text:
    Leon Friedman, Appellee, v. Edgewater State Bank, Appellant.
    Gen. No. 24,680.
    1. Banks and banking, § 143*—when attorney at law entitled to only nominal damages for hank’s urrongful refusal to pay check. An attorney at law whose check was refused payment through the mistake of his hank of deposit, was entitled to only nominal damages, in the absence of evidence of special damages.
    2. Banks and banking, § 143*—when attorney at law not entitled to special damages for slander of credit hy hank. Under a declaration charging that plaintiff, an attorney at law, suffered injury, etc., solely because of the dishonoring of his check hy his bank, when he had sufficient funds on deposit to cover it, plaintiff was entitled to nominal damages only where the act of defendant was due to mistake, and was not entitled to recover special damages for words uttered hy the cashier relative to the condition of plaintiff’s account about 4 months after such dishonor and about 2 months after the bank had advised the payee that its action was due to mistake.
    3. Banks and banking, § 143

      —when attorney at law not entitled to special damages for dishonor of his check hy hank. An attorney at law was not a trader, and was therefore not entitled to special damages because of the dishonor of his check by his hank, through mistake, although sufficient funds to cover the check were on deposit, in the absence of evidence of special damages.
    Appeal from the Circuit Court of Cook county; the Hon. Richabd S. Tuthill, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1918.
    Reversed and remanded.
    Opinion filed October 10, 1919.
    Rehearing denied October 21, 1919.
    Clyde C. Fisher, for appellant.
    Decker & Golden, for appellee.

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

   Mr. Justice Gridley

delivered the opinion of the court.

Plaintiff, an attorney at law, commenced an action in case on February 16, 1918, against the defendant bank to recover damages for the bank’s refusal to honor his check for $5, drawn on the bank and payable to the order of his sister, at a time when he was a depositor in the bank and had more than sufficient funds on deposit to meet the check. In his amended declaration plaintiff alleged that because of the dishonoring of said check he had been “greatly injured in his good name, credit, reputation, business and profession,” and that persons who formerly had been accustomed to deal with and retain him in a legal capacity had since refused so to do. The jury were instructed, at plaintiff’s request, “that, if they believe from the evidence that the defendant refused to honor the check issued by the plaintiff and that plaintiff had sufficient funds on deposit with defendant to the credit of plaintiff at the time said check was presented for payment, the plaintiff is entitled to recover substantial damages, although such refusal to so honor said check arose through a mistake or carelessness and every effort was made by defendant upon discovery thereof to rectify the error. ’ ’ And the court refused, at defendant’s request, to instruct the jury that “under the facts alleged in plaintiff’s declaration and offered in evidence, you are instructed that the plaintiff is entitled to nominal damages and not to substantial damages.” The jury returned a verdict for $250, upon which verdict the judgment appealed from was; entered.

On the trial plaintiff testified, in substance, that he was admitted to the bar in 1898 at Wheeling, West Virginia, that afterwards he practiced law in that State for 9 years and afterwards in Pittsburg, Pennsylvania, for 6 years, since which time he had been engaged solely in the practice of law in Chicago, except that for a short period he had once acted as an assistant trust officer of a Chicago bank, and that he occasionally made real estate loans for clients; that on September 28, 1917, he drew his check for $5 on the defendant bank, payable to the order of his sister, Julia Bier-man, and mailed it to her at Pittsburg, Pennsylvania, that the giving of the cheek was in regard to a family matter; that when the check was presented to the defendant bank payment thereon was refused on the ground “not sufficient funds”; that at the time the check was presented for payment at the defendant bank plaintiff had on deposit about $50; that subsequently plaintiff was informed by letter from Pittsburg that the check had been returned marked “not sufficient funds”; that immediately upon the receipt of said letter he telephoned a bookkeeper of the bank, who said: “There must be some mistake; your account is all right;” that after the check had been returned to him, about October 12 he called on the cashier of the bank, who said he would inform the payee of the check by letter that the dishonoring of the check was a mistake; that subsequently, on December 3, the president of the bank wrote the payee that the bank was to blame, as a mistake had been made in the posting of plaintiff’s account; that on February 11, 1918, plaintiff had a conversation at the bank with the cashier regarding a charge made for carrying his account, which averaged a balance of less than $100, during which conversation the cashier said: “We had to do it; we are returning your checks every day, ‘not sufficient funds,’ ” to which plaintiff replied that the cashier was mistaken; that at the time of the conversation three men were standing near the cashier and heard distinctly what was said; and that on the following morning plaintiff received from the cashier a letter as follows: “I find in searching our records that I was mistaken in my assertion of checks going back on your account. The party I had in mind has the same surname as yours, but cannot find any checks but the one that was sent back on your account in error.” , The cashier testified on behalf of the bank that his conversation of February 11 with plaintiff was held after banking hours in the presence of three tellers of the bank, and that thereafter plaintiff continued his business relations with the bank.

We are of the opinion that, under the pleadings and the facts in evidence in this case, the trial court erred in instructing the jury that plaintiff was entitled to recover substantial damages and in refusing defendant’s tendered instruction that plaintiff was entitled to only nominal damages. The charge in plaintiff’s declaration is that he has been injured in his good name, credit, reputation, business and profession solely because of the dishonoring of the check. There is no claim made in the declaration that plaintiff had also been injured because of the words uttered by the cashier of the bank in the presence of the three men, on February 11, 1918, which was. about 4 months after the bank had dishonored the check through mistake, and about 2 months after the bank had so advised the payee of the check. The plaintiff at the time of the dishonoring of the check was an attorney at law, practicing his profession in the city of Chicago. He was not a merchant or trader, and at the trial he introduced no evidence of special damages. And it clearly appears that the action of the defendant bank was due to a mistake or clerical error, and done without any malice or ill-will.

In Rolin v. Steward, 14 C. B. 595, it was decided in England that substantial damages may be recovered against a banker for dishonoring checks of a customer, engaged in trade, at a time when the customer had ample funds in the bank to meet the checks and when there was no evidence given that the customer had sustained any special damages. In this case Williams, J., said (p. 607): “As to the alleged misdirection, I think it cannot be denied, that, if one who is not a trader were to bring an action against a banker for dishonoring a check at a time when he had funds of the customer in his hands sufficient to meet it, and special damages were alleged and proved, the plaintiff would be entitled to recover substantial damages. And, when it is alleged and proved that the plaintiff is a trader, I think it is equally clear that the jury, in estimating the damages, may take into consideration the natural and necessary consequences which must result to the plaintiff from the defendant’s breach of contract; just as in the case of an action for the slander of a person in the way of Ms trade, or in the case of an imputation of insolvency on a trader, the action lies without proof of special damages.” In the case of Schaffner v. Ehrman, 139 Ill. 109, our Supreme Court rendered a decision to the same effect. And in the ease of Wiley v. Bunker Hill Nat. Bank, 183 Mass. 495, where plaintiff was a trader, engaged in the business of buying and selling coal and wood, Morton, J., said (p. 496): “In the case of a trader, injury to his credit may be inferred from the fact that he is a trader, and substantial damages may be found and given upon proof of that fact without anything more. In the case of a person who is not a trader, if no special damages are alleged and proved, nominal damages at least may be recovered. ’ ’ In Bank of New South Wales v. Milvain, 10 Victorian Law Rep. 3, the Supreme Court of Victoria decided that a farmer was not a trader and not entitled to recover more than nominal damages for the dishonor of his check, unless he prove special damage or that he has a mercantile character to be injured. In this case Stawell, C. J., said (p. 5): “There is no presumption legitimately deducible that a person who is not a trader suffers substantial damage by the dishonour of his cheque. In England it has been held that a farmer is not a trader. I see no reason for arriving at a different conclusion in this country; a farmer’s business is not one of buying and selling as a trader.” In the same case Holroyd, J., said (p. 5): “I think ‘trader’ means one whose business is to buy and sell, or to make up raw material into merchandise of which he afterwards disposes. Prima facie a man who tills the soil is not a trader, although he may in some cases follow trade as well; in the latter ease he must prove that he trades, if he would be treated as a trader.” In Bouvier’s Law Dictionary the word “trader” is defined: “One who makes it his business to buy merchandise, or goods and chattels, and to sell the same for the purpose of making a profit. * * * The principal question is whether the person has the intention of getting a living by his trading; if this is proved, the extent or duration of the trading is not material.” In the case of Third Nat. Bank of St. Louis v. Ober, 178 Fed. 678, the plaintiff, Ober, who lived in Natchez, Mississippi, had a small account with the defendant bank at St. Louis, Missouri, and, wishing to transfer a part of it to his home bank, he drew a check in its favor for $50. At that time his account with defendant had a credit balance of $122. Defendant refused payment on the ground that Ober’s account was overdrawn, and the check was protested for nonpayment. There was no malice or ill-will in the action of defendant. It was due solely to the clerical error of a bookkeeper. Ober was not a merchant or trader. He sued for the protest fees and for damages to his honor, truth, and business standing. Aside from the protest fees no special damages were alleged or proven. In the trial court there was a verdict and judgment for $500. The judgment was reversed by the U. S. Circuit Court of Appeals, for the eighth circuit, and the cause remanded, on the ground that the court erred in instructing the jury that the verdict should be for more than the protest fees and nominal damages. In delivering the opinion of the court, Hook, Circuit Judge, said (p. 679):

“The relation between banker and depositor is one of contract. The right of the latter is that, to the extent of his credit balance subject thereto, his cheeks drawn and presented according to the customs and usages of the business shall be promptly honored. For a breach of this right an action for damages will lie. If the depositor is a merchant or trader, it will be pre-. sumed, without further proof, that substantial damages have been sustained. * * * This rule proceeds upon the fact, commonly recognized, that the credit of a person engaged in such á calling is essential to the prosperity of his business, and the dishonoring of his checks is plainly calculated to impair it and to inflict a most serious injury. * * * On the other hand, if the depositor is not a merchant or trader, there is no such presumption of substantial injury, and his recovery should be a nominal one, unless he pleads and proves some special damages. * * * Counsel contend that the presumption arising in the case of a merchant or trader is merely that he possesses credit, and that when the depositor is not a merchant or trader the fact not presumed may be established by proof, and the same right to substantial damages would then follow. The character of the presumption is misconceived. It is not so much the possession of credit, as it is that substantial injury thereto has been inflicted by the dishonoring of the check. The very reason for allowing general substantial damages to a merchant or trader, without a showing of special injury, implies a contrary rule, generally, as to those not of that class. A mere technical violation of a - right is no, just basis for a recovery of general and substantial damages, where no actual injury is shown, and none appear to follow as the natural and probable consequence of the act.”

For the reasons indicated the judgment is reversed . and the cause remanded for a new trial.

Reversed and remanded.


source: Caselaw Access Project

author: Mr. Justice Gridley

license: Public Domain

text:
    John Gubbins, Appellant, v. Isadore Glabman and Morris Glabman, trading as Glabman Brothers, Appellees.
    Gen. No. 24,705.
    1. Landlord and tenant, § 217*—when error to direct verdict for lessees sued by landlord for money expended for repair of elevator. In an action by a landlord against his lessees to recover money expended in the repair of damage to an elevator through the lessees’ negligence, where the lease contained a covenant providing that the landlord should put the elevator in good condition and that the lessees should then keep it in good repair at their own expense, it was error for the court, who tried the case without a jury, to direct a verdict for defendants, where the lease was introduced and the evidence showed that the landlord had put the elevator in good condition and that it had been thereafter damaged by defendants.
    2. Trial, § 187*—what question raised by motion for directed verdict. In the trial of a case by the court without a jury, a motion for a directed verdict at the close of plaintiff’s case raises only a question of law as to the sufficiency of the evidence to sustain a verdict against the party making the motion; but the court may weigh the evidence, determine the question of the preponderance thereof and enter judgment accordingly, if the defendant plainly informs the court that such is his desire.
    3. Landlord and tenant, § 217

      —time when landlord may sué for money expended for repair of elevator. Under a covenant in a lease that the elevator in the building in question should be maintained by the lessees at their own expense and kept in good running order during the term of "the lease, the landlord was not compelled to wait until the expiration of the lease before bringing action for money expended by him in the repair of damage to the elevator because of the lessees’ negligence..
    Appeal from the Municipal Court of Chicago; the Hon. Howard Hates, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1918.
    Reversed and remanded.
    Opinion filed October 10, 1919.
    Archibald Cattell and Carl A. Waldron, for appellant.

      Sabath, Stafford & Sabath, for appellees; Charles B. Stafford, of counsel.

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

   Mr. Justice Gridley

delivered the opinion of the court.

In his statement of claim, filed in the Municipal Court of Chicago on April 3, 1918, plaintiff alleges that the defendants were indebted to him for repairs to an elevator in the premises known as 718-720 South Canal Street, Chicago, which premises had been leased by plaintiff to defendants by a written lease; that by the terms thereof defendants were liable for the upkeep of the elevator, and by reason of the negligence of defendants the elevator had been damaged and plaintiff had had it repaired at an expense to him of $107.24, for the recovery of which sum plaintiff sues. The lease in question, which is on a common printed form and dated July 31, 1917, provides among other things that plaintiff leases to defendants ‘‘ the three floors and basement, 718-720 South Canal Street, to be occupied for storage of merchandise and repairing” for the term of one year, from August 1,1917, to July 31,1918; that defendants agree to pay as rent for the premises the sum of $1,800, payable in instalments; that the lessees (defendants) will, at the expiration of the term, yield up the premises to plaintiff in as good condition as when the same were entered upon by defendants, loss by fire or inevitable accident and ordinary wear excepted; and that the lessees (defendants) will permit the lessor (plaintiff) to have free access to the premises to make any needful repairs or alterations of the premises as the lessor may see fit to make. There is a special provision, in typewriting, as follows: “It is understood and agreed that the elevator * * * is to be put in good repair by lessor, and is to be operated and maintained by lessees at their own expense and kept in good running order, during the term of this lease.” The defendants, in their affidavit of merits, alleged in substance that by the terms of said - lease it was agreed that plaintiff was to put into good repair the elevator mentioned; that plaintiff, the lessor, has failed to put the same in good repair in compliance with the building ordinances of the City of Chicago; that under the terms of said lease the defendants, lessees, were not liable for the upkeep of said elevator “until after the said lessor should so make the repairs as required by the City Ordinances”; and that, therefore, these defendants are not indebted to plaintiff in said sum of $107.24, or in any sum.

The case was tried before the court without a jury. Plaintiff introduced the lease in question, and plaintiff and two witnesses in his behalf testified. At the conclusion of plaintiff’s evidence the court, on defendant’s motion, entered a finding against the plaintiff and subsequently, after overruling a motion for a new trial, entered judgment against the plaintiff for costs.

Plaintiff’s evidence discloses that, at the time defendants took possession of the premises, plaintiff put the elevator and its safety device in good running order and repair and instructed defendants how to operate them. The trial court remarked during the course of the trial: “It looks to me as though the elevator was in good order and repair.” Plaintiff’s evidence further discloses that defendants operated the elevator for about 4 months, when, in December, 1917, it got caught and defendants pried it loose with a crowbar at one of the upper floors without stopping the machinery, and the cables broke and the elevator and cables fell into the pit; that the defendants had piled furniture “against the wall that the safety device worked on” high enough to interfere with the working of said device; that immediately after the occurrence the defendant, Isadore Grlabman, telephoned plaintiff, advising him that the elevator had broken down and requesting plaintiff to “send a man over to fix it,” to which plaintiff replied, “I have no men; I will send an elevator man”; that plaintiff Immediately sent an elevator man who made the necessary repairs and plaintiff paid him the snm of $107.24 therefor, which sum defendants’ counsel admitted at the trial was a fair and reasonable charge for the work done; and that at the time of said telephone conversation nothing was said as to who should pay for said repairs, but that plaintiff at the time “supposed the lease covered it.”

In Helm v. Illinois Commercial Men’s Ass’n, 279 Ill. 570-575, it is said:

“In a trial before the court without a jury a legal question, only, is raised by demurring to the evidence. The same question may be raised by submitting a proposition to the court or by a motion to find for the party. * * * If the court sustains the motion, judgment necessarily follows in favor of the party making the motion. The motion raises only a question of law as to the legal sufficiency of the evidence to sustain a verdict against the party making the motion. (Wolf v. Chicago Sign Printing Co., 233 Ill. 501.) If there is no Evidence, or but a scintilla of evidence, tending to prove the material ultimate facts necessary to sustain the plaintiff’s cause of action, such a motion by the defendant should be sustained; but if there is in the record any evidence, although contradicted, which the court can reasonably say fairly tends to prove all the ultimate facts necessary to entitle the plaintiff to judgment, then the court should overrule the motion, unless there is also uncontradicted evidence in the record that establishes an affirmative defense for the defendant. (Libby, McNeill & Libby v. Cook, 222 Ill. 206.) * * * In a case before a court without a jury, if at the close of the plaintiff’s evidence the defendant does not desire to introduce any evidence and desires the court to take the case on the evidence of plaintiff and weigh it and make a finding of the facts and render judgment accordingly, he should plainly so inform the court. The court may then weigh the evidence, determine the question of a preponderance thereof and enter judgment accordingly. If only a motion to find for defendant is made it must be understood that it only raises a question of law, as heretofore explained, and on such a motion the court cannot weigh the évidence and finally settle the issues of fact until the question of law is settled in favor of the plaintiff.”

We are of the opinion that the trial court erred in granting defendants’ motion made at the close of plaintiff’s case and entering judgment against plaintiff. We think that the uncontradicted evidence of plaintiff taken alone was sufficient in law to entitle plaintiff to recover back from defendants the amount plaintiff had expended for the repairs of the elevator. The evidence shows that plaintiff, in accordance with the special clause in typewriting in said lease, put the elevator in good repair at the time defendants, as lessees, took possession of the premises. It is provided in that special clause that the elevator “is to be operated and maintained by lessees at their own expense and kept in good running order, during the term of this lease. ’ ’ It, therefore, became the duty of defendants, under the lease, to keep the elevator in repair at their expense, and when, through defendants’ negligence the elevator broke down and had to be repaired and defendants requested plaintiff “to send a man over to fix it,” and plaintiff did so, and the elevator was repaired, we think it clear that under such an undisputed state of facts defendants would be liable for the amount expended by plaintiff for the repairs, it being admitted that said amount is fair and reasonable. In Trego v. Rubovits, 178 Ill. App. 127-133, it is decided in substance that, where the lessee of part of a building covenants to keep the elevator in good condition and repair, and his employee, who is injured because such elevator is not in good condition, recovers from the lessor or owner for such injuries, said lessor or owner has a right of action against the lessee for the damages recovered by such employee.

It is, however, here contended by counsel for defendants that the action was prematurely brought, in that plaintiff could not maintain the action until the term of the lease had expired. We cannot agree with the contention. The covenant was that the elevator should be maintained by the defendants at their own expense and kept in good running order during the term of the lease. Under such a covenant the landlord is not compelled to wait until the expiration of the term of the case before bringing action. (1 Taylor’s Landlord & Tenant, 9th Ed., sec. 361; Schieffelin v. Carpenter, 15 Wend. [N. Y.] 400-409; Buck v. Pike, 27 Vt. 529-532.)

The judgment of the Municipal Court is reversed and the cause remanded.

Reversed and remanded.


author: Mr. Justice G-ridley

text:
    William E. Grayson, Jr., Appellee, v. Chicago League Ball Club, Appellant.
    Gen. No. 24,806.
    1. CoKPOBATiorrs, § 170

      —when assignment of corporate claim not shown. An assignment of the claim of an Athletic Association against another corporation to plaintiff was not shown, where it appeared that such assignment was5 claimed hy plaintiff to have been effected by reason of a contract between himself as the owner of 487% shares out of a total of 500, and third parties, to which the association was not a party, and where the evidence failed to show that at the time of making such contract, the association had by act either of its board of directors or of its proper and duly authorized officer, made any sale of its assets, or assigned the claim in question to him.

      2. Statutes, § 272*—when foreign law must he pleaded. In an action brought by the alleged assignee of a corporation, where defendant claimed there was no competent evidence of any assignment to plaintiff, the latter could not claim that the law of a foreign State should govern in determining the question whether or not a certain agreement amounted to an equitable assignment to plaintiff of the claim in question, the claimed law of such foreign State not having been pleaded or proved.
    3. Assignments, § 11

      —when agreement cannot he construed as assignment. Even though the acceptance by a corporation of certain benefits under the agreement in question made by the holder of most of the stock, with third parties, without the consent of the corporation, be conceded as having amounted to a ratification by the corporation, the fact that under the agreement as it stood, moneys could be paid to the corporation upon the claim in suit, of which such stockholder claimed to be the assignee under said agreement, although the claim was not specifically mentioned, precluded the construction of such agreement as an assignment of such claim, either in law or equity.
    Appeal from the Municipal Court of Chicago; the Hon. Wells M. Cook, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1918.
    Reversed with finding of fact.
    Opinion filed October 10, 1919.
    Alden, Latham & Young, for appellant; Charles Martin, of counsel.
    Mergentheim, Altheimer & Mayer, for appellee; Morton A. Mergentheim, of counsel.

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

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

   Mr. Justice G-ridley

delivered the opinion of the court.

This is an action of the first class commenced November 8, 1915, in the Municipal Court of Chicago, to recover damages for an alleged breach of a written agreement between the Chicago League Ball Club, defendant, and the Louisville Athletic Association (hereinafter called the Athletic Association), which agreement, it is claimed, had been assigned by the Athletic Association to plaintiff. The jury returned a verdict in favor of plaintiff for $1,500, and on March 30,1918, judgment against defendant was entered, and this appeal followed.

In plaintiff’s statement of claim it is alleged in substance that on August 17,1911, the Athletic Association and the defendant entered into a written agreement whereby the Athletic Association released to the defendant two baseball players, E. Lennox and. L. Cheney, for $3,500 in cash; that it was provided in the agreement that Cheney was to report to defendant immediately and Lennox in the spring of 1912; that it was further provided therein that the defendant was to give to the Athletic Association two players in the spring of 1912, before May 1, 1912; and that on the same day that said written agreement was entered into the Athletic Association entered into a “supplemental” written agreement with defendant, which was ■ in the form of a letter from defendant addressed and delivered in Louisville, Kentucky, to plaintiff, who was then president of the Athletic Association, as follows :

“According to agreement made today, which is to be filed with the National Commission, if Larry Cheney is on the pay roll of the Chicago League Ball Club of the National League after May 1, 1912, I agree to give you two thousand dollars ($2,000) cash, and one player instead of two- players, as mentioned in agreement filed with the National Commission.

Yours truly,
Chicago League Ball Club Charles W. Murphy, President.”

It is further alleged in said statement of claim that the Athletic Association carried out all the terms and provisions of said agreement; that said Cheney was on the pay roll of the defendant after May 1, 1912, and has ever since been; that defendant has wholly failed to carry out any of the terms and provisions of said supplemental agreement and has never paid the sum of $2,000 to the Athletic Association or any one else; and that the said claim against the defendant in favor of the Athletic Association was duly assigned to plaintiff for a valuable consideration by the Athletic Association, and that plaintiff is entitled to interest thereon from May 1, 1912. In an amendment to plaintiff’s statement of claim, it is alleged that on November 15, 1912, the Athletic Association for a valuable consideration assigned to plaintiff a certain claim which said Athletic Association had at that time against the defendant and that plaintiff is the actual bona fide owner thereof.

The defendant, in its affidavit of merits denied that plaintiff was the bona fide owner of said claim and denied that the Athletic Association on November 15,1912, assigned to plaintiff said claim; admitted the making of the agreement of August 17, 1911, and alleged that it had been fully performed by defendant, and that defendant had paid $3,500 in cash to the Athletic Association and had given to it the two players mentioned prior to May 1, 1912, and denied that there had been any breach of the agreement; and further alleged that the so-called supplemental agreement was an alternative agreement to be operative only in case defendant decided to accept the services of Cheney only, and not the services of Lennox; that defendant as a matter of fact accepted the services of both Cheney and Lennox and carried out the original agreement in full, and that, therefore, the alternative agreement never became of any force or effect; and further alleged that no consideration was ever paid to defendant by the Athletic Association for said alternative agreement; and denied that it was indebted either to the Athletic Association or to plaintiff in any sum.

Counsel for defendant here contend that the trial court should have directed a verdict in favor of defendant because (1) there was no evidence to sustain plaintiff’s contention of a breach of contract, and (2) there was no competent evidence of any assignment to plaintiff of the alleged claim of the Athletic Association. against defendant.

We are of the opinion that counsel’s second point is well taken. On the trial both the agreement of August 17,1911, and the so-called supplemental agreement were introduced in evidence. It was admitted that the provisions of the agreement (as distinguished from said supplemental agreement) had been fully complied with by both parties, that the two ball players, Cheney and Lennox, had been delivered to defendant, and that defendant had paid the $3,500 to the Athletic Association and had delivered to it the two other players mentioned. And the evidence further disclosed that prior to November 18, 1912, plaintiff was the owner of 487% shares of the capital stock of said Athletic Association, which consisted of 500 shares; that one Hanlon was the owner of the other 12% shares; and that on said date plaintiff entered into a written agreement with William F. Knebelkamp and O. H. Wathen, of Louisville, Kentucky, whereby he sold to them his 487% shares of said stock. Said agreement was introduced in evidence over objection, and plaintiff contended that by virtue of certain provisions therein the alleg’ed claim here in question against defendant was assigned' to him. Those provisions are in substance that Grayson (plaintiff) agrees to protect and hold harmless said Athletic Association from any liability on account of two damage suits then pending against it; that said Athletic Association has no money in bank and no accounts due except from the president of the American Association on account of 1912 business, which amount is not included in the assets of said Athletic Association and is to be refunded to Grayson by Knebelkamp and Wathen or by said Athletic Association when paid; that Knebelkamp and Wathen agree to pay over to Grayson “any money collected or received on account of business prior to the date of this agreement” (November 18,1912); and that Grayson is to pay all debts contracted for any purpose, and all salaries of employees, prior to November 9, 1912, and that Knebelkamp and Wathen are to pay all debts contracted and salaries after that date. The Athletic Association, the corporation, was not a party to said agreement of November 18, 1912, and apparently no one assumed to represent it in the transaction. The main purpose of the agreement was the transfer of the 4871/2 shares of the stock of the Athletic Association, owned by Grayson, to Knebelkamp and Wathen. In executing said agreement and in making said transfer Grayson was acting in his individual capacity and was not representing the corporation. And, at this time, Knebelkamp and Wathen were total strangers to the corporation, as it was solely by virtue of the agreement and- the subsequent transfer of Grayson’s stock to them that they became stockholders in the corporation and interested in its welfare. The evidence does not disclose that at this time the Athletic Association, a corporation, by act of the board of directors, or by act of its proper and duly authorized officer, made any sale or transfer of any of its corporate assets, or assigned to the plaintiff, Grayson, the alleged claim in question against defendant. In Sellers v. Greer, 172 Ill. 549-553, it is said:

“A corporation is an artificial being created by law, clothed with certain powers. It acts through its board of directors and officers. Its property is not subject to the control or disposition of its members or stockholders. They have no power to sell or encumber the corporate property. * * * In Cook on Stockholders (3rd Ed., sec. 709) it is said: ‘The stockholders cannot enter into contracts with third persons. Contracts between the corporation and third persons must be entered into by the directors, and not by the stockholders. The corporation, in such matters, is represented by the former, and not by the latter. * * * Although one person owns a majority of the stock, or all of it, or all hut two shares, he does not in consequence thereof acquire the right to act for the corporation, or as the corporation, independently of the directors. * * * A single stockholder cannot make a contract for and in the name of the corporation which shall have any binding force or validity, except by subsequent ratification or adoption in the regular manner.’ * * * In Humphreys v. McKissock, 140 U. S. 304, the validity of the action of all the stockholders 'of a corporation in transferring its property without corporate action arose, and in disposing of the case the court said (p. 312): ‘Both the commissioner, and the court in confirming his report and entering the decree mentioned, seem to have confounded the ownership of stock in a corporation with ownership of its property. But nothing is more distinct than the two rights. The ownership of one confers no ownership of the other. The property of a corporation is not subject to the control of individual members, whether acting separately or jointly. They can neither encumber nor transfer that property nor ^authorize others to do so. The corporation—the artificial being created—holds the property, and alone can mortgage or transfer it; and the corporation acts only through its officers subject to the conditions prescribed by law.’ ” (See also People v. Dennett, 276 Ill. 43-46.)

It is contended by plaintiff’s counsel that the Athletic Association accepted the benefits of said agreement of November 18,1912, in that plaintiff paid $2,600 in settlement of said two damage suits and also paid a lumber bill against the Athletic Association and that, therefore, the Athletic Association cannot successfully take the position that plaintiff is not entitled to the benefit of the claim against defendant. Even if it be conceded (though not admitted) that the action of the Athletic Association in accepting the benefits of plaintiff’s settlement of. the two damage suits and the payment of the¡ lumber bill amounted to a ratification of said agreement by the Athletic Association, we are confronted with the question whether by the terms of the agreement the alleged claim against defendant was assigned to plaintiff. We cannot think it was. It is not specifically mentioned in the agreement. Plaintiff’s counsel rely on the provision in the agreement that Knebelkamp and Wathen agree to pay over to Grayson “any money collected or received on account of business prior to the date of this agreement.” This suggests that moneys due the Athletic Association on account of business prior to November 18,1912, were to be “collected and received” by said Athletic Association. And if defendant owed the Athletic Association any moneys on account of a business transaction prior to said date, clearly under the provisions of the agreement it could pay those moneys to the Athletic Association. This being so, we are of the opinion that the said agreement could not be construed as an assignment of the alleged claim against defendant, either in law or equity. In Christmas v. Russell, 14 Wall. (U. S.) 69-84, it is said:

“An agreement to pay out of a particular fund, however clear in its terms, is not an equitable assignment; a covenant in the most solemn form has no greater effect. The phraseology employed is not material provided the intent to transfer is manifested. Such an intent and its execution are indispensable. The assignor must not retain any control over the fund— any authority to collect, or any power of revocation. If he do, it is fatal to the claim of the assignee. The transfer must be of such a character that the fund-holder can safely pay, and is compellable to do so, though forbidden by the assignor.” (See also Newell v. Grant Locomotive Works, 50 Ill. App. 611-616; Bromwell v. Turner, 37 Ill. App. 561-563.)

And, as it seems to us, the agreement could only be construed as creating the relation of debtor and creditor between the parties thereto. (Wyman v. Snyder, 112 Ill. 99-103; Story v. Mull, 143 Ill. 506-511.)

It is further contended by plaintiff’s counsel that the agreement in question having been made in Kentucky, the law of .that State should govern in determining the question whether or not said agreement amounted to an equitable assignment to plaintiff of the alleged claim against defendant by the Athletic Association. It is a sufficient answer to this contention that the claimed law of Kentucky was not pleaded or proved. (Shannon v. Wolf, 173 Ill. 253-260: Hakes v. National State Bank, 164 Ill. 273-275; A. D. Juilliard & Co. v. May, 130 Ill. 87-97.) In the last-mentioned case it is said: “In the absence of any allegation or proof of a statute, we must presume either that the common law obtains in New York, or else that the laws of that State are similar to the laws which prevail in this State, where the action was tried.”

For the reasons indicated the judgment of the Municipal Court will be reversed without remanding.

Reversed with finding of fact.

Finding of Fact. We find as a fact that the alleged claim in question against the defendant, Chicago League Ball Club, was not assigned to the plaintiff.


text:
    Rhoda A. Baldwin, Appellee, v. Lester E. Tuttle et al. Stella Wood, Appellant.
    Gen. No. 25,324.
    Mortgages, § 738

      —when improper to appoint receiver to collect rents and profits during redemption period. Under a trust deed which provided for the collection of rents upon default and for the payment of those collected after sale and until the expiration of the redemption period to the purchaser at the sale, but did not expressly pledge the rents and profits to the mortgagee during the redemption period, the owner of the equity of redemption, who had not assumed to pay the mortgage debt and who was therefore not personally liable for the debt and against whom there was no deficiency decree, was entitled to the rents and profits during the redemption period; and the appointment of a receiver to collect rents, etc., during the redemption period, upon the petition of complainant who purchased at the sale and in whose favor a deficiency decree was entered, but who filed her petition not as purchaser but as the holder of such decree, was improper.
    Matchett, P. J., dissenting.
    Interlocutory appeal from the Superior Court of Cook county; the Hon. Charles M. Foell, Judge, presiding. Heard in the Branch Appellate Court.
    Reversed and remanded.
    Opinion filed October 10, 1919.
    Rehearing denied October 21, 1919.
    Statement by the Court. This is an appeal from an interlocutory order of the Superior Court of Cook county, entered April 24, 1919, appointing a receiver of certain premises after foreclosure and sale and after a deficiency decree had been entered, for the purpose of collecting the rents during the period of redemption, and out of the rents so collected of making reasonable repairs and of applying the balance towards the satisfaction of said deficiency decree.
    On March 16, 1894, Lester E. Tuttie and Ettie A. Tuttle, his wife, being indebted to Rhoda A. Baldwin, executed and delivered their principal note for $1,500, payable 5 years after date to the order of themselves and by them indorsed, together with interest coupon notes, and also their trust deed to William F. Lubeke, as trustee, conveying the premises to secure said indebtedness, The time of payment of said principal note was thereafter extended by several extensions to March 16, 1909. On July 1, 1905, the said Lester E. Tuttle and wife conveyed by warranty deed the said premises to Stella Wood, appellant, and, at the time of the filing of the bill and of the appointing of the receiver in this case, she was the owner of the equity of redemption. Said warranty deed recited that it was made “subject to an incumbrance thereon of $1,500,” but the grantee (Stella Wood) did not assume and agree to pay the indebtedness. The master in chancery reported that the evidence was insufficient to hold Stella Wood personally liable for the payment of said indebtedness, his report was approved by the court, and no deficiency decree was rendered against her.
    The trust deed contained a release and waiver of homestead, and it was provided therein, inter alia, that in case of default in the payment of any of said promissory notes, or any part thereof, or in case any of the buildings should be destroyed or injured or not kept in good order and repair, or in case of waste or nonpayment of taxes or assessments, or in ease of the breach of any of the covenants or agreements in said trust deed mentioned, it should be lawful for the party, of the second part (the trustee) or his successor in trust, or the person who might be appointed by the court to execute the trust, on application of the legal holder of said promissory notes or either of them, to enter upon and take possession of said premises and “to collect and receive all rents, issues and profits thereof,” and in his own name or otherwise to file a bill or bills in any court having jurisdiction thereof against the party of the first part (grantors), their heirs, executors, administrators and assigns, to obtain a decree for the sale and conveyance of the whole or any part of the premises, and “to pay any rents that may be collected after such sale and before the time of redemption expires to the purchaser or purchasers of said premises at such sale or sales.” And it was.further provided in the trust deed that:
    “The said party of the second part, or person appointed by the court to: execute this trust, may in case of any such default or breach of covenant take immediate possession of said premises, and collect the rents and profits as above provided, until the time of redemption shall expire under any sale that may be made by virtue of this trust deed, and the said party of the first part hereby expressly waive and release to the said party of the second part, his successor or person appointed by the court to execute this trust, all rights which they now have or may hereafter have under any law of this State, to retain possession of said premises after any such default or breach of covenant as aforesaid, until the time for redemption expires.”
    On December 18, 1918, Bhoda A. Baldwin filed her verified bill of complaint to foreclose said trust deed, making Lester E. Tuttle, Ettie A. Tuttle, his wife, Stella Wood, Theodore B. Wood, her husband, William F. Lubeke as trustee, and others, parties thereto. Certain amendments to the bill were afterwards made. All of the defendants were defaulted except Stella Wood and her husband, who filed answers. The bill as amended sets forth the execution and delivery of the notes and trust deed and the provisions of the trust deed; alleges that there is due complainant on said principal note the sum of $1,500, together with interest thereon from September 16, 1918, and certain moneys advanced, and that Stella Wood, the present owner, has allowed the premises to become in a dilapidated condition; and prays for a foreclosure and sale of the premises, that a receiver may be appointed to collect the rents and profits during the pendency of the proceedings and until the time of redemption shall expire, and that, in case of the failure upon a sale to realize a sufficient sum to satisfy the amount found to be due complainant, a personal decree be entered against Lester E. Tuttle and wife and Stella Wood for the deficiency.
    The foreclosure decree was entered on March. 17, 1919, in which the court found that the said Lester E. Tuttle and wife had in said trust deed expressly waived and released all rights to retain possession of said premises after any such default or breach of covenant until the time for redemption expired; that in the event of a sale of the premises and a failure to realize a sufficient sum to satisfy complainant for principal, interest, moneys advanced, and for costs, complainant was entitled to a personal decree against said Lester E. Tuttle and wife for such deficiency and to have execution issue therefor; that the total amount due complainant was $1,702.23; and that complainant had a valid and subsisting lien upon the premises for the amount due her prior and superior to the rights and interests of all of the defendants. And the court decreed that, unless the defendants caused to be paid within 2 days the amount so found to he due complainant, together with interest and costs, the premises be sold at public sale by the master, etc.
    The premises were thereafter duly sold. Ehoda A. Baldwin, the complainant, was the purchaser. On April 21, 1919, the master’s report of sale was approved and a deficiency decree was entered in favor of complainant against Lester E. Tuttle and wife for the sum of $337.10.
    Thereafter on the same day complainant filed her verified petition for the appointment of a receiver. In this petition she alleged, after setting forth the fact of the sale and the amount of the deficiency, that Lester E. Tuttle and Ettie A. Tuttle, his wife, were insolvent and that said deficiency could not be realized out of them; that the premises were improved with a 3-story frame apartment building; that said building had been neglected and was in a bad state of repair; that it was necessary that a receiver be immediately appointed to take possession of the premises to put the same in repair, and to let the same; and that the net rents collected after payment for repairs be applied towards the satisfaction of said deficiency decree.
    Stella Wood and her husband had due notice of the application for the appointment of a receiver. Neither of them by answer denied the allegations of the petition. On April 24, 1919 (upon the verified bill of complaint as amended, the decree of sale and said verified petition for a receiver), the court entered an order appointing Theodore E. Wood receiver of the premises “until the period of redemption from the sale of said premises expired,” upon his filing a bond in the sum of $600, and authorizing him, out of the rents to be collected, to make necessary repairs to preserve the premises and to keep them in a tenantable condition and “to apply the balance in his hands towards the satisfaction of said deficiency decree.” The receiver gave bond and duly qualified as receiver.
    Julian Kwasigroch, for appellant; James H. Dunn, of counsel.
    Theodore Johnson, for appellee.

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

   Mr. Justice G-ridley

delivered the opinion of the court.

It is here contended by counsel for appellant that the court had no authority under the facts and under the law to appoint the receiver and to.direct said receiver out of the rents to be collected to apply the balance, after making the necessary repairs, towards the satisfaction of said deficiency decree. The argument is, in substance, that the trust deed in question in this case does not pledge the rents and profits to the mortgagee during the redemption period, and that, where the rents and profits are not therein so pledged and where it appears that the owner of the equity of redemption is not personally liable for the indebtedness and there is no deficiency decree against him, such owner of the equity of redemption is entitled to such rents and profits during said redemption period.

In the case of Longley v. Wilk, 171 Ill. App. 419, Longley, the owner and holder of the principal note secured by a trust deed, filed his bill to foreclose and, pending the suit, a receiver was appointed to collect the rents and profits. Subsequently the premises were sold under a decree of sale and Longley was the purchaser at such sale. The sale was approved and a deficiency decree was entered in favor of Longley and against one Sarah A. Bartlett, the original mortgagor. One Walter M. Cowell, trustee, was the owner of the equity of redemption. Longley filed a petition asking that a balance of money in the receiver’s hands be applied upon said deficiency decree. ■ On this petition the court found that said Cowell, the owner of the equity of redemption, had not assumed in any way to pay the mortgage debt, and that the balance in the receiver’s hands belonged of right and by law to said Cowell, and the court ordered the receiver to pay said balance in his hands to said Cowell. Prom this order Longley appealed to this Appellate Court, where the order was affirmed. Prom an examination of the opinion in the case it appears that the provisions of the said Bartlett trust deed are almost identical with the provisions of the trust deed in the present case. Mr. Justice P. A. Smith in delivering the opinion said, p'. 423:

“The provisions in the trust deed referring to the rents, issues and profits of the premises do not pledge or create a lien thereon in favor of the complainant

for the rents, issues and profits collected after the foreclosure sale and before the time of redemption expires, but provides that they shall be paid to the purchaser or purchasers of the premises at such sale. It cannot be claimed or contended successfully that because the complainant was the purchaser of the premises at the sale this provision of the trust deed pledged the rents covered by the decree or order under review to the complainant as such purchaser.” (Citing Schaeppi v. Bartholomae, 217 Ill. 105, 110.) “The decree of sale in this case does not give the purchaser at the sale the rents, issues and profits, if any, during the redemption period. It does not dispose of them in any manner. In our opinion, the case of Standish v. Musgrove, 223 Ill. 500, controls the question presented by the order under review. * * * There was no deficiency decree against Walter M. Cowell, and moneys belonging to him could not be applied in payment of the deficiency decree against Sarah A. Bartlett. ”

In Standish v. Musgrove, 223 Ill. 500, 505, it is said:

“The substance of the provision of the trust deed referred to is, that the grantors waived all right to the possession of and income from the premises pending foreclosure proceedings, and in case of sale until the equity of redemption expired, and agreed that a receiver might be. appointed to take charge of the premises and collect the income therefrom, and, after paying the expenses of receivership, pay the same to the person entitled to a deed under the certificate of sale. In Schaeppi v. Bartholomae, 217 Ill. 105, where the mortgage contained a similar provision, it was held that the purchaser at the sale took title under and by virtue of the decree, and could claim no right to the rent by virtue of the provisions of the mortgage. * * * The appellant, so far as disclosed by the record, was the owner of the equity of redemption. There was no.deficiency judgment against the appellant and she is not made personally liable for the incumbrance by the decree. Under such circumstances, if she was in fact the owner of the equity of redemption, she was entitled to the rents and profits of the premises until the time for redemption had expired. The appointment of a receiver did not divest her of that right. She was still entitled to the rents and profits pending redemption, less such expenditures as were necessary and proper in preserving the property, but not in bettering its condition. ’ ’

In Owsley v. Neeves, 179 Ill. App. 61, the trust deed there in question, unlike the trust deed in the present case, expressly secured to the mortgagees a lien on the rents during the redemption period, and the question was whether the trial court had erred in ordering the rents accruing after foreclosure sale and before the expiration of the redemption period paid to said mortgagees (appellees) towards the satisfaction of the deficiency decree in their favor. It was held that under the particular facts in the case the trial court had not erred. But the court in the opinion (p. 65) said: “When the rents and profits are not expressly mortgaged to secure the debt, they, during the period of redemption, belong to the owner of the equity of redemption, if he is not personally liable for the mortgage debt and there is no deficiency judgment against him.”

In Stevens v. Pearson, 202 Ill. App. 22, it appears that Stevens (appellant) had filed a bill in the Superior Court of Cook county to foreclose a trust deed given by Pearson and wife; that pending foreclosure a receiver had been appointed; that subsequently a foreclosure sale was had and a deficiency decree entered in favor of Stevens against Pearson and wife; that subsequently the court ordered the receiver within 30 days to pay the balance of moneys in his hands, which had been collected from the rents and profits during the redemption period, to Cagney (appellee) the owner of the equity of redemption; and that from tin's order Stevens appealed to this Appellate Court. It further appears, both from the original opinion and the additional opinion filed on petition for a rehearing, that the trust deed in question did not expressly secure to the mortgagees a lien on the rents during the redemption period, and that Cagney was not personally liable for the mortgage debt or for the deficiency by the decree. The order of the trial court was affirmed.

In the present case it appears that, immediately after the deficiency decree for $337.10 was entered in favor of complainant (appellee) and against Lester F. Tuttle and wife only, the complainant filed her petition for a receiver. And it clearly appears that she filed that petition, not as the purchaser at the sale, but as the holder of said deficiency 'decree, for the sole purpose of obtaining satisfaction, full or partial, of the amount of said deficiency decree out of the net rents, to be collected during the redemption period by a receiver appointed under an order of the court. In view of the facts in the present case, viz., that the trust deed in question did not expressly secure to the complainant a lien on the rents during the redemption period and that appellant, Stella Wood, owner of the equity of redemption, was not personally liable for the indebtedness and no deficiency decree was rendered against her, and in view of the prior decisions of this court and of the Supreme Court above referred to, we are constrained to hold that the court erred in appointing the receiver “until the period of redemption from the sale of said premises expired,” and authorizing him out of the rents to be collected to make necessary repairs to preserve the premises, and “to apply the balance in his hands towards the satisfaction of said deficiency decree.” In our opinion, after the foreclosure sale in this case and until the period of redemption expired, the owner of the equity of redemption was entitled to the rents and profits from the premises; and was also entitled, subject to the equitable rights of the purchaser at such sale or her assigns, to the management and control of the property. (Bogardus v. Moses, 181 Ill. 554-558; Haigh v. Carroll, 209 Ill. 576-580.)

Counsel for appellee cites several decisions of the Supreme Court of this State and contends that they authorize the appointment of a receiver in such a case as the present one for the purpose of having the net rents applied towards the satisfaction of the deficiency decree. Among the cases cited are Haas v. Chicago Building Society, 89 Ill. 498; First Nat. Bank of Joliet v. Illinois Steel Co., 174 Ill. 140; Bagley v. Illinois Trust & Savings Bank, 199 Ill. 76, and Prussing v. Lancaster, 234 Ill. 462. An examination of the first three cases,- however, discloses that either the owner of the equity of redemption was also the original maker of the notes and mortgage, and therefore personally liable for the debt, or, the rents and profits during the redemption period had been expressly mortgaged by the provisions of the trust deed to secure the debt. In the Prussing case it is not disclosed what the provisions of the trust deed were. These cases, therefore, are to be distinguished from the present case.

For the reasons indicated the order of the Superior Court appointing the receiver is reversed and the cause is remanded for further proceedings not inconsistent with the views herein expressed.

Reversed and remanded.

Mr. Presiding Justice Matchett dissents.


author: Mr. Presiding Justice Thomson Mr. Presiding Justice Thomson

text:
    Chicago Junction Railway Company, Petitioner, v. Dollie F. Leitch et al., Respondents. Harry S. Mecartney, Lien Petitioner, Appellee, v. Dollie F. Leitch and Olive Leitch, Respondents, Appellants.
    Gen. No. 24,385.
    1. Attorney and client, § 138*—right to lien. Upon the abandonment of a petition for condemnation filed by a railway company, and the consequent allowance to respondents of a stated sum for costs and attorney’s fees, the attorney for the respondents was entitled to a lien on such fund for his fees for such services as he had rendered respondents in their defense and in the presentation of their claim for their costs and attorney’s fees following the abandonment of the petition; but the question whether the defense of the condemnation proceedings was a claim, etc., within the meaning of chapter 82, sec. 55 (J. & A. If 611), creating attorney’s liens, was not involved.
    2. Attorney and client, § 150*—when objection of lack of written notice of lien cannot be raised on appeal. Where, upon the dismissal of condemnation proceedings, an order was entered allowing costs and attorney’s fees to respondents, and part of the amount allowed was paid respondents and the remainder deposited with the clerk, and subsequently a petition for an attorney’s lien was filed by one of the attorneys for the respondents, and thereafter, without objection by respondents, such order was amended so as to provide that said deposit with the clerk should abide the event of any order made upon the petition for a lien, the respondents were precluded - from raising the objection on appeal, of a lack of the written notice required by chapter 82, sec. 55 (J. & A. If 611), creating attorney’s liens.
    3. Attorney and client, § 121

      —when fee dependent on “successful” outcome of litigation is properly disallowed. In the case of a dispute between an attorney and his clients who were the respondents in a condemnation proceeding, where upon the abandonment ' of the proceedings an allowance for costs and attorney’s fees was made to such respondents, and where the attorney claimed an additional per diem of $50 per day over that he had already been paid, under the contention that the litigation was “successful” within the meaning of an agreement between the parties, such double charge was properly disallowed, as at best the provision upon which such charge was based, viz., that the final result of the litigation be successful, was ambiguous, and the court could not say from the record that the outcome was such a successful result as the parties had in mind in reference to an additional charge in such event.
    4. Attorney and client, § 150*—what fees court can consider on petition for lien. The only attorneys’ fees which the court could consider in the matter of such attorney’s petition for a lien on money deposited in court after the abandonment of condemnation proceedings were those for which the railway company could be compelled to indemnify the respondents under the provisions of the Eminent Domain Act; and therefore an allowance for services performed on the question of establishing a “way of necessity” and other matters was improper.
    5. Attorney and client, § 137b*—what fees covered by statute. The statute allowing an attorney’s lien covers only such fees as may have been rendered on account of the suit, claim, judgment or cause of action in which the judgment or allowance for fees is rendered.
    6. Attorney and client, § 123*—when one attorney cannot recover severally one-half of value of services performed by him and another attorney. Where two attorneys are employed severally in a cause, each is entitled to recover for services performed by him either pursuant to an agreement or for reasonable value, and one is not entitled to recover severally one-half of the value of the services of both, but the court will determine from all the facts and circumstances what is the full value for the services sued for.
    7. Attorney and client, § 150

      —when finding on petition for lien will be reversed. Where on the hearing of a petition for an attorney’s lien on the fund which had been deposited in a condemnation proceeding upon the abandonment of the proceeding, as attorney’s fees for the respondents, the finding for petitioner was reversed because the record showed that the allowance included items not rendered “on account of” the condemnation proceedings, and it did not appear what those charges amounted to.
    Additional Opinion on Rehearing.
    Attorney and client, § 150*—when lien petitioner estopped from claiming more than proportionate share of fund. Where respondents in a condemnation case had two attorneys, and upon the abandonment of the case and the consequent allowance of attorneys’ fees by the court to such respondents, a petition for a lien on the fund was filed by one of such attorneys, and where both attorneys had appeared in court and stated that they had agreed with the railroad attorneys that a stated sum was a reasonable sum to be paid to the respondents to reimburse them for attorneys’ fees, the lien petitioner was estopped from claiming more of such fund than his proportionate share of it, considering the fees earned or services rendered by both counsel, although the other attorney was not a party in the Appellate Court.
    Appeal from the Circuit Court of Cook county; the Hon. Jesse A. Baldwin, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1918.
    Reversed and remanded.
    Opinion filed October 15, 1919.
    Rehearing denied and additional opinion filed November 8, 1919.
    John S. Huey and Newton A. Partridge, for appellants.
    John S. Brown, for appellee.

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

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

   Mr. Presiding Justice Thomson

delivered the opinion of the court.

The Chicago Junction Railway Company brought two condemnation suits involving land belonging to Dollie F. Leitch and others, which were consolidated as one case. Mr. John S. Huey represented the respondents and in the course of the proceedings the lien petitioner, Harry ¡3. Mecartney, was brought into the case as associate counsel. After considerable preliminary work had been done the railway company notified counsel for respondents that they were going to dismiss their petition and would expect to pay the latter their costs and reasonable attorney’s fees as provided by the statute. Thereupon Mr. Huey and Mr. Mecartney had several conferences and some correspondence both between themselves and with the attorney for the railway company as to what the attorney’s fees should be and it was finally arranged that the railway company should pay the respondents a total of $11,807.06 as and for their costs and expenses, including a reasonable attorney’s fee, paid or incurred by them in preparing the defense of the condemnation suit. Of this amount, $1,807.06 was for cash paid out for costs and other expenses and $10,000 was for attorney’s fees. Mr. Mecartney had rendered the respondents bills from time to time and they had paid him a total of $4,569.06 on account of his fees in the case. He claimed an additional sum of $4,930.94, making his total fee $9,500. It appears from the record that Mr. Huey took the position that they had agreed that $10,000 was a reasonable sum for the railway company to pay the respondents for their attorney’s fees and that each of them should, accordingly, accept $5,000 in full payment for their services, and it was further suggested that inasmuch as Mr. Mecartney had received an aggregate of $4,569.06, he should accept the difference between that amount and $5,000, or $430.94, in full payment of his bill. Mr. Mecartney was unwilling to agree to this, claiming that he had a contract with the respondents under which he was entitled to the additional amount above referred to. While this controversy was going on between the attorneys about the fees, the court entered an order, on the railway company’s motion, dismissing their petition at their costs and providing that the respondents have and recover from the railway company their costs and charges expended and have execution therefor. This was late in the month of January, 1918, and on the 6th of February Mr. Mecartney filed the petition involved in this appeal, by which he sought to establish an attorney’s lien under the statute to recover the balance of $4,930.94, which he claimed was due him. This petition was filed in the original condemnation proceedings. On February 13, 1918, the court entered a further order in which it was recited that the railway company had dismissed its petition and that it appeared to the court that the costs, expenses and reasonable attorneys’ fees of the respondents incurred in the defense pf said petition were $11,807,06, and it was ordered that the railway company, forthwith, pay the said respondents as and for their costs, expenses and reasonable attorneys’ fees, the snm of $11,807.06, and that the respondents have judgment against the railway company for that amount, and further, the order recited that it appearing to the court that the railway company had paid the respondents the sum of $6,307.06 and also that the railway company, at the direction of the court, had paid the clerk of the court the sum of $5,500 to abide the event of any- order that might be entered on the petition for an attorney’s lien, filed by Mr. Mecartney, said judgment should be marked, satisfied of record in the case.

'Subsequently the court heard the evidence submitted in support of Mr. Mecartney’s petition and the answer thereto which had been filed by the respondents and made a finding for the petitioner to the extent of $2,430.94, and upheld his claim for a lien for that amount. Judgment was entered accordingly, from which the respondents have perfected this appeal. The petitioner has assigned cross errors, claiming that the court erred in not giving him a judgment and lien for the full amount claimed by him.

In support of their appeal the respondents contend that this is not such a case as comes within the provisions of section 55 of chapter 82 of our statutes (J. & A. 611). That section provides: “That attorneys at law shall have a lien upon all claims, demands and causes of action * * * which may be placed in their hands by their clients for suit or collection, or upon which suit or action has been instituted, for the amount of any fee which may have been agreed upon by and between such attorneys and their clients, or, in the absence of such agreement, for a reasonable fee, for the services of such attorneys, rendered or to be rendered for their clients on account of such suits, claims, demands or causes of action * * * and such lien shall attach to any verdict, judgment or decree en-

■ tered and to any money or property which may be recovered on account of such suits, claims, demands or causes of action * *

The question whether the defense of the condemnation proceedings was a claim, demand or cause of action, placed in the hands of the petitioner by the respondents for suit or collection within the meaning of the statute creating an attorney’s lien, is not involved here. Upon abandonment by the railway company of their attempt to take the property under their condemnation proceedings, there arose a claim by the respondents for their reasonable costs and, attorney’s fees under the provisions of section 10 of the Eminent D'omain Act (J. & A. 5260). This claim was embodied in the judgment which the court entered in the original proceedings, in favor of the respondents and against the railway company, for said costs and attorney’s fees in the sum of $11,807.06., While it appears from the record that the dismissal of the condemnation proceedings was, at least in part, due to the information the railway company had received to the effect that the Sanitary District of Chicago was going to-take the property, it nevertheless appears that in the case in connection with which the petitioner rendered services, a claim arose in favor of his clients, and on that claim the court duly entered judgment and in satisfaction of that judgment the railway company has paid a part of the money into court to abide the disposition which may finally be made of the claim of the petitioner for his fees.

We hold that in that situation (with the qualifications hereinafter made), the petitioner would have a lien on the fund in question for his fees for such services as he had rendered the respondents in connection with the condemnation proceedings, both the defense of that action and presentation of the claim of his clients for their cost's and attorney’s fees, following the abandonment of the petition to condemn, by the railway company.

No authority on this question in this State has been called to our attention and we have found none. The trend of the decisions in other States involving statutes similar to, but worded somewhat differently from, ours, seems to be along the line of our holding as set forth above. 6 C. J. sec. 386; Agricultural Ins. Co. v. Smith, 112 N. Y. App. Div. 840; Ennis v. Curry, 22 Hun (N. Y.) 584; Bevins v. Albro, 86 Hun (N. Y.) 590; Harlan & Co. v. Bennett, 127 Ky. 572; Merchants’ Nat. Bank of Rome v. Armstrong, 107 Ga. 479.

The respondents contend that the lien petitioner, Mecartney, has failed to establish any right to an attorney’s lien, as against the fund in question, because the record contains no proof of such a notice as is provided for in the statute creating an attorney’s lien. We think the respondents are not in a position to raise this point now. The lien petitioner filed his petition claiming an attorney’s lien, in the condemnation proceedings, on February 6, 1918. The order of February 13,1918, already referred to, was approved, in writing, by Mr. Huey representing the respondents. On March 6,1918, on motion of the lien petitioner, Mecartney, the court entered an order amending the order of February 13 by adding the following: “and to abide the event of any order, judgment or adjudication, that shall be made by the court upon the petition filed by Harry S. Mecartney, herein, for a lien for attorney’s fees and disbursements, which petition of the said Mecartney was filed on or about the 16th (6th) day of February, 1918.” The record does not show any objection on the part of the respondents to the entering of this order. The record shows that these orders were entered with the knowledge and co-operation of the railway company. Having permitted this money to be paid into court, under these circumstances, pursuant to orders entered by the court and expressly approved by them or without any objection on their part, and having refrained from expressly raising the objection of the lack of notice in writing from the lien petitioner to the railway company, in the court below, the respondents are not in a position to raise it now.

We are unable to agree with the lien petitioner that the trial court erred in not allowing him the lien claimed for the full amount of his bill. The court properly disallowed his claim for an additional $50- a day for the time spent, based on his contention that the litigation had been “successful,” as provided for in certain communications from him to the defendants and in certain bills submitted by him to them in which he had made a charge for his time on the basis of $50 a day and referred to a possible balance of $50 a day as waiting the outcome of the litigation and a charge which was to be made “if the final result of the litigation is successful.” At best, the provisions about this double charge “if the final result of the litigation is successful” were ambiguous and without anything more definite than we find in the record as to what should be considered a successful result of the litigation, we cannot say that the outcome shown by the evidence was such a successful result as the parties had in mind in references they made to an additional charge of $50 a day in such an event.

The ultimate question of fact to be decided in this case is, not how much is Mr. Mecartnev entitled to as fees for the services rendered the respondents under his alleged agreement with them, but the question is, for what amount should he be awarded an attorney’s lien as against the money paid into the court by the railway company? To determine that ultimate question, the court should first find what amount of Mr. Mecartney’s fees can be taken into consideration, in fixing the lien that should be allowed. In our opinion the only fees that can be taken into consideration are those for which the railway company could be compelled to indemnify the respondents, under the provisions of the Eminent Domain Act.

Furthermore, the statute allowing an attorney’s lien covers only such fees as may have been rendered on account of the suit, claim, judgment or cause of action in which the judgment or allowance for fees is rendered. Davis v. Webber, 66 Ark. 190; Halsell v. Turner, 84 Miss. 432.

It appears from the record in this case that charges were included in the fees of the lien petitioner, for" which the trial court has granted him an attorney’s lien, for which the railway company could not be required to indemnify the respondents, and which were not rendered “on account of” condemnation proceedings. In his brief, counsel for the lien petitioner states that the latter advised the respondents that they should have a “way of necessity” or right of access to their property, established of record, by a bill in chancery, and that proceedings should be early filed to that end. In one of his communications to Mr. Huey, the lien petitioner wrote: “I see no reason why this item” (not the one finally submitted) “should not be presented to the railway company for payment in full, although I well realize that there are some matters, such as the exhaustive brief work and examination of old residents to establish the way of necessity, and other matters, which I do not expect the court to allow.” In one of his letters to the respondents, on the question of fees, the lien petitioner wrote, “It is possible and probable that all of the fees that you have agreed to pay me may not be taxed against the railroad company on the ground that some of the service is not strictly applicable to the trial of the issues, but to investigate our own title and our way of necessity, and perhaps some- other questions. ’ ’ In one of his early conferences with one of the respondents, about fees, the lien petitioner testified he “told her perhaps we could not get all from the railroad company, that she would be liable to pay because there would be a great deal of work done incidental to it which even the court might hold was not absolutely necessary, yet, even for precaution’s sake in the ordinary course of business would have to be, done. I referred particularly to this way of necessity.” When the lien petitioner submitted the respondents his first bill for services under date of November 23, 1916, he accompanied it with a letter referring to the charges he had made in the bill in which he wrote, in part, as follows: “Probably one-fourth of the time can be attributed to working out the brief and facts upon the issue of your right of way, and the balance to the suit proper.”

Although it appears from the record that the trial court gave a lien for charges made by the lien petitioner which could not properly be taken into consideration in allowing the claim of the respondents against the railway company, for a sum sufficient to indemnify them for their fees, and which covered services which were not rendered “on account of” the condemnation proceedings, it does not appear from the record what those charges amount to and we therefore cannot determine what proportion of the claim of the lien petitioner for fees was proper to be taken into consideration in determining the amount for which he should be allowed a lien.

After finding the amount of the fees of the lien petitioner for which the respondents could properly make a claim against the railway company, it would not follow that the lien petitioner should be given a lien for that entire sum as against this fund which has been paid in by the railway company, but in our opinion he could only be given a lien for his proportionate share of the $10,000, taking into consideration the fees of Mr. Huey for which the defendant could claim indemnification against the railway company. It is not correct, as the latter claims, that the lien petitioner and he should divide the fees equally. Where two attorneys are severally employed in a cause, each is entitled to recover for the services rendered by him, in accordance with whatever agreement may have been made with the clients and, in the absence of any such agreement, each is entitled to recover for the reasonable value of his own services. One of them is not entitled to recover severally, one-half of the value of the services of both attorneys, but the court will determine from all the facts and circumstances, what is the full value of the services sued for. 1 C. J. 754, sec. 334.

For the reasons stated we deem it necessary to reverse the judgment of the Circuit Court and remand this cause to that court for the determination there, of the following questions: First. What part of the $7,000 (which the lien petitioner would receive as fees under the decision of the trial court on this petition) was for services rendered “on account of” this case, which could properly be allowed in the claim of the respondents against the railway company for indemnification under section 10 of the Eminent Domain Act (J. & A. ft 5260). Second. On the basis of that amount and the total fees of both Mr. Mecartney and Mr. Huey, to what proportion of the $10,000 fund, which the railway company has paid in this case, would Mr. Mecartney be entitled? Those questions being determined, the lien petitioner would be entitled to a lien against the funds in the hands of the court, for the latter sum less the sum of $4,569.06, which has already been paid him by the respondents on account of his fees.

The judgment of the Circuit Court is reversed and the cause remanded to that court for further proceedings not inconsistent with this opinion.

Reversed and remanded.

Additional Opinion Filed on Petition por Rehearing.

Mr. Presiding Justice Thomson

delivered the opinion of the court.

In his petition for rehearing the lien petitioner makes contentions which, in onr opinion, are not applicable to the facts presented by the record in this case. The lien petitioner, as one of the attorneys for these respondents, appeared in court with Mr. Huey and advised the court that they had agreed with counsel representing the railway company that $10,000 was a fair and reasonable sum to be paid by the railway company to the respondents, for the purpose of reimbursing them for the attorneys’ fees they had in-! curred. That included all fees which the respondents were obliged to pay their attorneys for all the services they had rendered “on account of this case.” Having taken that position before the court in representing, the respondents in their claim against the railway company for reimbursement for their attorneys’ fees,' as provided in the Eminent Domain Act, the lien petr tioner is estopped from claiming more of this fund, than his proportionate share of it, taking into consideration the fees earned or services rendered by! both counsel engaged in the case, and he should not be given a lien on the fund paid in by the railway company for any greater sum than he can show that proportionate share amounts to. It is incumbent upon' the lien petitioner to prove what his proportionate share of this fund is, in view of the facts shown by the record in this case to which we have referred. This is so, notwithstanding the fact that Mr. Huey is not a party here and has made no claim for a lien on this fund. The fund does not belong to counsel but to the respondents. A different situation would be presented and the contentions of the lien petitioner, as set forth in his petition for rehearing, anight be in point, if the lien petitioner were endeavoring to establish his lien against a fund which had been awarded the respondents for the taking of their property, for example. But that is not this case. The lien petitioner seeks to establish an attorney’s lien against a particular fund, paid in under the statute, for the specific purpose of reimbursing the respondents in full for the attorney’s fees incurred by them “on account of this case”; the amount of which fund the lien petitioner himself, with Mr. Huey, both acting as counsel for the respondents, has agreed is a fair and reasonable sum for that purpose. Under those facts, an attorney’s lien against this fund, allowed the lien petitioner, must be limited as we have indicated.


author: Mr. Presiding Justice Thomson

text:
    Century Trust & Savings Bank, Appellant, v. Johanna Adams, Appellee.
    Gen. No. 24,525.
    1. Bills and notes, § 440*—when defense that guarantor was discharged "by coguarantor’s assignment for benefit of creditors not sustained. In an action by a bank as payee of a note against one of the guarantors on the note, the defense that defendant was discharged because the bank became a party to an assignment for the benefit of its creditors by a company which was also a guarantor on the note, and agreed to accept the dividend to be paid thereunder in full settlement of its claim against such company, was not sustained, where the evidence disclosed that plaintiff had refused to sign the assignment agreement and had refused to agree that the receipt by plaintiff of dividends should operate as a release of its claim against such other guarantor.
    2. Bills and notes, § 420

      —what testimony admissible on question of guarantor’s discharge by coguarantor’s assignment for benefit of creditors. In an action by a bank as payee of a note against one of the guarantors on the note, the defense that defendant was discharged because the bank became a party to an assignment for the benefit of its creditors by a company which was also a guarantor on the note, and agreed to accept the dividend to be paid thereunder in full settlement of its claim against such company, where the evidence disclosed that although the bank refused to sign the assignment agreement it had received a check reciting that it was in full —-- of its claim against such company, it was error to exclude testimony to the effect that the cashier of the bank had stated that it would take the check for dividends on account only, and would not receive it in full satisfaction and discharge of the indebtedness of such guarantor, and that the bank had also refused a cheek containing a clause releasing all the guarantors on the note.
    3. Evidence, § 327

      —when oral testimony admissible to shoxo that acceptance of check did not discharge guarantor on note. Testimony in an action by a bank against the guarantor on a note, to the effect that a dividend check received by plaintiff from the trustees of the estate of an insolvent coguarantor, reciting that it was in full of plaintiff’s claim against such coguarantor, was accepted on account only, was not in violation of the rule prohibiting the admission of oral testimony to vary an instrument in writing, as such check was not that of the bank but of such trustee.
    Appeal from the Circuit Court of Cook county; the Hon. Richabd S. Tuthill, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1918.
    Reversed and remanded.
    Opinion filed October 15, 1919.
    Harris, Kagy & Vanier, for appellant.
    Grossman & Grossman, for appellee.

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

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

   Mr. Presiding Justice Thomson

delivered the opinion of the court.

The plaintiff hank brought this suit as payee of a promissory note for the sum of $1,900, against the defendant who was one of the guarantors on the note. The trial was had before the court without a jury and the court found the issues for the defendant, holding that the plaintiff had released one of the other guarantors and this operated to release the defendant also. Judgment for costs was entered against the plaintiff, from which it prosecutes this appeal.

The note in question was the note of one John F. Adams, and the three guarantors on the note were the defendant Johanna Adams, Robinson Cheese Company and C. S. Robinson. The payee bank held two notes of the Robinson Cheese Company, as maker, each secured, in part, by a quantity of cheese. The cheese company made an assignment for the benefit of its creditors. The important question of fact involved in this case is whether the plaintiff bank, at any time, became a party to this assignment or agreed to accept the dividend to be paid thereunder, in full satisfaction of its claim against the cheese company, or whether it actually did so accept such dividend.

The collateral held by the bank on the two notes of the cheese company was sold and the proceeds credited on those notes. The claim of the bank against the cheese company then consisted of those items, namely, the balance due on each of the two collateral notes just referred to, and the liability of the cheese company as one of the guarantors on the Adams note. Although there was no dispute between the parties about the amounts due under the various items, it appears from the record that there was a question whether the trustees under the assignment would recognize all of them, and the bank began a suit in attachment and tied up the funds of the cheese company.

It is claimed by the defendant in the suit at bar, both that the bank became a party to the assignment and agreed to accept the dividend to be paid, in full settlement of its claim, and also that it did so accept such dividend. The bank contends to the contrary. The contention of the defendant that the bank did become a party to the assignment and agree to accept the dividend to be paid thereunder in full settlement of its claim is based on the following facts: The assignment made by the cheese company under date of February 13,1917, provided that the assignee trustees should be allowed a reasonable fee, should pay necessary expenses and distribute the balance pro rata among the creditors, “who, in consideration of the dividends paid to the respective creditors, agree to release the said Robinson Cheese Company,” and all the partners thereof, from further liability, as shows by a list attached thereto. A copy of this assignment was sent to each creditor including the plaintiff bank. The bank did not sign the instrument of assignment or expressly assent thereto as requested bul on the contrary declined to do so. Under date of April 4, 1917, the trustees wrote the plaintiff bank that they were in a position to declare a first dividend, “but are unable to do so because of your failure to consent to the assignment. We therefore request that you mail to us upon receipt of this letter, at the above address, your consent accompanied by a statement of your account showing the amount due you and thereby facilitate the distribution of the funds * * *.” So far as the record shows, there was no direct reply to that letter, but under date of April 20, 1917, the bank wrote the trustees saying that they had signed a stipulation to dismiss the attachment suit, above referred to, “with the understanding that you, as trustee, would recognize our claim on account of certain notes which we hold, and would, upon distribution of the funds belonging to the trust estate, pay to us our distributive share * # *.” This letter then referred to the three notes and continued to the effect that it was the bank’s understanding that in computing their distributive share, the trustees would take into account, in addition to the amount due on the Adams note, any deficiency that might remain owing on the collateral notes after the collateral might be sold and the amount thus realized credited on those notes. The letter requested the trustees to confirm the bank’s understanding as thus outlined. On the following day, April 21, 1917, the trustees wrote the bank in confirmation of their letter of the 20th, saying they had “credited your account,” with the claim of $1,900 (being the Adams note) and were waiting for the sale of the collateral on the other two notes, when they would “credit your account” with the deficiency or balance remaining due on those notes, 1 and upon distribution you will share pro rata with the balance of the creditors.” Under date of October 13, 1917, the president of the plaintiff bank notified the trustees that they had realized $2,212.25 from the sale of the collateral and he certified that the balance due the bank on the three items making up their claim, after crediting the amount realized from the sale of the collateral, on the two notes to which the collateral applied, was $6,584.65.

On these facts we are of the opinion that the bank never became a party to the assignment or agreed to accept the dividend to be paid by the trustees in full settlement of their claim against the cheese company. The bank refused to sign the assignment agreement. When the trustees wrote the bank on April 4, asking that the bank forward its “consent accompanied by a statement of your account,” the bank did not do so. The next correspondence of April 20 and 21 shows that the bank and the trustees had adjusted their differences which had caused the attachment suit and that the bank had stipulated to dismiss that suit with the understanding, not that the bank would become a party to the assignment or accept less than the full amount of their claim in discharge of it, but that the trustees would pay the bank a dividend, not only on the Adams note but also on the balance remaining due on the collateral notes after crediting the proceeds of the collateral. There is no stipulation in any of the correspondence or documents referred to, whereby the bank agreed that the receipt of dividends by it should operate as a release of the cheese company.

The next question is, did the bank, in fact, accept a dividend in full payment of its claim, so as to release the cheese company from any further liability? The evidence shows that they received a dividend check through the mails from the trustees for the sum of $1,284, reading, “in full payment of your claims against the Bobinson Cheese Company” and this check was retained by the cheese company and cashed. It was shown that when the bank received that check, one of the trustees, the cashier of the bank and its counsel were present. The cashier of the bank, when on the stand as a witness, was asked what was said at that time between the parties, as to the transaction, as to the indebtedness of the cheese company and the claim of the bank, if anything. Objection to this question, interposed by the defendant, was sustained. The plaintiff then offered to show that the representative of the bank there made the statement that the amount of the claim was undisputed and that they would take the check and apply it on account only and would not receive it in full satisfaction and discharge of the indebtedness of the cheese company. The witness was then asked if there was another check offered by the trustees to the bank before they offered the check which the bank cashed. Objection was also made to this question by the defendant and objection sustained. The plaintiff then offered to show that there was another check tendered prior to the tender of the one here involved, and that it had a clause in it releasing the defendant, Johanna Adams, the Bobinson Cheese Company, and the estate of John Adams, the maker of the $1,900 note. It was error to sustain the objections to these questions. To have admitted the evidence would not be permitting the bank to introduce oral evidence which would vary the construction of a written instrument or indorsement, as the defendant contends. It must be remembered that the instrument was not that of the bank but of the trustees. If the bank had accepted a plain dividend check, and surrendered the note it held and given the trustees a release, and the oral evidence sought to be introduced was for the purpose of varying the terms of that release, the defendant’s contention might be sound, and Clark v. Mallory, 185 Ill. 233, and the other cases cited by the defendant would be in point. But that is not at all the situation here. The admission of oral evidence to vary and explain an indorsement on a check similar to the one involved here was upheld in Reid, Murdoch & Co. v. Taylor, 212 Ill. App. 659.

The plaintiff bank had never joined the composition or agreed to accept a dividend in full payment of its claim and was therefore in the same position in taking and cashing this check as it would have been in if the debtor was not endeavoring to make a settlement with all its creditors. In that situation the retention of the check and the cashing of it did not necessarily operate to discharge the cheese company. Siegel v. Cohen, 210 Ill. App. 338; Teague v. John E. Burns Lumber Co., 187 Ill. App. 225. Although the correspondence which had taken place contained no stipulation by the bank that it would release the cheese company upon receipt of a pro rata dividend, nor could operate to bind the bank to that effect, it might be that if the bank had accepted the check in question without comment and cashed it, such action on its part could be said to give its previous correspondence such a construction as to show that in filing its claim it intended to accept its dividend in full. But if the evidence sought to be introduced by the plaintiff and rejected by the court were admitted, it would have tended to establish the opposite construction as contended by the plaintiff.

For the reasons we have given it was error to sustain the objections of the defendant to the offer of that evidence, and therefore the judgment of the Circuit Court is reversed and the cause remanded to that court for a new trial.

Reversed and remanded.