text:
    Benjamin E. Page, Appellee, v. W. F. Hallam & Company and W. F. Hallam, Appellants.
    Gen. No. 24,263.
    1. Bills and notes, § 460

      —when knowledge of and participation in fraud of indorser by indorsee is Question for jury. Evidence held to present a question for the jury as to whether an indorsee of notes before maturity had knowledge of and participated in the fraud of the indorser in procurance of signatures of prior indorsers to notes made payable to the maker, a corporation, and indorsed by the corporation and the majority stockholder thereof.
    2. Bills and notes, § 448

      —what not proof that indorsee of notes before maturity knew of intention of stockholder of indorser to convert proceeds of notes. That an indorsee of notes before maturity knew that the majority stockholder of a corporation, which was the indorser of the notes, was endeavoring to procure an advertising contract from the maker and agreed to take over the notes before the contract was executed, is not proof that he knew of the intention of such majority stockholder to convert the proceeds from the sale of the notes to his own use.
    3. Bills and notes, § 255

      —when fraud of majority stockholder of corporation indorser does not defeat title of indorsee before maturity. Even though a corporation indorser of a note had no legal existence at the time notes were executed by another corporation in part payment of a contract for advertising, and the owner of the business of the corporation indorser merely used the corporate name to further his fraudulent enterprises, the title of an indorsee of the notes before maturity cannot be defeated where he was not a party to and did not profit by the misconduct of such owner and had no knowledge of the facts.
    4. ' Fkatjd, §67

      —what insufficient to charge person with knowledge of. Mere suspicion that one is a party to or has knowledge of a fraud is not enough to charge him with knowledge of the fraud; some evidence must be presented which would authorize a finding against one charged with such knowledge of or participation in fraudulent conduct.
    5. Bills and notes, § 255

      —what will not defeat title of indorsee before maturity for value. Only bad faith will defeat the title of the indorsee of commercial paper taken before maturity, for value, without knowledge of any defense thereto; and mere suspicion, the knowledge of circumstances calculated to excite suspicion, or even gross negligence of the indorsee in acquiring the paper, will not defeat his title.
    6. Pleading, § 74a

      —when special plea excluded as filed too late. The trial court, in the exercise of a sound judicial discretion, has the right to exclude a special plea, where it appears that a long period of time has elapsed between the date of the bringing of the suit and the offer of the plea, and where the offer of the plea is unaccompanied by any statement explaining or excusing the delay.
    7. Pleading, § 74a

      —what should be made subject of special plea at time of making of defense to note. If the indorsers and the maker of notes, defendants in an action on such notes by an indorsee before maturity, knew of the alleged fact in a special plea that the notes were accepted as collateral security for an indebtedness at the time the suit was brought, such fact should have been pleaded at the time of making the defense.
    8. Pleading, § 74a

      —how defendants must show that they had no knowledge of defense at time of filing general issue and special pleas. If defendants in an action did not know of the facts alleged in a special plea, tendered nearly 4 years after the filing of several special pleas, in addition to the general issue, until the filing of a' motion for leave to file such special plea, 'such fact should have been shown by affidavit or otherwise.
    9. Courts, § 150

      —when decision of Supreme Court binding on Appellate Court. The decision of the Supreme Court on a particular point is binding on the Appellate Court in a case in which the same question is- raised.
    10. Bills and notes, § 259

      —when indorser estopped to claim want or failure of consideration. An indorser of negotiable paper, having given it the sanction of his own name, will not be permitted, by his own testimony, to show want or failure of consideration for it, where the note is in the hands of an innocent purchaser for value, who has received it in due course.
    11. Appeal and error, § 1491

      —when exclusion of evidence in action on notes is harmless error. Reversible error was not committed, in an action by an innocent purchaser for value before maturity, on notes signed by a corporation as maker and indorsed by the corporation and.one of its agents individually, in the exclusion of evidence of agents of the corporation maker offered solely for the purpose of showing a want or failure of consideration, and inadmissible for such purpose, even though it might have been admitted for the purpose of showing what the consideration of the notes actually was at the time they were executed.
    12. Bills and notes, § 165

      —when maker liable as indorser. Where a note is payable to a corporation maker and by the maker indorsed and delivered, the indorsement on the back of the note renders such maker liable, not only as a maker but also as an indorser.
    13. Conflict of laws, § 31

      —when law of forum governs. The lex fori, or law of the forum, governs as to the form of remedy and all matters of procedure relating thereto.
    14. Bills and notes, § 317

      -—when law of forum applicable in action on note. Whether, under the laws of the State of Illinois, makers and indorsers of promissory notes may be joined in the same action is a question of practice and procedure so as to render the law of the forum applicable.
    15. Partnership, § 43

      -—what not prima facie case of. Even though stockholders of a corporation became partners as a consequence of the failure to complete the incorporation of the company by recording its charter in the recorder’s office of a particular county, a prima facie case of partnership of such stockholders with one who was not an incorporator of the company, and had not subscribed to any of its stock, was not made out by proof that such person had advanced money to the majority stockholder and to the company at various times and in various ways and had guaranteed the payment of certain obligations incurred by them.
    16. Partnership, § 20

      —when not created. Special agreements for particular adventures and joint undertakings do not make a partnership.
    17. Bills and notes, § 406

      —when burden not on plaintiff to show that he acquired title to notes as holder in due course. In an action by an innocent purchaser, for value, before maturity of notes, signed by a corporation as maker, indorsed by the maker and an agent of the corporation in his individual capacity to another person, and sold by such person to plaintiff, where it was not shown that the title of the person indorsing the note to plaintiff was defective, the burden of proof did not rest upon plaintiff to show that he acquired title to the notes in question as a holder in due course under section 59 of the Negotiable Instruments Act (J. & A. ¶ 7698), applying to cases “when it is shown that the title of any person, who has negotiated the instrument, was defective.”
    18. New trial, § 77

      -—when on ground of newly discovered evidence properly refused. A new trial on the ground of newly discovered evidence is properly refused where, by the exercise of reasonable diligence, the evidence could have been discovered in time to produce it for trial.
    Appeal from the Circuit Court of Cook county; the Hon. Charles M. Thomson, Judge, presiding. Heard in this court at the March term, 1918. Certiorari denied by Supreme Court (making opinion final).
    Affirmed.
    Opinion filed November 11, 1918.
    Rehearing denied November 25, 1918.
    John W. Creekmur and D. J. DeWolfe, for appellants.
    Miller, Starr, Brown, Packard & Peckham, 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.

   Mr. Presiding Justice Dever

delivered the opinion of the court.

Benjamin E. Page, plaintiff, obtained a judgment for $3,787.50 in the Circuit Court of Cook county against W. F. Hallam & Company and W.' F. Hallam on two promissory notes, one for $1,000 and one for $1,500, both dated at Lakeland, Florida, January 19, 1912. The notes were payable to the order of the maker, W. F. Hallam & Company, and were indorsed by both defendants.

The evidence in the case tends to prove that the plaintiff purchased the notes in question about February 1, 1912, from Bertram J. Bussiere for the sum of $7,500. At the time the notes were executed, Bussiere was president of the Classified Ad Company, incorporated February 18, 1911. Its charter was canceled March 30,1912. As a defense to the action it is insisted that there was a total failure of consideration therefor; that the signatures thereto were obtained by fraud to which the plaintiff was a party, in that he was a partner of the Classified Ad Company, and that Page had knowledge of the failure of consideration, upon which the defendants rely.

It is also insisted for the defendants that the court erred in its refusal to permit defendants to file a further special plea after the suit was called for trial, which plea set up, in substance, that the notes were taken by plaintiff as collateral security for an indebtedness due him and that such indebtedness had been, as the result of other transactions, fully paid. At the time the notes in question were executed, the W. F. Hallam & Company had entered into a contract with the Classified Ad Company through its president, Bussiere, under which if was agreed that the Classified Ad Company would, by conducting an advertising campaign, provide a large increase in the business carried on by the Hallam Company. At the same time the Hallam Company executed and delivered to the Classified Ad Company notes, including the two in question, for the sum of $9,000, and also delivered to it $6,000 in certificates of deposit. The total sum of $15,000, under the arrangement, was to be expended by the Classified Ad Company in the advertising of the Hallam Company’s business.

There is much evidence in the record pertaining to the conduct of Bussiere in connection with the Classified Ad Company’s business and his relationship to the Hallam Company. Without discussing this evidence it may be assumed that Bussiere’s conduct was grossly fraudulent, so far as it was connected with the Hallam Company’s business. He appropriated the money which the defendant company gave him to his own personal use, and one of the warmly contested questions presented to us is whether this , fraudulent conduct on his part was known to the plaintiff, Page, on February 1,1912, at the time he says he purchased the two notes.

The trial court instructed the jury which tried the case to return a verdict in favor of the plaintiff; the jury did so, and plaintiff appeals from the judgment which was entered upon this verdict.

The evidence does not disclose that Page, the plaintiff, had any direct personal ownership or interest in the business conducted by the Classified Ad Company. It does appear that he had an arrangement with Bussiere by which he was to receive a percentage of the profits of a certain railroad project in Florida, and that he had discounted notes for Bussiere in considerable sums. It also appears that the Classified Ad Company borrowed of plaintiff the sum of $1,000, and that he advanced the sum of $125 to Bussiere on January 13, 1912, when Bussiere went to Florida, presumably to complete his contract with the Hallam Company.

On the whole evidence, we are not prepared to say that the court erred in its evident conclusion that there was mot sufficient evidence introduced on the trial to present, for the determination of the jury, a question of fact as to Page’s knowledge of or participation in the fraud which was committed by Bussiere. Page, the plaintiff, knew of Bussiere’s attempt to procure the advertising contract and he agreed, before the contract was executed, to take over the notes; but this fact in and of itself is no proof that Page knew that Bussiere would or intended to convert the proceeds from the sale of the notes to his own use. It is evident from the record that the Classified Ad Company was in fact Bussiere, and even if it be conceded, as contended, that the company had no legal existence at the time the notes were executed, and that Bussiere merely used the corporate name for the purpose of facilitating his fraudulent enterprises, the plaintiff is not, on the evidence, chargeable with knowledge of these facts or purposes. He does not appear to have been a party to or to have profited by the misconduct of Bussiere, nor does it appear that he had any knowledge of the facts referred to. Mere suspicion that one is a party to or has knowledge of a fraud is not enough; some evidence must be presented which would authorize a finding against one charged with such knowledge of or participation in fraudulent conduct, and such evidence must in quantity and quality be sufficient to raise more than a suspicion against one so charged.

‘‘Only bad faith will defeat the title of the indorsee of commercial paper taken before maturity, for value and without knowledge of any defense thereto. Mere suspicion, the knowledge of circumstances calculated to excite suspicion, or even gross negligence of the indorsee in acquiring the paper, will not defeat his title. ’ ’ Kavanagh v. Bank of America, 239 Ill. 408.

It is insisted that the court erred in refusing a motion for leave to file the special plea tendered on the day of the trial. The present litigation was begun in December, 1913. A plea of the general issue and three special pleas were filed to the declaration on January 21, 1914. A demurrer was sustained to the third "special plea on February 3, 1917. On May 2, 1917, the cause was continued on defendant’s motion to secure the testimony of a witness, which was subsequently taken by deposition. On May 7, 1917, pleas were amended so as to permit a special defense which set up a Florida statute. The motion to file an additional plea was made October 1,1917. This tendered plea set up, in substance, that the plaintiff had received the sum of $46,250 on ^certain life insurance policies, which sum was paid plaintiff on the death of Bussiere; that the two notes in question were given to secure an existing indebtedness of the Classified Ad Company, and that this indebtedness had all been paid by the receipt by plaintiff of the money paid on the insurance policies referred to.

On this point the only question we have to determine is whether the tender of the plea was made in apt time. No showing was made to the trial court, at the time the plea was offered, of diligence on the part of the defendants. For the plaintiff it ia insisted that the tender of the plea came too late and that under the circumstances of the case the court was right in denying leave to file the plea. Our attention has been directed to several cases decided by this and other courts, which hold that the refusal to file a. tendered plea rests in the sound judicial discretion of the trial court and that where a plea is tendered for filing after a long period of time has elapsed between the bringing of the suit and the tender of the plea, the court in the exercise of a sound discretion may, where injuries might follow to the other party from the delay, refuse its assent to the filing of the plea.

“Where a defendant asks leave to file a further plea setting up an entirely new defense, especially if a long time has passed since his original plea was filed and the case is about to be reached for trial, he must support his application by showing diligence and some reasonable excuse for not having sooner presented his defense. (Dow v. Blake, 148 Ill. 76; Phenix Ins. Co. v. Stocks, 149 Ill. 319; Dulle v. Lally, 167 Ill. 485; Phenix Ins Co. v. Caldwell, 187 Ill. 73; City of Chicago v. Cook, 204 Ill. 373.) There is nothing to show that appellant could not have filed this plea with the general issue over 25 months before.” Wilson v. Wilson, 125 Ill. App. 385, 388; Mathews v. Schuessler, 201 Ill. App. 211.

Nearly 4 years elapsed between the bringing of the suit and the presentation of the plea. No -effort of any sort was made to excuse this long delay. The tender of the plea was unaccompanied by any explanation why the plea, which set up a substantially new defense, was not presented to the trial court before the case was called for trial. The present case is essentially different from the case of Delfosse v. Kendall, 283 Ill. 301, relied upon by defendants. In that case the record shows that counsel were misled into the belief that the substantial defense which was attempted to be made in that case*could be presented under a plea of the general issue or other pleadings on file in the cause. The record there shows that counsel were taken by surprise when certain evidence was rejected by the trial court, and to meet the emergency asked leave to file an additional plea. The Supreme Court held that under the circumstances of that case the motion should have been allowed because it appeared that the failure to file the plea was the result, not of negligence, but of a misconception of the legal rights of the party under pleas on file in the cause. Somewhat similar circumstances existed in the case of Carlson v. Johnson, 263 Ill. 556, and other cases relied upon by counsel.

The trial court should have been placed in possession of the facts from which it mig*ht determine the good faith of the party tendering the plea. The plea tendered in the present case was offered before the jury was impaneled. The motion presented a mere request to file a plea about 4 years after defendants had filed several special pleas in addition to the general issue. The purpose of the amendment statute is, of course, to provide liberal means whereby justice may be done in the trial of lawsuits, and hence the courts have liberally interpreted the statutes so as to render the courts more efficient in doing the work for which they have been created; the decisions are in the main to the effect that amendments to pleadings in pending lawsuits should be allowed in every case where the party seeking such privilege is able to show that he has been without culpable negligence. While the decisions are not clear upon the point, we think that the court in the exercise of a sound judicial discretion has the right to exclude a plea where it appears that a long period of time has elapsed between the date of the bringing of the suit and the offer of the plea, and where the offer of the plea is unaccompanied by any statement explaining or excusing the delay. The defense presented by the special plea is that the notes were accepted as collateral security for an indebtedness. If defendants knew this alleged fact at the time suit was brought, they should have pleaded it; if they did not know of this defense until the motion to file was made, this fact should have been shown by affidavit or otherwise.

A somewhat interesting question is raised by the exclusion by the trial court of the testimony of agents of the defendant W. F. Hallam & Company. W. F. Hallara. was placed upon the witness stand and he attempted to testify to facts which would tend to show a failure of consideration for the notes and of fraud in their execution. His evidence, as also that of Miss Knudsen, secretary of the company, was excluded on, the authority of Dewey v. Warriner, 71 Ill. 198, in which case the court said:

1 1 The main question presented by this record, as we view it, for consideration, is this: Is the indorser of negotiable paper a competent witness to impeach its consideration?
“On the trial in the Circuit Court, on application of the plaintiff, the court excluded all the evidence of Dedrick, who was an indorser of the bill of exchange, that showed or tended to show a want of consideration of the draft, from the jury. The court also refused to permit Dewey, who was also an indorser of the draft, to testify what the original consideration of the draft was.
“In this we perceive no error. We are aware that on this question the authorities are not uniform in the different States, but this court has several times held, and it may be regarded as well settled in this State, that an indorser of negotiable paper, having given it the sanction of his own name, shall not be permitted, by his own testimony, to impeach the consideration of it. (Walters v. Smith, 23 Ill. 342; Walters v. Witherell, 43 Ill. 388.)”

It is earnestly insisted on behalf of the defendants that the case of Dewey v. Warriner, supra, should not be accepted in this State as an authority on the point raised. It is insisted that the case is founded upon the decision of the case of Walton v. Shelley, 1 T. E. 296, an English case, which was overruled by the English courts a few years after its decision, and the doctrine of that ease has never since been upheld in the English courts. The doctrine of the Walton v. Shelley case has not been followed by all of the courts of this country. It is sufficient for us, however, to know that it has been applied and, so far as we know, constantly followed by the Supreme Court of this State. The argument against the reasonableness of the rule or its inherent, injustice, or that it has never been cited or followed by any later cases decided by the Supreme Court of this State, can avail the defendants nothing here. We are bound by the case of Dewey v. Warrmer, supra, until the Supreme Court itself indicates its dissatisfaction of the doctrine adopted therein. There is substantial reason in support of the argument that a sound public policy would prevent indorsers from questioning the value and validity of a negotiable instrument either for failure or for want of consideration, where such paper has passed into the hands of an innocent purchaser who has received it in due course.

It is asserted that this evidence was admissible for the purpose of showing what the consideration of the notes actually was at the time they were executed. There might have been merit in this contention if it appeared, from the record, that the defendants had tendered any admissible evidence whatsoever of a failure of consideration. The testimony of Hallam and Miss Knudsen was offered solely for the purpose of showing a want or failure of consideration, and as under the Dewey v. Warriner case this evidence was inadmissible for this purpose, there was no reversible error in excluding the testimony of these witnesses. The rule of the Dewey v. Warriner case applies to a corporation indorser of a promissory note, and as such indorser can act. only by agent, the rule would apply where the evidence of such agent is offered for the purpose of impeaching the consideration for which a note is given. We also think that where a note is made payable to a maker and by the maker indorsed and delivered, the indorsement on the back of the note renders such maker liable, not only as a maker but also as an indorser of the note. It is our opinion also that the rule enunciated in Dewey v. Warriner was not modified, as urged, by statutes subsequently enacted by the legislature.

It is said by counsel for defendants that the laws of Florida do not permit the makers and indorsers to be joined in the same suit, and that it was error to so join them in an action brought in this State. There is no merit in this contention.

Whether, under the laws of this State, makers and indorsers of a promissory note may be joined in the same suit is a question of practice and procedure.

Nor do we think the court erred in excluding tendered proof of statements by Bussiere, made in the absence of Page, for the purpose of proving that a partnership existed between them. It is argued that the Classified Ad Company was not a corporation and that stockholders became partners, as a consequence, of a failure to complete the incorporation of the company by recording its charter in the recorder’s office of Cook county. Assuming this contention to be sound, we are unable to see how it affects the rights of Page. He was not an incorporator of the company, nor had he subscribed to any of its stock. As hereinbefore stated, he had advanced money at various times and in various ways to Bussiere and the company and had guaranteed the payment of certain obligations incurred by them. Standing alone, these facts did not make out a prima facie case of partnership. If the evidence had tended to show the existence of a partnership between Page and Bussiere and the Classified Ad Company, the partners would of 'Course have been bound by the agreements and statements of partners made in connection with the business of the partnership. Under the circumstances of the case, Page could not be bound by the statements of Bussiere made out of his presence.

“Special agreements for particular adventures and joint undertakings do not make a partnership. This rule has received apt illustration by Chancellor Kent in his Commentaries, vol. 3, p. 33. He says: ‘A person may be allowed in special cases to receive a part of the profits of a business without becoming a legal or responsible partner.’ ” Chicago Die & Electric Co. v. Nathan, 141 Ill. App. 173.

The burden of proof did not rest upon plaintiff to show that he acquired the title to the notes in question as a holder in due course under section 59 of the Negotiable Instruments Act (J. & A. ¶ 7698). This act applies to cases “when it is shown that the.title of any person, who has negotiated the instrument, was defective.” The evidence in the case fails to make the necessary defective title. Had the evidence shown that the title of the person who negotiated the notes to Page was defective, the burden would then have rested upon Page to show that at the time the notes were negotiated he took them without notice of any infirmity or defect in the title of the person negotiating them. Justice v. Stonecipher, 267 Ill. 448.

It is urged that the trial court erred in its refusal to grant a new trial on the ground of newly discovered evidence. The motion was supported by the affidavits of two witnesses. An examination of these affidavits discloses that one of the affiants, C. L. Richardson, Jr., was employed by the Hallam Company at the time the notes were executed and delivered. We think the affidavits were insufficient to show that this evidence was not procurable at arid before the time the case went to trial. It is apparent that W. F. Hallam, by the exercise of reasonable diligence, could have discovered this evidence in time to produce it at the trial. In O’Malley v. Illinois Publishing & Printing Co., 194 Ill. App. 544, this court speaking through Mr. Justice Holdom said:

“We find nothing in the affidavits presented regarding newly discovered evidence which shows that defendant used due diligence to procure the witnesses named, or their testimony by way of deposition, for use upon the trial of the cause. Robinson was said to be a convict in the penitentiary at Stillwater, Minnesota, and his deposition presumably could have been taken. The material point is not that the testimony discovered came to the knowledge of defendant after the trial, but, could such evidence have been procured for use upon the trial by the exercise of due diligence. It is evident that the same agencies which discovered such evidence after the trial were just as available to defendant before the trial. ’

The judgment of the Circuit Court will be affirmed.

Affirmed.


source: Caselaw Access Project

author: Mr. Justice Holdom

license: Public Domain

text:
    Ed. J. Baker, The Wallace Press and Bestwall Manufacturing Company, Appellees, v. Abbott Manufacturing Company, Edward R. Litsinger, George W. McGurn and Leonard C. Reid, Appellants.
    Gen. No. 24,177.
    1. Corporations, § 363

      —when representative shown to have power to enter into contract with another corporation. Evidence held sufficient to show that a representative of a corporation had power to malee a contract with another corporation, where it appeared that such representative was the only visible bead of the corporation at its office and factory; that he signed the name of the president to the checks of the company to a limited amount; that his authority to do so was registered at the bank at which the corporation did business; that he had charge of the office and all employees, received the mail, examined it, and had general supervision of the company’s affairs.
    2. Corporations, § 633

      —what constitutes cessation of business by manufacturing company warranting suit for dissolution. A manufacturing company had ceased to do business so as to render a suit for dissolution under section 25, ch. 32, Rev. St. (J. & A. ¶ 2442) proper, where such corporation had ceased manufacturing; had closed its factory; had put its machinery, etc., in storage; had taken its account books over to the law offices of the individual stockholders and had proceeded to wind up its affairs.
    3. Corporations, § 638

      —who are proper parties defendant to bill for dissolution. Stockholders who have not fully paid for their stock are proper parties defendant to a bill for the dissolution of a corporation and to enforce liability of the stockholders, under section 25, ch. 32, Rev. St. (J. & A. ¶ 2442).
    4. Corporations, § 637

      —when jurisdiction of suit to dissolve corporation not lost. Where one complainant, in a suit to dissolve a corporation under section 25, ch. 32, Rev. St. (J. & A. ¶ 2442), had a judgment for his claim and an execution in the hands of a proper officer unsatisfied after demand, the court had jurisdiction of the suit, although two other complainants did not have judgments and such jurisdiction was not lost although the corporation, after the filing of the bill, paid the judgment and the claim of one of the complainants.
    5. Corporations, § 637

      —when court in suit to dissolve corpora>

      tion has jurisdiction to settle dispute as to claim of creditor. A claimant whose debt is due, but has not been reduced to judgment, may avail himself of the provisions of section 25, ch. 32, Rev. St. (J. & A. ¶ 2442), relating to the dissolution of corporations and the bringing of suits against stockholders liable for the debts of the corporation, and the chancery court, having jurisdiction of the subject-matter, may proceed to settle the dispute.
    6. Appeal and error, § 1399

      —when finding of master not disturbed. The master in chancery, who alone sees the witnesses, is better able to judge of their credibility from their appearance and manner of testifying than "the chancellor or the Appellate Court; and, the testimony being conflicting, the master’s finding should not be disturbed on appeal.
    7. Evidence, § 48

      —who has burden of proving affirmative defense. The defendant has the burden of proving an affirmative defense by a preponderance of evidence.
    8. Evidence, § 475

      —when preponderance of is not in favor of defendant. The preponderance of evidence is not in favor of a defendant seeking to establish an affirmative defense, where there is one equally credible witness on each side.
    Appeal from the Superior Court of Cook county; the Hon. Charles M. Foell, Judge, presiding. Heard in this court at the March term, 1918.
    Reversed and remanded with directions.
    Opinion filed November 11, 1918.
    Rehearing denied November 25, 1918.
    Litsinger, Heart & Reid, for appellants; James J. Finn, of counsel.
    Homer K. G-alpin and Samuel G-. Hamblen, for appellees.

      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 Holdom

delivered the opinion of the court.

This is a bill by creditors brought under section 25 of the Corporation Act (J. & A. ¶ 2442), which provides that “suits in equity may be brought against all persons who are stockholders at the time or. liable in any way for the debts of the corporation. ’ ’

The defendant Abbott Manufacturing Company was organized to manufacture and sell bank, store and office fixtures, etc. The defendant Litsinger was president, defendant George W. McGum vice president, and defendant Leonard C. Reid secretary and treasurer of .the company. The capital stock of the company was $20,000, divided into 200 shares of $100 each. Litsinger subscribed for all the stock but two shares, while McGum and Reid subscribed for one share each. These officers comprised the law firm of Litsinger, McGum & Reid, practicing their profession in Chicago. The company was organized in October, 1913, and carried on its business first at 713-15 South Fifth avenue, Chicago, and afterwards at 2401 Normal avenue, Chicago. In August or September, 1915, the company’s factory closed, its employees were discharged, the office furniture, etc., moved and stored by the defendant Litsinger, and it ceased doing business. It moved its offices to the law offices of Litsinger, McGum & Reid.

. At the time of the filing of the bill, January 17, 1916, the Abbott Manufacturing Company had ceased doing business, leaving debts unpaid, among which were debts due to the original complainants. At this time the Abbott Company was indebted to complainant Edward J. Baker in the sum of $92.40, a judgment for which was obtained in the Municipal Court of Chicago against the company on November 12,1915, and on the 15th of November thereafter, execution was issued and delivered to the bailiff of the court. On January 26, 1916, the execution was returned satisfied in full.

The Abbott Company was also indebted to the complainant Bestwall Manufacturing Company at the time of the filing of the bill in the sum of $125.64. This debt was paid by the company subsequent to the filing of the bill and prior to January 25, 1916, the date of the filing of the amended answer.

At the time of the filing of the bill there was due from the Abbott Company to the complainant The Wallace Press, under a contract made between them, the sum of $459.20, the amount found due by the master to whom the cause was referred. The decree varied the finding of the master as to the amount due The Wallace Press, fixing it at $315.96, and on this part of the decree The Wallace Press assigns cross errors.

When the Abbott Company ceased carrying on the business for which it was incorporated it canceled the contract with The Wallace Press, and now contends that the contract was made by one William D. Innes without authority.

From the evidence of Innes found in the record the master might well find, as he did, that Innes was the only visible head of the Abbott Company at its office and factory; that he signed the name of the president to the checks of the company to a limited amount. His authority so to do was registered at the bank where the Abbott Company kept its account. He likewise had charge of the office and all of its employees. He received the mail and examined it and had general supervision of the company’s affairs; and we agree with the finding of the master that “the evidence shows that Mr. Innes had both actual and ostensible authority to enter into and carry out the contract on behalf of the Abbott Manufacturing Company.” '

It is likewise argued that the Abbott Company did not cease to do business so as to make it amenable to be proceeded against under section 25, ch. 32, Rev. St. (J. & A. ¶ 2442), and counsel have elaborately argued the meaning of the word “cease” and have made copious citations from various lexicographers in an attempt to show that the Abbott Company had not ceased to do business within well-defined definitions of the word “cease.” We think, however, that the master might well find, as he did, that the company had ceased to conduct the business for which it was incor-, porated. It is clear, even from defendant Litsinger’s testimony, that the company had disbanded. It was a manufacturing company, as its name implies. It had ceased to manufacture; it had closed its factory; it had put its machinery, etc., into storage; it had taken its account books over to the individual defendants’ law offices and had proceeded to wind up its affairs.

We think that, under any rational interpretation of the words of the statute, the company had ceased to perform its charter functions and was in process of liquidation and that the surface 'indications did not show a temporary suspension but a permanent going out of business.

As the individual defendants had not fully paid for their stock, it was proper to join them as parties defendant in the bill for a dissolution of the corporation under section 25, ch. 32 (J. & A. ¶ 2442), supra.

While The Wallace Press had no judgment at the time of the filing of the bill—only a pending suit—the’ complainant Baker had a judgment for his claim and an execution in the hands of a proper officer unsatisfied after demand. This was sufficient to give the court jurisdiction of the bill to dissolve the company, and the subsequent payment by the company of the judgment, as well as the claim of the Bestwall Manufacturing Company, did not oust the court of such jurisdiction. Furthermore, it was not necessary for The Wallace Press to reduce its claim to judgment as a condition precedent to invoking relief under section 25, supra. This has been expressly decided in Standard Distilling & Distributing Co. v. Springfield Coal Mining & Tile Co., 239 Ill. 600.

The contention that disputed claims cannot be liquidated in a proceeding instituted under section 25, ch. 32 (J. & A. ¶ 2442), supra, does not appeal to us as being well taken, as it has been expressly held that a claimant whose debt is due and not reduced to judgment may avail of the provisions of section 25, supra, and it logically follows that if such claim is disputed, the chancery court having jurisdiction of the subject-matter might proceed to settle such dispute.

The claim of The Wallace Press is allowed against the defendant Abbott Manufacturing Company and not against any of the codefendants. However this might be, the fact that the defendant Litsinger gave bond to pay any claim, with costs, which might be allowed against the company, as a condition of the court’s not appointing a receiver until final decree, makes the objection on this point of no avail.

We think The Wallace Press should prevail on its cross errors. The. cause was heard on exceptions to the master’s report, the chancellor hearing no testimony aside from that contained in the master’s report. An examination of the testimony sustains, in our judgment, the conclusion at which the master arrived. He saw the witnesses, which the chancellor did not, and was therefore the better able to judge of their credibility from their appearance and their manner of testifying than was the chancellor or this court. The finding of the master in this regard should not, therefore, have been disturbed by the chancellor.

On the disputed point there were two witnesses, one. for each of the parties. Their testimony was divergent, and it was therefore peculiarly within the power of the master to determine as to which one of the two witnesses he would believe; and furthermore, this being in the nature of an affirmative defense, the law imposed upon the company the burden of proving such defense by a preponderance of the evidence; this it failed to do. On the theory that each of these two witnesses was equally credible, the company did not sustain that part of its defense by a preponderance of the proof.

For the error of the chancellor in departing from the report of the master and varying the same, the decree of the Superior Court is reversed and the cause is remanded with directions to enter a decree confirming the master’s report in toto and decreeing $459.20 as the amount due The Wallace Press, costs here and below, mcluding that of the additional abstract, to bo taxed against defendants.

Reversed and remanded with directions.


text:
    William Feldman, Appellee, v. Chicago Railways Company et al., Appellants.
    Gen. No. 24,277.
    1. Carbiebs, § 278

      —what degree of care required towards passenger. A carrier owes the duty towards a passenger to exercise the highest degree of care to protect him from harm.
    2. Cabbibbs, § 306

      —what necessary to constitute person a passenger. To constitute a person a passenger it is necessary that such person should be under the control of the carrier in order to be entitled to its care. Such passenger must be at some place provided for passengers under the control of the carrier.
    3. Cabbibbs, § 329

      —who is not passenger. Where a passenger has safely alighted from a street car at a transfer point, has cleared the car on which he is riding and is off the railroad property, the relation of passenger ceases and the mere fact that he has a transfer and intends to take another car at such point does not make him a passenger.
    4. Street railroads, § 64

      —what duty under not to injure one who has been passenger. A street railroad owes the duty to one, who has been a passenger on its car, and has alighted to transfer to another car at a street intersection, to use ordinary care not to injure him, which duty the company owes to all the public alike who áre not passengers.
    5. Negligence, § 142

      —when doctrine of res ipsa loquitur is not invocable. The doctrine of res ipsa loquitur is not invocable where in all the counts of the declaration specific acts of negligence are charged, and in no one of them is there a charge of general negligence.
    6. Negligence, § 142

      —res ipsa loquitur defined. Res ipsa loquitur means “the thing speaks for itself.”
    Deveb, E. J., dissenting.

      Appeal from the Circuit Court of Cook county1; the Hon. Richabd S. Tuthhx, Judge, presiding. Heard in this court at the March term, 1918.
    Reversed and remanded.
    Opinion filed November 11, 1918.
    Busby, Weber & Miller, Franklin B. Hussey and Arthur J. Donovan, for appellants; John B. G-uilliams, of counsel.
    Stein, Mayer & Stein, for appellee; Sigmund W. David, of counsel.

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

   Mr. Justice Holdom

delivered the opinion of the court.

This is an appeal from a judgment of $5,500 entered upon the verdict of a jury against defendants in an action on the case for personal injuries.

The plaintiff was a passenger on a car from which he alighted at Cicero avenue and Twelfth street with a transfer and an intention to take another car and thereon continue his journey. He was safely upon the ground and clear of the car from which he had alighted, the front wheels of which car had cleared a switch. While plaintiff was walking on the street and about 5 or 6 feet west of the side of the car, the rear end of the ear struck Mm and knocked him down, injuring him. The accident is accounted for upon the theory that the wheels of the rear truck struck the switch by reason of some defect in the switch or truck, and started around the curve in the track instead of going-south following the front truck.

The declaration is contained within four counts, the first of wMch charges only that plaintiff was a passenger. The second and tMrd counts aver the duty of defendants to be that wMch a carrier owes to a passenger, and the fourth count charges defendants’ duty, which they neglected, to be to keep' the track and switches in good repair and condition.

There were two fatal errors committed in the trial of this cause. It was tried upon the theory that plaintiff was a passenger at the time he was injured and that the doctrine of res ipsa loquitur was applicable. Defendants requested the court to instruct the jury to disregard the first, second and third counts of the declaration because they were not supported by the proofs. This the court should have done, and its failure so to do was reversible error.

It is important for this court to determine the question whether plaintiff was or was not a passenger, for the purpose of fixing the duty of defendants in the premises. If plaintiff was a passenger, then defendants owed him the duty to exercise the hig’hest degree of care to protect him from harm. If, on the other hand, plaintiff was not a passenger, then the law cast upon defendants the duty to use ordinary care not to injure him, which duty the companies owed to all the public alike who were not passengers.

To constitute a person a passenger it is necessary that such person should be under the control of the carrier in order to be entitled to its care. Such passenger must be at some place provided for passengers under the control of the carrier, so that it may exercise the high degree of care exacted from it under the law. The mere fact that an intending passenger has a ticket and intends to take a train does not of itself and alone create the relation of carrier and passenger. Chicago & E. I. R. Co. v. Jennings, 190 Ill. 478; Illinois Cent. R. Co. v. O’Keefe, 168 Ill. 115.

This court in West Chicago St. Ry. Co. v. Walsh, 78 Ill. App. 595, followed Creamer v. West End St. Ry., 156 Mass. 320, and held that when the plaintiff, a passenger, alighted from the ear, the car having stopped at a safe place at which to alight, the relation of passenger and carrier and the carrier’s duty to such passenger incident to such relationship ceased; that when the plaintiff alighted and was on the public highway the carrier had no control over and owed such passenger no duty as a carrier. Haskins v. St. Louis & S. Ry. Co., 193 Ill. App. 437.

The fact that plaintiff had a transfer and intended to pursue his journey on another car did not make him a passenger after he had safely alighted from and cleared the car on which he had been riding. Such relationship did not continue during the time he was walking upon the public highway to the car for which he had a transfer. While the plaintiff was walking upon the public highway from the car from which he alighted to the car upon which he intended to continue his journey he was not a passenger, notwithstanding the fact that if he had reached the car for which he had a transfer and had boarded it, the relation of passenger and carrier would then have been restored.

Niles v. Boston El. Ry. Co., 225 Mass. 570, was a transfer case in which the passenger was injured under about the same circumstances as was the plaintiff in the case at bar. The trial, judge left it to the jury to decide whether plaintiff was a passenger, and the reviewing court said:

“The plaintiff when injured was not on the defendant’s premises, nor at a station or platform in use for the purpose of transferring passengers and within the control of the carrier; neither was she under its direction and within its care. She was upon a public highway where she was exposed to dangers not caused by the defendant. In passing from one car to the other she could go on either side of the car; she could choose her own way and her movements were entirely under her own guidance. While so walking on a public highway and in transferring from one car to the other, as matter of law, she was not a passenger.”

These observations are particularly applicable to the condition of plaintiff in the instant case. If plaintiff had been upon the property of defendants at the time of his injury, a different rule would prevail; and, as said in case supra: “If the defendant was guilty of negligence, it was, of course, liable to the } laintiff; but it cannot be held to that high degree of care required of a carrier towards its passengers.” Finseth v. Suburban Ry. Co., 32 Ore. 1; Smith v. City Ry. Co., 29 Ore. 539; Donovan v. Hartford St. Ry. Co., 65 Conn. 201; Bigelow v. West End St. Ry. Co., 161 Mass. 393.

Chattanooga Elec. Ry. Co. v. Roddy, 105 Tenn. 666, was a case of a man who had alighted from a car and went around the rear end of the same to reach the sidewalk. In crossing a parallel track he was struck by another car belonging to the same company. The trial judge instructed the jury that the plaintiff was a passenger at the time of the injury, which the reviewing court in a well-considered opinion held was error, in which opinion it was said inter alia:

“On this question there is a conflict of authority, but we think the more reasonable view is that, where a man who has traveled on a street car steps from the car upon the street, this terminates his relation and rights as passenger, and the railway company is not responsible to him, as carrier, for the condition of the street, or for his safe passage from the car to the sidewalk. Where a common carrier has the exclusive control or occupation of its tracks and stations, and can arrange and manage them as it sees fit, it may be properly held that a person intending to take passage upon or leave a train sustains the relation of a passenger in leaving or approaching the car at a station, but ‘one who steps from a street railway car to the street is not upon the premises of the railway company, but upon a public place, where he has the same rights with every other occupier, and over which the company has no control. His rights are those of a traveler upon the highway, and not of a passenger.’ * * *
“If the limitation indicated in the foregoing paragraph was not adopted, it would be difficult to suggest one resting upon a satisfactory basis. Take the case at bar. If the passenger relation did not determine when the defendant safely alighted from the car, when would it end? Would it continue only while he was crossing the parallel track, or until he had reached a point of comparative safety on the far side of the street? Or if, after reaching the ground, he had directed his steps to the other side of the street, would it have continued until he had reached the pavement? We think that the Massachusetts Supreme Court was wise in adopting the rule that this relation terminated the moment the passenger descended to the street. This is a fixed point, free from all speculation or uncertainty.” Welsh v. Spokane & I. E. R. Co., 91 Wash. 260, 157 Pac. 679.

We are in entire accord with the Tennessee court’s reasoning.

The doctrine of res ipsa loquitur was erroneously applied in the trial of this case, as such doctrine was not invocable in the condition of the pleadings.

In all the counts of the declaration specific acts of negligence are charged, and in no one of them is there a charge of general negligence. The doctrine of res ipsa loquitur is well stated in Midland Valley R. Co. v. Conner, 217 Fed. 956, in the following language:

‘Bes ipsa loquitur’ means ‘the thing speaks for itself.’ The question is, what does it say? Does it say that from the accident it is presumed that the company has been negligent in every possible way, or does it say that the presumption is that in some way the company has been negligent? Of course, if the first is what it says, that is, the company has been negligent in every conceivable way, then the presumption is that it was negligent in the very way specifically alleged; but if the second is true, if the presumption is that in some way the company has been negligent, then there is no presumption of negligence in any particular way specified, and this is true although, where the presumption exists, the company must show that it was not negligent in any way. The rule that the evidence must correspond with the allegations is as old as the common law, and if the presumption is simply of some negligence that caused the injury, and not a negligence in all things, one who specifies the negligence can find nothing in the presumption to sustain the allegation.”

In Crawford v. Chicago Union Traction Co., 137 Ill. App. 163, it was held that the evidence did not tend to prove the negligence of defendant charged in the declaration unless the doctrine of res ipsa loquitur was invocable, which we held it was not, and said:

“A plaintiff must prevail, if at all, upon the legal theory made by the averments of his declaration. The plaintiff below in each count of the declaration sought a recovery on specific acts of negligence charged against the defendant. No count in the declaration charges negligence generally. In this state of the pleadings the doctrine of res ipsa loquitur cannot be availed of upon the trial. West Chicago St. Ry. v. Martin, 154 Ill. 523; Chicago & E. I. R. Co. v. Driscoll, 176 Ill. 330; Field v. French, 80 Ill. App. 78; Chicago Union Traction Co. v. Leonard, 126 Ill. App. 189.”

As in the Crawford case, supra, no count of the declaration charges negligence generally.

Plaintiff cites Chicago Union Traction Co. v. Mee, 136 Ill. App. 98 and Chicago Union Traction Co. v. Berkes, 136 Ill. App. 105, and quotes liberally from the opinions of the court. The Mee case, supra, was a passenger cáse, and is therefore not in point here. In the Berkes case, supra, we held that the declaration was sufficiently general in its averment of negligence to permit of the plaintiff invoking the doctrine of res ipsa loquitur, and the whole decision was grounded upon the fact that the declaration was sufficiently general in its averment of negligence to warrant the application of the doctrine, while the declaration in this case is insufficient for that purpose.

We hold that the plaintiff was not a passenger at the time he was injured; that no averment of the declaration or any of its counts is sufficiently general in its averments of negligence to entitle plaintiff to rest his case on the doctrine of res ipsa loquitur; that under the evidence the first, second and third counts should have been instructed out of the case, as requested, and that such evidence does not support the verdict under the fourth count; that the case went to the jury under the •misconceived assumption that it was a passenger case, and all of the instructions to the jury are predicated upon that assumption.

For the reasons stated the judgment of the Circuit Court is reversed and the cause remanded.

Reversed cmd remanded.

Mr. Presiding Justice Dever dissents.


text:
    D. A. Matot, Appellee, v. Frederick R. Barnheisel and Mrs. Frederick R. Barnheisel, Appellants.
    Gen. No. 24,318.
    1. Appeal and error, § 866

      —when rule as to furnishing complete abstract not complied with. Rule 18 of the Appellate Court, First District, requiring a party bringing a cause to the Appellate Court to “furnish a complete abstract or abridgment of the record,” is not complied with where the pleadings, the master’s report, master’s certificate of services, etc., the exhibits to the master’s report, the objections to the masters report, and the decree, are all set out in hcec verba.

    2. Appeal and error, § 1752

      —when affirmance of decree for insufficiency of abstract proper. An abstract which does not comply with rule 18 of the Appellate Court, First District, because setting out the pleadings and record in hcec verba, might properly be stricken from the files and the decree pro forma affirmed.
    3. Mechanics’ liens, § 196

      —when existence of sublease shown. The existence of a sublease is prima facie shown, in proceedings for enforcement of a mechanic’s lien, where although the lessee disclaimed having possession of the lease when it was called for as evidence, yet he admitted its existence and the amount of' the rent per month.
    4. Mechanics’ liens, § 94

      —what is work for purpose of computing 4-month period for filing of lien notice. The putting of kick plates and brass on the doors of a building by a contractor, who is remodeling the building for a sublessee which work is of the value of §20, is not of inconsequential character so as to necessitate the disregarding of it in computing the 4-month period from the doing of the last work within which the lien notice must he filed.
    5. Mechanics’ liens, § 94

      —what is period of time for filing claim, as against owner. Under section 7 of the Mechanics’ Liens Act (J. & A. ¶ 7145), as against the owner, lien claimants have 2 years within which to file their claims for liens.
    6. Mechanics’ liens, § 27

      —who is “owner” within . act. A lessee for 99 years is an “owner” within the purview of section 1 of the Mechanics’ Liens Act (J. & A. ¶ 7139).
    7. Mechanics’ liens, § 27

      —what is meaning of word “owner.” The word “owner” as used in the Mechanics’ Liens Act means the owner of any interest in the land.
    8. Mechanics’ liens, § 32

      —when affirmative assent by lessee to snaking of improvements by sublessees shown. On a hill to enforce a mechanic’s lien, evidence held sufficient to show not only that the lessee permitted improvements to be made by a contractor working for the sublessee, but that he also affirmatively assented to the making of such improvements.
    9. Mechanics’ liens, § 32

      —when interest of lessee is subject to for work, done for sublessees. The interest of a lessee in the premises is subject to a mechanic’s lien for work done by a contractor employed by the sublessees, wherp such lessee not only permitted without protest the improvements to be made but also affirmatively consented to the making of such improvements.
    10. Mechanics’ liens, § 175

      —when subcontractors not necessary parties to proceedings to enforce lien. It is unnecessary that subcontractors be made parties to proceedings by the contractor to enforce a mechanic’s lien, where it is not shown that any subcontractor under the contractor has any unpaid claim or that any subcontractor has not been paid for his work done upon the premises.
    11. Mechanics’ liens, § 212

      —when defense raised too late. The defense that subcontractors were not made parties to proceedings to enforce a mechanic’s lien comes too late when made on appeal for the first time.
    12. Mechanics’ liens, § 212

      —when assumed that subcontractors neither have nor claim liens. It will be assumed on appeal, in proceedings to' enforce a mechanic’s lien in favor of the contractor, that subcontractors neither have nor claim liens where the time for filing notice of liens by subcontractors has expired, and there is no evidence in the record that any notice of any claim for a lien has been filed by any of them.
    13. Appeal and ebbob, § 1077

      —when assignment of cross errors

      proper. Where an appeal is general, and not limited, appellee may assign cross errors.
    14. Appeal and error, § 1077

      —when right to assign cross errors is preserved in favor of contractor in mechanics' liens proceedings. The right to assign cross errors was preserved to the contractor, appellee, in proceedings to enforce a mechanic’s lien in favor of a contractor, where the contractor filed objections to the portion of the master’s report disallowing his claim under the so-called contract, which objections were refiled as exceptions before the chancellor and overruled by both.
    15. Building and constbuotion contracts, § 75

      —when contractor not under duty to complete wortc. It is not incumbent upon a contractor to complete' the work of remodeling a building for sublessees where the latter first breach the contract and abandon the sublease.
    16. Mechanics’ liens, § 32

      —when lien for amount due contractor from sublessees extends to interest of lessee. The liability of a lessee on a contract for work done by contractor for sub-lessees is coextensive with that of the sublessees, where he is a party to the contract, and a lien for the amount so due extends to the interest-of the lessee in the land upon which the improvements were made.
    17. Building and construction contracts, § 81

      —when reasonable value of worlc done and materials furnished may be recovered. Where one party repudiates a building contract the other party may treat the contract as rescinded and recover the reasonable value of the work done and material furnished thereunder.
    Appeal from the Superior Court of Cook county; the Hon. Charles M. Foell, Judge, presiding. Heard in this court at the March term, 1918.
    Reversed in part and remanded with directions.
    Opinion filed November 11, 1918.
    Dickinson, Wetten & Keehn, for appellants.
    Edmund W. Froehlicb:, 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.

   Mr. Justice Holdom

delivered the opinion of the court.

The motion of appellants to strike the cross errors assigned by appellee from the record, reserved to the hearing, is denied.

There has been a most flagrant violation of rule 18 of this court in the manner of the preparation of the abstract. The rule says that the party bringing a cause to this court “shall furnish a complete abstract or abridgment of the record. ’ ’ The document called an abstract is far from complying with this rule. The bill, the answer of Ebert in the nature of a bill of inter-pleader, the answer of appellants, the replication thereto, the master’s report and master’s certificate of services, etc., the exhibits to the master’s report, the objections to the master’s report, twenty-six in number, and the decree, are all set forth in hcec verba, including the formal parts, even to the signatures and official designations of the master to his report and of the judge to the draft of the decree.

These infractions of the rule are inexcusable, the penalty for which would justify the abstract being ordered stricken from the files, followed by a pro forma affirmance of the decree. Counsel should understand that they cannot violate the rules of the court in this way with impunity, and furthermore that the court’s refraining in this instance from so striking the abstract must not be taken as a precedent sanctioning such violation of the rule.

This is a proceeding to enforce a mechanic’s lien upon certain premises in Chicago of which appellant Frederick R. Barnheisel is the lessee for a term of 99 years. Notice of the lien claim was filed by both appellee and Ebert, as required by statute, October 28, 1914, and January 19, 1915, this proceeding was instituted.

Barnheisel made a sublease to Watson & Baschelli of the first floor of the premises for a term of 10 years, and while Barnheisel disclaimed having possession of the lease when it was called for as evidence, yet he admitted its existence and that the reserved rental was $1,000 a month. Under the circumstances we t.biuk this was sufficient prima facie evidence of the existence of this sublease. Furthermore it is not disputed that the premises were sublet to Watson & Baschelli in which to conduct a saloon and restaurant. To so convert the premises required the repartitioning, painting and papering of the rooms, the installation of a new store front, windows, transoms, lavatories and other plumbing and the building of an addition in the rear for use as a kitchen.

The sublessees, Watson & Baschelli, accepted verbally three estimates made by appellee Matot, the first of which was for the sum of $1,272, plus $8 per foot for extra partitions, and covering the partitioning of the space, new store front and incidental work. The second estimate covered the installation of urinals, lavatory and plumbing, and of new windows, and was for the sum of $711. The third estimate covered the construction of a complete permanent brick addition in the rear at a price of $1,210.

Theodore Ebert, Jr., did certain interior decorating, painting and paper hanging at the request of Watson & Baschelli, amounting to $83.50. Ebert was made a defendant and filed an answer in the nature of an intervening petition, claiming a lien for the amount due him. There was a reference to a master and upon his report a decree was entered allowing a lien to Ebert for the amount of his claim and also allowing Matot a lien on contracts 1 and 2 and disallowing Matot’s claim under contract 3. From this decree as to Matot, appellants prosecute this appeal, and appellee Matot has assigned cross errors for the failure of the chancellor to enter a decree including the amount due him on the so-called third contract.

Appellants first contend that appellee Matot is not entitled to the lien because the lien notice was not filed within 4 months from the doing of the last of the work, and while it is admitted that on June 25, 1915, kick plates and brass were put on the doors, the approximate value of which work was $20, it is insisted that this was of such an inconsequential character that it should be disregarded. We do not, however, agree with this contention; on the contrary we are of opinion that the claim for lien was filed within 4 months. Moreover, were this not so, under section 7 of the Liens Act (J. & A. ¶ 7145), as against the owner, which Bamheisel was, lien claimants had 2 years within which to file their claims. Barnheisel as a lessee for 99 years was, within the purview of section 1 of the Liens Act (J. & A. ¶ 7139), an owner. In Sorg v. Crandall, 233 Ill. 79, it was held that “owner” as used in the act means the owner of any interest in the land. Paulsen v. Manske, 126 Ill. 72.

It is next contended that the interest of Barnheisel in the premises is not subject to the lien claim. It appears that Barnheisel was cognizant of the making of the contracts and sat by and assented thereto; that he had knowledge of the progress made under the contracts, the construction of the kitchen and the making of the other improvements upon his leasehold premises ; that subsequently the sublease to Watson & Baschelli was canceled and Barnheisel took possession of the premises, including the improvements thereon made by appellee.

We think the proof abundantly establishes the fact not only that Barnheisel permitted without protest the improvements to be made, but that he affirmatively consented to the making of such improvements. Bamheisel himself testified: “To tell the truth, I supposed they were working in there, but I didn’t know. ” If he “supposed they were working in there,” the law will fasten upon him knowledge of that fact. In these circumstances the interest of Barnheisel in the land is subject to the lien of appellee. Wertz v. Mulloy, 144 Ill. App. 329; Loeff v. Meyer, 284 Ill. 114.

It is also contended that there is included in the contracts nonlienable items. If there are any such the proofs do not so disclose. Every item included in the contract was for permanent improvements, which, when installed, became a part of the freehold and were not even removable by the tenant at the expiration of the lease.

Appellants contend that there is a lack of proper parties, and that the subcontractors of Matot should have,been made parties to the action. There is no force in this contention, as there is no evidence showing that any subcontractor under Matot had any unpaid claim or that any subcontractor had not been paid for work done upon the premises. Furthermore, no such defense is raised by the pleadings, and it comes too late when made in this court for the first time. Jennet Bridge & Iron Works v. Churchill, 182 Ill. App. 548.

As the time for filing notice of any liens by subcontractors has long since expired, and there being no evidence in the record that any notice of any claim for a lien has been filed by any of them, we will assume that none of them either has or claims a lien.

We now come to the consideration of the cross errors assigned by appellee Matot. His right so to do is challenged. Where an appeal is general, as in the instant case, and not limited, appellee may assign cross errors. Oliver v. Wilhite, 201 Ill. 552.

We think, however, the right to assign cross errors was preserved to Matot because he filed objections to the portion of the master’s report disallowing his claim under the so-called third contract, which objections were refiled as exceptions before the chancellor and overruled by both. Matot by these objections and exceptions preserved his right to assign cross errors and have this part of the decree reviewed.

The assignment of cross errors involves the so-called third contract. The amount proven under this contract was $949. This contract covered a brick addition to the premises and the claim was disallowed upon the theory that the work thereon was not subsequently completed. The proof shows that-Watson & Baschelli abandoned the contract and the sublease and that Barnheisel took possession of the property upon such abandonment, including all the work done upon the brick addition. Watson & Baschelli first breached the contract and it therefore was not incumbent upon Matot to complete the work. To hold Bamheisel liable to pay for the work done imposes no hardship upon him, because he has received the benefit of all such work. The liability of Watson & Baschelli to pay could hardly be disputed; this being the fact, Bamheisel is equally liable. In other words, Watson & Baschelli could not plead as a defense their abandonment of the premises and the noncompletion of the improvements by Matot after such abandonment. The liability of Bamheisel is coextensive with that of his sublessees for the reason that he was a party to the contract, and a lien for the amount so due extends to the interest of Bamheisel in the land upon which the improvements were made. Russell, Burdsall & Ward v. Excelsior Stove & Manufacturing Co., 120 Ill. App. 23.

In Dent v. Sexsmith, 175 Ill. App. 537, it is held that where one party repudiates a building contract the other party may treat the contract as rescinded and recover a reasonable value for work done and material furnished thereunder.

The proof shows that there was rightfully due Matot under the contract last referred to $949, for the disallowance of which the decree is to that extent erroneous.

The decree of the Superior Court is reversed in part and the cause is remanded with directions to amend the decree by adding to the amount therein found due to Matot the sum of $949, the amount due bim under the so-called third contract, and as so amended to enter the same of record as the final decree in the case, cost of the additional abstract to be taxed as costs in the canse, and all costs hoth here and below to he taxed against appellants.

Reversed in part and remanded with directions.


author: Mr. Justice McSurely

text:
    Henry C. Hackney, Appellant, v. Onorphrion Bock and Lucy S. Bock, Appellees.
    Gen. No. 24,035.
    1. Gaming, § 18

      —when note given to brokers and arising out of gambling transaction is based on sufficient consideration. Even though a note given to brokers arose out of a gambling transaction, it was based upon a sufficient consideration and was valid, where such note was given in settlement of a pending suit by the brokers against the principals, and the collateral originally deposited with the brokers as security for the purchase of stocks was returned.
    •2. Compromise and settlement, § 11

      —when settlement by note of claim in litigation is conclusive. A settlement by note of a pending suit by a broker against his principals for the amount of loss sustained on stock sold in the market estops both parties from any further litigation of the matter in dispute.
    Appeal from the Municipal Court of Chicago; the Hon. Joseph P. Raeeerty, Judge, presiding. Heard in this court at the March • term, 1918.
    Reversed and remanded with directions.
    Opinion filed November 11, 1918.
    Miller, Starr, Brown, Packard & Peckham, for appellant; Don C. Wray and Thomas McCall, of counsel.
    H. J. Rosenberg and Joseph Rosenberg, for appellees; Irving Zimmerman, of counsel.

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

   Mr. Justice McSurely

delivered the opinion of the court.

On December 18, 1915, plaintiff had judgment for $886.92 by confession entered upon a note made by the defendants payable to the order of plaintiff. Subsequently, on motion of defendants they were allowed to appear and defend, and upon trial before a jury, under instructions from the court, a verdict was returned finding the issues against the plaintiff, upon which judgment was entered from which plaintiff appeals.

The trial judge was of the opinion that the note arose out of a gambling transaction and, instructing the jury upon this theory, held that plaintiff could not recover. We are of the opinion that the court was in error in its conclusion that this was a -gambling transaction. However, even if this were the fact, another consideration would prevent defendants from raising this as a defense.

The evidence shows that on April 20, 1915, Lucy S. Bock, one of the defendants, placed an order with plaintiff, a broker, for certain stock and deposited as collateral security, bonds of the value of $5,000. This order was complied with and the stocks were delivered to a New York firm of brokers who were acting as agents for the plaintiff. About the same time Onorphrion Bock also gave plaintiff an order to buy stock of the same company, which was done. Subsequently there was a drop in the market price of this stock and it was sold, leaving plaintiff with a claim against the defendants for the amount of the loss. Defendants refusing to pay, suit was brought against them in the Municipal Court for the amount claimed by plaintiff. This was pending on November 17, 1915, on which date the parties met and agreed to a settlement of their differences. This was effected by the defendants giving the judgment note now in question, on condition that plaintiff would dismiss his suit in the Municipal Court and return to defendants their securities, which was accordingly done.

Regardless of the question of the validity of the original transaction, it is a sufficient and binding consideration for the new note that the pending suit was dismissed and the collateral security returned; such a settlement estops both parties from any further litigation of the matter in dispute. Among the many cases sustaining this are Bartlett v. Smith, 17 Fed. 668; Leverenz v. Haines, 32 Ill. 357; Cassell v. Ross, 33 Ill. 245; Honeyman v. Jarvis, 79 Ill. 318; Grant & Kelly v. Chambers, 30 N. J. L. 323; Moon v. Martin, 122 Ind. 211; Hulse v. Hulse, 155 Ill. App. 343.

It follows that the note in question was supported by a good and valid consideration, and it was error for the court to instruct to the contrary. The judgment of the Municipal Court will therefore be reversed and the cause will be remanded with directions to reinstate the judgment of December 18, 1915.

Reversed and remanded with directions.


text:
    Eleanor Harris, Appellee, v. August Lipman, Appellant.
    Gen. No. 24,243.
    1. Sales, § 226

      —when pawnbroker liable to owner of stolen goods. One whose diamond earrings were stolen by a Pullman porter, while a passenger on a Pullman sleeper, may maintain an action under section 243 of the Criminal Code (J. & A. ¶ 3896) against a pawnbroker in Whose possession the earrings were at one time after the theft.
    2. Appeal and ebbob, § 1491

      —when exclusion of evidence is harmless error. In an action under section 243 of the Criminal Code (J. & A. ¶ 3896), against a pawnbroker, in whose possession the stolen earrings of plaintiff were at one time after the theft, the question of error in the exclusion of evidence on the part of defendant, that at some time previous to the trial he had seen two diamonds he had given another person in part payment for the earrings in the possession of one of the attorneys for plaintiff, was not reviewable where the record disclosed that upon the defendant’s attorney disclaiming his ability to show how or for what purpose the diamonds came into the possession of plaintiff’s attorney, the court ruled that this unconnected fact was immaterial.
    3. Sales, § 226

      —what evidence is immaterial in action against pawnbroker to recover value of stolen goods. In an'action under section 243 of the Criminal Code (J. & A. ¶ 3896) against a pawnbroker, in whose possession the stolen earrings of plaintiff were at one time after the theft, evidence of defendant that some time before the trial he had seen two small diamonds which he had given another person in part payment for the earrings in the possession of one of the attorneys for plaintiff, was not material or relevant, especially where defendant pleaded no counterclaim or set-off, and in brief stated that he was “not seeking to recoup.’’
    4. Sales, § 33

      —what constitutes fraudulent sale of diamonds exchanged for stolen diamond earrings. Even though one who had diamond earrings stolen by a Pullman porter while a passenger in a Pullman sleeper received exchanged diamonds from the porter, who had obtained them from another who had received them from a pawnbroker in exchange for the stolen diamonds, it was at most a fraudulent sale, voidable not at the instance of the pawnbroker but at the interest of the vendor.
    5. Appeal and error, § 1473

      —when improper admission of evidence is harmless error. The admission of improper testimony relating to an undisputed matter is harmless error.
    6. Costs, § 67

      -—when imposed because of dilatory appeal. The statutory penalty of costs for appeals prosecuted for the purpose of delay is properly imposed where the appeal is wholly without merit.
    Appeal from the Municipal Court of Chicago; the Hon. Hugh J. Kearns, Judge, presiding. Heard in this court at the March' term, 1918. Gertiorari denied by Supreme Court (making opinion final).
    Affirmed with judgment here for delay and costs.
    Opinion filed November 11, 1918.
    Rehearing denied November 25, 1918.
    Richard J. Cooney and John A. Verhoeven, for appellant.
    Dent, Dobyns & Freeman, 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 McSurely

delivered the opinion of the court.

Defendant seeks the reversal of a judgment against him for $1,000 upon a verdict in the trial of an action brought under section 243 of the Criminal Code (J. & A. ¶ 3896), which gives the owner of stolen property a right of action against any person in whose possession the stolen property may be found.

There is little dispute as to the facts. In February, 1914, two diamond earrings belonging to plaintiff were stolen from her by the porter, Classberry, of the Pullman sleeper upon which she was a passenger. Classberry sent them by mail to his rooming place in Chicago, kept by Sarah Herron, a colored woman, who gave them to her son Willis. Willis Herron testified that he was a janitor at the time of the trial, but during the 10 or 12 years previous he had been in the saloon, pool room and barber shop business in Chicago, and also “in the diamond business as a side line.” He had a record of service in the penitentiary in Tennessee, was twice in the county jail here, and in the bridewell. Herron took the stolen diamonds to the defendant, a pawnbroker, with whom he had been doing business in diamonds, pawning and selling them, for over 10 years. The defendant gave him for the diamonds in question some money and two smaller diamonds, which Herron testified he gave to his mother; afterwards they came into the possession of Classberry and were on his person when he was arrested. It seems that subsequently, upon the trial of Classberry upon the criminal charge, these smaller diamonds were produced. The defendant testified that he had sold the two diamonds belonging to plaintiff which he had received from Herron, and that they had passed beyond his ability to recover them.

That plaintiff has a right of action has been decided and is conceded. Sharp v. Parks, 48 Ill. 511.

Defendant complains of the action of the trial court in refusing to permit him to testify that at some time previous to the trial he had seen the two small diamonds which he had given to Herron in the possession of one of the attorneys for the plaintiff. There was no reversible error in this, for these reasons: (1) The matter is not properly reviewable for the record shows that upon defendant’s attorney disclaiming his ability to show how or for what purpose the smaller diamonds came into the possession of plaintiff’s attorney, the court ruled that this unconnected fact was immaterial. (2) Defendant pleaded no counterclaim or set-off, and in his brief before us asserts that he is “not seeking to recoup.” There is therefore no reason in law making such evidence material or relevant. (3) Even upon the assumption that plaintiff got these diamonds from Classberry, it would be at most a fraudulent sale, voidable not at the instance of the defendant but at the instance of the vendor. Michigan Cent. R. Co. v. Phillips, 60 Ill. 190; Western Union Cold Storage Co. v. Bankers’ Nat. Bank of Chicago, 176 Ill. 260. It is a reasonable inference from the testimony that the incident concerning which the defendant tried to testify, was the production of the smaller diamonds in the Criminal Court at the time of the trial of Classberry.

It may have been technically erroneous to permit Herron to testify as to the details of the theft imparted to him by Classberry out of the hearing of the defendant, but this related only to the theft of plaintiff’s diamonds, which fact is not disputed by the defendant, hence the admission of the conversation does not require a reversal.

Plaintiff’s attorneys ask for the imposition of the statutory penalty for appeals prosecuted for the purpose of delay, and under the circumstances disclosed by the record we are of the opinion that the appeal is wholly without merit and comes within the statute. We shall therefore enter judgment in this court against the defendant for $100 as a penalty, in addition to the ordinary costs. The judgment of the trial court is affirmed, with judgment here for delay and costs.

Affirmed with judgment here for delay and costs.


author: Mr. Justice Barnes

text:
    Carl Bushnell, Appellant, v. Homer H. Cooper, Administrator of the Estate of Mary B. Bushnell, Deceased, Appellee.
    Gen. No. 23,802.
    1. Equity, $ 574

      —When bill in nature of bill of review merely presents matter in abatement. A bill in the nature of a bill of review to set aside a decree for separate maintenance in favor of the wife, because of the discovery, after entry of the decree, that the wife died prior thereto, merely presents a matter of abatement.
    2. Abatement and revival, § 50

      —when suit not ipso facto abated. The death of a party in a chancery case does not, ipso faeto, abate the suit without any order of the court.
    3. Equity, § 574

      —what not basis for bill in nature of bill of review. Mere matters of abatement are insufficient as a basis for a bill in the nature of a bill for review.
    4. Judgment, § 9

      —when after death of party is not void. A judgment for separate maintenance rendered in a divorce suit in favor of cross complainant, after her death, is erroneous but not void.
    5. Equity, § 569

      —when allowance of petition for leave to file bill of review within discretion of court. The allowance of a petition for leave to file a bill of review for newly discovered evidence rests in the sound discretion of the court.
    6. Equity, § 570

      —when discretion of court in denying petition for leave to file bill of review not abused. There is no abuse of discretion in denying a petition for leave to file a bill of review for newly discovered evidence where the newly discovered matter, the death of the cross complainant seeking separate maintenance in a divorce suit, did not relate to the merits of the controversy but was presented as ground for relieving petitioner from the payment of attorney’s fees in the nature of costs, which fees it was equitable that he pay.

      7. Equity, § 569

      —wh at is function of till of review filed for newly discovered evidence. The function of a bill of review, filed for newly, discovered evidence, is to relieve one having a meritorious claim from a clear miscarriage of justice where the court is able to see, upon a view of all the circumstances, that the remedy can be applied without mischief to the rights of innocent parties, and without unduly jeopardizing the stability of judicial decrees.
    8. Judgment, § 9

      —when decree for separate maintenance deemed entered prior to death of wife on same day. Where there is no claim that there are any property rights surviving a wife that would be affected by a decree awarding separate maintenance to a wife as cross complainant in a suit by the husband for divorce, which decree was rendered on the same day as the death of the wife but after her death, the doctrine that judicial acts are considered to have taken place at the earliest period of the day when done should be applied, and the decree should be regarded as rendered prior to her death.
    Appeal from the Superior Court of Cook county; the Hon. Charles M. Foell, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1917.
    Affirmed.
    Opinion filed November 22, 1918.
    Rehearing denied December 3, 1918.
    Norman K. Anderson and Benjamin Clarke, for appellant.
    S. C. Irving, 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.

This appeal is from an order denying and dismissing a petition for leave to file a bill in the nature of a bill of review to set aside a decree for separate maintenance entered after the death of the wife. The material facts and circumstances disclosed by the petition, answer and affidavits are as follows:

The decree in question dismissed for want of equity appellant’s bill for divorce, and gave his wife, Mary B. Bushnell, separate maintenance and incident relief on her cross-bill. A hearing on the merits of the issues was concluded November 18, 1915, when the chancellor settled all the terms of the decree except as to the amount of solicitors’ fees, and a draft in accordance therewith was presented December 3, 1915, when discussion arose over the amount to be allowed for such fees. The matter was referred to a master to take evidence and report. His report, returned June 9th following, was called up at 2:15 p. m. of that day for hearing on the exceptions thereto, counsel for cross complainant then informing the court that his client, Mary B. Bushnell, “was exceedingly ill and likely to die.” The hearing proceeded, and at 4:15 p. m., after overruling the exceptions to the report and fixing the amount of solicitors’ fees, the chancellor signed the decree in question. Through alleged inadvertence the clerk did not file the decree until the following day, but at a subsequent term, before this petition was .presented, it was ordered to be filed nunc pro tunc as of the date it was signed. The cross complainant died at 2 p. m., June 9th, but the fact did not become known to appellant or counsel for either side until a subsequent date, not in time, as claimed by petitioner, to present the matter on a motion during that term of court.

The petition was not regularly filed and presented until March, 1917. It is unnecessary, however, to consider the causes of delay. From the time of settling the terms of the decree (except as to solicitors’ fees) up to the date of its entry appellant performed everything required thereunder and even paid the taxed costs, so that nothing remained for enforcement except payment of solicitors’ fees and master’s fees therein provided for. The only relief appellant could obtain would be the formal vacation of the decree and a seemingly inequitable discharge from paying fees for services rendered in the cause long prior to the death of his wife. The petition and a draft of the proposed bill attached thereto disclose no other practical end to be attained.

The petition proceeds upon two theories: (1) That the suit abated when the decree was signed, and (2) that the decree was entered through misrepresentation and fraud. The latter theory rests on mere conclusions unsupported by any sufficient averment of fact. They are to the effect that the statement to the court by counsel for cross complainant as to the illness of his client at a time when she was deceased was tantamount to a misrepresentation or mistake that misled the court into assumption of continued jurisdiction. The petition, however, does not charge that her counsel knew of her death before the entry of the decree, or any state of facts that amounted to misrepresentation' or fraud. Neither the petition nor proposed bill contains any allegation that would support a bill to impeach the decree on the ground of fraud, if the proposed bill be regarded as one of that nature.

Whatever merit the proposed bill has rests wholly on discovery of the death of said cross complainant after entry of a decree in her favor. Viewed as based on newly discovered matter, it seeks to attack the decree on a ground that does not, as it should, relate to the matters in issue at the hearing (Boyden v. Reed, 55 Ill. 458; Story Eq. Pl. sec. 413), but, merely presents a matter of abatement. Citing Crook’s Ex’r v. Turpin, 10 B. Mon. (Ky.) 243, in Danforth v. Danforth, 111 Ill. 236, the court said that “the death of a party in a chancery case does not, ipso facto, abate the suit without any order of the court.” (p. 241). But, were it otherwise, it is a principle of equity practice recognized by various authors on that subject that mere matters of abatement are not considered sufficient ground for review. (Story Eq. Pl. sec. 411; Adam Eq. [7th Am. Ed.] 417; Mifford & Tyler’s Pl. & Pr. on Eq. p. 182, and cases referred to.) A judgment in such a case is simply deemed erroneous but not void. (Danforth v. Danforth, supra, and cases cited.)

But the allowance of a petition for leave to file a bill of review for newly discovered evidence rests in the sound discretion of the court. (Schaefer v. Wunderle, 154 Ill. 577; Elzas v. Elzas, 183 Ill. 132.) Inasmuch as the newly discovered matter does not relate to the merits of the controversy decided but is presented as ground for relieving the petitioner from payment of certain fees in the nature of costs, which it is equitable he should pay, there was no abuse of discretion in denying the petition. As said in Hopkins v. Hebard, 235 U. S. 287: “The function of a bill of review, filed for newly discovered evidence, is to relieve a meritorious claimant from a clear miscarriage of justice where the court is able to see, upon a view of all the circumstances, that the remedy can be applied without mischief to the rights of innocent parties, and without unduly jeopardizing the stability of judicial decrees. The remedy is not a matter of absolute right, but of sound discretion.”

We also think that, in view of the absence of any claim that there were any property rights surviving decedent that would be affected by the decree, the doctrine that judicial acts are considered to have taken place at the earliest period of the day when done, should, in furtherance of justice, be applied, so that the decree would be regarded as entered prior to her death. (Edwards v. Reg. 9 Exch. star pp. 628, 630, 631; Wright v. Mills, 4 H. & N. star pp. 488, 492; Danforth v. Danforth, supra; Mead v. Mead, 1 Mo. App. 247, 254.)

Affirmed.

Mr. Presiding Justice McDonald took no part in this decision.