text:
    Hanover Fire Insurance Company et al. v. L. B. Connor, use, etc.
    1. Garnishment—-Debt "uncertain.—A debt which is uncertain and contingent and may never become due and payable, is not subject to garnishment.
    2. Garnishing insurance company.—An insurance company may be garnished on account of a loss accruing under a policy of insurance issued by it, for the liability to the insured clearly exists and the policy furnishes the standard by which the amount of the liability may be ascertained and fixed. This applies to unadjusted as well as adjusted claims.
    3. Same.—A writ of garnishment was served upon a fire insurance company after a loss, but prior to the production by the assured of any proofs of loss. The garnishees, in their answers, admitted the execution to the assured of the two policies in question on the assured’s stock of merchandise, the partial destruction by fire of the property insured during the term of the insurance, and that the amount of the loss was $1,000. It did not appear that the payment of the loss was in any way made conditional upon the production of proofs of loss. Held, that there was an indebtedness from the insurance company to the assured upon which the former are liable to be held as garnishees in this suit.
    4. Same—Option to replace stock.—Where the language of the policy gave the insurance company an option “ to repair, rebuild or replace the property with other of like quality ” and the property in question was a stock of merchandise, and at the time of the service of the writ of garnishment the option had not been exercised by the insurance company, held, that as repairing and rebuilding would not apply to a stock of merchandise, the option reserved was to replace the stock; that the indebtedness can not be held to be uncertain and contingent, and therefore not subject to garnishment, merely because of an option on the part of the debtor to pay in merchandise rather than in money.
    5. Rule under our statute.—Under our statute it is sufficient that the indebtedness be owing without uncertainty or contingency at the date of the answer. Even if it he contingent at the time of service of the writ, if the contingency he removed before answer, it is subject to garnishment.
    6. Condition as to change oe title—Chattel mortgage.—Policies of insurance contained the condition that if the property should be sold or transferred, or any change take place in title or possession-thereof, whether by legal process, judicial decree, voluntary transfer or conveyance> the policies were to be void. After the execution of the policies the assured gave a chattel mortgage on the property. Held, that until the mortgage had matured, so as to vest the mortgagees with the legal title, the above condition was not broken.

      7. Parties.—It was not necessary that the assignees, claiming the insurance money under the assignment disclosed in the answers, should have been made parties, as they obtained their interest pendente lite.

    Appeal from the Superior Court of Cook county; the Hon. Elliott Anthony, Judge, presiding.
    Opinion filed November 8, 1886.
    On the 20th day of December, 1884, Ithiei B. Farnum and George G. Farnnin brought their suit in assumpsit in the superior court, by attachment, against Mrs. L. B. Connor, and caused the Hanover Fire Insurance Company, of New York, and the Citizens Fire Insurance Company, of New York, doing business under the name and style of the Underwriters Agency of New York, to be summoned as garnishees. Judgment was duly rendered in favor of the plaintiffs against Mrs. Connor for $546.85 and costs, and interrogatories to the garnishees were duly filed. On the 16th day of February, 1885, said garnishees filed their answers to said interrogatories, in which, after denying that at the date of the service of the writ they were indebted to Mrs. Connor in any sum, or had in their possession, custody or control, any lands, tenements* goods, chattels, moneys, rights, credits or effects belonging to her, or any rights, credits or effects of hers due and owing from them at the date of said service, or at any time since, or which might thereafter become due, and also denying that at the date of their answer they had any property, goods, chattels, rights, credits or effects of any kind, belonging to her or in which she was interested, stated, in answer to specific interrogatories, that Mrs. Connor had a policy of insurance in said companies upon a stock of goods at Charlevoix, Michigan; that they were informed that said stock of goods had been partially destroyed by fire, and so answered, but denied that they were liable or owed to her any sum of money under any policy of insurance; that they issued said policy to Mrs. Con-nor for a term of one year, from January 1, 1884, to January 1, 1885, for $1,000, said policy being numbered 900,002, the written portion of which policy being as follows : “Upon her stuck of boots, shoes and leather, and such other merchandise as is usually kept for sale in a boot and shoe store, while contained in the one-story frame, single-roof building, 15x30 feet, occupied by assured, situate on west side of Bridge street, between Mason and Clinton streets, Charlevoix, Michigan. For further particulars reference is had to survey Mo. 900,002, on file in this office, which is hereby made a warranty by the assured and a part hereof; §1,000 additional insurance concurrent herewith under policy 900,175, May 20, 1884 that they issued another policy of insurance, similar to the foregoing, numbered 900,175, for §1,000, for a term of one year, from May 20, 1884; that after the partial destruction of said goods, Mrs. Connor, the assured, made a claim upon the garnishees for loss to the amount of §1,000, which claim has not been admitted or acknowledged by said garnishees; that since said partial destruction of said goods, and since said claim of §1,000 had been made upon them, they had been duly notified that Mrs. Connor had duly assigned her interest in said claim for loss to the following persons and firms, being her creditors, to wit: to W. D. Robinson & Co., of Detroit, Michigan, §500; to C. M. Henderson & Co., of Chicago, Illinois, §250; and to various parties different sums amounting in the' aggregate to §250; that since the service of the writ they have been served with a writ of garnishment in the suit of C. M. Henderson & Co. against said Connor, in a suit then pending in the Superior Court of Cook county, upon a claim for §336.14.
    The plaintiffs thereupon, by leave of the court, filed additional interrogatories to the garnishees, and on the 30th day of March, 1885, said garnishees filed their answers thereto, in substance, that the loss suffered by Mrs. Connor upon the property covered by said policies had not been adjusted and determined between the garnishees and her; that the amount of damage to said property was agreed upon by the State agent of the garnishees for Michigan and Mrs. Connor at §1,000, but they deny that they are liable or owe to her, or to any other person, said sum of §1,000, or any other sum, under either of said policies; that they had not at any time consented to pay the loss, if any occurred, under said policies, to any other person than Mrs. Connor, and that neither said polieies or either of them, or the loss occurring thereunder, had been assigned by Mrs. Oonnor by the consent of the garnishees at any time prior to the service on them of the writ of garnishment in this cause; that said garnishees received notice of the alleged assignment by Mrs. Connor to W. D. Robinson & Co. and others, by letter from Mrs. Connor, dated February 6,1885: that they were served with the writ of garnishment in the case of Henderson et al. v. Connor, on the 21st day of January, 1885.
    The plaintiffs afterward, by leave of the court, filed further interrogatories to the garnishees, to which answers were filed by them, June 10, 1885, stating, in substance, that the agreement mentioned in their former answers fixing the amount of the loss, was not in writing, and was only to the effect that the damage by fire to said goods amounted to $1,000, said agreement being made January 24, 1885, and not being indorsed upon either of said policies; that said loss occurred December 15, 1884; that proofs of loss under said policies were submitted to said companies January 24, 1885, and on that day the claims for damages arising from said fire were assigned to the parties, and in the manner set forth in their former answer; that by the terms of their said policies it was provided that it should be optional with the said companies to repair, rebuild or replace the property lost or damaged with other of like kind and quality, within a reasonable time, giving notice of their intention to do so within thirty days after the receipt of the proofs therein required; that the writ of garnishment in this cause was served upon them before said proofs of loss were snbmitted'to said companies; that said assignment was made within thirty days from the time when the said.proofs of loss were submitted to said companies; that at the time of the service of said writ of attachment, the said garnishees were not liable in law to be garnished or attached on account of any claim for loss or damage arising under said policies or either of them; that in and by said policies it was provided that if the interest of the assured in the property be any other than the entire, unconditional and sole ownership of the property, for the sole use and benefit of the assured, or be incumbered by any Jien, whether by deed of trust, mortgage or otherwise, or if the building insured stands on leased ground, it must be so represented to the companies and so expressed in the written part of this policy, otherwise the policy shall be void; and that it was further provided in said policies, that if the property insured should be sold or transferred, or any change take place in title or possession, whether by legal process, judicial decree or voluntary transfer or conveyance, then said policies should be void; that by a certain chattel mortgage dated July 24, 1884, and filed in the office of the township clerk of Charlevoix township, in the. county of Charlevoix and State of Michigan, said Mrs. Connor conveyed to W. D. Robinson & Co., of Detroit, Michigan, the goods and chattels insured by said policies; that said mortgage was made and delivered without the knowledge or consent of said garnishees, whereby said policies and each of them became void, and that there was due on said mortgage, at the time of' said fire, the sum of about $900.
    Mo issues were taken upon said answers, but the cause coming on to be heard, as to the garnishees, on the interrogatories to them, and their answers thereto, the court found that it appeared from said answers that said garnishees were indebted to Mrs. Connor in the sum of $1,000, and judgment was thereupon entered in her favor, and against said garnishees' for that sum ; of which judgment a sum equal to the' amount of the judgment in favor of the attachment creditors against Mrs. Connor, and interest and costs, was adjudged to be for the use of said attachment creditors. The garnishees have appealed to this court.
    Mr. Daniel L. Shorey, for appellants;
    that where judgment is demanded upon the answers alone it must clearly appear from the answers that the garnishee is chargeable, cited C. & St. L. R. R. Co. v. Killenberg, 92 Ill. 142; Rippen v. Schocn, 92 Ill. 229; Laschear v. White, 88 Ill. 43; C. & St. L. R. R. Co. v. Hindman, 85 Ill. 521.
    The claim on the 20th day of December, 1884, could not be garnished: Bishop v. Young, 17 Wis. 46; Lovejoy v. Hartford Fire Ins. Co., 11 Fed. Rep. 63; Gies v. Bechtner, 12 Minn. 279; McKean v. Turner, 45 N. H. 203 ; Bucklin v. Powell, 60 N. H. 119 ; Thorp v. Preston, 42 Mich. 511 ; Godfrey v. Macomber, 128 Mass. 188 ; Martz v. Detroit F. & M. Ins. Co., 28 Mich. 201; Williams v. A. & K. R. R. Co., 36 Maine, 201; Frothingham v. Haley, 3 Mass. 68 ; Richardson v. Lester, 83 Ill. 55; Drake on Attachment, § 551; Waples on Attachment, 197, 366 ; Wade on Attachment, § 449.
    Messrs. Weigley, Bulkley & Gray, for appellee ;
    that to bring a case within the provision as to sale or transfer so as to work a forfeiture, an absolute transfer must be made, cited Simpson v. Satterlee, 64 N. Y. 657; Johnson v. Hart, 3 Johns. Cas. 322; Conover v. Ins. Co., 1 N. Y. 290; Bard v. Poole, 12 N. Y. 495 ; Whitney v. McKinney, 7 Johns. Ch. 144; Field v. Mayor, 6 N. Y. 179 ; Hitchcock v. N. W. Ins. Co., 26 N. Y. 68; Jackson v. Silvernail, 15 Johns. 277; Lazarus v. Com. Ins. Co., 5 Pick. 80.
    A mortgage is not included in the cases of such provision as it merely gives a lien of security: Conover v. Ins. Co., 1 N. Y. 290.
    There was not any contingency existing at the date of the service of the writ herein that rendered ic uncertain whether anything would ever become due from the garnishees. The contingency must be one that affects the debt itself, and not the parties, time, or manner of payment: Drake on Attachment, § 552; Thorndike v. DeWolf, 6 Pick. 119; Downer v. Curtis, 25 Vt. 630; Dwinel v. Stone, 30 Me. 384.
    A claim against an insurance company under a policy of insurance for a loss that has occurred is a “ credit ” or an “ effect” of the debtor: Loudeman v. Wilson, 2 H. & J. 379; Stadler v. Parmlee, 14 Ia. 175 ; Smith v. Caboon, 37 Me. 281; Ware v. Gowen, 65 Me. 534; Wilcus v. King, 87 Ill. 107.
    Under our statute an indebtedness due or to become due at the time of filing the answer is included: Young v. First First. Bk., 51 Ill. 73.
   Bailey, J.

A judgment having been given against the garnishees on their answers alone, two questions are presented: 1, whether the garnishees have charged themselves hy their answers; and 2, whether the facts set up hy them in defense of their liability upon their policies of insurance are sufficient to discharge them. The principal controversy in the case arises upon the first of these questions, and we have given it as careful consideration as the time at our command has permitted.

The answers admit the execution by the garnishees to Mrs. Connor of two policies of insurance against fire for $1,000 each, on her stock of.merchandise; the partial destruction by fire of .the property insured during the term of the insurance, and that the amount of the loss was $1,000. The writ of garnishment was served after the loss but prior to the production by the assured of her proofs of loss, and also prior to the intervening of any right or claim of any third party to the insurance money. Was there, then, an indebtedness from the insurance companies to the assured upon which the former are liable to be held as garnishees in this suit?

It is laid down as a general rule by the text writers on the subject of garnishment, that a debt which is uncertain and contingent; and may never become due and payable, is not subject to garnishment. In Drake on Attachment, § 551, the rule is laid down as follows: “ The debt from the garnishee to the defendant, in respect to which it is sought to charge the former, must be absolutely payable, at present or in future, and not dependent upon any contingency. If the contract between the parties be of such a nature that it is uncertain and contingent whether anything will ever be due in virtue of it, it will not give rise to such a credit as may be attached; for that can not properly be called a debt which is not certainly, and at all events, payable, either at the present or some future period.” See also Wade on Attachment, § 449 ; Waples on Attachment and Garnishment, 197, 336. Many decisions of the courts of the various States may be cited in support of the same rule, and it must be accepted as the law, except so far as it may be modified by the peculiar provisions of our statute, a question which we will consider hereafter.

It is insisted by counsel for the garnishees that the claim of the assured under said policies was uncertain and contingent, at the date of the service of the writ, and therefore, under the rule above stated, not subject to garnishment. This uncertainty and contingency arose, as is claimed, 1, from the fact that no proofs of loss had then been served, and that the amount of the loss had not then been adjusted between the parties; and 2, from the fact that the insurance companies had, by the terms of the policies, an option to replace the property destroyed with other of like kind and quality, and were given thirty days after the production of proofs of loss to make and give notice of such election.

Considering these two propositions in their order, it seems very clear, in the first place, that upon the case made by the answers of the garnishees, there was no contingency or uncertainty,within the meaning of said rule, growing out of the fact that no proofs of loss had been produced. "The policies themselves are not set out in the answers, nor are we apprised of the nature or terms of any of the conditions requiring the production by the assured of proofs of loss. It does not appear that the payment of the loss was in any way made conditional upon the production of proofs, nor is it shown, except by inference, that the duty of furnishing proofs was imposed upon the assured in any form. The only reference to the }3rovisions of the policies on that subject is in the recital of the condition giving the insurers thirty days “after the receipt of the proofs therein required,” to give notice of their election to replace the property destroyed. In the absence of express stipulation, there is no rule of law requiring the assured to furnish proofs of loss, or making the production of such proofs a condition precedent to the payment of the loss; and while we may know as a matter of general information, and from our professional experience, that policies of insurance against fire ordinarily contain provisions of that character, we can not say as a matter of law, or presume as a matter of fact, that these policies contained them, or that the liability of the insurance companies was in any way conditional upon the production of proofs.

A contract of insurance against fire is a contract of indemnity against loss by that casualty, and in the absence of any express stipulation to the contrary, the liability of the insurer becomes fixed and absolute upon the happening of the loss. Undoubtedly, where the policy requires something to be done after the loss, and makes the performance of that act a condition precedent to payment, the liability is contingent until the performance of the condition. The answers in this case admit the contract of indemnity and the loss, but set up, at least so far as proofs of loss are concerned, no condition precedent to payment of the loss, other than the happening of the loss itself.

The case of Lovejoy v. Hartford Fire Ins. Co., 11 Fed. Rep. 63, to which reference is made, does not seem to be in conflict with what we have said. In that case the policy itself was before the court, and is shown to have contained the usual provision requiring the assured as soon after the loss as , possible, to render a particular account of the loss, etc., and it was held that such provision constituted a condition precedent to the payment of the loss.

It is urged, in connection with the foregoing proposition, that because, at the time of the service of the writ, no adjustment of the loss had been made and its amount ascertained and liquidated, the claim was not subject to garnishment. This is upon the theory that until the adjustment of the loss, the claim of the insured was merely a claim for unliquidated damages, and that such claim can not be reached by process of garnishment. While there are some decisions sustaining this view, as, for example, McKean v. Turner, 45 N. H. 203, and Gies v. Bechtner, 12 Minn. 279, the current of authority is the other way. The rule is stated by Mr. Drake as follows: Where, under a contract of indemnity, a loss has occurred, and the party indemnified has a claim for such loss against him who engaged to indemnify him, the latter may be charged as garnishee in respect of such loss, if the contract furnish a standard by which the amount of the liability may be ascertained and fixed. Thus, an insurance company may be so charged on account of a loss accruing under a policy of insurance issued by it; for the liability to the insured clearly exists, and the policy furnishes the' required standard. This has been held, not only as to adjusted claims for loss, but also to such claims unadjusted.” Drake' on Attachment, § 549. It is so held in relation to unadjusted claims for losses under insurance policies, m Knox v. Protection Ins. Co., 9 Conn. 430; Northwestern Ins. Co. v. Atkins, 3 Bush. 328; Girard Fire Ins. Co. v. Field, 45 Penn. St. 129.

Was the indebtedness garnished rendered uncertain and contingent by the option to replace the property lost or damaged, reserved to the insurance companies by the policies, and not exercised by them at the date of the service of the writ, so as to take it out of the statute in relation to garnishment? It should be observed that, while the language of the policies gives an option “to repair, rebuild or replace the property lost or damaged, with other of like kind and quality,” the insurance was wholly upon a stock of merchandise kept by the assured in her store for sale, so that the words, repair ” and “ rebuild,” manifestly have no force or application to the case. The policy was undoubtedly prepared, as such instruments almost universally are, by filling up a printed blank, adapted by its phraseology to insurance on all varieties of property, and said policies being upon merchandise only, those words only can be considered operative which apply to that species of property. The option to repair and rebuild would manifestly apply only to buildings, so that the only option reserved by these policies was, to replace the merchandise lost or damaged with other of like kind and quality. The indebtedness garnished then seems to be an absolute liability on the part of the insurance companies to pay the assured her loss, with an option on their part to pay in money or merchandise. It was a debt for $1,000, absolutely payable, but capable of being discharged in either of these modes. We are unable to see how it can be held to be uncertain and contingent, and therefore not subject to garnishment, merely because of an option on the part of the debtor to pay in one mode rather than another.

We are referred by counsel for the garnishees to two decisions which he claims sustain his position on this question. We have examined those cases carefully, and are of the opinion that they are distinguishable from this. One is Godfrey v. Macomber, 128 Mass. 188. In that case the insurance was upon buildings, and-the policy gave the company the right to make good the damage, by repairing or replacing the buildings destroyed, and it was held that the company had no money or property in its hands due or belonging to the principal defendant absolutely and without contingency, since it had the right to rebuild instead of paying the money, and therefore that the trustee was properly discharged. There the alternative of payment was a right to erect a building on the land of the assured, and an election to rebuild would substitute for the policy a mere building contract. All that a judgment in garnishment could do, especially before a breach of such contract, would be to enforce its performance according to its terms, and performance would be the placing of permanent improvements and additions upon real property in the possession of the assured, and thus place the asset sought to be reached beyond the reach of the writ.

The other case is Martz v. Detroit Fire and Marine Ins. Co., 28 Mich. 201. There the policy, which was upon goods and fixtures, gave the insurer the right to elect whether to replace the articles lost or damaged, or to take the goods at their appraised value, or rebuild or re pah- the building, etc., and it was held that the liability was not subject to garnishment. The decision turned, however, upon the negative provisions of a statute of Michigan which enacted that “ no one shall be adjudged a garnish e 6 by reason of any money or other thing due from him to the principal defendant, unless it be at the time of the service of the writ of garnishment due or-to become due absolutely and without depending on any contingency. ” It was held that as the liability might be discharged in one of two ways, at the option of the debtor, viz., by payment in goods or by payment in money, a contingency existed within the meaning of the statute. We are of the opinion that said statute, as thus interpreted, goes beyond the purview of the general rule above stated, and requires not only that the debt garnished should be payable without any uncertainty or contingency, but also that the mode of payment should be subject to no contingency.

In Smith v. Caboon, 37 Maine, 281, it was held that one who had received personal property from the principal defendant, giving therefor his obligation to pay a stipulated price or return the property within a prescribed period, was chargeable as trustee, although when the writ was served, the time allowed him for making the election had not expired, and though in fact the election had not then been made. In Stradler v. Parmelee, 14 Iowa, 165, where the garnishee was indebted to the principal defendant in the sum of 8500, payable in goods from his store, the garnishee was held, and a condi fcional judgment entered for the amount, to be discharged in goods and merchandise at a fair value, to be placed at the disposal of the sheriff, and in default of which the judgment should, on motion, be made absolute. In Londerman v. Wilson, 2 Harr. & John. 379, it was held that a debt due and owing, but which by agreement was to be paid in labor, was subject to attachment. In Ware v. Gowan, 65 Me. 534, a contract provided for payment upon estimates of the engineers, and process was served before any estimates were submitted, and it was held not to be such a contingency as would discharge the trustee.

The proceeding by garnishment is strictly a statutory proceeding, and to determine the precise limitations within which the writ may be used in this State, recourse must be had to, our own statute. The fifth section of the act in relation to' garnishment, provides that the creditor shall “ exhibit and file all and singular such allegations and interrogatories, in writing, upon which he shall be desirous to obtain and compel the answer of any and every garnishee, touching the lands, tenements, goods, chattels, moneys, choses in action, credits and effects of such defendant, and the value thereof, in his possession, custody or charge, or from him due and owing, to the said defendant at the time of the service of said writ, or at any time after, or which shall thereafter become due;” and the garnishee is then required to make “full, direct and true answers to all and singular the allegations and interrogatories by the plaintiff so exhibited and filed.” It is manifest that under this statute, the creditor is not confined to debts due, or even to debts owing at the date of the service of the writ. The statute seems to embrace all of the following cases : 1, where the debt is owing and due at the date of service; 2, where it is owing at the date of service and becomes due thereafter; and 3, where it is owing and due at any time after the service of the writ, up to the date of the answer. It is accordingly held in Young v. First National Bank, 51 Ill. 73, that the garnishee is required to answer and make full discovery in reference to any indebtedness to the debtor up to the time of making his answer, and is not limited in that respect to the date of the service of the writ. The court, in considering the statute above cited, says: This section, so far from limiting the answer to the time of the service of the writ, extends it to future indebtedness and subsequent possession of goods, chattels, money, property and effects. Under this enactment, no one would seriously contend that the garnishee would not be compelled to make a full discovery up to the time of making his answer. The statute declares he shall, and in language too plain to be mistaken.” See also, Wilcus v. King, 87 Ill. 107. The case of Bliss v. Smith, 78 Ill. 359, and other cases following that decision, do not affect this question, as that case turned Upon a construction of the statute exempting from garnishment a certain amount of the wages of a defendant, being the head of a family and residing with the same, and made no attempt to construe the section of the statute in relation to garnishment above cited.

The rule, then, that an indebtedness, to be subject to garnishment, must be owing absolutely and subject to no contingency, must be applied, in this State, in such way as to be consistent with the provisions of our statute. It is sufficient that the indebtedness be owing without uncertainty or contingency at the date of the answer. Even if it be contingent at the time of service, if the contingency be removed before answcr, it is subject to garnishment under our statute. However, then, we may view the liability of the insurance companies in this case at the date of the service of the writ, it can not be questioned that the insurance money was absolutely owing, and was due at the time the answers of the garnishees were completed. Then more than thirty days had elapsed after the production of proofs of loss and the adjustment of the loss. It is not pretended that the insurance companies elected to replace the property lost or damaged, and the time within which they were at liberty to make the election had then elapsed. The liability was then . absolute to pay the loss in money, and it was in no way obnoxious to the rule excluding debts which are uncertain and contingent, from the operation of the process of garnishment.

We do not think, and it does not seem to be seriously claimed, that the answers disclose any substantial defense to the liability of the insurance companies on their policies. Two conditions of the policies are set out, but no facts are stated which seem to amount to a breach of either condition. The first of these conditions provided that the policies should be void if the interest of the assured in the property was not the entire, unconditional and sole ovmership for her sole use and benefit, or if it was incumbered by deed of trust, mortgage or otherwise, and such defects of title were not represented to the companies and inserted in the policies. This condition manifestly related to the state of the title of the insured to the property covered by the policies at their date, and tlieie is no pre'ense that her ownership of the property insured was not then the entire, unconditional and sole ownership for her sole use, or that it was then incumbered in any manner.

The other condition was undoubtedly prospective in its operation. It provided that if said property should be sold or transferred, • or any change take place in title or possession thereof, whether by legal process, judicial decree, voluntary transfer or conveyance, the policies should be void. It is then alleged that after the execution of the policies, the assured gave a chattel mortgage on said property to W. D. Robinson & Co., and that at the date of the loss there was due on said mortgage the sum of about §900. Conditions of this character, by which it is sought to work a forfeiture of the policies, will be strictly construed, and will'not be enforced unless the facts show a case clearly within their provisions. The execution of the , chattel mortgage, at least until its maturity, was neither a sale nor transfer of the property, nor did it divest the insured of either the title or possession. It was a mere lien, the legal title and the possession remaining in the mortgagor. There is no sufficient averment that the mortgage had matured prior to the loss. The length of time it was to run before maturity is not stated, nor are any facts shown from which the date of its maturity can be inferred. It is true the answers allege that at the date of the loss there was due on the mortgage the sum of about §900, but the use of the word “ due ” in this connection is equivocal, as it may mean, and was probably intended to mean, simply that, at the time of the loss, the sum of about §900 was owing on the mortgage. If the mortgage had matured so as to vest the mortgagees with the legal title to the property, the garnishees should have so stated in clear and unequivocal language.

It is suggested that the assignees claiming the insurance money under the assignment disclosed in the answers, should have been made parties. They obtained their interest pendente lite, and we know of no rule which requires attachment creditors to bring before the court parties who have become purchasers of the property attached, or of some interest in it after the commencement of the attachment proceedings, and after the lien of the attachment creditors has attached. A° rule requiring such creditors to bring in every subsequent assignee or purchaser, would tend to embarrass and protract the proceedings to an insufferable extent, and might defeat them altogether.

We find no error in the proceedings and judgment of the court below, and said judgment will therefore be affirmed.

Judgment affirmed.


source: Caselaw Access Project

author: Bailey, J.

license: Public Domain

text:
    Samuel Marshall v. John C. Ender.
    1. Evidence.—The court is of opinion that the court helow was justified in finding that the proof of the negotiation of the securities to appellant, prior to their sale and delivery to appellee, was too uncertain and unsatisfactory to justify a decree in appellant’s favor.
    2. Agency—Fraud.—Where one of two innocent persons must suffer by the fraud of a third, it must be the one who placed it in the power of such third person to commit the fraud. As appellant, who claims to have boug.,t from his brother-in-1 iw the securities in question (a bond and deed of trut, the time for payment of the bond having been extended by an instrum 3nt signed by the parties) placed these securities in the hands of his brother-in-law a,nd clothed him or permitted him to clothe himself with the indicia of ownership, he is bound by the latter’s sale of such securities to an innocent purchaser.
    Appeal from the Circuit Court of Cook county; the Hon. Murray F. Tuley, Judge, presiding.
    Opinion filed November 8, 1886.
    Mr. George F. Blanke and Mr. Francis Lackner, for appellant;
    that after maturity negotiable paper is subject to the fundamental principle of the law of personal property, that no man can be divested of it without his own consent or by operation of law, cited Jennings v. Gage, 13 Ill. 610; Salturs v. Everett, 20 Wend. 275; Wood v. McKean, 18 The Reporter, 359; 2 Parsons on Notes and Bills, 279; Chase v. Whitmore, 21 The Reporter, 682.
    The general rule is that one in possession of personal property can transfer to another, by pledge or sale, no greater interest in the property than he himself has: Wright v. Solomon, 19 Cal. 64; Kohler v. Hayes, 41 Cal. 455; Barstow v. Savage M. Co., 64 Cal. 388; Covill v. Hill, 4 Denio, 323; Cowdrey v. Yandenburgh, 101 U. S. 572.
    Mr. Isaac E. Adams, for appellee;
    as to the consequences of clothing one with indicia of ownership, cited Pickering v. Buck, 15 East, 44; Lichbarrow v. Mason, 2 T. R. 63; 2 H. Black, R. 11; 5 T. R. 367; Stalker v. McDonald, 6 Hill, 93; Potts v. Mayor, 74 N. Y. 595.
    As to the paper being overdue: 1 Daniel on Negotiable Instruments, § 827; Oates v. Nat. Bk., 100 U. S. R. 248; Goodman v. Simonds, 20 How. 243.
   Bailey, J.

This was a bill of interpleader, brought by Benjamin Lichtenstein against John C. Ender and Samuel Marshall, to require them to interplead in relation to the ownership of a certain bond and a deed of trust on certain -lands of the complainant securing the same, of which both Ender and Marshall claimed to be the owner. A decree being entered directing said defendants to interplead and the cause afterward coming on to bo heard as between the defendants on pleadings and proofs, the court decreed that said Ender was the owner of said securities, and ordered the money due thereon to be paid to him. From this decree said Marshall has appealed to this court.

Said securities consist of a bond in the penal sum of §4,000 bearing date July 15, 1873, executed by Carl H. Carlson to Francis Bradley, conditioned for the payment to said Bradley, his executors, administrators and assigns, of the sum of §2,000, July 15,1878, with interest at the rate of ten per cent, per annum, and a deed of trust securing the same, executed by said Carlson and wife to Lyman Baird, as trustee, upon certain premises known as 188 Sedgwick street, Chicago. The bond and deed of trust were afterward assigned by Bradley to Haney Swift, by an indorsement on the bond. Carlson, the obligor, died before the maturity of the bond, and Carin Carlson, his widow, and Edward L. Hansen, became the owners of the mortgaged premises, subject to the deed of trust. At the maturity of the bond, Haney Swift agreed to extend the payment thereof until July 15, 1881, said Hansen and Mrs. Carlson entering into a written agreement to pay said bond on the 15th day of July, 1881, with interest at the rate of eight per cent, per annum, payable semi-annually, and executed their promissory notes to her for said several installments of interest.

At the time said period of extension expired, said bond and deed of trust appear to have been in the hands of one Charles A. Schmidt, the bond being then indorsed in blank by Haney Swift; and Hansen and Mrs. Carlson being unable to pay said bond, applied to said Schmidt, as the legal owner of the securities, for a further extension of three years, which extension was agreed to by said Schmidt, and an agreement was thereupon executed by Hansen and Mrs. Carlson, under their hands and seals, and delivered to Schmidt, in which, after reciting the previous history of said securities, and the application by Hansen and Mrs. Carlson to Schmidt, “the present legal holder and owner of said bond,” to extend the time of payment of the principal sum due thereon, set out an agreement on the part of Schmidt to extend and postpone the payment of said principal sum to July 15, 1884, the interest to he paid semi-annually at the rate of seven per cent, per annum, and an agreement on the part of Hansen and Mrs. Carlson, in consideration thereof, to pay said Schmidt, his legal representatives and assigns, said principal sum, on the 15th day of July, 1884, with interest at the rate aforesaid, on the 15th day of each January and July during the period of extension, according to the tenor and effect of six coupons, bearing even date with said agreement. There was also contained in the agreement a stipulation that time should be of the essence of the contract, and that in the event of a failure to pay either of said coupons at maturity, the principal sum should at once become due and payable, at the election of said Schmidt, his legal representatives and assigns, and might he collected without notice, together with the interest. Also a stipulation that nothing in the agreement should operate to discharge or release the legal representatives of Carl M. Carlson, their successors or assigns, heirs, executors, or administrators, from their liability upon said bond, it being expressly understood that the agreement was to be taken as collateral and additional security for the payment for said bond. Accompanying the contract were six coupon notes for the intercst, executed by Hansen and Mrs. Carlson, payable to the order of Schmidt.

In September, 1884, defendant Ender purchased said bond and the accompanying securities of Schmidt, paying him $2,000 therefor, and Schmidt, after indorsing the interest notes in blank, delivered the bond, deed of trust, agreement and interest notes to him. As each of the several interest notes became due, except the last, they were presented by Ender to Schmidt, and were paid by him. Said securities remained in Ender’s possession, except a short period during which he seems to have deposited them in a bank as collateral security for a promissory note which he had indorsed for am,ther party, and it does not appear that Ender had any notice of any adverse claim to said securities on the part of defendant Marshall, until September, 1884, when this bill was filed. The property covered by the deed of trust was sold by Hansen and Mrs. Carlson to Lichtenstein, the complainant, in 1882. One of the vendors testifies that said sale was made in 1883, and the bill alleges that the complainant purchased said premises on the 8th day of March of that year, and this allegation is admitted in the answers of both the defendants. There is no evidence that Lichtenstein had any interest in said premises prior to that date. The foregoing facts are substantially uneonfradicted.

On the part of the defendant Marshall it is claimed that a few days prior to July 15, 1881, Marshall, whose business is that of a sailor on the lakes, met Schmidt, who was his brother-in-law, when Schmidt told him that he knew of an opportunity for the investment of $2,000 on good security; that Schmidt thereupon gave him his card, on the back of which was written a brief des'ription of the property covered by said deed of trust, and informed him that, as additional security, there was an insurance on the property of $3,000; that Marshall soon after went to see the property and found it satisfactory and so informed Schmidt; that thereupon Marshal^ on or about the 12th day of July, 1881, placed in Schmidt’s hands the sum of $2,000 to be invested in said securities; that Schmidt then told him that said papers were in the hands of Baird & Bradley, but that he would go and get them and make everything all right; that Marshall then went out on the lake, returning in a week or ten days, when he again saw Schmidt, who informed him that he had all the papers made out on the 15th of the month, and proposed, as Marshall was on the lakes and not much at home, to take care of the papers for him, and put them in his (Schmidt’s) safe; that Marshall never saw or had possession of said papers, but left them in the care and custody of Schmidt; that afterward Marshall, both personally and by his wife, applied to Schmidt for certain sums of the interest on said securities, and received various sums of money from time to time which Schmidt paid him on account of such interest; that about July or August, 1884, Schmidt fell sick, and Marshall, for some reason, suspecting that something was wrong about said securities, applied to Schmidt for them, and was told that they were at the bank; that Marshall went to the bank and was there informed that they were claimed by another person; that Schmidt thereupon told Marshall that if he would wait a few days until he got around again, he would make everything right. A few days afterward Schmidt died.

The proof of the foregoing facts rests almost exclusively upon the testimony of Marshall, and there is much in his testimony which is confused, contradictory and unsatisfactory. He testifies, and reiterates the statement, that during the first negotiations with Schmidt in relation to the investment of said money, Schmidt referred to the premises in question as belonging to Lichtenstein, and said that Lichtenstein was to make out the papers; that Lichtenstein would be in on the 15tli of the month and would then execute the papers, and that he supposed that he was loaning the money to him, when in fact Lichtenstein did not own the premises or have any interest in them, or any connection whatever with the matter, until nearly two years afterward. Many, if not most of the facts in relation to his alleged purchase of the securities in question, though stated positively and unequivocally in his direct testimony, are rendered more or less uncertain and doubtful by his statements and admissions on his cross-examination; and, upon consideration of his entire evidence, we can not say that the court below was not justified in finding that the proof of the negotiation of said securities to him, prior to their sale and delivery to Ender, was too uncertain and unsatisfactory to justify a decree in his favor.

But there is another ground upon which the decree may be sustained. At the time of the sale and delivery of the securities to Ender, the legal title and ownership of said securities was apparently in Schmidt. On or just before the, 15th day of July, 1881, at the time the former extension expired, as has been stated, Schmidt obtained the possession of the bond and deed of trust, the bond being indorsed in blank by the former holder. It may be admitted that he gained such possession at the instance and as the agent of Marshall, but, in performing the duties of his agency, he dealt with said securities as though they were his own. The owners of the equity of redemption applied to him, as owner of the bond and deed of trust, for an extension of the day of payment, and he, assuming that character, entered into an agreement witli them, under their seals, in which he was expressly styled the legal owner" and holder of the bond, and by which .they covenanted to pay the principal of the bond to him, his assigns and legal representatives, at the expiration of the period of extension, and in the meantime to pay him interest thereon at the rate of seven per cent, per annum; and they also executed and delivered to him their promissory notes, payable to his order, for the several installments of interest. By this means he certainly became invested with the apparent ownership, if not with the actual, legal ownership. This contract with the owners of the equity of redemption, which became at least a subsidiary security, was with him, and was capable of being enforced at law only in his name, and suit on the interest notes could have been brought only by him.

It can not be said that the mode adopted by Schmidt to obtain these securities for Marshall, his principal, was outside of the purview of his powers as agent. He was employed by Marshall to invest for him 8*2,000 in certain securities, but the mode of obtaining the title to the securities, and the details of the arrangement with the makers of the securities, or those incidentally, liable thereon, were left wholly to his discretion. Ho restrictions whatever in that respect were laid upon him. He was, as to that particular matter, in the fullest sense, the general agent of his employer. Whatever he did then in that behalf was in law the act of his principal.

It is of no consequence, so far as this point is concerned, that Schmidt did not show the papers to Marshall or report to him what he had done. Marshall trusted him implicitly, and apparently had.no care for such report. But he is nevertheless responsible for what his agent did, precisely as though he had done the same thing himself. If Marshall had in person superintended the drafting and execution of these papers relating to the extension of the bond, no one, we presume, would have doubted his responsibility for the apparent ownership of the securities with which his agent would be thereby clothed. There is no difference in law, however, between the acts performed by a duly authorized agent and those performed by the principal, in their binding effect upon the rights of the latter.

Marshal], having thus placed these securities in the hands of Schmidt and clothed him, or permitted him to clothe himself, with the indie,ia of ownership, is bound by what Schmidt did as the apparent owner, upon the familiar principle that where one of two innocent persons must suffer by the fraud of a third, it must be the one who placed it in the power of such third person to commit the fraud. Enders was an innocent purchaser from one who was clothed by Marshall with the power and the apparent right to sell, and upon the principle above stated, his title must be upheld. We are of the opinion that the decree was justified by the evidence, and it is therefore affirmed.

Judgment affirmed.


author: McAllister, P. J.

text:
    Lewis W. Pitcher v. The Board of Trade of the City of Chicago.
    1. Corporations—Powers of expulsion.—A distinction is generally recognized as respects the power of expulsion between voluntary Unincorporated bodies and those which are incorporated or created by statute.
    2. Voluntary organizations—Same.—In the former case the power of expulsion may be provided for by rules and by-laws, and if it be exercised by a fair and honest compliance with such rules or by-laws an expelled member is without redress from the courts.
    3. Incorporated bodies—Same.—But in incorporated bodies, whore the several members are in the enjoyment of a franchise conferred by statute, a member can not be expelled and disfranchised by any act of the corporation, unless the power to do so is expressly conferred by the statute; and this is peculiarly so as to any corporation owning property in which the respective members have a beneficial interest, either absolute or contingent.
    4. Board of Trade—Before and after incorporation.—The court is of the opinion that as to those members of the voluntary organization known as the Board of Trade of the City of Chicago, which was incorporated by act of 1859, whatever franchises, rights or privileges were • conferred upon them respectively by such incorporation were derived directly from the statute; but that as to all persons subsequently becoming members, their rights and privileges are to be in reality derived from the body itself, rather than from the statute.
    5. Same—Expulsion of member under by-laws held valid.—The court is of the opinion that the by-laws of the Board of Trade, under which appellant was tried, convicted and expelled, were authorized by the act of incorporation, are not inconsistent with any principle of natural justice or the laws of the land, and are valid; and that the trial, conviction and expulsion were by a tribunal (board of directors) not only authorized by appellee’s charter but by reason of appellant agreeing to be bound by said by-laws.
    6. Jurisdiction.—Under the decisions of the Supreme Court, a court of chancery is not the proper forum in a case of this character.
    Appeal from the Circuit Court of Cook county; the Hon. Murray F. Tuley, Judge, presiding.
    Opinion filed November 8, 1886.
    This record shows that the Board of Trade of the city of Chicago is a body corporate, created by an act of the legislature of this State, passed February 18, 1859, and that the appell ant, Pitcher, was admitted as a member thereof some eight years ago. That March 16, 1886, one Hall made a complaint in writing against appellant, charging him with fraudulent conduct in business transactions, as a member of said corporation, and that, upon presentation of said complaint to the board of directors, the latter appointed a committee from its own members to investigate said charges; that said committee, after investigation, made a report containing specific charges of dishonorable conduct on the part of appellant in said business transactions, whereupon said board of directors caused appellant to be notified of said charges and to appear and answer the same.
    It appears that appellant, in pursuance of said notice, did appear before said board of directors, May 4,1886, and pleaded not guilty to said charges, without any objection to the jurisdiction of said board of directors. That thereupon a trial ensued, Pitcher being present and participating therein; that the trial continued from day to day, until May 11, 1886, when the said board of directors before whom it was had, comprising sixteen, sustained said charges, and by a vote of thirteen for to three against, ordered that Pitcher be expelled from the corporation. From and after which he was excluded from the exchange hall of said Board of Trade, and all the privileges of membership. That June 14, 1886, Pitcher filed his petition in the circuit court for a mandamus to said Board of Trade, to restore him to membership thereof, of which- he had been thus deprived, upon the principal ground, that said order of expulsion was illegal and void, for the following reasons:
    First. That said Board of Trade, a body corporate of which he had become a duly admitted member upon a money consideration, as well as being otherwise qualified, was the owner of a large amount of property, held by it in trust for the benefit of its members; a certificate of membership thereof being of the value of ten thousand dollars.
    Second. That the power of expulsion was by the charter vested in the corporation at large, and could not be exercised by a board of directors, since it was a power in trust which could not be delegated.

      Third. That by the by-laws of the corporation the concurrence of at least twelve directors was indispensable to the validity of an order of expulsion, if it be conceded that the directors possessed the power; that two of the thirteen directors voting for expulsion had been appointed and acted as prosecutors upon the trial.
    Fourth. That out of said thirteen directors voting for expulsion, there were two who were not present at the hearing, and in rendering their judgment in concurrence with the other eleven, acted upon evidence which was introduced orally, but which they did not hear. It appears that upon such petition a summons issued, and was served on said Board of Trade, returnable June 21, 1886 ; and that before said day, and June 8, 1886, Pitcher exhibited his bill on the chancery side of said court, setting up the same matters as in said petition, and facts and circumstances showing an irreparable injury, and praying that said Board of Trade be restrained from interfering with or preventing plaintiff from having access to the said exchange hall or enjoying the privileges of membership, until the determination of said mandamus case. A temporary injunction was issued pursuant to the prayer of said bill, but which was, upon motion of defendant, dissolved, and the bill dismissed by the court for want of equity.
    It appeared that at the time Pitcher became a member the following rules or by-laws were in force, and that Pitcher, at the time, signed an agreement as a condition of his admission to abide by them.

      “ Sec. 9. When any member of the association shall be guilty of improper conduct of a personal character, in any of the rooms of the association, or when any member shall be guilty of a willful violation of any business contract or obligation, and shall neglect or refuse to equitably and satisfactorily adjust and settle the same; or when any member shall willfully neglect or refuse to comply promptly with the award of any committee of arbitration or committee of appeals, rendered in conformity with the rules, regulations, and by-laws of the association; or when any member shall violate any of the rules, regulations or by-laws of the association; or when any member shall be guilty of making or reporting any false or fictitious purchases or sales; or when any member shall be guilty of any act of bad faith, or any attempt at extortion, or of any dishonorable or dishonest conduct, he shall be censured, suspended or expelled by the board of directors, as they may determine from the nature and gravity of the offense committed. A majority of a quorum, sitting at a regular or adjourned meeting of the board of directors, shall be necessary to censure or suspend, and an affirmative vote of at least twelve members of the board of directors shall be necessary to expel.”
    “ Sec. 16. It shall be the duty of the board of directors, in case any grave offense or act of dishonesty committed by any member, involving the good name or dignity of the association, or any act of dishonesty on the part of a member shall come to their knowledge, either by complaint or public report, to cause a preliminary or informal investigation to he made, by a committee of their number, into the truth or falsity of such complaint or report; and if the said committee, after investigation, shall deem any member guilty of such offense, they shall so report to the board of directors, with specific charges; whereupon the member thus implicated shall be notified to appear before the board of directors in manner as provided by section 14 of this rule, and, if found gui'ty, the said member shall be suspended or expelled, as hereinbefore provided.”
    From the decree aforesaid Pitcher appealed to this court, and assigns the dissolution of said injunction and dismissal of said bill, as error.
    Messrs. Bisbee, Ahrens & Decker, and Mr. C. Beckwith, for appellant;
    that an expulsion is a forfeiture and is not favored in law, cited People v. N. Y. Cotton Ex., 15 N. Y. 216; Evans v. Phila. Club, 50 Penn. 127; People v. Medical So., 32 N. Y. 187; 17 Cent. Law Journal, 295.
    By-laws which vest in a majority the power of expulsion for minor offenses are void, and expulsions made under them will not be sustained in a court of justice: Evans v. Phila. Club, 50 Penn. 127.

      The power to disfranchise can only be exercised by the entire association: Medical So. v. Wetherly, 75 Ala. 248; Commrs. v. German So., 15 Penn. St. 251.
    In all courts, all triers must be indifferent both as to the parties and as to the issue: Gates v. People, 14 Ill. 433; Winmesheik Ins. Co. v. Schueller, 60 Ill. 463; C. & A. R. R. Co. v. Adler, 56 Ill. 344; Fleming v. State, 11 Ind. 234; Rice v. State, 16 Ind. 298; Rex v. Edmonds, 4 B. & Ald. 471; Stewart v. State, 15 O. St. 155; Rafe v. State, 20 Ga. 60; Willis Case, 15 Howell St. Trials, 613; Com. v. Hussey, 9 Pick. 496; Spear v. Spencer, 1 Iowa, 534.
    As to the jurisdiction of equity: Hutchinson v. Lawrence, 67 Howard Pr. R. 38 (1884); Olerry v. Brown, 51 Howard Pr. Rep. 92; Littleton v. Blackburn, 33 L. T. Rep. (N. S.) 641; White v. Brownell, 4 Abb. Pr. R. 162; Roorke v. Russell, 2 Lansing, 244; Ryan v. Brown, 18 Mich. 196; Fisher v. Keane, 11 Law Rep. Ch. Division, 353; Leech v. Harris, 2 Brewst. (Penn.) 571; Dickens v. Chamber of Commerce, 29 Wis. 45.
    Mr. Sidney Smith, for appellee;
    that equity will not interfere by injunction in this case, cited Fisher v. Board of Trade, 80 Ill. 85; Baxter v. Board of Trade, 83 Ill. 146.
    The board of directors had power to expel appellant: People v. Board of Trade, 45 Ill. 112; People v. Board of Trade, 80 Ill. 134; People v. N. Y. Com. Asso. 18 Abbott Pr. Rep. 271; Black & White Smith. So. v. Vandyke, 2 Wharton Rep. 309-11; State v. Managers of Cartenet Club, 40 N. J. Law, 295; High on Extraordinary Remedies, § 292; State v. Chamber of Com., 47 Wis. 670.
    The decision of the board of directors is conclusive and will not be reviewed either by a court of law or equity: Angelí & Ames on Corporations, § 418.
   McAllister, P. J.

The first question for consideration arises upon the position taken by counsel for appellant, and seemingly much relied upon, that whatever power to expel or disfranchise a member may have been given by the incorporating act of the Board of Trade, was conferred in terms upon the members of the corporation at large, that in its nature it was a power in trust, and could not. therefore, be delegated to a board of directors and exercised by a quorum of twelve of that body.

The authorities recognize a distinction, based upon reason, as respects the power of expulsion, between voluntary, unincorporated bodies, and those which are incorporated, or created by statute. The reason is, that the former class come into existence by the mutual agreement of the persons forming them, and are carried on solely under rules and regulations which the respective bodies adopt. It logically follows in such a case, where all the rights and privileges of the individual members are derived from the body itself, and the members are bound by mutual agreement to be governed by such rules and regulations, that the power of expulsion, may be provided for by rules and by-laws, and if it be exercised by a fair and honest compliance with such rules or by-laws, an expelled member is without redress from the courts. But in the latter case, where the body is incorporated and the several members are in the enjoyment of a franchise conferred by statute, as in Bagg’s Case, 11 Coke, 93, or that of The People v. The Medical Society of the County of Erie, 32 N. Y. 187, it has generally been held that a member can not be expelled and disfranchised by any act of the corporation, because such member derived his franchise, rights and privileges from the statute, and not from the corporation, unless the power to do so is expressly conferred by the statute. This is peculiarly so as to any corporation owning property in which the respective members have a beneficial interest either absolute or contingent. Bagg’s Case, supra; Evans v. Philadelphia Club, 50 Penn. St. 107 ; White v. Brownell, 2 Daly, 357; Ang. & Ames, on Corp., §410; Hopkins v. Exeter, Law Rep. 5 Eq. 68; Wood v. Wood, Law R., 9 Exch. 190 ; Blisset v. Daniel, 10 Hare, 493; Hutchins v. Lawrence, 67 How. Pr. R. 38.

It appears from the record that appellee is a body corporate created by special act of the legislature passed Feb. 18, 1859; that it owns a large amount of property; that its general objects are the promotion of trade in the products of the country and the interests of its members, by providing a commodious exchange hall, telegraphic facilities and other conveniences, for the transaction of their business, and prescribing rules and regulations under which it may be done; that so valuable are these privileges, the fee to be paid upon becoming a member is ten thousand dollars. It appears that at the time of passing said act, there existed a voluntary unincorporated body of the same name; but just how numerously composed, does not appear. How, by the first section of that act, all the members of said voluntary body were incorporated as a body politic and corporate, under the name of “ The Board of Trade of the City of Chicago.” As to those persons it is manifest that whatever franchises, rights or privileges were conferred upon them respectively, were derived directly from the statute. But from our study of said- act, it seems to us that as to all persons who should subsequently become members, the character of a voluntary association is plainly marked; that is, that the rights and privileges of such persons were to be in reality derived from the body itself rather than from the statute. At the close of § 1 express authority is given, “ to make such rules, regulations and by-laws, from time to time, as they may think proper or necessary, for the government of the corporation hereby created, not contrary to the laws of the land.”

Then again, § 4 says: “ The said corporation is hereby authorized to establish such rules, regulations and by-laws for the management of their business, and the mode in which it shall be transacted, as they may think proper.”

But § 6 comes close to the question under consideration. It reads: “ Said corporation shall have the right to admit or expel such persons as they may see fit, in manner to be prescribed by the rules, regulations and by-laws thereof.” Here the power is expressly conferred by the act creating the corporation, to expel such persons as they may see fit, in manner to be prescribed by the rules, regulations and by-laws thereof. ’’

But counsel for appellant seem to suppose that the words “in manner ” have reference to the mere method of doing it, through a majority of all the members of the corporation, but are not broad enough to authorize a delegation of the power to a board of directors.

Lexicographers give to the word “manner” a broader meaning than that of “method .” The derivation of the word “marine?’” is from the Latin ma?ius, the hand. “ Marnier is literally the handling of a thing, and has a wider sense, embracing both method and ?node.” Webster’s Diet, (new Ed.) “method”

It seems to us, from a consideration of all the provisions of the act, that its framer s intended to leave the whole subject-matter of the expulsio n of members, to be regulated, both as to method and tribunal, by rules and by-laws of the body, not inconsistent with the principles of natural justice or the laws of the land. In pursuance of that power, the by-laws set out in our statement of the case were adopted, by "which appellant, on admission, formally agreed to be bound. We are of opinion that such by-laws were authorized by the act, are not inconsistent with any principle of natural j ustice or the laws of the land, and are valid; that the trial, conviction and expulsion of appellant were by a tribunal, not only authorized by appellee’s charter, but by reason of appellant agreeing to be bound by said by-laws.

This conclusion we regard as removing the only basis for a distinction between this case and cases decided by the Supreme Court of a similar character. We felt it incumbent upon us to fully consider the point that the tribunal expelling was without authority, because, in that event, the resolution or order of expulsion would have been illegal and void, and the appellant’s rights unaffected by it. Wood v. Wood, L. Rep. 9 Exch. 190. And the appellant having made so strong a showing as to irreparable injury, we were in doubt whether the case would not present such special circumstances as that an injunction would lie.

As to the other grounds, we think the case, as respects the jurisdiction of chancery, is governed by the cases Fisher v. Board of Trade, 80 Ill. 85, Baxter v. Same, 83 Ill. 146. Those cases are directly in point and hold that a court of chancery is not the proper forum. In other States, and in England, the rule is different; but we are absolutely bound by the decisions referred to in our Supreme Court, because no distinction can be made upon the facts between this and those referred to. The decree of the chancellor will be affirmed.

Affirmed.


text:
    Patrick L. Garrity v. Charles F. Betts.
    Promissory note—Insolvency of maker—Suit against indorser.— If, at the time a promissory note falls due, proceedings against the maker Would be unavailing, the holder may proceed immediately against the indorser; but if he will not do this he must be prepared, in order to fix the liability of the indorser, to show that the insolvency of the maker continued down to the time of the commencement of his suit against the indorser.
    Appeal from the Circuit Court of Cook county; the Hon. Loein C. Collins, Judge, presiding.
    Opinion filed December 8, 1886.
    Mr. Dewitt C. Jones, for appellee;
    cited Bledsoe v. Graves, 4 Scam. 382.
    Messrs. Peckham & Brown, for appellee.
   Bailey, J.

This was a suit in assumpsit, commenced March 17,1884, by Charles F. Betts, the indorsee, against Patrick L. Garrity, the payee and indorser of a promissory note. Said note bore date August 25,1882, and was executed by Edward Scanlon, for 880, payable to the order of the defendant ninety days after date, and assigned by indorsement on the day of its date, by the defendant to the plaintiff.

The declaration consisted of two counts. The first count alleged the exercise of due diligence on the part of the plaintiff, by the institution and prosecution of a suit against the, maker of the note for the recovery of the money due thereon» The second count alleged that when the note became due said; maker was, “and from thence hitherto has continued to be,” insolvent and unable to pay the amount of said note, or any part thereof, by reason whereof the institution of a suit against him at that time or afterward would have been unavailing. The first count was withdrawn by the plaintiff, and on the trial, which was had before the court without a jury, the issues were found for the plaintiff and his damages assessed at the amount appearing to be due on the note, and judgment was rendered accordingly.

The maker of the note was called as a witness and testified that on the 26th day of November, 1882, the date of the maturity of the note, he had no property, and that he had no property during the residue of that month, nor during the month of December, 1882, or January, 3883. This was all the evidence as to the insolvency of said maker, there being no evidence introduced as to his Decuniary circumstances at any time from the last of January, 1883, to March 17, 1884, the date of the commencement of this suit.

Under this evidence the plaintiff was not entitled to recover. It was incumbent upon him to prove, not merely that the maker of the note was insolvent at or for a short time after the note matured, but he was bound to show that such insolvency continued down to the time of the commencement of his suit. This precise question was before the Supreme Court in Bledsoe v. Graves, 4 Scam. 382, where the court, in considering an instruction involving this identical rule, say: “The inquiry arises whether the holder can delay proceedings both against the maker and indorser, after the maturity of the note, and afterward hold the latter liable, by showing the insolvency of the former when the note fell due, although the money might have been collected of him between that time and the institution of the suit against the indorser. We are of the opinion that he can not. If at the time the note falls due, proceedings against the maker would be unavailing, the holder may proceed immediately against the indorser; but if he will not do this, he must be prepared, in order to fix the liability of the indorser, to show that suit against the maker would have been unavailing in the intermediate time while he retained the note. If he omit any opportunity of collecting the money of the maker before he proceeds against the indorser, he is guilty of such laches as will discharge the latter.”

This doctrine, laid down by Mr. Justice Catón forty-three years ago, has never been departed from or criticised, but has been recognized and acted upon by the Supreme Court in later decisions. Phillips v. Webster, 85 Ill. 146; Clayes v. White, 83 Id. 540.

The plaintiff insists, however, that evidence of the insolvency of the maker of the note, during the residue of the period between the maturity of the note and the commencement of the suit, was offered by him and excluded on the defendant’s objection, and that the defendant should be estopped to insist upon a defect of evidence in that respect. As we read the record the facts are not as the plaintiff claims. The plaintiff’s counsel, while examining the maker of the note, asked him certain questions as to his insolvency at a pieriod subsequent to the commencement of the suit, and also at the time of the trial. These questions were objected to, and in the discussion of one of said objections, viz., the one interpiosed to the question in relation to his insolvency at the date of the trial, a colloquy took place between the court and counsel, in which the counsel made an offer to prove the insolvency of the maker during a portion of the period prior to the commencement of the suit. To that offer the defendant’s counsel made no objection, and said nothing, but at the close of the colloquy the court merely sustained the objection. The theory of the defendant’s counsel seems to have been that the piroof should be confined to the pieriod prior to the commencement of the suit; and in that we think he was correct, and consequently no objection was made by him to any evidence which was limited to that period. We are unable to see any ground for estopping the defendant from objecting to the defect of proof, as its absence from the record was in no sense the result of any objection interposed by his counsel at the trial.

The judgment will be reversed on the ground that the finding of the court is unsupported by the evidence, and the cause will be remanded for a new trial.

Judgment reversed.


text:
    Adolph Hirsch v. Henry A. Kohn et al.
    1. Statute of Frauds.—The court is of opinion that the contract set up under the oral lease which the defendant’s evidence tended to establish was not within the Statute of Frauds, as the evidence failed to show that the oral lease sought to be proved was for the term of one year from the expiration of the then existing lease, or for any other fixed or definite term, and therefore it does not appear thatyaid contract could not have been performed within one year.
    2. Practice—Reviewing judgment of circuit court.—In reviewing the judgment of a circuit court on appeal, the reasons assigned by the circuit judge for his decision are immaterial. It will be presumed that he duly considered and passed upon every question presented by the record before him, and if bis decision can be sustained upon any grounds fairly deducible from the pleadings and evidence, the judgment will be affirmed wholly irrespective of the reasoning which the judge may have adopted in arriving at his decision.
    Appeal from the Circuit Court of Cook county; the Hon. Lorin C. Collins, Judge, presiding.
    Opinion filed December 8, 1886.
    Messrs. Kane & Kane and Mr. J. K. Anderson, for appellant.
    Mr. Lewis H. Mitchell, for appellees.
   Bailey, J.

This was a suit brought by Henry A. Kohn and others, against Adolph Hirsch, before a justice of the peace, and afterward taken by appeal to the circuit court, where a trial was had before the court without a jury, resulting in a judgment in favor of the plaintiff for $135 and costs. It appears that for several years prior to May 1, 1882, the defendant had occupied certain premises as a tenant of the plaintiffs, and that on that day the plaintiffs executed to him a lease in writing, demising said premises to him for the year ending April 30, 1883, reserving as rent the sum of $810, payable in equal monthly installments of $67.50 each; that by an indorsement on said lease dated March 18,1883, and signed by both the plaintiffs and defendant, said lease was extended for one year from May 1, 1883, on the same terms and conditions. The defendant continued to occupy said premises until some time in January, 1885, and the present suit was brought to recover the rent for the months of September and October, 1884.

The defendant set up, by way of defense, certain damages arising from a breach by the plaintiffs of an oral contract in relation to making repairs on the demised premises, alleged to have been entered into by the plaintiffs on the 15th day of March, 1884. The defendant gave evidence tending to show that on that day he had a conversation with one of the plaintiffs in relation to renting the premises for a further term, in which it was agreed on the part of the plaintiffs, that they would repair said premises and put them in good condition; in consideration of which the defendant agreed to rent the premises for a further term and pay §67.50 per month therefor. The evidence also tended to show that the plaintiffs failed to make such repairs, and that by reason of the leaky condition of the roof of the building, the defendant’s goods and merchandise therein were wet by rains and considerably damaged.

The defendant’s evidence in relation to said oral contract was directly disputed by the evidence introduced by the plaintiffs, and the conflict thus raised presented a question of fact which it was peculiarly within the province of the court below, who saw and heard the witnesses, to settle. As the court found the issues for the plaintiffs and assessed their damages at the full amount of the rent, it will be presumed, in support of said finding, that the court gave credence to the plaintiffs’ witnesses on this question, and found that no such contract was entered into. We have examined the evidence, as the same is preserved in the record, with care, and we are unable to say that there is such a preponderance in favor of the defendant, as would warrant us in setting aside the finding of the court as being against the weight of the evidence.

But it is said that the court erroneously held that the contract set up by the defendant was within the Statute of Frauds, for the reason that it could not be performed within one year from the time it was made, and that as a result of such erroneons holding the defense arising from the breach of said contract was excluded. We are inclined to the opinion that the contract which the defendant’s evidence tended to establish was not within the Statute of Frauds, as said evidence wholly fails to show that the oral lease sought to be proved was for the term of one year from the expiration of the then existing lease, or for any other fixed or definite term; and consequently it does not appear that said contract could not have been performed within one year.

The record, however, fails to furnish us with any legal evidence that the decision of the court was based upon an application of the Statute of Frauds. Fío propositions of law were submitted to the court to be held as the law in the decision of the case. All that appears is, that the court, in rendering his decision, gave as a reason for his finding, that the contract set up by the defendant was within the statute and therefore void, and consequently that the defendant must be deemed to have held the premises as a tenant holding over, and that his rights and liabilities were fixed by the terms and conditions of the former lease. It is well settled, however, that in reviewing the judgment of a circuit court on appeal, the reasons assigned by the circuit judge for his decision are immaterial. It will be presumed that he duly considered and passed upon every question presented by the record before him, and if his decision can be sustained upon any grounds fairly deducible from the pleadings and evidence, the judgment will be affirmed, wholly irrespective of the reasoning which the judge may have adopted in arriving at his decision. See Potter v. Gronbeek, 117 Ill. 404.

But even if it should be conceded that the judge based his decision upon a finding that the contract set up was within the statute, it nowhere appears that he found that the contract was proved, and the evidence on that point being conflicting, the finding of the issues for the plaintiffs is conclusive evidence that the issue as to the making of such contract was found against the defendant.

There being no error in the record, the judgment will be affirmed.

Judgment affirmed.


author: Per Curiam.

text:
    Chicago & Northwestern Railway Co. v. Frank Cummings.
    1. Excessive veedict—Remittitue.—In an action by a passenger against a railroad company for damages for an assault upon him by the company’s brakeman, the jury brought in a verdict, seven tenths of which the plaintiff was compelled to remit in order to prevent a new trial. Held, that the verdict can not but be regarded as the result of passion and prejudice on the part of the jury.
    2. Same—Practice.—While it is in the power of the trial court to render judgment on verdicts reduced to an amount satisfactory to the trial judge, and the entering of such judgment is not error, yet the judgment so rendered is anomalous, and in a reviewing court can not be entitled to the presumptions which obtain in favor of a judgment upon a fair verdict, which results from concurrence upon all the issues by the jury and the court.
    Appeal from the Circuit Court of Cook county; the Hon. John G. Rogeks, Judge, presiding.
    Opinion filed December 8, 1886.
    This was an action of trespass for assault and battery brought by appellee to recover damages, for an alleged battery upon him by the brakeman of the appellant, when appellee was a passenger on the cars of appellant. The pleas were the general issue and son assault demesne. While it appeared that appellee was beaten by the brakeman of the train in which he was a passenger, there was a sharp conflict of evidence as to whether appellee did not first strike the brakeman. The jury rendered a verdict against appellant and assessed the damages at $2,000. A motion for a new trial was made and on the argument of the motion, the plaintiff, by the requirement of the court, remitted $1,400 of the verdict, and thereupon the motion was denied and judgment was rendered for §600 against the company, and the case is brought to this court by appeal.
    Mr. W. C. Goudy and Mr. W. B. Keep, for appellant.
    Messrs. Ellis & Meek, for appellee.
   Per Curiam.

The damages assessed by the jury were, according to the judgment of the court, more than three times greater than were justified. The damages were unliquidated, and there was no way in which the court could ascertain what part of the judgment was for actual damages, and what for punitive damages. The defendant company ought to have the right to have the verdict of an unprejudiced jury upon the case, and not be compelled to accept in lieu thereof the judgment of the court, and thus be practically denied trial by jury.

A verdict in such a case as this, so excessive that seven tenths of it will be remitted to prevent a new trial, can not but be regarded as the result of passion and prejudice on the part of the jury, and it is difficult to see how the vice in such a verdict can be cured by a remittitur, for the passion and prejudice was in the jury, and must have entered into and permeated the whole finding, and must abide in that which remains as well as in that which is remitted. We are aware that the practice of sustaining such verdicts when reduced by remittitur, has obtained and may be said to be established in this State, it having been adopted and sanctioned by the Supreme Court in several cases, at least so far as to refuse to reverse judgments entered where a portion of excessive verdicts was remitted: Thomas v. Fischer, 71 Ill. 576; McCausland v. Wonderly, 56 Ill. 410.

The course of decision has not, however, been uniform. In Lœwenthal v. Streng, 90 Ill. 74, the court said of the verdict: " It could only have been induced by prejudice, passion or a total misconception of the case, and when it is so flagrantly excessive as to be only accounted for on the grounds of prejudice, passion or misconception, the remittitur does not remove the prejudice, passion or misconception. These elements may have entered, and probably did enter into the finding of facts important to the issue, if not the issue itself. Such feelings would naturally lead to an unfair .finding against appellant.”

While it must be said that by the law as settled, it is in the p )wer of the trial court to render judgments on verdicts reduced as the one under consideration was, to an amount satisfactory to the trial judge, and the entering of such judgment is not error, yet'the judgment so rendered is anomalous, and in a reviewing court, can not be entitled to the presumptions which obtain in favor of a judgment upon a fair verdict, which results from concurrence upon all the issues by the jury and the court. In the exercise of the revisory power of this court, we may reverse a judgment rendered under such circumstances as appear in the record, notwithstanding there appear to be no errors of law, where, in our opinion, such course will best tend to promote the impartial administration of justice. In view of all the circumstances shown by the evidence in this record, and the impeachment of the verdict by the trial judge, in which appellee concurred by entering a remittitur of so large a' part of the verdict, we conclude that the better and more prudent course, the one most likely to conserve the rights of both parties, and approximate justice most nearly in the end, is to submit the issues between the parties to the consideration of another jury, and that this may be done, the judgment will be reversed and the case remanded.

Reversed and remanded.