author: Mr. Justice Graves

text:
    Edward Taylor, Appellee, v. Scott, Foresman & Company, Appellant.
    Gen. No. 17,124.
    1. Equity — where contract which is not mutual is basis for an accounting. A contract whereby defendants agree to pay plaintiff a royalty for the publication of his book, though lacking mutuality sufficient to support an action to compel defendants to publish and market the .books, may be the basis of an action for an accounting and recovery of royalties on books actually published.
    2. Statutes of frauds — contracts not to be performed, within a year. A contract, to be invalid as not to be performed within one year, must affirmatively so appear by its terms.
    3. Statute of frauds — when contract is to be performed. In determining whether a contract is to be performed within a year, facts or circumstances not gathered from a reasonable interpretation of the express terms of the contract cannot be considered.
    4. Statute of fr'auds — intention of parties as to time of performance. The intention or expectation of the parties, or the probabilities as to time of performance, cannot be considered in determining whether a contract is within the statute of frauds.
    5. Statute of frauds — where contract is not to be performed, within a year. Where defendant agrees orally to pay plaintiff a certain royalty on his book and promises to make semi-annual reports on the first day of January and the first day of July, and settlements on the first day of May and the first day of November of “each and every year,” the contract is void under the statute of frauds.
    6. Statute of frauds — what writing sufficient. Any writing signed by the party to be-charged, definitely stating the terms of a contract, or from which those terms can be fairly inferred, is sufficient to take the contract out of the operation of the statute.
    7. Statute of frauds — when letters will not take contract out of the statute. Letters between the parties to a contract, which merely reiterate the claims of the respective parties concerning the terms, to which the other does not assent, are not sufficient to take the contract out of th? operation of the statute.
    8. Statute of frauds — where contract is partly parol and, partly written. Where a contract is partly in writing and partly in parol, it will be treated as parol in determining whether it is within the statute of frauds.
    9. ArbitratioN and awabd — when award, is void,. Where an award of arbitrators does not follow the contract of submission, it is void.

      10. ARBITRATION AND award — when award does not follow submission. Where a hoard of arbitrators in determining the royalty to be paid on a booh limit the award to boohs sold in Kansas when the submission was not so limited, and in another finding where the submission is to determine the royalty on boohs exchanged in Kansas do not limit the award to Kansas, the findings do not follow the submission and are not binding.
    11. Limitations — on written contracts. The Five-Year Statute of Limitations has no application to actions on written contracts.
    12. Interest — under R. S. ch. Vf, § 2. In determining interest under R. S. ch. 74, § 2, it is improper to compound it.
    13. Interest — money due for royalties. R. S. ch. 74, § 2, applies to money due on a contract to pay royalties on a booh.
    14. Interest — when offer to pay stops interest. In order that an offer to pay a debt may have the effect of stopping interest, it must not be coupled with conditions.
    15. Costs — when divided. Where the decree is affirmed in part and reversed in part, with directions to disallow certain items, the appellant may be ordered to pay three-fourths and appellee one-fourth of the costs in the court of review.
    Appeal from the Circuit Court of Cooh county; the Hon. Thomas G. Windes, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1910.
    Affirmed in part,
    reversed in part and remanded with directions.
    Opinion filed March 26, 1913.
    S. E. Lambert, for appellant.
    Arthur Hxjmpheey and Charles S. McIlvaiNE, for appellee.
   Mr. Justice Graves

delivered the opinion of the court.

Appellee, the author of “A Brief History of the American People,” sometimes known as the “Model History,” designed for use in schools, and who was the owner of the copyright thereon, in January, 1879, entered into the following contract with George Sherwood & Company, viz.:

“We hereby agree in consideration of the exclusive right to publish and sell a certain work entitled, ‘A Brief History of the American People,’ by Edward Taylor, to pay to'the said Edward Taylor or his assigns the sum of four cents (4 cents) on each, and every copy sold by ns.

“It being provided, however, that no copyright or royalty shall be paid on said book or any of said books that are given away; or supplied at specially reduced rates for first introduction into schools.

‘ ‘ Copyright payments are to be made semi-annually as follows:

“The account of sales are to be made up to the first of January and first of July of each and every year and the amount found due the said Taylor as per this agreement is to be paid respectively on the first day of May and first day of November of each and every year during the continuance of the copyright. That is to say, the amount found due for sales to Jany. first shall be paid May first following and the amount found due July first shall be paid first of November following.
“Chicago, January 23, 1879.
“Geo. Sherwood & Co.
“I accept from George Sherwood & Company the above mentioned copyright, under the conditions specified, as an equitable compensation to me for their use of my late work, ‘A Brief History of the American People’. I hereby confirm this contract, and make it binding upon myself, my heirs, and my assigns.
“Edward Taylor.
“Gifford, Iowa, January 27, 1879.”

Under this contract the work was published and sold by Sherwood & Company until sometime in 1895, when appellant, Scott, Foresman & Company, purchased the business of Sherwood & Company and took over the above contract with the consent of appellee, and assumed all the obligations of Sherwood & Company thereunder, and from then until February 17, 1897, published and sold the work and reported to and paid appellee in accordance with the terms of that contract. On the last named date appellee and appellant, through E. H. Scott, its president and general manager, entered into a verbal agreement at Indianapolis, Indiana, by which the parties attempted to modify the terms of the former agreement in certain particulars. The terms of this verbal agreement, as found and declared by the court, were “that the royalty on said books in the future should be 5% of the selling price.” At the time this verbal agreement was entered into the book had become practically a dead proposition, the sales during the year previous having netted appellee little or nothing. The new or verbal agreement was entered into for the purpose of making the royalties proportionate to the selling price in case the selling price should be lowered, in order to obtain a market, and there is some evidence tending to show that appel-land had in mind at that time competing for the adoption in the schools of the State of Kansas of the book under a uniform school text book law then being considered by the legislature of that state. At all events the contemplated law was passed in the State of Kansas and the book was adopted there for a period of'five years beginning with the 1st day of September, 1897. During the five years next following September 1,1897, something more than 91,000 copies of the work were sold and something more than 31,000 copies were exchanged in the State of Kansas, and outside of that state 567 copies were sold. Those disposed of in Kansas brought fifty cents each for those sold outright and twenty-five cents each and an old book for each one exchanged. Those sold outside of Kansas brought eighty cents each.

After the verbal agreement was entered into at Indianapolis a controversy arose over what its terms were. The discussion concerning that agreement was carried on by correspondence between the parties. In this correspondence both appellant and appellee, not only recognize the oral agreement as having been made, and express a willingness to be bound by what they respectively claimed its terms were, but insisted that the other should do the same. The bone of contention between them was not whether the Indianapolis verbal contract was made, or whether it was binding, but was concerning what, in fact, tbe agreement was. Tbe parties later and on June 28, 1898, signed tbe following written agreement to submit to arbitrators for determination tbe differences between tliem:

“A difference baying arisen between tbe undersigned regarding, first, tbe amount of royalty to be paid on each copy of the Model United States History, second, tbe payment of royalty on tbe exchanges of books sold in the State of Kansas, and, third, tbe payment of Mr.. Prentiss for writing- tbe supplement on tbe History of Kansas, — it is hereby agreed that said differences shall be submitted to arbitrators who shall decide between tbe parties hereto, on tbe points mentioned above. In making their decision tbe arbitrators shall be guided solely by a contract made in writing between Geo. Sherwood & Company, and Edward Taylor, in 1879; and by an oral agreement subsequent to this written agreement, which oral agreement was made at Indianapolis in February, 1897, between E. H. Scott, for Scott, Foresman & Company, and Edward Taylor. The substance of such agreement is evidenced by the correspondence of the parties hereto.’’

Evidence was presented to the arbitrators chosen under the agreement and they, on July 21, 1899, made a report containing the following findings:

“* * * First: In accordance with the spirit of said contract and subsequent verbal agreement, said Edward Taylor is entitled to a royalty of 'five per cent on all copies of ‘The Model United States History’, sold at the full contract price in the State of Kansas. (It being understood said price is fifty-five cents per copy.)

‘ ‘ Second: In the matter of exchanges, we find that said Edward Taylor is entitled to five per cent royalty on all cash received for sale of new books, together with the amount received from the sale of old books, after deducting all expenses of handling said old books.

“Third: We find that the expense incurred for writing the supplement of the ‘History of Kansas,’ should not be borne by said Edward Taylor. * * *”

Appellee refused to abide by the first and second findings of the arbitrators, because these findings did not follow the arbitration agreement in that the first finding was limited to sales in Kansas, when it should have covered the whole United States, and the second finding covered the whole United States, when it should have been limited to the State of Kansas. Appellant made reports and undertook to settle with and pay to appellee royalties due in accord with the above findings of the arbitrators, while appellee as consistently refused to accept such payments and adjustments, claiming he was entitled to four cents royalty on each copy of the book sold instead of 5% per cent, on the selling price. This continued until May 31,1905, when appellee filed the bill in this case.

The bill sets up the original contract with Sherwood & Company, its assignment to Scott, Foresman & Company, the Indianapolis verbal agreement, which it is averred was obtained "by fraud and misrepresentations, and by an amendment filed later that the Indianapolis agreement was and is void as within the statute of frauds of the State of Indiana. It is further averred in the original bill that appellant published and sold large numbers of the book under the terms of the original contract, but that it has not truly accounted for or paid the royalties due under the Sherwood contract, or kept correct books of account thereof; that appellee is entitled to four cents on each copy of the work sold by appellant, including those sold in Kansas and paid for in cash, or part in cash and part in other books; that the differences between the parties had been submitted to arbitration, but that the finding and award of the arbitrators was void, and prays for discovery and accounting; that the Indianapolis verbal contract be held void; that the first and second finding of the arbitrators be held void; that appellant be required to pay the amount found due on an accounting and for general relief.

Appellant’s answer admits liability under the Sherwood contract, as amended by the Indianapolis verbal agreement, and that it has published and sold numerous volumes of the history under the terms thereof as so amended; denies failure to keep accurate accounts ; denies failure to truly account to appellee, and sets out a tabulated account, including books sold and exchanged and amount received from the old books, from January 1, 1897, to August 1, 1902; avers offers to pay and readiness to pay all royalties due appellee, and the payment to appellee of all of such royalties as he would receive; admits the making of the Indianapolis verbal agreement and denies fraud in procuring it; admits the submission of differences between the parties to arbitration and the finding of the arbitrators and denies that it is void in any particular, but avers that it is final and binding on the parties; admits liability to appellee on the basis of the finding of the arbitrators.

Issues being joined, the cause was by the agreement of the parties referred to a master in chancery to take proofs and report the same, together with his conclusions of law and fact. After the cause was referred to the master appellant obtained leave to file and did file an amendment to its answer, in which laches and the statute of limitation are set up as a defense.

The master in his report finds that the Sherwood contract was made as averred in the bill and that appellant took over that contract and published and sold books under it until February 17, 1897, when the parties made or attempted to make a verbal amendment thereto, but that there is no evidence of any fraud having been practiced by either party in procuring the Indianapolis agreement, but that it is void under the statute of frauds of the State of Indiana, and that the original contract is still in force, and that appellant is bound to pay appellee four cents royalty for each copy of the book sold by it, and interest thereon from the time it became due, regardless of how it received its pay therefor, or whether it received its pay or not; that the court has jurisdiction; that the equities are with the complainant, and that he is entitled to the-relief prayed for. The master then states an account in which he found appellee is entitled to receive from appellant $7,145.98, including interest on the deferred payments, to July 1, 1908, and finds that appellee is entitled to interest thereon at five per cent, per annum from July 1, 1908.

Objections to this report was filed by both parties, all of which were overruled by the master. These objections being’ ordered to stand as exceptions to the master’s report were considered by the chancellor and were all overruled. The chancellor, on May 2, 1910, entered a decree in which it is found that there is no controversy concerning the original contract; that it is in full force and binding on both parties to this suit; that on February 17, 1897, at Indianapolis, Indiana, the parties “made or attempted to make a verbal amendment to” the original contract; “and that the parties then agreed verbally that the royalty on said books in the future should be five per cent of the selling price;” that the verbal agreement was never reduced to writing, nor was there any memoranda thereof signed by the party to be charged; that it was understood that it should remain in force more than one year and that it would require more than one year to perform it, and that it is void under the statute of frauds of Indiana, where it was entered into; that the first and second finding of the arbitrators are void and that the third is valid; that appellant must account for and pay to appellee four cents on each copy of the book sold by it, irrespective of how it received pay for it, or whether it received its pay or not, and that interest should be paid on the various amounts of royalties from the time the same became due to the date of payment; that the amount due, including interest, is $7,801.03; that the court had jurisdiction and that complainant is entitled to the relief prayed for in the bill. A money judgment was then entered against appellant for-the amount found due and for costs. Appellant excepted to each action of the court in overruling’ its exception to the master’s report and in making said findings, “except said finding that a verbal agreement was made in February, 1897, to which finding said defendant (appellant) does not object.” Twenty-eight assignments of error are filed by appellant. No cross-errors are assigned.

The hill seeks discovery and an accounting and presents a proper ease for equitable relief. Whether or not the Sherwood contract would have been held had for want of mutuality in a proceeding by appellee to compel Sherwood & Company or their successors to publish and market the books therein mentioned, or to do so within any specific time, or in any specific manner, it is clearly sufficient to base an action for the recovery of the stipulated royalties on books actually published and sold under the rights conferred by it. Plumb v. Campbell, 129 Ill. 101.

It is often true that a contract that is not enforcible while it remains executory, is enforcible against one who has availed himself of the rights and benefits secured to him by it. A party to a contract may not perform it, so far as it is beneficial to him, and hide behind its want of mutuality, when called upon to perform the part of it that is beneficial to the other party. Forthman v. Deters, 206 Ill. 159; Kadish v. Garden City E. L. & B. Ass’n, 151 Ill. 531; Evans v. Moore, 247 Ill. 60. The evidence shows that appellant has availed itself of the rights secured to it by this contract by publishing and disposing of nearly 125,000 volumes of the work at a very considerable profit. It is now estopped from saying it is not bound by it to pay ap-pellee the agreed royalty, because perchance appellee might not have been able to compel it to publish and sell the books.

The chancellor found, and the evidence warrants the finding, that the parties entered into an agreement at Indianapolis, Indiana, by which agreement, as ascertained and declared, tlie royalties to Tbe paid were thereafter to be on a basis of five per cent, of tbe selling price of tbe books, whereas by tbe Sherwood contract tbe royalties to be paid were fixed at tbe flat rate of four cents per copy of tbe book sold. This agreement tbe court found was and is void under tbe statute of frauds of Indiana, because it w'as not in writing and was not to be performed within a year. Tbe clause of tbe Indiana statutes in question is as follows:

“1. No action shall be brought in tbe following cases:

“Fifth: Upon any agreement that is not to be performed within one year from tbe making thereof.

“Unless tbe promise, contract or agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing and signed by the party to be charged therewith or by some person thereunto by him lawfully authorized; excepting, however, leases not exceeding the term of three years.”

It has frequently been decided by the courts of Indiana, and has become the settled law of that state, that in order to bring, a contract within the provisions of the statute above quoted, it must affirmatively appear from the terms of the contract itself that its stipulations are not to be performed within a year. Durham v. Hiatt, 127 Ind. 514; Shumate v. Farlow, 125 Ind. 359; Wilson v. Ray, 13 Ind. 1. The same principle has been announced in the Appellate Court of this state. First Presb. Church of Davenport v. Swanson, 100 Ill. App. 39. Of course, it is not necessary that the contract in express terms shall say “this contract shall not be performed within a year,” or equivalent words, but it is necessary that from the express terms of the contract it shall appear that it is not to be performed within the year. Neither the real intention or expectation of the parties that the contract would or would not be performed within a year, or the probabilities that it would or would not, or the fact that it was or was not so performed, or any other matter, fact, or circumstance not gathered from a reasonable interpretation of the express terms of the contract can be considered in determining whether the contract is so to be performed. Warner v. Texas & P. R. Co., 164 U. S. 418; Blair Town Lot & Land Co. v. Walker, 39 Iowa, 406.

The Indianapolis contract was an oral contract. Its terms were the same as the original written contract with the exception of the rate of royalty to be paid, which was changed from four cents per copy of the book sold to five per cent, of the proceeds of the sale. By the terms of the original contract, which became the terms of the Indianapolis contract, it was provided that semi-annual reports should be made by appellant on the first day of January and the first day of July and that semi-annual settlements of the royalty account should be made by appellant on the first day of May and the first day of November of “each and every year.” Plainly, by its terms, this contract could not be performed in a single year. It was clearly void under the terms of the statute quoted. True, several letters were written by each of the parties to the other, in which each insisted that a contract had been there made, but the parties differed widely as to what the terms of that contract were. While any writing, signed by the party to be charged, definitely stating the terms of a contract, or from which those terms can be fairly inferred, will be sufficient to take a contract out of the operation of the statute quoted, the terms so stated or inferred must be the terms mutually agreed to by the parties. The letters above referred to fail in that regard, and really amount to nothing more than reiterations of the claims of the respective parties concerning those terms, to which the other party does not assent. As to the fact that under some conditions the royalties were to be five per cent, on the proceeds instead of four cents on each copy of the book sold, the parties do agree, but as to what those conditions were, they disagree, so that, as to those conditions at least, the contract remains a parol contract, and it is well settled that when a contract is partly in writing and partly in parol, it will he treated as a parol contract in determining whether it is within the inhibition of the statute of frauds. Wright v. Raftree, 181 Ill. 464; Cloud v. Greasley, 125 Ill. 313; Farwell v. Lowther, 18 Ill. 252; Elwell v. Hicks, 238 Ill. 170; Hartenbower v. Uden, 242 Ill. 434.

As a general rule, an award of arbitrators, in order to be binding, must follow the contract of submission as made by the parties. It is not for a board of arbitrators to change the terms of the submission or to determine any matter not therein contained. Their sole authority is the contract of submission. If the award is broader or narrower than the submission, the whole award is void. Buntain v. Curtis, 27 Ill. 374; Stearns v. Cope, 109 Ill. 340; Tucker v. Page, 69 Ill. 179; Whetstone v. Thomas, 25 Ill. 361; Alfred v. Kankakee & S. W. R. Co., 92 Ill. 609; McDonald v. Bacon, 4 Ill. (3 Scam.) 428; Ingraham v. Whitmore, 75 Ill. 24; Busse v. Agnew, 10 Ill. App. 527; Sherfy v. Graham, 72 Ill. 158; Steere v. Brownell, 113 Ill. 415; McCullough v. McCullough, 12 Ind. 487. The submission and award are above set out. In at least two important particulars the award does not follow the submission. The first question submitted called for an award and determination as to “the amount of royalty to be paid on each copy of the ‘Model United States History.’ ” The board of arbitrators limited its findings to the amount of such royalty to be paid on all books sold in the State of Kansas. This finding was not as broad as the submission which was not limited to the State of Kansas. The second submission called for a determination as to “the payment of royalty on the exchanges of books sold in the State of Kansas.” The award in this respect was not limited to the State of Kansas and was, therefore, broader than the submission. For these reasons, under the authorities cited, the award of the arbitrators referred to in this case was not binding.

In order to accomplish the sale of the hook in the State of Kansas, it became necessary to have added to it as originally published a supplemental history of the state. This appellant procured to be done by one Prentiss, and paid him for it. There was at one time some contention on the part of appellant that appellee should stand this item of expense, but the evidence in the record would not warrant a holding that he was liable therefor, and the claim was properly disallowed by the court.

In the account, as stated by the master in chancery and made the basis of the decree under consideration, appellant is charged with $8.64 for royalties due prior to July 1, 1897, and with $4.76 for interest thereon. Appellee, in his testimony, says he had received all royalties due him up to that date on the regular edition, and no claim is made that any of the Kansas edition were sold prior to that date. The master’s findings and the decree are, therefore, erroneous as to the items antedating July 1, 1897.

From á careful examination of the record and the questions of law involved we conclude that the original written Sherwood agreement was in force and binding on the parties to this suit up to the time the last item of royalties shown in the master’s report became due.

This suit is based on the original Sherwood written contract and the contentions of appellant that the five year statute of limitation barred a recovery for all items of royalties accruing prior to May 31, 1900, and that appellee is entitled to no interest on delayed payments are not sound. The five year statute of limitations has no application to actions on written contracts, and as to the question of interest, section 2 of Chapter 74, R. S., provides, in part, as follows:

“Creditors shall be allowed interest at the rate of 5 per centum per annum for all moneys after they become due on any bond, bill, promissory note, or other instrument of writing * *

It would seem that this statute is too plain to need construction. It has. been held to apply to a great variety of contracts. McDonald v. Patterson & Co., 186 Ill. 381; Keeler v. Herr, 157 Ill. 57; Massachusetts Mut. Life Ins. Co. v. Robinson, 98 Ill. 324; Heissler v. Stose, 131 Ill. 393; Supreme Lodge A. O. U. W. v. Zuhlke, 129 Ill. 298; Knickerbocker Ins. Co. v. Gould, 80 Ill. 388; Morris v. Wibaux, 159 Ill. 627. The Sherwood contract provides for the payments on May 1st of each year of the royalties on books sold up to January 1st next previous, and for the payment on November 1st of each year of the royalties due July 1st next previous. Beginning with the sales made after July 1,1897, royalties became due at various times before this suit was commenced, aggregating $4,957.80, figured on the basis of the Sherwood contract, that have not been paid appellee, which he is entitled to receive and on which he is entitled to five per cent, interest from the time each item thereof became due to the date the final decree is entered in this case. The master computed the interest on the basis of the Sherwood contracts down to July 1, 1908, and added the interest so computed to the amount of the royalties, and found that on that date there was due for principal and interest $7,145.98. The decree based on this report was entered May 2,1910, in which the court has undertaken to compute interest to the date of the decree, and in so doing has computed interest on the interest figured by the master, or, in other words, has compounded the interest. Of course, that is incorrect. The interest should have been computed on each item of royalty from the time it became due to the date of the decree. The interest found by the master to be due up to July 1,1908, was $2,179.54. The item of interest improperly allowed by the court on this amount was approximately $200.

The claim of appellant that it should not be required to pay interest, because it bad offered to pay tbe royalties from time to time, as tbe same accrued, is without force. True, it did offer to settle and pay royalties at tbe rate of five per cent, of tbe proceeds of books sold on tbe basis of tbe finding of tbe arbitrators, but in eacb instance sucb offers were coupled with tbe condition that tbe amount offered should be accepted in full for all royalties due on tbe various sales to which such offers referred. In order to have tbe effect of stopping interest, offers to pay must not be coupled with sucb conditions.

Tbe decree of tbe Circuit Court is, therefore, reversed as to tbe items of royalties accruing on sales made prior to July 1, 1897, and tbe item of interest computed on tbe interest found by tbe master to be due up to July 1,1908, and tbe cause is remanded with directions to tbe Circuit Court to restate tbe account, and in so doing to disallow tbe items of royalties on books sold prior to July 1, 1897, and to compute interest, without annual or other rests, at tbe rate of five per cent, per annum on tbe various items of royalties found by tbe master to be due on sales made after July 1, 1897, from tbe dates tbe several items became due to tbe date tbe final decree shall be entered, and to enter a decree accordingly. In all other respects tbe decree is affirmed.

Appellant to pay three-fourths and appellee one-fourth of tbe costs in this court.

Decree affirmed m part; reversed in part and re manded with directions.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    Belle C. McCarthy, Appellee, v. The Pacific Mutual Life Insurance Company of California, Appellant.
    Gen. No. 16,947.
    1. CONTRACTS — interpreted as mutally understood. In the interpretation of a contract, the courts seek to give effect to it according to the sense in which the parties mutually understood it when made.
    2. Contracts — intention of the parties. Where the intention of the parties is sufficiently apparent, the contract is construed accordingly, though in so doing violence is done to the ordinary meaning of the words.
    3. Contracts — when language is given its usual meaning. Where there is nothing to indicate that the parties intended otherwise, the language used in a contract is given its usual and ordinary meaning.
    4. Insurance — construction of clause in accident policy. In an action on an accident policy, the words “injured in an occupation,” used in a clause changing the indemnity where the assured changes his occupation, are construed to mean “while engaged in an occupation” in the sense that it was his regular occupation when he was injured.
    5. Insurance — when declaration states a prima facie case. A declaration on a policy of insurance states a prima facie case when it alleges the issuance of the policy and the performance of all the conditions precedent therein contained, and it is unnecessary to negative matters of defense.
    6. Insurance — when' declaration is sufficient. In a declaration on a life or accident insurance policy, it is sufficient to aver the issuance of the policy, its terms, payment of the premiums, the death or injury, and notice and proof thereof to the insurance company.
    7. Insurance — when change in liability is proper defense to action on insurance policy. Where a clause in an insurance policy provided that if insured is injured “in an occupation” classified by the company in its latest manual as more hazardous than that stated in the schedule of warranties, the liability of the company is thereby reduced, it is a proper matter of defense where insured has changed occupations, and may be pleaded either in the language of the policy or in its legal effect.
    8. Insurance — what need not be averred in plea to an action on policy. Where an insurance company, in its defense to an action on a policy, pleads a reduction of liability on account of insured changing to a more hazardous occupation, it is unnecessary to aver that insured was not engaged in the former occupation where it is averred that he was engaged in the more hazardous one.
    9. Insueance — when provision that liability may be determined by “latest" manual is valid. A stipulation in an insurance policy is valid which provides that in case insured shall change his occupation the “latest” manual of the company shall be referred to to determine whether the newly-adopted occupation is more hazardous and what amount of indemnity is the basis of liability.
    10. Insurance — use of manual in determining liability. In an action on an accident policy, R. S. ch. 73, § 208, cl. 3, and § 209, do not apply in determining whether the manual of the insurance company may be looked to in ascertaining the amount of indemnity that is to be the basis of liability.
    Appeal from the Superior Court of Cook county; the Hon. Ben M. Smith, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1910.
    Reversed and remanded with directions.
    Opinion filed March 26, 1913.
    Rehearing denied and opinion modified and refiled April 25, 1913.
    George H. MasoN, for appellant.
    Jure F. Brower and Samuel B. KiNG, for appellee.
   Per Curiam.

— On March 18, 1908, appellant issued to Matthew H. McCarthy, then a tailor by occupation, an accident insurance policy, in which, in consideration of $25 premium then paid by him, appellant undertook to pay to appellee, as beneficiary, in case the insured should be killed by certain means therein named a sum varying according to the character of the occupation or exposure in which he was injured. On November 12, 1908, the insured died as the result of injuries received in a manner rendering appellant liable for some amount. This suit was commenced to recover the amount appellant would be liable for on the theory that the insured was injured in the occupation or exposure of a tailor, in which he was engaged when insured. On the issues joined and submitted to a jury, a directed verdict for appellee was returned for $6,880, and a judgment was entered for appellee for that amount and for costs. It is not contended that, on the issues as they were made up at the time the case was submitted to the jury, there is anything wrong with the verdict or judgment, but it is earnestly insisted that in sustaining a demurrer to four pleas of appellant, designated as additional pleas, reversible error was committed by the court.

The policy contained, among other stipulations, the following:

“3. If the insured is injured in an occupation or exposure classified by this company in its latest manual as more hazardous than that stated in the Schedule of Warranties, the company’s liability shall be limited to such proportion of the principal sum or other indemnity as the premium actually paid will purchase at the rate fixed by the company for such more hazardous occupation or exposure.”

With the quoted stipulation as a basis appellant filed the four pleas above mentioned. In the first of these additional pleas, after reciting that the policy contained the stipulation quoted, appellant avers:

“That at the time of receiving the bodily injuries, as alleged in the plaintiff’s declaration, the said insured, to wit: the said Matthew H. McCarthy, was then and there engaged in the occupation of farmer; and that the occupation of said McCarthy at the time and place last aforesaid was that of farmer; by means whereof defendant became liable, upon the death of the said insured, to wit: said Matthew H. McCarthy, as alleged in said declaration, and still is liable to pay to the plaintiff the sum of $2,031.25, part and parcel of the said sums of money in the said declaration mentioned, according to the tenor and effect of tie said policy of insurance.”

The second additional plea is the same as the first, except, instead of containing the words, “was then and there engaged in the occupation of a farmer; and that the occupation of said McCarthy at the time and place last aforesaid was that of farmer,” it contains the words, “was exposed to the risk or hazard of a farmer and received the bodily injury mentioned and alleged in the declaration while so exposed.”

The third additional plea was, in substance, the same as the first, except the occupation of the insured at the time of the injury is described as “farmer supervising only,” and it is averred that the occupation of “farmer supervising only” was classified as “medium,” but more hazardous than that of a tailor and that at the time of the injury the insured “was engaged in the occupation of farmer supervising only, and that his occupation was at the time last aforesaid that of a farmer supervising only.”

The fourth and last additional plea was the same as the third, except that, instead of the language last above quoted, the words “was exposed to the risk of a farmer supervising only and received the bodily injury mentioned in the declaration aforesaid while so exposed” were used.

In the view we take of this case, the question of the sufficiency of these four additional pleas can be disposed of by determining what construction should be given to the words “injured in an occupation or exposure,” contained in the clause of the policy above quoted, and whether these additional pleas or any of them set up a state of facts which under that stipulation, when properly construed, would limit the liability of appellant to the amount mentioned in such pleas.

In the interpretation of a contract it is the duty of courts to seek to discover and give effect to it according to the sense in which the parties to it mutually understood it when it was made. Whalen v. Stephens, 193 Ill. 121. If the intention of the parties is sufficiently apparent, the contract will be construed accordingly, even if in so doing violence is done to the ordinary interpretation of the words (Dowiat v. People, 193 Ill. 264), but if there is nothing to indicate that the parties intended otherwise, the language used will be given its usual and ordinary meaning. Kirby v. Wabash, St. L. & P. R. Co., 109 Ill. 412.

It is a matter of common knowledge that the classification of risks, using the term to signify persons applying for accident insurance, is made upon the basis of the employment in which the risk or applicant is engaged at the time the policy is applied for and issued. This classification is made for the purpose of ascertaining whether such person is eligible for insurance at all, and if so, what premium will he exacted for a given amount of indemnity. Such premium varies according to whether the employment in which the applicant is engaged is considered by the insurance company as preferred, or as hazardous, and if hazardous, to what degree. It is also well known that persons change their employment. In order to avoid the forfeiture of the policy and the loss to the insured of all the premium paid by him, in case, after the policy is issued, he embarks in some business more hazardous than the one he was engaged in when insured, it has come to be the practice of insurance companies to provide by some apt language in the policy some plan or scheme whereby, when the assured does change his occupation, the indemnity shall he proportionate to the hazard of the new employment and rate paid. It is to effectuate that purpose that the clause quoted was included in the policy issued to Matthew H. McCarthy.

Appellant contends that the insured in this case was engaged in a more hazardous occupation, when he was injured, than he was engaged in when he was insured, and that by reason of this change in occupation his indemnity was decreased; that the words “injured in an occupation,” as used in the clause quoted, mean “while engaged in an occupation” in the sense that it was his regular occupation when he was injured,as distinguished from being the occupation in the actual performance of which he was being injured. Identical, as well as similar, language has, however, been construed by the courts to mean what is here contended for it. McNevin v. Canadian Ry. Accident Ins. Co., 32 Ont. Rep. 284; Berliner v. Travelers’ Ins. Co., 121 Cal. 458; Fox v. Masons’ Fraternal Acc. Assn., 96 Wis. 390; Holiday v. American Mut. Acc. Ass’n, 103 Iowa 178; Standard Life & Accident Ins. Co. of Detroit v. Carroll, 30 C. C. A. 253, 86 Fed. 567 ; Aetna Life Ins. Co. v. Dunn, 71 C. C. A. 79, 138 Fed. 629.

While without doubt the origin of that construction can be traced to cases in which the insured had been injured in some employment or occupation in which he was temporarily or incidentally engaged, and different from the one in which he was engaged when insured, and the courts, by reason of the uncertainty of the language employed in the policy, have applied the rule that the language used in policies of insurance and other contracts, when doubtful, must be construed most strongly against the party who framed them, it has been adhered to so uniformly, even in some cases where it results in a reversal of that rule, that we feel bound to follow in the beaten path, although to do so in this case is to adopt a construction most favorable to the party who worded the stipulation.

A declaration on a policy of insurance states a prima facie case when the issuance of the policy and the performance of all the conditions precedent therein contained are alleged. It is not necessary to negative in the declaration matters of defense. Phenix Ins. Co. v. Stocks, 149 Ill. 319; Continental Life Ins. Co. v. Rogers, 119 Ill. 474. In a declaration on a life or accident insurance policy it is sufficient to aver the issuance of the policy, its terms, the payment of the premiums, the death or injury, and the notice and proof thereof to the insurance company. If the insured in this case was injured “in an occupation or exposure,” classified by the company in its latest manual as more hazardous than that stated in the schedule of warranties, and the liability of the company was thereby reduced, it was a proper matter of defense, and if set np in a plea, either in the language of the policy or in its legal effect, it is a good plea. The pleader in this case chose to set up the defense under the stipulation quoted according to his understanding of the legal effect thereof, which is, as heretofore shown, in accord with the weight of authority. Appellee insists the pleas are bad, because they do not contain an express averment that the insured was not a tailor. The declaration does not contain an averment that he was a tailor or engaged in any particular employment. In the absence of such an averment in the declaration the averment in the pleas that the insured was engaged in the employment of “farmer” or “farmer supervising only” is equivalent to an averment that he was not a tailor.

The contention of appellee that the latest manual of the company not being part of the policy cannot be considered for any purpose in this case is not sound.

As we understand it from the terms of the policy quoted, as well as from the arguments of counsel, the “latest manual of occupations” referred to is a tabulated list of employments relatively classified by the company from time to time, with reference to the liability of persons engaged therein, to be injured or killed by external, violent means, and fixing a rate of premiums to be paid by persons engaged in those employments respectively for a given amount of indemnity, and which being subject to change by the company may or may not be the same at the time an injury is sustained, as it was when the policy was issued, and that whatever manual is the “latest manual” at the time an injury is sustained is the one referred to in the stipulation. It is manifest that neither what did not exist at the time the policy was issued nor that which did then exist, but which might not exist when the injury should be received, could be incorporated in the policy. We agree with counsel for appellant that the manual of occupations was not part of the policy. We are unable, however, to see why it may not be looked to for the purposes for which the parties have agreed it shall he.

The question of when and under what conditions the liability of the insurance company may be reduced, and the means by which the extent of such reduction pba.il be determined are certainly legitimate subjects for contract. The stipulation in question, in substance and legal effect, is that in case the insured shall, while the policy remains in force, change his occupation, the manual that is then the “latest” manual of the company, whether it is the one that was in existence when the policy was issued or not, shall be referred to to determine, and shall be conclusive on the questions of whether the newly adopted occupation is then classified by the company as more hazardous than that of tailor, and if so classified, then what the amount of indemnity is that is the basis of liability, in view of the adoption of the new and more hazardous employment. It being a proper subject of contract and the parties having contracted concerning it, no reason appears why they should not be bound. In Consolidated Real Estate & Fire Co. v. Cashow, 41 Md. 59, and in Blackstone v. Alemaina Ins. Co., 56 N. Y. 104, very similar contracts were upheld. These cases were reinsurance cases and the stipulations in the reinsurance policies that were upheld left the determination of such questions as the extent of liability and.the time and manner of payment to be determined by the obligations of the original insurer under its policy. The courts then held the reinsurance companies bound by the stipulation, not because the original insurer’s policy or contract, or its obligation under it, was part of the policy of reinsurance, but after expressly holding that it was not.

Appellee insists that clause 3 of section 208u and section 209 of chapter 73, E. S., are controlling and prohibit the consideration of the manual for any purpose. Clause 3 of section 208u is found in that part of chapter 73, E. S., dealing with life insurance policies, and provides, in part, “* * * that the policy together with the application therefor, a copy of which application shall be endorsed upon or attached to the policy and made a part thereof, shall constitute the entire contract between the parties.” Section 209 is found in that part of chapter 73, E. S., dealing with accident insurance and provides, in part, “* * * that the policies or certificates shall state on their face the agreement with the person receiving the same.” Waiving the question whether clause 3 of section 208u applies to accident insurance policies, which is doubtful, to say the least, that clause, as well as section 209, could relate only to the question whether the manual can be considered a part of the policy, and are not helpful on the question whether the manual, although not part of the policy, can be looked to as a means of ascertaining the amount of indemnity that is to be the basis of liability.

The stipulation being construed in accordance with the foregoing authorities, the pleas were sufficient and the demurrer to them should have been overruled.

The judgment of the Superior Court is, therefore, reversed and the cause remanded with directions to ’ overrule the demurrer to the pleas referred to.

Judgment reversed and remomded with directions.


author: Mr. Justice Fitch

text:
    Thomas Lynch, Appellee, v. Spare Motor Wheel of America, Limited, Appellant.
    Gen. No. 17,863.
    1. Appeal^ and errors — what appealable. A record which shows that the final order appealed from is a mere memorandum reciting that motions for a new trial and in arrest of judgment were overruled, that a “judgment on the verdict” for a stated amount followed and that an appeal was prayed and allowed does not show any appealable order or judgment.
    2. Appeals and errors — final order or judgment. There is no final order or judgment in a ease where an order or judgment appealed from is not a judgment but is a mere memorandum, and an order of judgment referred to therein is a judgment by confession which was opened up and a trial had, but the record does not show that any order was entered overruling a motion for new trial or that judgment was entered on the verdict.
    3. Costs — when each party may he required to pay his own costs. On appeal, where no final order or judgment is before the appellate court, and the cause is remanded with leave to appellee to move for judgment on the verdict, each party may be required to pay his own costs on the appeal.
    Appeal from the Circuit Court of Cook county; the Hon. William B. Scholfield, Judge, presiding. Heard in the Branch Appellate
    Court at the October term, 1911.
    Remanded with leave to move for judgment on the verdict.
    Opinion filed March 28, 1913.
    William C. McHeNry, for appellant.
    Jesse LoweNhatjpt and Lewis F. JacobsoN, for ap-pellee.
   Mr. Justice Fitch

delivered the opinion of the court.

In this case the record shows the following as the order or judgment appealed from:

“Thomas Lynch vs. The Spare Motor Wheel of America, Ltd. 289849 — 5470. Motion of defendant for new trial overruled, exception by defendant. Motion of defendant to vacate order of judgment entered on March 22, 1909, allowed, exception by plaintiff; motion of defendant in arrest of judgment overruled, exception by defendant, and judgment on the verdict for thirty-eight hundred sixty-six dollars and forty-eight cents ($3866.48) exception by plaintiff and defendant, appeal prayed by defendant to Appellate Court and allowed upon filing bond in the sum of $6000.00 in forty days (40) to be approved by the clerk of the court and bill of exceptions to be filed in sixty days. H. B. Scholfield, Judge.”

This is not a judgment. It is a mere “loose memorandum., evidently intended as a guide to the clerk in making np his record at some subsequent time. ’ ’ Metzger v. Morley, 184 Ill. 81; Martin v. Barnhardt, 39 Ill. 9; Santa Clara Valley M. & L. Co. v. Prescott, 238 Ill. 625.

The “order of judgment entered on March 22,1909” referred to in the memorandum appears from the rec-. ord to be a judgment entered by confession in favor of appellee against appellant for $4339.00 and costs. This judgment, however, was not appealed from, but on October 25, 1909, by an order duly entered of record, leave was given to plead to the declaration, upon which said judgment was based, the judgment to stand as security. The record further shows that pleas were filed and that a jury trial was had in February, 1911, resulting in a verdict in favor of appellee for $3866.48, and that appellant entered a motion for a new. trial. So far as the record shows, no order overruling the motion for new trial and no judgment on the verdict has ever been entered of record in this cause. There is therefore no final order or judgment before us for review.

Following the rule announced in Metzger v. Morley, supra, as to the proper practice in such cases, the cause will be remanded to the Circuit Court, with leave to the appellee to move for judgment on the verdict, if he shall be so advised, each party to pay his own costs on this appeal.

Remanded with leave to move for*judgment on the verdict.


author: Mr. Presiding Justice Gridley

text:
    Sophia McCambridge, Appellee, v. City of Chicago Appellant.
    Gen. No. 17,966.
    1. Evidence — exclamations of pain and expression of pain on features. In an action for personal injuries, it is not prejudicial error to admit testimony as to an expression of pain seen on plaintiff’s face and as to her moaning and exclamations of pain.
    2. Instructions — repetition. An instruction may properly be refused when the propositions therein seem to have been fully covered in instructions given.
    3. Damages — not excessive. A verdict for $1,000 is not excessive where plaintiff’s left wrist was fractured and caused her pain down to the time of trial.
    Appeal from the Superior Court of Cook county; the Hon. Harry C. Moran, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1911.
    Affirmed.
    Opinion filed April 3, 1913.
    William H. SextoN and N. L. Piotrowski, for appellant ; David R. Levy, of counsel.
    Jtjle F. Brower and Samuel B. King, for appellee.
   Mr. Presiding Justice Gridley

delivered the opinion of the court.

This is an appeal from a judgment of the Superior Court of Cook county for $1000 against the City of Chicago, rendered upon a verdict of a jury in an action for damages for personal injuries sustained by the plaintiff while walking on a defective sidewalk in said city on the evening of September 22, 1903.

The material facts, as disclosed by the evidence, are substantially as follows: On the evening in question, plaintiff, a woman of about 34 years of age, visited the home of a family named Taylor, on the west side of Artesian avenue, about midway between 35th and 36th streets, where she remained until about half past ten o’clock, when she left to go to her own abode. Intending to board a car on 35tb street and knowing that the west side of Artesian avenue was tom up, she walked south to 36th street, crossed over to the east side of Artesian avenue, turned north, and was walking towards 35th street, when she stepped upon a board in the sidewalk, which “flew up and tripped” her, and “one foot went down about a foot and a half under the sidewalk,” and she “fell lengthwise,” sustaining a fracture of the wrist of her left arm, which caused her pain from that time down to the time of the trial, especially during bad weather. Plaintiff testified that as she got on the sidewalk in question she noticed it was “kind of shaky,” “was beginning to get rickety and * * * to wabble, under my knees,” and “was going to be dangerous,” and as she was not used to the sidewalk she “was kind of careful;” that she “could not walk in the street,” because it was muddy and dark; that she “laid there” where she had fallen “maybe five minutes,” when Mr. Taylor and a man named Love answered her calls, helped her up and assisted her back to the Taylor home, where Mrs. ■ Taylor bathed her arm in warm water and rubbed her hand; that her hand was swollen and her arm “black up to the elbow;” that she returned to her abode that night and when she arrived there she fainted, then sent for a physician who left medicine to rub on her hand; that her hand was then so swollen that the physician could not set it, but that he subsequently did so and put on a plaster cast which remained about five weeks; that she did not work for two or three months and earned no wages; that prior to the accident she earned $6 per week as a house servant; that her wages since have been considerably less; that the muscles of the arm do not work and when she handles “anything that is any size” she drops it; that she has broken many dishes since her accident and on this account her wages have, on many occasions, been materially diminished. It was not disputed that the sidewalk at the point in question was rotten, with loose and missing boards, and that this condition had existed for snch a period of time as amounted to constructive notice thereof to the city.

It is urged by counsel for the city that plaintiff has failed to establish that she was in the exercise of ordinary care for her own safety at the time of the accident, inasmuch as she continued to walk on the sidewalk after she was aware of its dangerous condition, when she could have easily left the sidewalk and walked without danger on the east side of the street, which was not torn up. Whether she was in the exercise of ordinary care for her own safety was a question for the jury, under all the facts and circumstances in evidence. City of Mattoon v. Faller, 217 Ill. 273, 281; City of Sandwich v. Dolan, 141 Ill. 430; Village of Clayton v. Brooks, 150 Ill. 97; Wallace v. City of Farmington, 231 Ill. 232. We see no reason to disturb its conclusion on this point.

It is further urged that the trial court erred in allowing plaintiff’s witness, Mrs. Tripp, to testify that on one occasion plaintiff had “an awful look of pain on her face,” and that on another occasion the witness heard plaintiff moaning and saying “0! Mrs. Tripp! 0! Mrs. Tripp!” We do not think that, under the decisions, the admission of the testimony constituted prejudicial error. While it has been held that self-serving narrative statements by an injured plaintiff “that he suffers pain are not competent proof in his behalf, unless they are a part of the res gestae, or are made to a physician during treatment, or upon an examination prior to and without reference to the bringing of an action to recover damages for the injury complained of, or unless the examination was made at the instance of the defendant and with a view to the trial; ’ ’ (Village of Gardner v. Paulson, 117 Ill. App. 17, 19; West Chicago St. R. Co. v. Carr, 170 Ill. 478; West Chicago St. R. Co. v. Kennelly, 170 Ill. 508; Lake Street El. R. Co. v. Shaw, 203 Ill. 39; Chicago & E. I. R. Co. v. Donworth, 203 Ill. 192) “yet the rule does not apply to natural manifestations of pain, such as the expression of the features, groans, screams and like indications of pain and suffering, notwithstanding it must he conceded that these can be feigned for self-serving purposes.” Village of Gardner v. Paulson, supra; Cicero & P. St. Ry. Co. v. Priest, 190 Ill. 592; Lauth v. Chicago Union Traction Co., 244 Ill. 244, 250.

Counsel further urge that the court erred in refusing to give instruction No. 16, offered by defendant. The propositions contained in this instruction seem to have been fully covered in instructions Nos. 8, 9 and 11, offered by defendant and given by the court. “A correct instruction may be refused, where its substance is embodied in other instructions given.” West Chicago St. Ry. Co. v. Lieserowitz, 197 Ill. 607, 617; Chicago Union Traction Co. v. Sawusch, 218 Ill. 130.

We do not think that the verdict is manifestly against the evidence, nor are we disposed to disturb it on the ground that it is excessive, and the judgment will be affirmed.

Affirmed.


text:
    O. M. Steffenson, Appellee, v. Harry Bostrom, Guardian, Appellant.
    Gen. No. 17,976.
    1. Guardian and ward — personal judgment against guardian. In an action against defendant as guardian of the estate of a minor, his daughter, for medical services rendered to the daughter, a personal judgment against defendant is not erroneous.
    2. Judgments — when judgment order is erroneous. Where a personal judgment is rendered against defendant, a guardian, an order that it “he paid in due course of administration” is erroneous.
    3. Appeais and ereobs — when error does not necessitate new trial. Where no error intervened up to and including the' overruling of defendant’s motion for new trial, and an erroneous direction is included in the judgment order, the judgment is reversed and remanded with directions to enter judgment in the usual form, each party to pay his own costs in the court of review.
    Appeal from the Superior Court of Cook county; the Hon. Richard E. Burke, Judge, presiding. Heard in the Branch Appellate
    Court at the October term, 1911.
    Reversed and remanded with directions.
    Opinion filed April 3, 1913.
    O. 0. Peterson, for appellant.
    CameboN & MatsoN, for appellee.
   Mr. Presiding Justice Gridley

delivered the opinion of the court.

This is an appeal from a judgment of the Superior Court of Cook county for $135, rendered February 25, 1911, in favor of 0. M. Steffenson, a physician, plaintiff, against Harry Bostrom, defendant. The judgment order directed the judgment “to he paid in due course of administration. ’ ’ The cause was tried before the court without a jury.

It appears from the transcript of the record that the suit was originally commenced before a justice of the peace of Cook county, and on November 9, 1906, plaintiff recovered a judgment before said justice against “Harry Bostrom, guardian of the estate of Buth Bos-trom” for $150; that an appeal was taken to said Superior Court, where a trial was had on June 5, 1908, before the court without a jury, resulting in a finding in favor of plaintiff for the sum of $55; that on motion of plaintiff and consent of defendant, said finding -was set aside and a new trial awarded. The second trial resulted in the judgment from which this appeal is taken.

It further appears that the suit is for two so-called “sets of medical services,” the first, rendered by plaintiff to defendant’s minor daughter, Buth Bostrom, in the presence of her mother in 1902, and one visit in 1905-; tlie other, rendered "by plaintiff in 1906, in connection with the preparation for trial, which trial soon thereafter occurred, of the case of Ruth Bostrom, by her next friend, Harry Bostrom, against the Union Traction Company, to recover damages for personal injuries sustained by said daughter.

The evidence as to what services were rendered, and as to whether or not the defendant expressly or impliedly agreed to pay plaintiff for the same, is very conflicting, but, after a careful review of the testimony, we are of the opinion that the finding of the court is not manifestly against the weight of the evidence, as contended by defendant’s counsel.

Counsel further contends that as the suit was against the defendant, described as “guardian of the estate of Ruth Bostrom, minor,” the judgment against him personally is erroneous. Under the facts of this case, and under the law, we cannot agree with, the contention. Sperry v. Fanning, 80 Ill. 371, 375; Kingsbury v. Powers, 131 Ill. 182; Johnson v. Leman, 131 Ill. 609; Bradner Smith & Co. v. Williams, 178 Ill. 420, 425.

Counsel further contends that the judgment order, because of the direction “to be paid in due course of administration,” is erroneous,.and that the judgment should be reversed and a new trial had. We are of the opinion that this error will necessitate a reversal of the judgment, but as no error had intervened up to and including the overruling of defendant’s motion for a new trial, no occasion exists for awarding a venire facias de novo. In accordance with the decisions of McNulta v. Ensch, 134 Ill. 46, 56; Storing v. Onley, 44 Ill. 123; Meyer v. Village of Teutopolis, 131 Ill. 552, the judgment will be reversed, and the cause remanded to the Superior Court with instructions to enter judgment in the usual form, upon the finding of the court, against the defendant, Harry Bostrom, personally, each party to pay his own costs in this court.

Reversed and remanded with directions.


author: Me. Justice Pitch

text:
    Frank B. Buszin and Simon R. Flynn, Appellees, v. Wojciech Martinowicz et al., on appeal of Nellie Carlin, Guardian, Appellant.
    Gen. No. 17,982.
    1. Mortgages — allowance for abstract of title. In foreclosing a trust deed it is error to allow for money paid for continuation of abstract of title wben not provided for in the trust deed.
    2. Mortgages — iInsurance. In foreclosing a trust deed it is error to allow for insurance premiums where there is no competent evidence of such expense.
    3. Mortgages — solicitor's fees. In foreclosure it is error to allow as solicitor’s fees five per cent, of the amount found due, including insurance and taxes, when the trust deed provided for five per cent, of the principal, interest and costs.
    4. Mortgages — failure of guardian ad litem, to object to improper expense. In foreclosure of a trust deed the failure of the guardian ad litem to object to the allowance of improper items can not prejudice the rights of the minor.
    5. Mortgages- — when homestead is waived. Where a bachelor gives a trust deed to certain property with a release and waiver of the right of homestead, and conveys the property subject to the lien to a third party, and after his marriage it is reconveyed to him and his wife as tenants in common, and the wife dies leaving a son by a former marriage and her husband as the only heirs, the complainant in foreclosure is entitled to á decree for sale of the premises free and clear of any homestead right.
    6. Mortgages — respective interests of defendants in foreclosure. Where defendants to a foreclosure suit desire to have their respective interests in the surplus declared and set forth in the decree, it is their duty to produce competent evidence upon which the master and the court may make a finding with reference thereto.
    7. Mortgages — where decree in foreclosure is erroneous. Where a decree, after the usual provisions for redemption, contains a further clause that all of said defendants other than a certain one “be and they are hereby foreclosed and barred forever from claiming any right to or interest in the said premises,” it is erroneous.
    Appeal from the Superior Court of Cook county; the Hon. William Fenimore Cooper, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1911.
    Reversed and remanded.
    Opinion filed April 3, 1913.

      Mast E. Miller, for appellant.
    FsaNK C. Rathje and EdwiN C. Ceaweord, for ap-pellees.
   Me. Justice Pitch

delivered the opinion of the court.

This is an appeal from a decree entered in a foreclosure suit. The errors assigned, so far as they have been discussed in the briefs of counsel, are substantially as follows: that the court erred (1) in the allowance of $48.75 for insurance premiums, $17.10 for continuation of abstract, interest on those amounts, and $84.57ifor complainants’ solicitor’s fees; and in failing to allow more to the solicitor for the guardian ad litem; (2) in failing to find and declare the respective interests of the defendants; (3) in failing to find that the interest of the principal debtor in the mortgaged premises must first be sold; and (4) in entering a decree providing that after the sale all of the defendants, other than the principal debtor, be barred from exercising any right of redemption.

The trust deed, which is the basis of this suit, provided, by one clause thereof, that out of any sale of the mortgaged premises upon foreclosure, shall be paid the costs of suit, all costs of advertising, sale and conveyance, all expenses of the trust, including all moneys advanced for insurance, taxes and other liens or assessments, with interest at seven per cent., the principal of the notes secured thereby, with interest up to the time of the sale, and five per cent, of the amount of such principal, interest and costs for solicitor’s fees, and that the over-plus, if any, shall be paid to the grantor, or his legal representatives or assigns. By a subsequent clause it is provided that in case of the failure or neglect of the grantor to keep the premises insured or pay taxes, the holder of the notes may procure such' insurance or pay such taxes and all ■moneys thus paid, with interest at seven per cent., shall become so much additional indebtedness secured by tbe deed of trust, and be paid out of tbe proceeds of tbe sale of tbe mortgaged premises, if not otherwise paid by tbe grantor. Under these provisions it is obvious that upon a proper showing, all sums expended for insurance premiums, taxes and court costs, were properly chargeable against tbe mortgaged premises. We are unable to find any competent evidence, however, to tbe effect that anything was in fact paid for insurance. Hence tbe item of $48.75, allowed by tbe decree for insurance, was erroneous. Tbe items also of $17.10 for money paid out for continuation of abstract of title, and $1.58 for interest on that amount, were erroneously allowed because they were not provided for by tbe trust deed. Cheltenham Improvement Co. v. Whitehead, 128 Ill. 279. Tbe court allowed to tbe complainants’ solicitor a fee of ñve per cent, upon tbe amount found to be due, including tbe above items, as well as tbe amounts paid out for taxes. Tbe amount of solicitor’s fees should have been computed according to tbe terms of tbe trust deed, viz: five per cent, of tbe amount of principal, interest and costs. Tbe amount of costs does not appear; tbe total amount found due for principal and interest is $1545.28, five per cent, of which is $77.26, and that amount should have been allowed instead of $84.57, as allowed by tbe decree. While it is true that the allowance of these items was not specifically objected to in tbe court below by tbe guardian ad litem, tbe minor’s interests cannot be prejudiced by a failure on tbe part of tbe guardian to make such objection.

We cannot agree with appellant’s counsel that tbe court erred in failing to find tbe respective interests of tbe defendants in tbe mortgaged premises, or to find that tbe minor bad a homestead right in tbe premises, or to find that tbe interest of tbe principal debtor should be first sold. It appears from tbe evidence that tbe trust deed in question was given by Wojciecb Martinowicz when be was a bachelor; that be subsequently married, and that just prior to his marriage he conveyed the premises, subject to the lien of the trust deed, to a third party, who, after the marriage, conveyed the premises, subject to the lien, to Mar-tinowicz and his wife, as tenants in common. The minor is a son of that wife by a former marriage. She died prior to the beginning of the foreclosure suit, leaving her son, the minor in question, and her husband, Martinowicz, her only heirs at law and next of kin. The trust deed contains a specific release and waiver of the right of homestead, over the signature of Martinowicz, in these words: “In consideration of the money paid, as aforesaid, to the party of the first part, (Martinowicz) and in order to create a first lien and incumbrance on said premises under this deed, for the purposes aforesaid, and to carry out the foregoing specific application of the proceeds of any sale that may be made by virtue hereof, the said party of the first part do * * * hereby release and waive all right under and benefit of the exemption and homestead laws of the state of Illinois, in and to the lands and premises aforesaid, and the proceeds of sale thereof, and agree to surrender of possession thereof to the said party of the second part, peaceably on demand, upon default in the payment of said note or any part thereof, or the breach of any of the covenants herein contained, to be kept by him or his heirs, executors, administrators or assigns.” In the certificate of acknowledgment, the notary public certifies that Martinowicz, a bachelor, acknowledged that he “signed, sealed and delivered the said instrument as his free and voluntary act for the uses and purposes therein set forth, including the release and waiver of the right of homestead.” By these provisions, the homestead right in the whole premises was released and waived as against the holder of the incumbrance, and all rights of the wife of Martinowicz and her minor child were acquired and held subject to these provisions of the trust deed. The complainant was entitled to a decree for the sale of the whole premises, free and clear of any homestead right, for the purpose of satisfying and discharging his lien, and the only interest of the defendants was an interest in any surplus there might he in the proceeds of the sale, after the payment of the indebtedness secured by the trust .deed, with interest, costs'and solicitor’s fees. Hence, if the minor or his guardian (who was a party to the suit, as well as the guardian ad litem) desired to have the respective interests of the defendants in such surplus declared and set forth in the decree, it was their duty to produce competent evidence upon which the master and the court could make a finding with reference thereto. This the guardian failed to do, and cannot, therefore, now complain that no such findings were made. Moreover, if there should be any such surplus, the chancellor has full jurisdiction to protect the minor’s rights therein and thereto, at the time the master shall hereafter make his report of sale.

The court allowed $50 to the guardian ad litem for the services of her solicitor, in addition to a small amount for the personal services of the guardian ad litem, and this allowance is claimed to he too small - The solicitor for the guardian ad litem presented a bill for services amounting to $185, but the statement of services rendered shows that a large part of the work performed by the solicitor was unnecessary, so far as this case is concerned. We see no error in the allowance that was made by the chancellor.

There is one clause of the decree which appellees’ counsel do not explain, and which we are at a loss to understand. After the usual provisions to the effect that the defendant or his heirs, representatives or grantees may redeem within twelve months from the date of sale, and that all judgment creditors may likewise redeem within fifteen months, and that in case there shall be no such redemption a master’s deed shall be issued, there is a further clause which reads as follows: “And the court further orders and decrees that on and after such sale of said premises above ordered, all of said defendants, other than said Wojciech Martinowicz, he and they are hereby foreclosed and barred forever from claiming any right to or interest in the said premises.” If by this clause it was intended to prevent any defendant, other than Martinowicz, from exercising his or her statutory right of redemption, the decree is clearly erroneous in that respect; and as we are unable to gather any other or different meaning from that clause, the decree must be reversed for that reason.

For the errors indicated, the decree of the Superior Court will he reversed and remanded for further proceedings not inconsistent with the views herein expressed.

Reversed and remanded.


text:
    Helen H. Bradley, Appellee, v. Federal Life Insurance Company, Appellant.
    Gen. No. 17,995.
    1. Courts — jurisdictional questions. Tlie appellate court lias no power to consider constitutional questions.
    2. Pleading — declaration or statement of claim. Wliere plaintiff’s statement of claim filed in the municipal court contains all the necessary elements of a common-law declaration, it is immaterial whether it he called a declaration or a statement of claim, and a motion to dismiss for want of a declaration is properly denied.
    3. Pleading — requisites of declaration. The general requisites or qualities of a declaration are, first, that it correspond with the process; second, that it contain a statement of all the facts necessary in point of law to sustain the action, and no more; and third, that these circumstances he set forth with certainty and truth.
    4. Insurance — when motion to strilce statement of claim is properly denied. In an action on an insurance policy, a motion to strike the statement of claim from the files on the ground that plaintiff relies on a waiver of an admitted right of forfeiture and sets up no facts showing a waiver, is properly denied where it is alleged that several months after the overdue premium had been paid, “while the policy was in full force and effect,” the assignor of defendant took the policy as collateral security on a loan and later assigned it to defendant who accepted, reinsured and guaranteed it.
    5. IwsxniANOE — effect of reinsurance. Where one insurance company assigns a policy to another, the reinsurance contract operates only between the insurer and reinsurer and creates no privity of t ontract between the reinsurer and the person insured unless there is a provision in the contract whereby the reinsuring company assumes and agrees to perform the contracts of the insuring company.
    6. Insurance — statement of claim on reinsurance contract. In an action on an insurance policy, where it is alleged in the statement of claim that by the terms of the reinsurance contract defendant agreed to reinsure the policies, assume all liabilities and pay all losses, and the premiums were thereafter paid to defendant, a motion to strike the statement of claim on the ground that it does not show consideration for the reinsurance contract is properly denied.
    7. Contracts — for benefit of third person. The party for whose benefit a simple contract is made may maintain an action on it though the consideration does not move from him.
    8. Pleading — formal defect waived by subsequent pleading. In an action on an insurance policy against the reinsuring company, the failure to allege consideration between the insuring and rein-suring company on the reinsuring contract is a formal defect which, though objected to by demurrer or motion, is waived by subsequently pleading to the declaration and going to trial upon the merits.
    9. Evidence — printed circulars bearing facsimile signatures. In an action on an insurance policy against the reinsuring company, printed circulars bearing facsimile signatures of defendant’s officers, referring to the fact that policies of the original insurer had been transferred to defendant, are admissible.
    10. Evidence — official reports of insurance company. In an action on an insurance policy, official reports of defendant’s officers required by law are admissible.
    11. Appeals and errors — admission of incompetent evidence on trial by the court. On a trial by the court without a jury, the admission of incompetent evidence is not ground for reversal if there is enough competent evidence in the record to sustain the findings, since it is presumed on appeal that the court considered the competent evidence only.

      12. Special findings — when not ■ error to refuse. .Under R. S. eh. 110, § 61, It is not error to refuse to consider special findings of fact submitted after the case is taken under advisement.
    13. Insubance — forfeiture for nonpayment of note given for premium. In the absence of any stipulation with reference to forfeiture for nonpayment of a note given for premium, the premium is regarded as paid by the note, and default in payment of the note does not forfeit the insurance.
    14. Insurance — when loan is made on policy after premium is due. Where an insurance company loans money on a policy after the notes given for premium are due, there is a recognition that the policy is still in force.
    15. Insurance — when policy is not forfeited hy nonpayment of notes. Where an insurance company, after receiving a note in payment of a premium writes, “this note will give you an extension of time in which to pay in cash the semi-annual premium due on your policy,” this letter does not have the effect of making the policy void in the event the note is not paid at maturity, when by a subsequent course of dealing the company recognizes the policy as still in force.
    16. Appeals and errors — appeal for delay. Statutory damages are not assessed against appellant on the ground that an appeal is prosecuted for delay where there is room for reasonable differ-erence of opinion as to the questions of law involved, and nothing in the record to warrant a conclusion that the appeal was prosecuted in bad faith and solely for delay.
    Appeal from the Municipal Court of Chicago; the Hon. William W. Maxwell, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1911.
    Affirmed.
    Opinion filed April 3, 1913.
    Rehearing denied April 17, 1913.
    Charles A. Atkinson and Joseph P. Mahoney, for appellant.
    Sheriff, Dent, Dobyns & Freeman, for appellee.
   Mr. Justice Fitch

delivered the opinion of the court.

This is an appeal from a judgment for $5231:66, entered by the Municipal Court, in an action brought by appellee against appellant on a policy of life insurance originally issued by the Inter-State Life Assurance Company, of Indianapolis, Indiana, on June 29, 1902, to Charles Bradley, the husband of appellee, and reinsured and guaranteed on December 31, 1909, by appellant. Tbe ease was tried before the conrt without a jury, and numerous alleg’ed errors are assigned.

The suit was begun as a first-class case, and appel-lee filed, instead of a common-law declaration a “plaintiff’s statement of claim” in accordance with rules 14 and 15 of that court, which provide that the pleadings in first-class cases shall be the same as in cases of the fourth-class, and that in first-class cases the plaintiff shall file in lieu of a declaration, a statement of claim which shall consist of a “statement of the account, or of the nature of the demand, and shall contain such further information as shall reasonably inform the defendant of the nature of the case he is called upon to defend.” These rules are not set out in the bill of exceptions. Defendant’s counsel interposed a motion to dismiss the suit for failure on the part of the plaintiff to file a formal declaration, which motion was denied. It is claimed that the motion should have been allowed. It is insisted that this court cannot take judicial notice of the rules of the Municipal Court, even though the Municipal Court Act distinctly so provides, for the reason, it is said, that the section requiring appellate courts to take judicial notice of such rules is unconstitutional. This court has no power to determine that question, but must take the statute as we find it. It is also urged, apparently in anticipation of the refusal of this court to consider constitutional questions, that section 20 of the Municipal Court Act, authorizing that court to make rules regulating the practice in that court, has no application to pleadings, because, it is said, there is an essential difference between pleadings and practice; that the term “pleadings” refers to “the allegations made by the parties for the purpose of definitely presenting the issue to be tried,” while “practice” is defined as “the form, manner and order of conducting and carrying on suits.” Bouvier, Law Dictionary. We do not find it necessary to follow this argument or to decide the point, for the reason that the plaintiff’s statement of claim as filed in this case contains all the necessary elements of a common-law declaration, and therefore, it is immaterial whether it he called a declaration or a statement of claim. Chitty defines a declaration to he a ‘ ‘ specification in a methodical and legal form of the circumstances which constitute the plaintiff’s cause of'action, which necessarily consists of the statement of a legal right * * * and of an injury to such right remediable at law hy action, as distinguished from the remedy hy hill in equity.” 1 Chitty PI. (16th Am. Ed.) 264. The same author, on the same page, says: “The general requisites or qualities of a declaration are, 1st, that it correspond with the process; 2dly, that it contain a statement of all the facts necessary in point of law to sustain the action, and no more; and, 3dly, that these circumstances he set forth with certainty and truth.” The plaintiff’s statement of claim, as here filed, corresponds with the process and states, in substance, that about the year 1903, the Inter-State Life Assurance Company entered into a written contract with Charles Bradley, the husband of plaintiff, said contract being the kind commonly known as a life insurance policy, and numbered 7508 by said company, whereby said company, in consideration of the payment to it of a semi-annual premium of $76.20, on June 18th and December 18th in each year, agreed to pay to the plaintiff, within sixty days after the death of said Charles Bradley and upon the receipt of satisfactory proofs of death, the sum of $5000, and in addition thereto, a sum known as the cash-value of said policy; that said policy provided that thirty days’ grace would be allowed for the payment of premiums; that the premium due on said policy on June 18, 1909, was paid on July 29, 1909; that on October 25, 1909, “while the policy was in full force and all premiums had been fully paid to the next succeeding date for the payment of premiums, ’ ’ said Inter-State Company made a loan of $370 to said Charles Bradley for ninety days, and as collateral security therefor took possession of said policy, and still holds possession of the same and refuses to furnish plaintiff with a copy thereof; that on December 31, 1909, said Inter-State Assurance Company assigned said policy, with other policies and contracts of life insurance, to the defendant, and that defendant “accepted, reinsured and guaranteed” the same, and notified Bradley to that effect, and notified him further that his said policy would thereafter he known as number 19600 in said defendant company; that said Bradley acquiesced in said assignment, reinsurance and guaranty; that Bradley died on January 17, 1910, and on January 26, 1910, complete proofs of death in writing were delivered to and received by the defendant; that defendant has not paid the amount due on said policy or any part thereof, hut has refused so to do; by reason whereof, defendant is indebted to the plaintiff in the sum of at least $5037, for which, and for the full amount due to her by said contract, she sues. This statement seems to comply with Chitty’s definition of a declaration. It contains a methodical specification of the circumstances which constitute the plaintiff’s cause of action, and we see nothing illegal in its form. It states a legal right of the plaintiff, and an injury thereto by the defendant, remediable by action at law. It is true that it does not use the precise phraseology of the time-worn precedents, but nevertheless, or perhaps for that reason, there cannot be the slightest doubt as to its meaning. We are of the opinion that the court did not err in denying the motion to dismiss for want of a declaration, even if it be assumed that the rules of the common law, instead of those of the Municipal Court, are still in force in first class cases.

After the motion to dismiss had been denied, defendant’s counsel made a further motion to strike the statement of claim from the files, upon the alleged ground that it appears from the plaintiff’s statement that she relies upon a waiver of an admitted right of forfeiture and that the statement of claim sets up no facts showing a waiver. The trial court denied the motion, and error is assigned upon this ruling. As above shown, the statement alleges that the premium due in June, 1909, was paid and although the date given for such payment is a date subsequent to the expiration of the time agreed on, yet the statement further alleges that several months later, “while the policy was in full force and effect,” the Inter-State Company loaned $370 to Bradley, and took the policy as collateral security, and still later, and before the next payment was due, assigned the policy to defendant, who accepted, reinsured and guaranteed it and notified Bradley to that effect. These allegations are sufficient, in our opinion, as a statement of facts amounting to a waiver of the right of forfeiture, or an estoppel to assert that right, if any such right had accrued.

The statement of facts is further objected to upon the ground that it contains no statement of any consideration for the reinsurance contract, either as between the plaintiff and defendant, or as between the defendant and the Inter-State Life Assurance Company. In support of this objection it is urged that a reinsurance contract ordinarily operates only as between the insurer and the reinsurer, and creates no privity of contract between the reinsurer and the person insured. This is undoubtedly the general rule as to ordinary reinsurance contracts, provided there is no provision in the contract by which the reinsur-ing company assumes and agrees to perform the contracts of the insuring company. Vial v. Norwich Union Fire Ins. Soc., 257 Ill. 355. In this case, however, the statement alleges, and the proof shows, that by the terms of the reinsurance contract, defendant not only agreed to reinsure the policies issued by the Inter-State Company, but in effect it assumed all liabilities upon sucb policies and agreed to pay all losses directly to the policy holders. The language of the reinsurance contract is, in part, as follows: “In consideration of the foregoing and of the sundry covenants and agreements therein contained, the ‘Federal’ accepts said transfer to it of said policies and securities, and hereby reinsures, as of the time when this contract goes into effect, all the then living policy holders of the said ‘Inter-State’ whose policies" are then in force in said ‘Inter-State,’ and said ‘Federal’ assumes and guarantees the said policies of said living policy holders, in accordance with the terms and conditions of said policies respectively, the future premiums on said policies to be paid to the ‘Federal.’ ” The substance of this clause of the contract is set forth in the statement of claim. In Bristow v. Lane, 21 Ill. 194, the plaintiff, Lane, declared upon a contract entered into between one Moses Clampit and the defendants, by the terms of which, in consideration that Clampit would convey to the defendant certain real estate, the defendants undertook and promised to pay the debts of Clampit; and it was averred that Clampit did convey such real estate and that thereby the defendants became liable to Lane for the payment of an indebtedness due to him from Clampit. IJpon a demurrer to the declaration it was contended that Lane could not sue upon said contract for the reason that no privity was shown between the defendants and Lane, who, it was urged, was a stranger to the consideration. The court held that the declaration stated a good cause of action, upon the principle that “in simple contracts, the person for whose benefit the promise, is made may maintain an action in his own name upon it, although the consideration does not move from him; ’ ’ and also held that by the act of bringing suit, Lane affirmed, or consented to, the act of Clampit in making the contract with the defendants, citing with other cases, Eddy v. Eoberts, 17 Ill. 505. As to the point that no consideration is averred for the reinsurance contract, as between the two insurance companies, the defect, if any, is a merely formal one (Lowden v. Wilson, 233 Ill. 340) which, even though it be objected to by demurrer or motion, is waived by subsequently pleading to the declaration and going to trial npon the merits. Illinois Cent. R. Co. v. Patterson, 69 Ill. 650. The proof shows that the consideration was the transfer to the defendant of divers securities mentioned in the contract, and there is uncon-tradicted evidence to the effect that such securities were in fact transferred to the defendant, as agreed.

Many points are raised regarding alleged errors in the admission and exclusion of evidence. We do not deem it necessary to discuss each of these points in detail. The point about which most complaint seems to be made is that the court erred in admitting in evidence certain printed circulars, some of them bearing the facsimile signatures of the officers of the InterState Company, and others bearing the facsimile signatures of defendant’s officers, both referring to the fact that the insurance policies of the Inter-State Company had been transferred to the defendant and re-insured and guaranteed by the latter. In one of such circulars, although not addressed to Bradley by name, it was stated, in substance, over the printed fac'simile signatures of defendant’s officers, that policy No. 7508 in the Inter-State Company, which was the number of the Bradley policy, would be known thereafter as “Federal No. 19600,” and that all premiums thereon should be remitted directly to the home office of the defendant. These letters or circulars were objected to because there was no proof of their authenticity. Such printed letters or circulars, sent broadcast to policy holders, and shown to have been received by one of them, were held admissible in U. S. Life Ins. Co; v. Ross, 159 Ill. 476; and for the reasons stated in the opinion in that case, we think they were properly admitted in evidence in this case. Official reports of de-feñdant’s officers, required by law, were also offered in evidence. Upon the authority of Aetitus v. Spring Valley Coal Co., 246 Ill. 32, we think these reports were likewise admissible. It may also be added, as to these and similar objections raised by counsel, that in cases tried by the court without a jury, the rule is that the admission of incompetent evidence will not, of itself, be held to be ground for reversal, if there is enough competent evidence in the record to sustain the findings of the court, since it will be presumed on appeal, that the court considered the competent evidence only. Knight v. Collings, 227 Ill. 348.

It is next urged that the court erred in refusing to make certain special findings of fact submitted by defendant’s counsel. The certificate of the trial judge in the bill of exceptions shows that these special findings were not submitted until after the case had been taken under advisement, and for this reason, the court declined to mark them either “held” or “refused.” There was no error in the refusal of the court to consider them, under such circumstances. Hurd’s Rev. Stat. Ill. chap. 110, sec. 61.

It appeared from the evidence thát on July 29, 1909 (forty-one days after the semi-annual premium was due), Bradley gave, and the Inter-State Company accepted, his note for the amount due, with interest, payable on October 18, 1909. On October 25, 1909, when the loan of $370 was made, Bradley paid $50 on this note, and gave a new note for the balance ($27.52), payable on November 25, 1909. The last note was never paid. The next premium was due December 18, 1909, with thirty days’ grace, making it payable January 17, 1910, the same day on which Bradley died. Under these facts, it is insisted that the court erred in refusing to hold as law the tenth proposition of law submitted to the court by appellant’s counsel and marked “refused.” That proposition, in substance and effect, was that the giving of a note by the insured for part of the amount of an insurance premium is not a payment of the premium in the absence of any proof that it was delivered to and received by the insurer as payment, hut is to he construed merely as evidence of an extension of the time of payment until the date of the maturity of the note, and that in such case, a failure to pay the note at maturity is a failure to pay the premium when due. The authorities upon this question are not entirely harmonious; hut after a study of such authorities as have been cited, and as we have been able to find, we think that the following statement found in 25 Cye. 826, is a correct statement of the general rule: “By the weight of authority, in the absence of any stipulation, with reference to forfeiture for nonpayment of a note given for premium, the premium must be regarded as paid by the note, and default in payment of the note will not forfeit the insurance.” In Mutual Life Ins. Co. of New York v. Allen, 212 Ill. 134, the court said (p. 144): “In the absence of proof of a clause in the policy providing the policy shall be void in the event the premium is not paid at maturity of a note or notes taken for the premium, default in the payment of the note will not work a forfeiture of the policy. 19 Am. & Eng. Ency. of Law (2nd Ed.) 47 and notes; U. S. Life Insurance Co. v. Ross, 159 Ill. 476; May on Insurance (2nd Ed.) sec. 87.” The policy offered in evidence in this case contains no such clause. It seems to have been the habit of the officers of the Inter-State Company to accept such notes from Bradley, as the premiums fell due, and after receiving such a note, to write him a letter telling him that “this note will give you an extension of time in which to pay in cash the semi-annual premium due on your policy” to the date of the maturity of the note. The notes themselves, however, did not contain any such statement, but were negotiable instruments. Seven days after the July note was due, the Company loaned Bradley $370 upon the policy, when, if the present contention of appellant’s counsel is correct, the policy was null and void. Part of the note was then paid and a new note was given for the balance. This was a clear recognition, by the company, that the policy was still in full force. Over a month after this last note was dne, the Company made a formal assignment of the policy to the defendant, who reported it as among its existing policies to the State insurance officers, and notified Bradley that it wonld be thereafter known as No. 19600. In view of all these facts, if any effect is to be given to the “course of dealing” between the parties, as is now strenuously insisted by appellant’s counsel, it must, we think, be held that such “course of dealing” clearly negatives the claim that the letters above mentioned can take the place of a specific clause in the policy or note providing that the policy shall be void in the event the note is not paid at maturity. Forfeitures are not favored in the law. There was no claim that either the defendant or the Inter-State Company returned or offered to return the note given for the premium. On the contrary, they retained it evidently as an asset. It would be highly inequitable and unjust to permit the Company to retain the premium note and treat it as an existing obligation, and at the same time repudiate its liability under the insurance contract.

All of the remaining contentions are substantially covered by what has been said. A motion has been interposed by appellee, asking that statutory damages be assessed against appellant upon the ground that it appears that the appeal was prosecuted for delay. "We are not satisfied that such is the fact. There is room for reasonable difference of opinion as to the questions of law involved, and we see nothing in the record to warrant us in concluding that the appeal was prosecuted in bad faith and solely for delay. The motion will therefore be denied.

Finding no reversible error in the record, the judgment of the Municipal Court will be affirmed.

Affirmed.