting in such losses, such allegations tend to support the contention that such defendant’s failure to perform his duties was not the proximate cause of the losses sustained by the bank, the bill being in such case construable most strongly against the pleader.
    3. Banks and banking, § 43

      —what are duties of nonresident directors of national hank. The National Banking Act (U. S. Rev. St, sec. 5146), providing “that at least three-fourths of the directors” of a national bank “must have resided in the State * * * in which the association is located for at least one year” prior to election as such, permits the election of nonresident directors by a national bank, and contemplates that such nonresident directors shall not give the same attention to the affairs of the bank as that required of those directors who are resident,
    4. Equity, § 147

      —how bill by stockholders of hank against director should he construed. On general demurrer to a bill seeking to enforce against a nonresident director of a bank, liability for losses sustained by the bank while defendant held office as such director, where such liability is predicated on allegations that such defendant failed to perform his duties as such director, the question raised by the demurrer is whether the bill shows that such failure of defendant was the proximate cause of the losses alleged, and not whether a nonresident director can escape liability for failure to participate in the administration of the bank’s affairs.
    5. Equity, § 148

      —when bill does not sufficiently charge actual knowledge of matters. Where in order to maintain a cause of action it is essential that defendant should have actual knowledge of the matters on which the cause of action is predicated, on general demurrer. |to the bill, an allegation in a bill that defendant “knew or by the exercise of ordinary care would have known” of such matters does not sufficiently charge such actual knowledge.
    6. Banks and banking, § 43

      —what is liability of nonresident director of hank for losses of hank. A nonresident director of a national bank who is not shown to have actual knowledge of an unlawful manipulation of the bank’s funds, resulting in losses to the bank, or who is not shown to have assented to or connived in such unlawful manipulation, cannot be placed in the same category with resident directors who are shown to have known of, assented to, and connived in such unlawful acts, and are chargeable with a greater degree of activity in the affairs of such bank, so as to make the acts of such nonresident director the direct and proximate cause of the losses sustained.
    7. Banks and banking, § 43

      —when director not liable for acts 'of other directors. A director of a bank is not liable for the mere omission to watch and restrain other directors from wrongdoing, or for the misconduct of other directors, not participated in by such director as a wrongdoer, provided that such director has no wrong intention in such omission, and has no knowledge of wrongdoing by others.
    8. Equity, § 148

      —when bill insufficient to show that failure of director to perform duties proximate cause of loss to hank. On general demurrer to a bill seeking to enforce against a director of a bank liability for losses sustained by the bank while such defendant held office as such director, predicated on allegations that defendant failed to perform his duties as such director, averments held to show that such failure by defendant' was not the direct and proximate cause of such losses.
    9. Equity, § 114

      —when bill demurrable for want of necessary parties. A bill seeking to enforce against a director of a bank liability for losses sustained by the bank while defendant held office as such director is demurrable for want of necessary parties, where others who held office as directors of such bank at the time when such losses were sustained are not made parties to the bill, for the reason that in case defendant is held liable he would be entitled to contribution from such codirectors, who should be bound by the decree.
    10. Equity, $ 114

      —how objection of want of necessary parties may be taken. Where a final decree under a bill cannot be recovered without affecting the interests of persons not made parties thereto, the objection of want of necessary parties may be taken by general demurrer, at the hearing, on appeal or by writ of error, although if the objection be the want of proper though not necessary parties, such objection, by correct rules of practice, should be taken, by demurrer, plea or answer.
    11. Banks and banking, § 43

      —when director entitled to contribution from codirectors for losses paid. A director of a bank, who was held liable for losses sustained by the bank while holding office as director, on the ground that he failed to perform his duties as director, is entitled to contribution from his codirectors whether the liability enforced against defendant be deemed as sounding in contract or tort, as defendant would be entitled to such contribution, though a tort feasor, where it appeared that, defendant was guilty of no intentional wrong, and was chargeable with a lesser degree of delinquency than such codirectors; and, if such directors be deemed trustees, all are guilty of a breach of duty in not attending to the affairs of the bank and are bound to contribute.
    12. Equity, § 342

      —when dismissal of bill should be without prejudice to right to amend. A decree dismissing a bill for want of necessary parties should be without prejudice to the right to amend the bill and bring in such parties.
    13. Appeal and error, § 971

      —when questions not considered on appeal. Where the record shows that a bill was dismissed for want of equity, and also shows ground for dismissal for want of necessary parties, it cannot be held that such bill was dismissed for Wjant of necessary parties in the absence of an affirmative showing that such point was raised in the trial court.

      Appeal from the Circuit Court of Cook county; the Hon. Lockwood Honobe, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1914.
    Affirmed.
    Opinion filed December 21, 1915.
    Statement by the Court. This appeal is from a final decree sustaining general demurrers to an amended and supplemental bill of complaint as amended, and dismissing the same for want of equity. Said bill was filed by complainants as stockholders in behalf of themselves and other stockholders of the Chicago National Bank, after demand on and refusal by its directors to bring the suit for the bank, to recover from Cornelius K. G. Billings, one of its directors, for losses to the bank resulting from his alleged negligence.
    It contains many allegations unnecessary to set forth. After averments as to the filing of the original bill, incorporation and suspension of the bank, the interests of complainants as stockholders, and provisions of the law and the bank’s articles and by-laws relating to its management, its officers, their duties, etc., the bill avers, in substance, that during the existence of the bank, from 1881 to 1905, its board of directors elected John R. Walsh as its president; that he controlled and dominated all of its business and the other officers elected by the board; that Billings was a sworn director from 1892 to 1905 inclusive; that from the beginning of 1900 until the bank suspended, December 18, 1905, neither the board of directors nor its members individually exercised any control or supervision over the business and affairs of the bank but permitted them to be dominated and controlled by Walsh as he saw fit; that during said period Walsh personally dominated and controlled large and various business enterprises of a speculative and hazardous character, in which the bank was not interested financially and which required vast sums of money to conduct; that by certain unlawful means and methods Walsh during said period diverted to such enterprises and misappropriated and misapplied large amounts of the funds of the bank, aggregating millions of dollars, resulting in losses of over $2,200,000; that the directors as a board and individually knew or by the exercise of ordinary care would have known all of these things; that Walsh had employed such unlawful means, and methods also prior to said period of which notice had come to all the directors; that at different times from July, 1897, to June, 1905, the bank examiner made reports to the comptroller of currency, and the latter sent notices to the bank, calling attention to and criticising Walsh’s unlawful practices, and that the board of directors and individual members were chargeable with notice thereof and by their neglect and failure to give attention to the business of the bank, suffered and allowed Walsh to continue such unlawful appropriations of the bank’s funds during said period until the bank was forced to suspend, causing losses to the bank of over $2,000,000 and its shares to become comparatively worthless, which could have been prevented had they, as directors, exercised supervision and control of the bank’s business and affairs; that Billings was a man of large wealth and great business skill and acumen; “that, he was in no way, shape or manner subservient to or dependent upon or under the influence of John R. Walsh, or any director or officer of the bank” and that had he exercised such reasonable or ordinary care as a director of a national bank should give to its business and affairs, he could and would have discovered such unlawful transactions in apt time to have prer vented such losses or the greater part thereof; that said Billings “had an express or secret understanding or agreement with John R. Walsh during the year 1901, which continued * * * until the bank suspended * * * that he would not as director do anything in the way of administering affairs of the bank, or exercise supervision of its business, and that he would not do anything as a director of the bank,” and that pursuant thereto, Billings utterly neglected his duties as director and by reason of such agreement and his consequent neglect of such duties became liable for such unlawful transactions independently of liability on other grounds; that by person or proxy Billings attended the annual meetings of stockholders held during the period aforesaid at which he was elected a direct- or ; that there were several directors ’ meetings during each year of said period attended by other directors but not Billings, at which certain specified matters came up for action; that Billings did nothing towards examining into, administering or supervising the affairs of the bank but permitted and allowed Walsh to conduct them as he saw fit; that he might have prevented such unlawful transactions by various steps indicated in the bill, among them by inducing the board of directors to appoint an auditing committee each year or investigating committee and to require detailed reports from its officers, by inducing action for the removal of Walsh and restitution of funds unlawfully taken, by informing the stockholders of such unlawful transactions that they might take some proper action, by personal examination of the bank’s books and by investigation into its financial condition; that it was the duty of Billings to take these and other designated steps to prevent such unlawful transactions or their continuance; and that the consequent losses were the direct and proximate result of his neglect and failure to exercise any diligence or care whatever as a director of the bank, whereby he became liable to the bank for the sum of more than $2,200,000.
    The bill alleges the demand on and refusal by the bank to institute and prosecute these proceedings, that none of complainants prior to the suspension of the bank was officially connected therewith or had knowledge or information of such unlawful transactions or that the board of directors and said Billings were neglecting their duties as directors; that since January 1, 1901, Billings has been out of the State within the statute of limitations; that Walsh became insolvent just prior to the suspension of the bank and continued so until his death in 1911; and that certain stockholders therein named including William Best, Fred M. Blount and Maurice Bosenfeld, directors of the bank during said period and equally guilty with Billings and legal representatives of other directors, since deceased, should not share in a recovery under the bill.
    The relief prayed is that Billings be held and decreed liable for and on account of the wrongful neglect of his duties as such director; that the amount of loss to the bank in consequence thereof be ascertained and he decreed to pay it or so much as may be just and equitable ; that the court should determine what stockholders are entitled to participate in the recovery and make distribution among them, and other incidental relief.
    Newman, Poppenhusen & Stern, for appellants; Jacob Newman and Charles T. Farson, of counsel.
    Sears, Meagher & Whitney, for appellee Cornelius K. G. Billings; Nathaniel C. Sears, James F. Meagher and Jesse J. Ricks, of counsel.

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

   Mr. Justice Barnes

delivered the opinion of the court.

While there are other defendants, the bill seeks recovery from Billings alone of the seven directors of the bank, on two grounds of liability, (1) his failure to give any attention whatever to his duties as a director and (2) his so-called secret agreement to abdicate his functions as such. When analyzed, however, they constitute the single charge of inattention to his official duties, for the allegations with respect to said agree-* ment do not justify the legal conclusion of an independent or different liability. They are not such as support an inference that Billings entered into the agreement for the purpose of doing an intentional wrong or 'facilitating said unlawful transactions or with actual knowledge that they were then being carried on. Such an inference does not follow merely from characterizing the understanding as “secret.” The agreement described, taken with other averments in the bill, was not inconsistent with a mere understanding that Billings would remain a director if not required to return from out of the State to attend the board’s meetings and take an active part in managing the bank’s affairs, and we fail to see that a mere understanding to that effect, unless made for an unlawful or ulterior purpose, which is not charged, aggravates or' changes the character of the negligence elsewhere charged in the bill of inattention to his official duties.

In the absence, therefore, of any averments of actual knowledge of the unlawful transactions or of a positive wrong or actual misfeasance on the part of Billings— and none appears in the- bill—his liability from the facts set up in the bill rests wholly on the charge of inattention to official duties.

But construing the bill most strongly against the pleader, it charges the other directors with more than mere nonfeasance and supports appellees’ contention that Billings’ inaction was not the proximate cause of the bank’s losses.

Billings appears to have been a nonresident director. While the bill does not expressly so aver (unless we import into it allegations of a former bill filed herein November 21, 1910, which the bill asks to be considered with reference to continuing the receivership), still the bill shows that although elected as a director from year to year he was almost continuously absent from the State during the years it is sought to hold him liable as a director, and up to the filing of the bill, returning here only on matters of personal business. The National Banking Act unquestionably recognizes the right to elect nonresident directors. It provides “that at least three-fourths of the directors must have resided in the State, territory or district in which the association is located for at least one year immediately preceding the election, and must be residents therein during their continuance in office. ’ ’ Section 5146, U. S. Rev. St. It presumably contemplates some advantages from having some nonresident directors. But it may reasonably be inferred from the nature of the banking business and from the specific requirement that at least three-fourths of the directors shall be residents, and because of the inconveniences and obstacles attending nonresidence, that the act did not contemplate that nonresident directors should exercise the same vigilance and give the same attention to the bank’s affairs as is manifestly required of the resident directors. As stated in First Nat. Bank of Concord v. Hawkins, 174 U. S. 364, referring to said act: “One of the evident purposes of this enactment is to confine the management of each bank to persons who live in the neighborhood, and who may, for that reason, be supposed to know the trustworthiness of those who are to be appointed officers of the bank, and the character and financial ability of those who may seek to borrow its money.”

But as we view it, the question is not whether Billings as a nonresident director can entirely escape liability for not attending the board’s meetings and participating in the administration and management of the bank’s business and affairs, but whether the bill shows that the failure so to do was the proximate cause of the bank’s losses for which it is sought to hold him liable. Does the bill show such a casual relation?

These essential facts stand out prominently in the bill either in the form of express averments or inferences that sholild, if not true, have been negatived: (1) That the losses ensued from misuse of the funds of the bank by its president Walsh; (2) that a quorum of the bank’s directors frequently held meetings, at which Billings was not present, and thereby assumed the functions of their office and undertook in some degree, at least, to supervise and transact the bank’s business; (3) that they thus placed themselves in a position to know and must have known of the unlawful transactions which were of such magnitude as to involve loans of millions of dollars; (4) that they permitted Walsh to engage in such transactions, either by conniving at or assenting thereto; (5) that all of the bank’s officers and directors except Billings were dominated and controlled by Walsh and permitted him to exercise control of them and the bank’s affairs; and (6) that Billings had no actual knowledge of such unlawful transactions, and was guilty of no act intended to promote them.

We need not refer specifically to the several averments from which these facts are deducible, when appellants ’ counsel themselves say in their brief: “The bill in this case shows that Mr. Walsh absolutely dominated all the directors of the bank, except Billings, that none of them acted except as Walsh commanded them to act, and therefore none of them exercised the functions and duties imposed upon them by law. In fact all the directors except Billings simply obeyed the commands and directions of Mr. Walsh and never exercised their individual judgments respecting any matter or thing * * * .” This statement practically admits what is above summarized and recognizes what are most palpable inferences from the bill that the other directors either had actual knowledge of such unlawful transactions and assented thereto or connived at them; and in order to place Billings in pari delicto, counsel added to their statement, “and Mr. Billings failed to do so under this secret agreement with Mr. Walsh.” But, as before stated, no such effect can be given to said agreement. The bill does not charge Billings with actual knowledge of such transactions, and significantly fails to charge that the other directors did not know of, or connive at, or assent to them. In fact it is difficult to understand how resident members of the board sitting around the directors’ table could have been ignorant of them.

The bill attempts to charge Billings with such knowledge by averments that he “knew or by the exercise of ordinary care would have known” of particular facts including the fact that the other directors “permitted, suffered and allowed” Walsh to operate the bank and carry on its business and affairs, and “did his bidding without question.” But averments in this alternative form do not charge Billings with actual knowledge (Babcock Bros. Lumber Co. v. Johnson, 120 Ga. 1030; Southern Bell Telephone & Telegraph Co. v. Starnes, 122 Ga. 604; Durell v. Hartwell, Williams & Kingston, 26 R. I. 125), and without knowledge, connivance or assent on his part, he cannot, in our opinion, be placed in the same category as the resident directors who were chargeable therewith as well as with a greater degree of vigilance and activity, and whose conduct either by voluntary co-operation or connivance enabled Walsh to engage without restraint in such unlawful transactions and thus became the direct and proximate cause of the losses ensuing therefrom.

It is charged that Billings did not watch and restrain them. “But,” as said in Movius v. Lee, 30 Fed. 298, “it is nowhere adjudged that all (directors) must always act, or that they must not trust one another to act, or that they are liable for the mere omission to watch and restrain the others, without wrong intention on their own part, or actual knowledge of the wrong on the part of others. ’ ’ It has been held, too, that a direct- or is not liable for the misconduct of codirectors not participated in as a wrongdoer by bim. Briggs v. Spaulding, 141 U. S. 132; Fisher v. Graves, 80 Fed. 590; Commercial Bank of Bay City v. Chatfield, 121 Mich. 641. “Even trustees,” says Chief Justice Fuller in the Briggs case, supra, “are not liable for the wrongful acts of their co-trustees unless they connive at them or are guilty of negligence conducive to their commission."

To avert the consequence of the mismanagement of the bank, the bill avers that Billings might have done various things therein set forth. But so far as they relate to any steps he might have taken in the ordinary exercise of his functions as a director, it is not apparent that, being the only director not dominated and controlled by Walsh, Ms suggestions would have been of any avail, and what he might have done to stem the disaster does not appear to have been the direct cause of it. It might have occurred just the same.

The bill charges Billings with passive negligence, but it supports the inferences of connivance or assent as aforesaid on the part of the other directors. It was brought upon the theory of liability to the bank. But to quote again from the opinion in the Briggs case, supra:

“Treated as a cause of action in favor of the corporation, a liability of this kind should not lightly be imposed in the absence of any element of positive misfeasance, and solely upon the ground of passive negligence ; and it must be made to appear that the losses for which defendants are required to respond were the natural and necessary consequences of omission on their part.”

The same doctrine has been recognized in other cases where it has been sought to hold directors of a bank liable for the negligence either of themselves or the bank’s agents. (Warner v. Penoyer, 91 Fed. 587; Wallace v. Lincoln Sav. Bank, 89 Tenn. 630; Bloom v. National United Ben. Sav. & L. Co., 152 N. Y. 114; Kavanaugh v. Gould (App. Div.) 131 N. Y. Supp. 1059.)

It is difficult, therefore, to escape the conclusion that the direct and proximate cause of the losses for which it is sought to hold Billings was Walsh’s unlawful transactions aided by the connivance, or assent, or voluntary co-operation 'of some if not all the other directors, and not Billings’ inaction, whatever may have been his duty in the premises.

This conclusion obviates the necessity of considering any other grounds for dismissing the bill. We agree with appellees, however, that if the bill was not demurrable on the ground considered, it would be for the want of necessary parties, on the ground that Billings would be entitled to the right of contribution and they should be bound by the decree. Appellants urge that the question cannot be raised on general demurrer. But as stated in Johnson v. Huber, 134 Ill. 511: “It is true, that by the rules of correct practice the objection to the bill for want of proper parties should have been raised by demurrer, plea or answer; but where the omitted party is not only a proper but a necessary one, so that a final decree cannot be recovered without affecting his or her interests, the objection may be taken at the hearing, or on appeal or writ of error.”

We have no doubt that whether the case be regarded as sounding in tort or contract the right of contribution would exist, for, in the. former case, Billings not being charged with any intentional wrong and with a lesser degree of delinquency than the others, would have such right though a tort feasor (7 Am. & Eng. Encyc. of Law (2nd Ed.), 364; Wanack v. Michels, 215 Ill. 87; Farwell v. Becker, 129 Ill. 261; Pennsylvania Steel Co. v. Washington & B. Bridge Co., 194 Fed. 1011-1013; Vandiver v. Pollak, 107 Ala. 547; Lowell v. Boston & L. R. Corporation, 23 Pick. [Mass.] 24-32); and, in the latter case, on appellants ’ theory that directors are liable as trustees of the corporation or the body of the stockholders (Hooker v. Midland Steel Co., 215 Ill. 444; Thompson on Corporations, par. 1269), all the directors were equally guilty of a breach of duty in not attending to the bank’s affairs and would be bound to contribute. (Machen on Modern Law of Corporations, par. 1685.) That the other directors ought on such ground to have been made parties defendant is supported by unquestioned authority. The reason of the rule is well stated in Mandeville v. Riggs, 2 Pet. U. S. 482, and Perry on Trusts. (2nd Ed.), sec. 876, and recognized in Hutchinson v. Ayres, 117 Ill. 558; Beach on Trusts, par. 542; Cunningham v. Pell, 5 Paige N. Y. 607; Boyd v. Gill, 19 Fed. 145; Pennsylvania Steel Co. v. Washington & B. Bridge Co., 194 Fed. 1011; Ramskill v. Edwards, L. R. (1886), 31 Ch. Div. 100, and such right of contribution made them necessary parties. (Chandler v. Ward, 188 Ill. 322; North Hudson Mut. Building & Loan Ass’n v. Childs, 82 Wis. 460.)

But if the bill was dismissed for want of necessary parties, it should have been without prejudice, that an opportunity might have been given to bring them before the court. (Thomas v. Adams, 30 Ill. 37; 1 Daniel Ch. Pl. & Pr. (5th Ed.), p. 288, note 2.) It might be said that complainants had such opportunity when they elected to stand by their bill instead of again amending it, and from the fact that they voluntarily dismissed two of the directors out of the case. The record, however, does not disclose that the point of necessary parties was made in the court below, and the bill was dismissed for want of equity on its face as against each of the demurring defendants. While there may be some authority on such a state of facts for the unqualified dismissal of the bill, we are not disposed to hold that the dismissal was justified for want of parties in the absence of an affirmative showing that the point was raised in the court below. But for reasons already stated, the decree will be affirmed.

Affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    John F. Wallach et al., Appellants, v. Cornelius K. G. Billings et al. On Appeal of Pauline Cahn et al., Executors, v. Chicago National Bank et al., Appellees.
    Gen. No. 20,906.
    (Not to be reported in ML)
    Appeal from the Circuit Court of Cook county; the Hon. Lockwood Honor®, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1914.
    Affirmed.
    Opinion filed December 21, 1915.
    Statement of the Case.
    Bill by John F. Wallach et al., complainants, against Cornelius K. G. Billings et al., defendants, on the appeal of Pauline Cahn et al., executors, against the Chicago National Bank et al., appellees.
    A decree sustaining a general demurrer to the bill and dismissing the bill for want of equity affirmed on the authority of Wallach v. Billings, Gen. No. 20,733, ante, p. 605.
    Foreman, Levin & Robertson, for appellants.
    Sears, Meagher & Whitney for appellee Cornelius K. G. Billings; Nathaniel C. Sears, James F. Meagher
    and Jesse J. Ricks, of counsel.
   Mr. Justice Barnes

delivered the opinion of the court.


text:
    Employers’ Liability Assurance Corporation, Limited, of London, England, Appellee, v. Kelly-Atkinson Construction Company, Appellant.
    Gen. No. 20,737.
    1. Account stated, § 3

      —when statements of premiums by employers' liability insurance company not account stated. In an action to recover premiums due under policies insuring defendant against loss due to liability for personal injuries sustained by employees while in the employ of defendant, which policies provided that the amount of the premium payable thereunder should be a percentage of the amounts paid by defendant for wages, to be computed from correct reports thereof to be furnished by defendant for the purpose of such computation, statements of the amounts of such premiums based on a report of defendant later found to be incorrect, held not to be an account stated, operating to bar the original rights of action accruing under the policies, although defendant paid the amount stated in such statements to be due, and plaintiff received such payment without objection to the correctness of defendant’s reports, such acts being contemplated by the contract and essential to its complete execution, and not a basis for the adjustment of a controversy, for which reason such acts were not independent of the original causes of action so as to form a new contract, based on a new consideration and involving a promise to pay the amounts found to be due.
    2. Account stated, § 3

      —when written contract not account stated. The principle that án account stated of the amount due under a contract will bar the original cause of action accruing on such contract has no application to a case of the statement of the amount due under a written contract, where there is no dispute as to the amount due and plaintiff has no means of verifying the amount due independently of information furnished by defendant.
    3. Account stated, § 3

      —when no acquiescence in account so as to constitute stated account. Where a plaintiff renders an account of the amounts due under a written contract on information furnished by defendant as to matters of which defendant has exclusive knowledge, plaintiff cannot be held to acquiesce in the correctness of such information by the mere fact that it failed to make objection thereto, where it had no means of verifying its correctness, and therefore had no groupds for such an objection.
    4. Account stated, § 16

      —when account stated not conclusive. The principle that an account stated of the amounts due under a contract will bar the original right of action accruing under such cdntract does not apply to transactions involving fraud, concealment or misrepresentation.
    5. Estoppel, § 74

      —when, employers’ liability insurance company not estopped by laches from questioning accuracy of reports. In an action to recover the amounts of premium due under policies insuring defendant against loss due to liability for bodily injuries sustained by employees while in defendant’s employ, where the policy provided that the amount of such premium should be a percentage of the amounts paid by defendant for wages to be determined from correct reports of such amounts to be furnished by defendant, plaintiff held not estopped by laches from questioning the accuracy of such reports by the fact that for five years it continued to accept payments based on such reports without objection to the accuracy thereof, although such want of objection may have resulted in a change in defendant’s position, in that it meantime lost its books, and although plaintiff had the right to compel a view and examination of defendant’s books, and failed to assert such right, for the reason that plaintiff was not required to assume or suspect fraud where the business relation between the parties was such as to invite confidence in such reports.
    6. Witnesses, § 196

      —when witness may use memoranda to refresh memory. It is proper to permit a witness to read from a memorandum book or other writing items entered' therein by the witness at the time of the transactions testified to, although after inspecting the writing witness may have no independent recollection of the facts therein recorded, provided witness can state that the memoranda were made at the time of such transactions or within such subsequent time that he had a perfect recollection thereof, and that at the time of making such memoranda he knew the matters recorded to be true, or now knows that he would not have made such memoranda unless he had then so known, and also provided that the writing be produced with an opportunity for cross-examination as to it, so that the jury may also draw their conclusions as to the facts recorded.
    7. Witnesses, § 198

      —when truth of facts in memoranda question for fury. Where a witness is 'permitted to read from a memorandum book in which he has recorded the facts testified to, the question whether the facts are correctly set forth therein, as testified to, is one of fact for the jury.
    8. Witnesses, § 195

      —when memoranda of proper character to be used by witness to refresh memory. In an action to recover premiums due under policies insuring defendant against loss by reason of liability for bodily injuries sustained by employees while in defendant’s employ, where the policy provided that the amount of the premium should be a percentage of the amounts paid by defendant for wages to be computed from correct reports of such amounts to be furnished by defendant, held not error to permit a witness to read from a memorandum book the amounts of certain pay rolls, notice to produce the originals having been given and not complied with, and there being evidence that the amounts therein recorded were copied from original sources, and so numerous as to render independent memory thereof practically impossible, as such evidence was competent, regardless of whether the amounts were copied from pay rolls or journals, as being the next best evidence and the best and only evidence obtainable of items copied from defendant’s documents or books, by which defendant would have been bound if it had produced them.
    9. Evidence, § 366

      —when question not objectionable as calling for conclusion. Questions to a witness are not objectionable as embodying conclusions where such questions are mere references to evidence to which it is desired to draw the attention of the witness.
    10. Instructions, § 96

      —when refusal of instruction on credibility of witnesses not error. Where a witness was permitted to read from a memorandum book entries made at the time of the transactions testified to and where a general instruction as to the credibility of witnesses was given, held not error to refuse an instruction that the credibility of what witness was permitted to read from his memorandum book depended on the testimony and credibility of the witness himself, for the reason that the instruction refused singled out the testimony of a particular witness for the application of the test of credibility.
    11. Instructions, § 96

      —when cautionary instruction as td credibility of witness improper. The principle that a cautionary instruction as to the credibility of the testimony of an accomplice is proper has no application to the case of a witness who is permitted to read from a memorandum book entries made at the time of the transactions testified to.
    12. Insurance, § 158a

      —when evidence of number of men employed and pay rolls inadmissible in action by employers’ indemnity insurance company for premiums. In an action to recover the amounts due for premiums under policies insuring defendant against liability for bodily injuries sustained by employees while in its employ, where each policy provided that the amount of such premium should be a percentage of the amounts paid by defendant for wages to be computed from correct reports of such amounts furnished by defendant, evidence of the average number of men employed by defendant during the period for which premiums were sought to be recovered and its pay rolls for such time held properly excluded, the real question for the jury being the actual amount of such pay rolls shown in some cases by the original pay rolls and in others by what purported to be correct copies of. their totals, so that where defendant relied on the accuracy of its reports, the evidence rejected was incompetent as being uncertain and indefinite, and in not legitimately tending to show the accuracy of such reports or to refute the testimony of plaintiff that such reports were inaccurate.
    13. Insurance, § 158b

      —when exclusion of evidence whether foreman made pay roll not prejudicial. In an action to recover the amounts due for premiums under policies insuring defendant against liability for bodily injuries sustained by employees while in its employ, where each policy provided that the amount of such premium should be a percentage of the amounts paid by defendant for wages, to be computed from correct reports of such amounts to be furnished by defendant, but not including wages paid to employees of defendant’s subcontractors, and where one of plaintiff’s witnesses was testifying to memoranda copied from original pay rolls of defendant, in which memoranda witness had noted the fact that a certain pay roll was sent in by a foreman who in certain eases had been a subcontractor of defendant, the exclusion of a question to such witness asking whether a pay roll so indorsed was that of the foreman in question, held not prejudicial where it appeared affirmatively that pay rolls of subcontractors did not come into defendant’s office, and also, that the pay roll in question was one on which defendant recognized its obligation to pay a premium under the policy sued on.
    14. Instructions, § 151

      —when requested instruction properly refused. A requested instruction is properly refused where it is already covered in the charge.
    15. Insurance, § 158b

      —when refusal of instruction as to burden of proof not reversible error. In an action to recover amounts due as premiums under employer’s, indemnity insurance policies which provided that the premiums should be based upon the wages paid, as deduced from reports furnished by insured, except wages paid employees of subcontractors and employees in certain territory, held that the refusal of an instruction that plaintiff had the burden of proving that each item of wages was not that of a subcontractor nor for work performed in excepted territory was not reversible error.
    16. Champerty and maintenance, § 2

      —when insurance policy not void as providing for maintenance. Policies insuring defendant against loss due to liability for bodily injuries sustained by employees while in defendant’s employ, which provide that insurer shall have the right at its own cost to defend and' settle actions for damages against insured, and forbidding, except at its own cost, the settlement of such actions without the consent of insurer, are not void as amounting to maintenance, as the liability of insurer under the policy gave insurer an interest in the litigation which prevented the doctrine of maintenance from applying thereto, the rigor of the common law in applying the doctrines of champerty and maintenance having been relaxed as to modern forms of business.
    17. Interest, § 80

      —when instruction as to recovery of statutory interest on liability insurance premiums not erroneous. In an action to recover the amounts due as premium under policies insuring defendant against loss due to liability for bodily injuries sustained by employees while in defendant’s employ, an instruction that plaintiff could recover statutory interest on amounts found to be due from the time such amounts became due under the terms of the policies, held not erroneous for the reason that each policy was “an instrument in writing” within the meaning of Hurd’s Rev. St., ch. 74, sec. 2 (J. & A. ¶ 6691), providing for the recovery of interest at five per cent, on moneys due under “any bond, bill, promissory note or other instrument in writing.”
    18. Interest, § 17

      —when interest recoverable on liability insurance premiums. The right accruing under Hurd’s Rev. St., ch. 74, sec. 2 (J. & A. ¶ 6691), to recover interest on amounts found to be due under policies of liability insurance, requiring the payment by defendant of a premium in the amount of a certain percentage of the amounts paid by defendant for wages, which statute provides for the recovery of interest at five per cent, on moneys due under “any bond, bill, promissory note or other instrument in writing,” is not affected by the fact that a controversy as to the correct amounts due as premiums under such policies arose subsequently to the accrual of plaintiff’s right to such premiums, as such premiums became due as each policy expired, and the amounts were easily calculable at such time, and stood finally liquidated and ascertained as of that date.
    Appeal from the Municipal Court of Chicago; the Hon. William N. Gemmill, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1914.
    Affirmed.
    Opinion filed December 21, 1915.

      Certiorari denied by Supreme Court (making opinion final).
    Statement by the Court. This is an action brought by appellee, a casualty company, against appellant, a corporation engaged in construction work, to recover additional or excess premiums under twenty-five of appellee’s policies, indemnifying appellant against loss for damages from common law or statutory liability for bodily injuries to its employees and others. The amended declaration contains twenty-five counts, a count for the claim under each policy, and the common counts. Defendant pleaded the general issue and statute of limitations, and appellee replied. The total amount claimed with interest exceeded $30,000. Verdict and judgment were in favor of plaintiff for $15,000.
    The policies covered a period extending from June 1900 to June 1904, and expired at different intervals by their terms or cancellation. The last was adjusted in March 1904. Each policy contains this provision:

      “G. The premium is based on the compensation to employees to be expended by the assured during the period of this policy. If the compensation actually paid exceeds the sum stated in the schedule hereinafter given, the assured shall pay the additional premium earned; if less than the sum stated, the corporation will return to assured the unearned premium pro rata.”

    This last clause was subject to a provision for a minimum premium which does not appear to figure in this case. The schedule referred to, which is part of the contract, states the premium rate for each $100 of compensation or wages paid to said employees and also the estimated amount of said wages for the period of the policy.
    Each policy also provides:
    ‘6 E. The corporation shall have the right and opportunity at all reasonable times to examine the books of the assured so far as they relate to the compensation paid to his employees. * * * The assured shall, if requested, furnish the corporation with a written statement of the amount of such.compensation during any part of the policy period under oath if required.”

      The premium paid at the time of taking out the policy was computed by applying said rate to said estimated amount, and on its expiration defendant made a report of what purported to be the actual amount, and thereupon plaintiff rendered a bill for the additional or excess premium earned, or refunded a proportionate part of that already paid, according to whether the actual wages exceeded or were less than the estimated wages.
    Each special count alleges that the amount of the actual compensation or wages paid by defendant to its employees mentioned in the policy declared on, exceeded the estimated amount and that defendant’s statement or report of the actual amount was false and fraudulent.
    Plaintiff’s agent sometimes compared such reports with a private memorandum of pay rolls kept by defendant’s secretary, but at no time did he examine or obtain access to defendant’s original pay rolls or books, and not until near the close of 1903 did plaintiff make any request of defendant to produce them, when it was informed by defendant’s secretary (who furnished the reports) that they were lost or destroyed. Plaintiff’s agent testified that on certain occasions before their loss or destruction was reported, he sought to verify defendant’s report, but on one pretext or another defendant urged the inconvenience of examining its original books and papers at those times. While there was some loose reference to a “final account” and the closing of all transactions between the parties on plaintiff’s books, the evidence does not indicate that there was anything in the nature of a general accounting or of striking a balance of accounts.
    On failure of defendant on notice or under process of court to produce any of its original books, pay rolls, etc., plaintiff offered in evidence some of defendant’s original pay rolls and time books, obtained from defendant’s storehouse through a writ of replevin. The wages, as shown by them, greatly exceeded the amounts as reported by defendant. . To show the amount of pay rolls not produced or found, secondary evidence was resorted to. Plaintiff called Sierts, defendant’s bookkeeper for the periods in question, who testified that for personal convenience he kept a private memorandum book into which he entered the correct amounts of all the pay rolls. He testified that some of the pay rolls were sent in by the foreman of the particular job and some were made up by him from the foreman’s time books sent into the office; that it was a part of his duty to enter and he did correctly enter the total of each pay roll into the journal and ledger; that, except during about the first six months the policies were in force, he correctly entered the amounts of the several pay rolls in said private memorandum book at or about the same timé he entered them in the journal and ledger, and the amounts of the pay rolls for said six months he correctly copied into his private book from the journal after comparing it with the pay rolls kept on file. In view of his inability to remember their respective amounts, he was permitted to read them to the jury.
    Zane, Morse & McKinney, for appellant; John M. Zane and Clarence E. Eldridge, of counsel.
    Winston, Payne, Strawn & Shaw, for appellee.

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

   Mr. Justice Barnes

delivered the opinion of the court.

1. Appellant contends that the transactions by which the amounts due upon the several policies were ascertained made them accounts stated, and as a conclusion therefrom that the original accounts were merged therein upon which no action would lie, plaintiff’s remedy being an equitable action upon the stated accounts to surcharge or falsify, for fraud or mistake, an action of which the Municipal Court of Chicago has no jurisdiction. As we cannot assent to the premise we need not discuss the conclusion.

The basis of the contention that the transactions constituted stated accounts is that plaintiff made no objection to the “settlements” and no claim that defendant’s reports were incorrect. The use of the term “settlement” is somewhat confusing. There was nothing in the transaction to justify its use in the sense that there was either an accord and satisfaction or a stated account. There was no dispute or controversy between the parties as to the amount of the pay rolls or the amount of premiums. Defendant alone knew thg former and the latter was a matter of mere calculation when the former was known. There might be some basis for the contention had there been a controversy or dispute between the parties as to the amount due on the policies and plaintiff had accepted defendant’s reports as the basis of an adjustment thereof, but these were not the facts. Reduced to its simplest form, the transaction with regard to each policy was simply this: that defendant, pursuant to its obligations so to do under the policy, reported the amount of its wages so that the premium could be computed and billed according to the rate specified in the policy. It was not something done independently of the contract forming a new consideration and a new and distinct promise to pay the amount found due, but the acts done were contemplated by the contract and essential to its complete execution, and therefore did not, as contended, have the effect to change it into one of an account stated so as to preclude recovery on the original cause of action.

Appellant finds analogy to an account stated in the claim that plaintiff acquiesced in the correctness of defendant’s reports because it made no objection thereto and rendered its bill thereon, but we think there can be no application of the rule of a stated account to this state of facts, particularly (1) because the hill rendered was for ah amount due according to a written instrument for the payment of money over which there was no dispute, and (2) because plaintiff had no independent means of verifying the information on which it was based.

In Middleditch v. Ellis, 28 Exch. (Eng.) 623, an action was brought upon an account stated where the parties to a mortgage had met and agreed upon a balance due thereon. The court said:

“The defendant is charged with nothing but the money secured by the deed; there is no consideration for the suggested new liability, except the ascertaining how much remains due on the deed. It is a perversion of language to speak of this as an account stated; it is merely a process adopted for the purpose of ascertaining how much of the original debt has been discharged; and all which is really done is to make out to what extent the defendant remains liable upon the deed. This does not entitle the plaintiff to proceed as on a new liability arising as if from an account stated.”

In Young v. Hill, 67 N. Y. 162, it was said:

“When a sum of money is secured by a deed and the balance is struck for the purpose of ascertaining how much remains due thereon, and the obligor admits the correctness of the amount and promises to pay it, an action will not lie on this account and promise, but the action must be brought on the security. ’ ’

In Valley Lumber Co. v. Smith, 71 Wis. 308, it was held that the principle of law of a stated account has no application where the claim is the subject of a special contract.

While the written instrument in each of these cases was a specialty, yet the same principle was applied in Jasper Trust Co. v. Lamkin, 162 Ala. 388, 24 L. R. A. (N. S.) 1237, and in Thomasma v. Carpenter, 175 Mich. 428, 45 L. R. A. (N. S.) 543. In the former the parties to promissory notes had met and made a calculation as to the amount due thereon, and it was held that the mere calculation of the amount did not merge the notes into an account stated. In the latter case a statement of account for personal services under an express contract to pay a specified sum for a specified service was rendered without objection, and it was held not to come within the meaning of the rule applicable to an account stated. We think the principles of these eases are applicable to the facts at bar.

But there is another reason why the transaction cannot be deemed an account stated. There was no acquiescence by plaintiff in the correctness of defendant’s reports on which the bills were rendered. The debtor had exclusive knowledge of the facts on which the bills were rendered and the creditor had no independent means of ascertaining their correctness nor grounds for objecting thereto.

In Vanuxem v. New York Life Ins. Co., 122 Fed. 107, it was held that the general rule as to admission of items of an account from failure to object thereto was not applicable where the creditor had no means within his knowledge of verifying the amount and had only before him such items as the debtor chose to submit. Attention was also called in that case to the anomaly that exists here, of the debtor instead of the creditor invoking the rule, the court adopting the language of counsel to the effect that the admission of the correctness of an account rendered from failure to object thereto and the acquiescence in an account received from retention of it without objection must be the admission and acquiescence of the party charged or indebted.

To support its contention as to an account stated, appellant relies upon State v. Illinois Cent. R. Co., 246 Ill. 188, but we think it is distinguishable from the case at bar in this essential fact, as well as others, that knowledge of the omitted items of account in that case was imputed to plaintiff.

Beaching the conclusion that there was no stated account, we need not discuss appellee’s contention for which there is ample authority, that the doctrine of an account stated does not apply where the transaction involves fraud, concealment or misrepresentation. Nor need we discuss any of appellant’s other contentions based on the doctrine of a stated account.

Appellant also urges that as plaintiff had the right to demand a view and examination of defendant’s books and to compel an examination if refused, and has waited over five years before attempting to assert its rights, it was not only guilty of laches but had induced defendant to alter its position and was thereby estopped from claiming that the reports made and accounts as settled were incorrect. The only change in defendant’s position suggested is the destruction or loss of its books, which can hardly be ascribed to anything plaintiff did. However, when this case was here on appeal before (182 Ill. App. 372), we said that the evidence disclosed nothing until just before the suit that led appellee to question the accuracy of such reports or to put it on inquiry, and that it would be a strange doctrine to hold that plaintiff was guilty of lack of diligence because it did not assume or suspect fraud where the nature of the business relation was such as to invite its confidence in defendant’s reports.

2. It is contended that it was error under the circumstances above stated to permit the witness Sierts to read from his private memorandum book the amounts of the pay rolls not produced, which he had entered therein as aforesaid. Under very similar circumstances a witness was permitted to read from a book entries showing dates and amounts of the delivery of coal in O. S. Richardson Fueling Co. v. Seymour, 235 Ill. 319. The principle upon which such testimony is admissible is stated in Diamond Glue Co. v. Wietzychowshi, 227 Ill. 338-347. It is there said:

“Another condition under which a writing may be used is where a witness, after inspecting a writing, still has no independent recollection of the facts stated therein, bnt is able to state that he correctly reduced them to writing at the time of the occurrence or within such a time afterward that he had a perfect recollem tion of them. If the witness knows that the facts were recorded at the time or when they were fresh in his memory, and that the memorandum would not have been made unless he knew the facts therein stated to be true when it was made, he will be permitted to make use of it, provided the writing is produced with an opportunity for cross-examination as to it, so that the jury may also draw their conclusion as to the fact.”

These several conditions are presented in the instant ease. If the items were correctly set forth, as testified to,—a question of fact for the jury,—they constituted the next best evidence, if not the only existing evidence, of the amounts of such pay rolls; and in view of the testimony that these items were correctly copied from such original sources and were so numerous and for such sums as to render independent memory of them practically impossible, we think they were admissible, regardless of when they were copied or whether they were copied from the pay rolls or journal. In either event, they constituted the next best obtainable evidence of items copied from defendant’s documents or books by which it would have been bound had they been produced.

Objections were made to certain questions put to Sierts on the ground that they embodied certain conclusions. We shall not repeat the questions, but what are termed conclusions seem mere references to matters in evidence to which it was sought to direct the witness’ attention.

It is also urged that it was error to refuse to give the jury a cautionary instruction to'the effect that what the witness Sierts - read from his memorandum book depended for its credibility upon the testimony and credibility of the witness himself. We think the instruction was properly refused. A general instruction relating to the credibility of witnesses was. given and the court was justified in refusing an instruction of that character which, in effect, singled out the testimony of a particular witness for applying the test of credibility. A cautionary instruction may be given as to the testimony of an accomplice, but the principle justifying it had no application in this instance.

3. Appellant complains of the exclusion of an offer to show what was the average number of its men and its pay rolls for the years in question. The ruling was proper. The real question for the jury was the actual amount of the pay rolls shown in some instances by the original pay rolls and in others by what purported to be correct copies of their totals. Defendant relied upon the accuracy of its. reports, and the rejected proof was not only uncertain and indefinite in character but did not legitimately tend to establish the correctness of defendant’s reports or to refute the testimony relied on by plaintiff, nor did it appear that the witnesses had sufficient personal knowledge of the pay rolls to testify to their amounts with any degree of accuracy.

The. policies did not cover wages paid to the employees of subcontractors. On some pay rolls in evidence, the witness Sierts had written the name of the foreman who sent them in, and because it had appeared that such foreman had on certain occasions been a subcontractor under defendant, its counsel asked the witness Sierts if the pay roll so indorsed was the foreman’s. The court sustained objection thereto. No harm was done, for it affirmatively appeared that the pay rolls of subcontractors did not come into plaintiff’s office and that the pay roll in question was one of those on which defendant recognized its obligation to pay a premium.

4. As the policies covered wages of plaintiff’s employees only and not those of subcontractors, and some policies excepted work done in certain territory, defendant requested instructions to the effect that plaintiff was required to show that each item of wages was not of wages paid by a subcontractor nor for work performed in excepted territory, but was for the particular work covered by the policies. We think the request was sufficiently covered by an instruction that it was necessary for plaintiff to show that the pay roll was one that arose under a particular policy and from the job described in the policy; but, if it was error to refuse the instructions in the form requested, it was not reversible error as the particular pay rolls plaintiff sought to prove related only to jobs defendant had reported and on which it had charged itself with the premiums. Another point urged against the refusal to give such instructions was that some pay rolls apparently included wages of employees for time taken in traveling to the jobs, which might more appropriately have been raised on a motion to exclude such evidence. If there was denial of such a motion it is not argued. But these items were relatively small and the verdict is for a much less sum than that which the jury were warranted in-finding on the proof submitted.

5. When this case was here before, we decided adversely to appellant’s contention that clauses in the policies, giving the insurer the right to defend find settle at its own costs actions for damages against the assured and forbidding settlement thereof by the assured without the insurer’s consent except at its own cost, rendered the policies illegal on account of maintenance. The law of the case as stated on the former appeal is deemed binding on us. (Hoxsey v. St. Louis & S. Ry. Co., 184 Ill. App. 410.) On this point we then adopted the reasoning in Breeden v. Franhford Marine Accident & Plate Glass Ins. Co., 220 Mo. 327, 119 S. W. 576, that liability under the policies gave the insurer an interest in the litigation affecting the liability that removed such clauses from the doctrine of maintenance. It was then and is still our opinion that the views expressed in the case cited are in harmony with prevailing opinion, which discloses a manifest relaxation of the rigor of the common law in applying the doctrine of champerty and maintenance to modern forms of business.

6. It is urged that it was error to instruct the jury that plaintiff would be entitled to statutory interest on amounts found to be due from the time they became due under the terms of the policy. The instruction was proper, as the facts bring the case within section 2, ch. 74, Hurd’s Rev. St. Each policy was “an instrument in writing” on which money became due. The money or premium became due on each policy when it expired. Defendant recognized that fact by then charging itself therewith on its books. The fact that a controversy subsequently arose as to the correct amounts of the premiums does not affect the right to interest thereon, inasmuch as plaintiff’s contracts were performed and accepted and the amount due on each policy was easily calculable at the time it expired and stands finally liquidated and ascertained as of that date. (Bauer v. Hindley, 222 Ill. 319; Elgin, J. & E. Ry. Co. v. Northwestern Nat. Bank of Chicago, 165 Ill. App. 35, and cases cited therein.)

Finding no reversible error, we affirm the judgment.

Affirmed.


text:
    Albert Wacholz, Appellant, v. Homewood Press et al., Appellees.
    Gen. No. 20,879.
    (Not to be reported in full.)
    Appeal from the Circuit Court of Cook county; the Hon. Adelor J. Petit, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1914.
    Affirmed.
    Opinion filed December 21, 1915.

      Abstract of the Decision.
    1. Appeal and error, § 471

      —when objection to cross-examination insufficient to preserve ground for review. A general objection to a cross-examination not made on the specific ground that the cross-examination objected to was improper will not preserve the point urged for review.
    2. Masted and servant, § 699

      —when evidence to sustain finding of contributory negligence. In an action by a servant against the master to recover for personal injuries sustained while unloading boxes from a wagon, a verdict finding plaintiff guilty of contributory negligence held not manifestly against the weight of the evidence.
    Statement of the Case.
    Action by Albert Wacholz, plaintiff, against the Homewood Press, a corporation, and George H. Cotter, trading as Cotter Teaming Company, defendants, in the Circuit Court of Cook county, to recover for personal injuries sustained while employed by der fendant Cotter. From a judgment for defendants, plaintiff appeals.
    . It appeared that plaintiff was working near a shipping platform on which were boxes containing paper, and the charges mainly relied on were (1) that a wagon belonging to the defendant Cotter was negligently backed up to the platform against one of the boxes causing one to fall on plaintiff and injure him; and (2) that his foreman had ordered him to assist in removing the boxes against his protest that there was danger under the circumstances in so doing.
    Litzinger, McGurn & Reid, for appellant.
    Henry B. Bale, Rose, Symmes, & Kirkland and Charles F. Vogel, for appellees.

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

   Mr. Justice Barnes

delivered the opinion of the court.


text:
    Hugo Munzer et al., Appellees, v. Kate K. Hillabrant, Appellant.
    Gen. No. 20,960.
    (Not to be reported in full.)
    Abstract of the Decision.
    Usury, § 56

      —when evidence insufficient to establish usury, in a bill to foreclose a trust deed, a finding by the master that the 'loan secured by the trust deed sought to be foreclosed was not usurious as including a commission from the lender, held not contrary to the evidence where there was positive evidence to sustain the finding, against which there were circumstantial facts not inconsistent therewith.
    Appeal from the Superior Court of Cook county; the Hon. John M. O’Connor, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1914.
    Affirmed.
    Opinion filed December 21, 1915.
    Statement of the Case.
    Bill by Hugo Munzer and others, complainants, against Kate K. Hillabrant, defendant, in the Superior Court of Cook county, to foreclose a trust deed. From a decree of foreclosure, defendant appeals.
    Complainant applied for the loan to a real estate agent in Chicago and authorized a commission to be paid therefor. The latter applied to a second party and he in-turn to a third who obtained the money from a fourth party and received part of the commission.
    The evidence tended to show that the loan actually came from the fourth party, who received part of the commission, and that the intermediate parties acted as agents for the borrower and not for the lender.
    Robert B. Clark and P. H. Bishop, for appellant.
    Samuel J. Richman, for appellees.

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

   Mr. Justice Barnes

delivered the opinion of the court.


text:
    Samantha F. Williams, Appellee, v. J. F. Rowley Company, Appellant.
    Gen. No. 20,965.
    (Not to be reported in full.)
    Abstract of the Decision.
    1. Saxes, § 398

      —when variance exists between allegations of rescission and proof. In an action to recover for breach of a contract of sale, whereby plaintiff purchased an artificial leg of defendant, where a count in plaintiff’s declaration averred a rescission evidence, held not to sustain the count, there being no evidence of a rescission.

      Appeal from the Superior Court of Cook county; the Hon. Marcus A. Kavanagh, Judge, presiding.
    Heard in the Branch Appellate Court at the March term, 1915.
    Reversed with finding of fact.
    Opinion filed December 21, 1915.
    Statement of the Case.
    Action by Samantha F. Williams, plaintiff, against the J. F. Rowley Company, defendant, to recover back the amount paid for an artificial leg. From a judgment for plaintiff for one hundred dollars, defendant appeals.
    It appeared that plaintiff had retained possession of the leg since delivery and that two years after-wards she came into the factory wearing the leg for the purpose of having some repairs made upon it, and wore it when she left. While she denied that she had used it in the meantime, except for the purpose of testing it, two witnesses testified that it bore evidence of use and wear. She admitted that she tried to use it, but claimed that it did not fit her and that she asked to have her money back, though she never returned or apparently offered to return the leg.
    Earl J. Walker, for appellant.
    Beach & Beach, for appellee.

      See Illinois Notes Digest, Vols. 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.

   Mr. Justice Barnes

delivered the opinion of the court.

2. Sales, § 398 —when variance exists between allegation of breach of warranty and proof. In an action to recover for breach of a contract of sale, whereby plaintiff purchased an artificial leg of defendant, where one count in plaintiff’s declaration averred a breach of warranty, evidence held not to support the count although there was evidence of a verbal warranty by defendant, where it appeared that subsequently a written contract containing no warranty was tendered to and accepted by plaintiff.

3. Evidence, § 345 —when evidence of parol warranty inadmissible te contradict subsequent written agreement. In an action to recover for breach of a contract whereby plaintiff purchased an artificial leg of defendant, evidence of a verbal warranty of the leg by defendant held properly stricken, where it appeared that a written contract not containing a warranty, but embodying the conditions under which the leg was sold, was subsequently tendered to and accepted by plaintiff.

4. Sales, § 404 —when damages not recoverable for lack of proof. In an action to recover for breach of warranty contained in a contract of sale whereby plaintiff purchased an artificial leg of defendant, there is no basis for an assessment of damages where there is no evidence of the value of the leg actually furnished, as the measure of damages is the difference in value between the leg furnished and that which the contract required defendant to furnish.

5. Sales, § 401 —when evidence sufficient to show acceptance in action for breach of warranty. In an action to recover for breach of a contract whereby plaintiff purchased an artificial leg of defendant, where it appeared that plaintiff never returned the leg to defendant, although she complained that it did not conform to the contract, evidence held to show an acceptance of the leg.

6. Sales, § 388 —when buyer should be required to elect remedy. In an action to recover damages for alleged breach of contract, where in one count plaintiff declares on a breach of warranty and in another count alleges a rescission of the contract, plaintiff should be required to elect which cause of action she would rely upon, for the reason that the remedies are inconsistent, in that an allegation of a breach of warranty implicitly affirms the sale, while a rescission involves a disaffirmance thereof.


text:
    The People of the State of Illinois, Defendant in Error, v. John H. Montgomery, Plaintiff in Error.
    Gen. No. 21,083.
    (Not to be reported in full.)
    Error to the Municipal Court of Chicago; the Hon. Joseph E. Ryan, Judge, presiding.
    Heard in the Branch Appellate Court at the March term, 1915.
    Reversed and remanded.
    Opinion filed December 21, 1915.
    Statement of the Case.
    Prosecution by the People of the State of Illinois against John H. Montgomery, defendant, in the Municipal Court of Chicago, charging him with selling cocaine contrary to the statute. To reverse a judgment of conviction with a sentence of three months in the county jail and a fine of $1,000, defendant prosecutes this writ of error.
    There was no direct evidence of a sale and no evidence which did not comport with defendant’s innocence. It appeared that one Clay was handed money by a police officer with which to purchase cocaine, and in the presence of witnesses he handed defendant the money and $5 of his own, asking defendant to keep it for him. Clay stepped behind the counter and taking a bottle of cocaine, worth about $2, and retired to a water-closet. There was no evidence of any secret understanding between defendant and Clay, or that any one else knew that Clay took the bottle. Defendant denied that any such understanding existed. Defendant returned Clay’s money on request. Clay was formerly a porter at defendant’s store and it was not unusual for him to ask defendant to keep money for him.
    Edward H. Morris, for plaintiff in error.
    Maclay Hoyne, for defendant in error; Edward E. Wilson, of counsel.

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

   Mr. Justice Barnes

delivered the opinion of the court.

Abstract of the Decision.

Druggists, § 9 —when evidence insufficient to warrant conviction for unlawfully selling cocaine. In. a prosecution charging defendant with illegal sale of cocaine, where it appeared that a person handed defendant money which he asked defendant to keep for him, and then stepped behind the counter of defendant’s drug store and took a bottle of cocaine, after which defendant returned his money at his request, a judgment of conviction held not sustained by the evidence, it not appearing affirmatively that defendant knew of such taking or that there was a secret understanding between defendant and said person to effect an illegal sale.


text:
    The People of the State of Illinois, Defendant in Error, v. E. Robinson, Plaintiff in Error.
    Gen. No. 21,195.
    (Not to be reported in full.)
    Error to the Municipal Court of Chicago; the Hon. John R. Cavebly, Judge, presiding.
    Heard in the Branch Appellate Court at the March term, 1915.
    Reversed and remanded.
    Opinion filed December 21, 1915.
    Statement of the Case.
    Prosecution by the People of the State of Illinois against E. Robinson, defendant, in the Municipal Court of Chicago, charging defendant with obtaining money by false pretenses. The complaint charged that defendant “did unlawfully and fraudulently with intent to cheat and defraud by certain false representations or pretenses, obtain from one G-us Schreiber the sum of One Hundred Dollars ($100) lawful money,”' etc. To reverse a judgment of conviction, defendant prosecutes this writ of error.
    Benjamin E. Cohen, for plaintiff in error.

      Abstract of the Decision.
    1. False pretenses, § 28

      —when information insufficient. In a prosecution charging defendant with money by false representations or pretenses, an information wherein it is not alleged that such representations were made, the nature of them, that defendant knew they were false, and that the person defrauded believed them to be true, or wherein all such facts are included in or expressly implied from other averments in the information, is fatally defective for the reason that all such facts are essential elements of the offense charged.
    2. False pretenses, § 28

      —when information insufficient. An information under section 6. of division 11 of the Criminal Code (J. & A. U 4105), charging that defendant “did unlawfully and fraudulently with intent to cheat and defraud” obtain money from a person named, by false representations, held fatally defective in that such complaint omitted the word “knowingly” as provided by the statute, and used no equivalent word therefor, the words of the information being insufficient to allege scienter.
    Maclay Hoyne, for defendant in error; Edward E. Wilson, of counsel.

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

   Mr. Justice Barnes

delivered the opinion of the court.


author: Mr. Justice Pam

text:
    Thomas J. Healy, Administrator, Appellee, v. Chicago City Railway Company, Appellant.
    Gen. No. 20,322.
    (Not to be reported in full.)
    Appeal from the Superior Court of Cook county; the Hon. Marcus A. Kavanagh, Judge, presiding.
    Heard in the Branch Appellate Court at the March term, 1914.
    Affirmed.
    Opinion filed December 8, 1915.
    Rehearing denied December 21, 1915.

      Oertiorwri denied by Supreme Court (making opinion final).
    Statement of the Case.
    Action by Thomas J. Healy, administrator of the estate of Michael Moriarity, deceased, plaintiff, against the Chicago City Railway Company, defendant, in the Superior Court of Cook county, to recover for the death of plaintiff’s intestate as a result of the alleged wrongful act of defendant. From a judgment for plaintiff for $5,000, defendant appeals.
    Franklin B. Hussey and Charles LeRoy Brown, for appellant; John R. Guilliams, of counsel.
    Caswell & Healy, for appellee.

      See Illinois Notes Digest, Vols. 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.

   Mr. Justice Pam

delivered the opinion of the court.

Abstract of the Decision.

1. Death, § 73 —when instruction on negligence properly refused as misleading. In an action to recover for the death of plaintiff’s intestate caused by injuries received while a passenger on defendant’s electric car, an instruction to the effect that evidence that an accident has occurred is not evidence of negligence on the part of defendant, held properly refused, as tending to mislead and confuse the jury, in that it singled out one item of evidence and stated that a certain conclusion would follow therefrom.

2. Trial, § 155 —province of jury to weigh conflicting evidence. Where the evidence is conflicting, a question of fact for the jury is presented.

3. Trial, § 155 —province of jury to determine weight and truth of evidence. It is always the province of the jury to determine the weight of evidence and the credibility of witnesses as well as the question as to which of the witnesses is better entitled to be believed.

4. Appeal and error, § 1410 —when verdict will not be disturbed on review. Where the evidence is conflicting, a verdict of a jury will not be disturbed on review unless clearly and manifestly against the weight of the evidence.

5. Carriers, § 476 —sufficiency of evidence as to negligent death. In an action to recover for the death of plaintiff’s intestate alleged to be due to the wrongful act of defendant, where the death of deceased was caused by being brought in contact with an iron pole standing near defendant’s street railway track, deceased being at the time of the accident a passenger on one of defendant’s electric cars, evidence examined and judgment for plaintiff held sustained by the evidence.

6. Carriers, § 480 —whether person on car a passenger as question for jury. In an action to recover for the death of plaintiff’s intestate caused by injuries received while a passenger on defendant’s electric car, the question whether at the time of receiving such injuries deceased was a passenger as alleged is for the jury.

7. Carriers, § 480 —when contributory negligence of passenger question for jury. In an action to recover for the death of plaintiff’s intestate caused by injuries received while a passenger on defendant’s electric car, the question whether recovery is barred by contributory negligence is for the jury.

8. Appeal and error, § 1512 —when remarks of court on credibility Of witness harmless error. In an action to recover for the death of plaintiff’s intestate as a result of the wrongful act of defendant, the remark of the trial judge that a witness for plaintiff who was under cross-examination had stated a matter differently, which, on exception to the remark, was followed by an examination of the witness in regard to the matter adverted to, held not prejudicial where the fact stated by the court was not denied by defendant and was borne out by the record, for the reason that the remark was natural and that when defendant excepted the court may have supposed that counsel took issue with him as to the correctness of witness’ testimony, and hence interrogated witness further, and also for the reason that such statement and examination was a just and reasonable exercise of the judicial function.

9. Witnesses, § 178 —when questions put to witness objectionable in form. Questions to a witness containing a positive assertion rather than a query, and which are in the form of a contradiction of the witness, are objectionable.


text:
    John F. Waters, Defendant in Error, v. Universal Store Specialties Company, Plaintiff in Error.
    Gen. No. 20,386.
    (Not to be reported in full.)
    Error to the Municipal Court of Chicago; the Hon. John K. Prindiville, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1914.
    Reversed and remanded.
    Opinion filed December 8, 1915.
    Statement of the Case.
    Action by John F. Waters, plaintiff, against the Universal Store Specialties Company, a corporation, defendant, in the Municipal Court of Chicago, to recover on a contract of employment. To reverse a judgment for plaintiff for $215, defendant prosecutes this writ of error.
    Plaintiff’s cause of action is based on a written contract of employment with defendant wherein the latter agreed, among other things, to advance to plaintiff the sum of $50 per week for a period of one year. This contract is dated May 28, 1913, and plaintiff’s claim is for nine weeks’ advances, $450, less a credit of $235, being moneys due defendant from customers, which moneys plaintiff had collected and retained.
    While defendant in its affidavit of merits sets forth several defenses, yet upon the trial of the case the principal defense relied on was that plaintiff had not given a bond as required by the contract, but in lieu thereof had entered into a new contract of employment which superseded the written one.
    The only evidence offered on behalf of the plaintiff was the contract itself, and plaintiff’s testimony that he had not received advances from defendant for a period of nine weeks, and that there was due him under said contract for advances the sum of $450; that he had collected moneys due defendant to the extent of $235, for which he had given it credit, leaving a balance due of $215.
    It appeared, on examination of plaintiff under section 33 of the Municipal Court Act (J. & A. ¶ 3345), and from the testimony of H. E. Dugan, district sales manager of the defendant, that plaintiff had received in advances more money than was earned by him in commissions under the contract of employment; that shortly after October 31, 1913, in a conversation with plaintiff, Dugan read to plaintiff a letter which he had received from defendant, which letter was as follows:
    “With regard to Mr. Waters, his account has been speedily going behind, as you know, and the statement for the last week shows a net overdraft, or difference between overdraft and prospective, of $460.98. We wish you would have a talk with Mr. Waters and endeavor to show him that we cannot possibly keep remitting him $50 per week unless he does business to warrant our doing so. When the writer saw him, and in his correspondence about September 1st, he told of a great many sales that he surely could close during September, or soon, and these sales have not matured. If they had, no doubt his account would be in different shape. If he will consent to having his remittance reduced to an-amount that he can earn, we will continue with him, but if not, we shall certainly have to cut him off the remittance list. In his application he states that he can give a personal bond, signed by two owners of real estate. If he can furnish such a bond that will protect us against loss by making him the advances that we have agreed to make against his commissions, we will be willing to go along with him, but we cannot take a chance of losing any money on his account.”
    That at said conversation he requested plaintiff to furnish a bond as required under section 9 of the contract and in accordance with the letter above quoted. Plaintiff testified that Dugan stated to him that the company might want him to give a bond.
    Dugan testified that plaintiff stated he would not give a bond; that upon the refusal of plaintiff to give a bond, he informed plaintiff that defendant would make no further advances to him, but that if he wished to continue selling goods on the same commission, defendant would advance him fifty per cent, on commissions earned, and apply the remaining fifty per cent, on the indebtedness due defendant; that plaintiff stated that he was satisfied but that he wanted him (Dugan) to write defendant a letter for him, asking the company to advance sixty-five per cent, of his earned commissions, and apply the remainder, thirty-five per cent., on the indebtedness due from him to the defendant.
    Plaintiff did not deny that these terms were discussed, but insisted that he refused to accept the proposition; admitting, however, that he asked Dugan to write defendant a letter requesting that he be allowed to draw sixty-five per cent, instead of only fifty per cent, of his earned commissions.
    The testimony further disclosed that thereafter plaintiff sent in two orders on which his commission amounted to $96.'26; that shortly thereafter he telegraphed' defendant as follows:
    “No sinews of war, commissions last week $96.” That after sending this telegram, he received a check from Dugan for $48.13, exactly fifty per cent, of the commissions earned by him; that this was the last business transaction plaintiff reported to the defendant. The evidence further disclosed that on November 14, 1913, plaintiff received the following letter in response to one he had written defendant on the 12th:
    Abstract of the Decision.
    Contracts, § 385

      —when evidence insufficient to establish existence of contract sued on. In an action to recover on a written contract whereby defendant agreed to employ plaintiff, evidence examined and judgment for plaintiff held not sustained by the evidence, it appearing therefrom that the contract sued on had been annulled by consent of both parties, and a new arrangement on different terms substituted in regard to the subject-matter of such contract, to which plaintiff had assented.

      “I have received your personal letter of the 12th inst., and as before you receive this you will have received the remittance sent you yesterday, no doubt financial matters will be all satisfactory. I believe that you may possibly work a little harder on a straight commission basis, and if you do, I feel sure that you will get in enough orders so that you will make more money than you did on the basis of a regular weekly remittance. I appreciate the difficulties you have had on account of competition you have had, but it is no worse in Chicago than it is in New York and many other sections, and so long as we have so many superior features on our machines and the right sort of salesmen to present these features to the merchants, I am convinced that we will get our share of the business. I suppose the company cannot afford to pay more than its regular percentage for getting business, and naturally a badly overdrawn account is discouraging here, and calls for some action to head off a possible loss.”
    Upon this evidence the court found the issues for the plaintiff.
    William J. Dillon, for plaintiff in error.
    James J. Kelly, for defendant in error.

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

   Mr. Justice Pam

delivered the opinion of the court.